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Textiles, Guano and Railroads: The Role of the United States in the Early Development Failures of Peru, 1818-1876


Peru's importance to the United States in the nineteenth century has been underappreciated because there were few instances of sharp conflict between the two nations. But, beginning with U.S. export of coarse cloth from new cotton mills just after Peruvian independence, continuing during the influence of Peruvian guano on U.S. "scientific agriculture," and then in the period of Peru's extraordinary effort to build trans-Andean railways, Peru exercised important influence on U.S. economy and imagination.

This work traces the relationship of both "developing nations" from their early engagement through Peru's "guano era," with an emphasis on why the United States pursued industrialization and Peru did not. Conventional wisdom holds that Peru lacked the requisite labor, capital and entrepreneurship required to become an industrial nation. Yet, preindustrial textile manufacturing was well established in Peru, and a country reaping large fortunes from guano in the nineteenth century could not be wanting in capital. Study of how relations with Peru were advantageous to U.S. development helps clarify some of Peru's nineteenth century development policy failures.

It is argued here that the cotton textile "revolution" was actually an evolution that Peru could have engaged in during the first decades of its independence. Peru possessed key factors (water power, high quality cotton, merchant capital, potential labor) and had a source of machinery in the United States. A U.S. ship captain was impressed with water-powered machinery he glimpsed in Lima in 1805 during a trip immortalized by Herman Melville in Benito Cerreno. But, the necessary "Hamiltonian" policies were defeated politically by elite groups, including those who exploited national sentiment to gain special commercial privileges as hijos del pa�s.

The social backgrounds of the first U.S. representatives, merchants and naval officers sent to Peru are contrasted as an introduction to early U.S. industrialization and its implications for Peru. The study's formal opening year, 1818, marked establishment of the U.S. navy's Pacific Station off the west coast of South America, a U.S. whaleship's discovery of the fabled "Peruvian grounds" and arrival of the first U.S. agent in Peru, Bartow Prevost. The future of the U.S.-Peruvian relationship was presaged in the years leading up to Peruvian independence by the U.S. navy's aggressive protection (over Prevost's objections) of U.S. merchants who defied the patriot blockade to resupply Spain's forces. U.S. naval captains also collected fees for moving U.S. and Spanish merchant capital out of the viceroyalty.

Following Peruvian independence in 1824, U.S. interests worked over the next decade to discourage Peru from following the very policies used to achieve development success in the United States. The guano bonanza that gave rise to the Peruvian oligarchy was largely squandered as a development vehicle because Peru's human capital was neglected and abused through forced labor. Evidence from the U.S. guano market demonstrates, contrary to conventional belief, that Peru underpriced its precious fertilizer.

To provide focus, this study examines the relationship to the United States of a subgroup within Peruvian elites, here termed the "Barreda social network," whose rise was based upon control of the U.S. guano market in the 1850s.

Throughout the period under study, misguided policy choices were driven by elite Peruvian racial contempt for labor and laboring classes (Indians, blacks and Chinese), something scholars have minimized when accepting elite claims that the country was plagued by a "labor shortage" throughout the nineteenth century.

Because they despised their country's Indian majority, Peruvian elites dreamed of attracting European immigrants and, in the meantime, made recourse to importation of Chinese bondsmen for their development projects and even conducted slave raids on Polynesia. White artisans tried to prevent blacks and Indians from competing in skilled trades. The man who tried to launch a Peruvian cotton textile industry with U.S.-made machinery felt obliged to promise he would only employ white workers.

At the same time, guano riches and foreign borrowing supported extravagant importing of U.S. and European manufactures, dampening stimulus to local production. U.S. goods were especially damaging because they most closely resembled those Peruvians could produce for themselves.

Frustrated by stagnation, in the late 1860s Peruvians embarked on a frantic program of railroad building to leverage the guano boom into something concrete before the bubble burst. Unfortunately, while impressive from an engineering and quality standpoint, the construction was conducted under the same cheap-labor and import-intensive policies that had discouraged manufacturing.

For the final years examined here, this study looks at the relationship between two much-mystified figures, railroad evangelist Manuel Pardo (the Barreda's political figure whose presidency ended in 1876), and U.S. railroad contractor Henry Meiggs (whose projects became paralyzed at the same time), showing how the latter carried to extreme the same import-intensive development approach favored by the Barredas. How Pardo and Meiggs brought the country to bankruptcy demonstrates the failure of Peru's nineteenth century development model.

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