This law ordered in turn the issuance of
resealed/overstamped fiscal banknotes to try to relive the economic
situation at that time. Because coins in the necessary quantities
did not circulate at that time, banknotes replaced the lack of
circulating species. This move was partially accepted with much
difficulty because foreign transactions demanded silver soles
that were accepted along with the Pound Sterling.
The government ordered the banknote exchange
for those notes specifically printed for said law with the name "The
Republic of Peru" (La Republica del Peru). These notes would
be exchanged for metallic money. These banknotes would have an issue
of 20,333,333 soles, which would be backed by the treasury in
metallic money. The delivery of these notes would effect the
withdrawal of the fiscal notes in accordance with the amortization
law that would occur later on.
In 1897 the country found itself in the
middle of a war, and it took emergency measures such as the May 13th
law that enabled the government to take resealed notes from the
banks. It deposited them to exchange them for new ones, which
amounted to more than 2,000,000 soles; the old ones would be
burned. Also, the October 28th and the November 3rd issues for
32,000,000 and 5,000,000 soles respectively for war expenses
were also authorized of in like manner. These issues managed to make
the real value of these notes lower and lower because the
corresponding mtallic exchange was not figured in. All of this
carried over to an exchange in the monetary system which occurred
further on during the Pierola govenment.
All of these banknotes' issuing, circulatory,
exchange, and amortization operations were in charge of the Junta
Administrativa y de Vigilancia de la Emision Fiscal
(Administration and Overseeing Committee of Fiscal Issuing). This
committee was comprised by seven (7) members who could not be
senators, deputies, managers, or bank directors. Said members would
be elected for a renewable period of two (2) years.
Members who figured in this group were: Don
Carlos Pflucker, Don Juan de Dios Quintana, Don Enrique Ayula, Don
Federico Bresani, Don Jose Manuel Canturias, Don Ramon de la Fuente,
Don Valentin Gil, Don Manuel Montero, Don Jose Santiagto Concha, Don
Enrique L. Barron, and Don Carlos Prevost.
On February 11, the following people were
elected as officers: Don Juan de Dios Quintana as President; Don
Federico Bresani as Treasurer; and Don Jose Manuel Contuarias as
Secretary.
Part of the initital work of this institution
was to prepare internal regulations that merited the approval of the
government. These included the establishment of denominations and
the sizes of the banknotes that they would issue for exchange.
This organization ordered the manufacturing
of banknotes in the United States,printed by the American Banknote
Co. The ABNC printed banknotes in denominations of 1,2,5,20,50,100
and 500 soles up to the amount of 16,829,333 soles.
This was equivalent to the bank issuing balance converted into
fiscal circulating currency. The exchange from the old notes to the
new ones ws begun on July 26, 1879, and only in the city of Lima.
This was because the manufactured notes had not arrived in Peru. The
incineration was carried our on August 16, 1879.
Subsequently, a 10 soles banknote was
ordered to be issued. Its shipment, on board the shipnamed
Islay, was captured by Chilean ships off the Chimbote coast.
The invading force forced the circulation of these notes at the time
that the government was taking away its monetary value.
There were other modifications of the 5 andf
20 soles denominations. In the first place, the 20
soles note was issued with a different multi-colored design,
which was very different with the previous design, printed in a
sepia brown. The new 5 soles was very similar to the previous
design, but the "V" was removed. This "V" appeared on both sides of
the words "La Republica del Peru". Some additional read sun rays
were added.
All denominations have as
their date June 30, 1879. The lower denominations have their
signatures printed, and the three highest have hand written
signatures.