It is the purpose of this article to examine in detail the way in which the Peruvian guano trade was launched and the form which it initially took. The decisions which were made and the shifts which occured in the early 1840s, it can be argued, conditioned to a very considerable degree the future course of the trade. In this period one can detect many of the flawed structures which were to produce serious commercial and financial problems in the years ahead. The defective arrangements included the government’s ownership of the guano and its ability to exercise a high degree of control over the conduct of the trade; a system of exporting by which certain merchant houses were, through a number of contract arrangements, given exclusive rights of sale in certain overseas markets in exchange for large loans to the government; and the government’s use of these contracts and the loans accruing from them as a means of dealing with short-term budgetary difficulties. The trade, almost from the moment of its inception, was intimately bound up with Peruvian financial problems, and by offering monetary temptations to the Peruvian government and opening up new possibilities for military, bureaucratic, and other largely unproductive expenditures, it served in the long run to aggravate rather than alleviate these problems.
The movements of the trade and its ancillary parts hinged, as the above remarks imply, on one central relationship, that between the government and the foreign merchant houses who were the main guano contractors. Three questions can at once be posed. Why was exporting conducted by contracts which granted monopoly trading rights to the contracting parties? Why were foreigners so prominent in the trade? What was the relative power within the guano business of the contractors who handled the commodity and the Peruvian government who owned it? The third question is of particular interest here, for the conclusions which will be set out at the end of this paper differ quite sharply from those which have hitherto been stated or hinted at in print. D. K. Fieldhouse has observed that European traders and financiers in the nineteenth century were able, as he puts it, to obtain a “stranglehold” over the “defenceless, though politically independent, states of South America, the Middle and Far East.”1 What better candidate for the title of strangler, one might ask, than a house like Antony Gibbs & Sons of London, the most important of all the mercantile participants in the first twenty years of the guano trade, which, with its branch in Lima, handled a very substantial portion of total Peruvian exports? Fredrick Pike, taking up this sort of question, has remarked that by the late 1840s “Peru’s economy was largely at the mercy of Antony Gibbs & Sons of London.”2 Heraclio Bonilla, in a recent thesis, writes that the guano contract of 1842 which first brought Gibbs into the trade “sanctioned almost complete British dominance in Peruvian commercial and financial afifairs.”3 Jonathan Levin, in his detailed pioneering study of the guano trade, is concerned to establish the existence of a conflict of interests between the contractors and the government over intermediate costs and market prices, and to argue that the contractors emerged unbruised and victorious from the contest.4 Views such as these give the impression that the relationship between government and contractors was an unbalanced one: between a weak and impotent institution on the one hand, owning the guano but unable to have much effect on the way in which it was disposed of abroad, and on the other hand powerful foreign capitalists, pursuing their own interests without let or hindrance, and inflicting damage on Peru in the process. Much of the reasoning behind such views is, however, deductive, a priori reasoning, and much of the evidence against the contractors purely circumstantial. The merchants, it is often pointed out, gained handsomely from the trade, whereas the Peruvian nation gained little, and the Peruvian government saw its financial difficulties grow rather than diminish.5 If one party clearly gained, and the other faced mounting, ultimately insuperable problems, then the relationship between the two, it is concluded, must have been structured in favor of the former. The logic at first sight seems sound; on closer inspection, however, it is revealed as faulty.
The method adopted here will be to examine the three successive contracts which set the trade in motion. In so doing, the answers to the questions posed will gradually emerge. They will, however, be set out quite explicitly towards the end of the article. The three contracts were drawn up within the short period of fifteen months. The first was devised in November 1840; the second, involving roughly the same personnel, was arranged a year or so later, in December 1841; and the third, in February 1842. Each new contract involved the scrapping of the one which had preceded it. If we look closely at the arrangements, we find that the sequence involved a progressive and very notable strengthening of the government’s position.
Our main sources will be the hitherto under–utilized documents of the British Foreign Office relating to Peru, and the large and splendidly informative archive of Antony Gibbs & Sons,6 one of the principal dramatis personæ. These British materials lend detail and flavor to events which so far have been delineated only in bold outline.
The first contract, of November 1840, appears to have been drawn up almost entirely on the initiative of the merchants. Not surprisingly, therefore, they managed to arrange things in such a way that if the commerce proved remunerative they would stand to gain most of the winnings. The government, at this stage in the game, appears to have had little idea of the potential profitability of the trade and did not as yet claim ownership of the guano deposits.7 The merchants had for some time prior to the arrangement of the contract been sending samples of guano to the Liverpool firm of William Joseph Myers & Co. through its Valparaiso branch, Myers Bland & Co.8 The interested parties in Lima appear to have been French (or Franco-Spanish) in origin: merchants by the names of Allier, Barroilhet, and Dutez.9 The guano they sent to Liverpool was distributed by Myers among farmers for trial. Happily, these first experiments proved successful.10 Myers sent news of this back to Lima, indicating at the same time that he would be willing to give financial support to a full fledged trade in the fertilizer.11 Armed with this knowledge, the traders in Lima asked the Peruvian government for exclusive rights to export guano.12 As monopolies had always been an important source of income for the state, and as they were being granted quite liberally at the time by the incumbent Gamarra regime,13 the merchants secured a favorable response.
The one thing which might have caused the government not to accede to their request was the prevailing attitude of hostility towards foreigners in Peru. Belford Wilson, the British chargé d’affaires in Lima, made frequent references to this in his despatches of the late 1830s and early 1840s. Wilson viewed the very practice of granting monopolies as “part of a series of ridiculous attempts . . . by the Government of General Gamarra to exclude Foreigners from any participation in the benefits that may be deserved from the Speculations in Peruvian Native Productions.”14 The foreign merchants tendering for a monopoly in guano, however, either by good fortune or design, did so in association with a prominent Peruvian capitalist, Francisco de Quiroz, and this was probably a crucial element in their success. In Bonilla’s view, circumstances at the time were “not propitious for direct dealings between the Peruvian government and foreign merchants. . .. A direct concession for the working of the guano deposits would have incurred public hostility. Prudence and cool calculation made it seem advisable for them to shelter behind a ‘national:’ Francisco de Quiroz.”15 The bulk of any profits, however, was to go to the French merchants, and the management of the enterprise was placed almost entirely in their hands. Most of the capital came from William Myers of Liverpool.16 The merchants in Peru had been given permission to draw bills on him which could, of course, be sold in Lima to raise the money required for the various expenditures connected with the trade.
The principal features of the contract which was finally arranged in November 1840 were that a) it was to run for a fixed period of time—six years; b) it set no limits on the amount of guano to be exported; c) it gave the merchants involved exclusive rights to sell in any market they chose; d) it required them to pay the government 60,000 pesos (roughly £ 12,000), in three instalments: 40,000 at once, 10,000 at the end of the first year, and another 10,000 at the end of the second.17 On December 4, 1840, the duration of the monopoly was extended by an additional three years to give nine in all, and the merchants agreed in return to pay the government a further 30,000 pesos during the course of this extra period.18 The Gamarra regime, therefore, was charging 90,000 pesos or £ 18,000 for the trading rights. Considering that the monopoly was to run for nine years, this was a very low price to ask. 40,000 pesos had to be paid right away, but of this sum 38,500 was received by the government in the form of depreciated debt certificates held by one of the merchants, Aquilles Allier, these being accepted at face value. In effect, as Belford Wilson expressed it, 38,500 pesos were “paid over” to Allier19 in a grossly inflated debt settlement.20 The initial cash payment received by the government, in short, amounted to only 1,500 pesos, or about £300. Figures such as these give some idea of the very low value the government set upon guano in 1840 as an exportable commodity.
As sales commenced overseas, however, it soon became evident that guano was a commercial item of potentially exceptional profitability. Britain was virtually the only market at the time, but farmers there had already acquired the habit, if only on a modest scale, of purchasing imported fertilizers.21 The first cargoes arrived in the spring of 1841, and the response was immediately favorable. In July guano was referred to in The Liverpool Times as “the most powerful and concentrated of all manures”,22 and in October the professor of chemistry at Durham University, James Johnston, claimed that it contained “the greater part of the ingredients which are necessary to the growth of almost every variety of crop.”23 Impressive testimonials were matched by the prices which the new fertilizer fetched. From the various figures for 1841 which are available it is impossible to calculate any exact average for wholesale prices. Rough guesswork, however, by informed parties in Peru might have placed it at around £ 18 per ton.24 According to the British minister in Lima, it cost about 11s,6d. to dig and load a ton of guano (the work mainly of convict labor),25 a further £4,17s. on average for freights, and another 11s,6d. for insurance, warehousing, sales commissions, “delcredere” payments etc. in Britain,26 giving a total of £6 and a clear profit, therefore (small fixed capital costs apart), of around £12. The volume of exports in 1841, Wilson calculated, was 8,602 tons.27 If the assumed £18 average were to prevail until these substantial quantities all arrived on the market, total profits of roughly £100,000 could be expected from the first year of trading. Remembering that the Peruvian government received only £300 or so in cash in this first year, and that its total receipts over the remaining eight years of the contract period were to amount to about £ 10,000 in aggregate, one can get a fair idea of the degree of dissatisfaction which came to be felt in official circles over the terms of the 1840 arrangement. In a letter of November 1841, Gibbs Crawley & Co., the hitherto passive Lima branch of Antony Gibbs & Sons of London, noted that guano was “becoming very important” and informed their parent house that discussions had begun concerning the possible annulment of the Quiroz contract.28 Formal cancellation came on November 27, by which time the government was beginning to look on guano as state property. The huaneras were in fact formally nationalized four months later:29 on the face of it a prudent move, but in practice a measure with many unfortunate long-term consequences.30 The annulment was made, in the words of the British chargé d’affaires, “on the plea, warranted by Spanish Law of enormous Lesion to the State; the Government at the time of granting the Monopoly not having been aware of the Value of ‘Huano’ as a Return.”31
It is highly significant, and part of a more general point which we shall return to later, that Peru had just embarked on military engagements against Bolivia.32 Indeed, Peru issued a formal declaration of war on Bolivia on the very same day that the guano contract was cancelled.33 An official request was immediately made for fresh proposals “on the condition that, within Eight days after the celebration of the Contract, a Sum of Money shall be paid in to the Treasury sufficient to defray the Expenses of the State.”34 As Wilson put it, guano was “about to be made use of for waging War against a neighbouring Republic.”35
The government, therefore, clearly wished to cash in on what now appeared to be a potentially very profitable trade, and it urgently needed extra funds to enable it to continue its assault on Bolivia. To these factors, two others might be added, both relating to rumors circulating at the time. One was that a number of merchant houses, among them Gibbs Crawley & Co., had offered the government 300,000 pesos for a cancellation of the Quiroz contract in return for permission to engage in the trade themselves.36 The other was that Quiroz and his French associates, alarmed at the growing excitement over guano, themselves proposed to the government that the old contract be scrapped and that they be allowed to draw up a new one.37 Although hard proof of the truth of these allegations is lacking, both would seem quite plausible, given the new and powerful appeal of the trade.
The first contract, then, was annulled and fresh offers were solicited. There followed in the course of the next three months a highly complex series of public and private proposals and counter-proposals. Two concrete things emerged from all the negotiating, bribing, and general jostling for position: a second contract, dated December 8th, 1841, between the government and the old Quiroz group who signed the 1840 agreement; and a third contract, dated February 19th 1842, between the government and a much larger body of merchants, including Quiroz and his friends, but embracing also a number of other houses, among them Gibbs Crawley & Co.
The events immediately preceding the December 1841 arrangement, and the form which this new contract took, can now be examined. Jonathan Levin is incorrect when he suggests that the government was obliged to draw up the second contract with the Quiroz group again because no other merchant bodies revealed an interest in the trade.38 The government in fact received proposals from three main quarters: from the British house of Maclean Rowe & Co. (who offered to take the business on consignment at a commission of 2½ per cent and to advance 20 pesos per ton to the government before shipment);39 from Gibbs Crawley & Co. (acting in association with a Chilean merchant named Candamo and the French firm of Puymerol Poumarroux & Co.); and from Quiroz and his associates. Two things emerge clearly from the various dealings which took place. First, the government now wished to secure a large loan in return for trading rights. Second, it40 was eager to invite the participation of Gibbs Crawley, itself suggesting terms on which a contract might be arranged. Gibbs rejected these, mainly because the loan which the government wanted seemed much too large (125,000 pesos down and 50,000 pesos a month “for a certain time”),41 but they remained interested in the possibility of getting in on different terms. The government knew this, and when it received a fairly attractive offer from the Quiroz group (involving an immediate loan of 87,000 pesos, and 50,000 pesos for each of the following four months, all of it in cash),42 it accorded it only conditional acceptance, reserving the right to contact Gibbs Crawley and their friends once more before coming to any final decision.43 When it did communicate with the Gibbs group it appears to have deliberately exaggerated the generosity of the Quiroz proposals, referring to interest-free loans, claims to only 20,000 tons of guano, and an offer to place two steamers in Callao harbor for government use within twelve months.44 The hope, one may reasonably surmise, was that Gibbs, eager to prevent the trade returning to Quiroz’s hands, would make some really extravagant gesture. Throughout the proceedings the government appears to have been holding Quiroz and his colleagues in reserve while attempting to provoke responses from an alternative set of merchants. Gibbs, however, judged in the light of the information they had received45 that it would be unwise to engage in competitive maneuverings, and the government in the end settled for a second contract with Quiroz. It had been gaming for excessively high stakes and had overplayed its hand. The new contract was signed on December 8, 1841. When Gibbs discovered that the terms were not quite so favorable from the government’s point of view as they had been led to believe, they and their associates—Candamo and Puymerol Poumarroux & Co.—finally did submit a firm offer.46 For the moment at least, however, the government decided against yet another annulment of a Quiroz contract. The Gibbs proposals were not significantly more attractive than those already accepted. The government probably also had a shrewd idea as to how events would turn over the next few weeks, and how it might itself help fashion a situation in which much larger bounties would be available. Of relevance too may have been certain advantages not mentioned in the December contract; for instance, there was a suspicion, expressed by Gibbs’ London house, that the Quiroz group had thrown in sizable bribes for certain unnamed individuals in order to keep the trade in its hands.47
The second contract was to run for an obligatory period of only one year, and, if both government and contractors so desired, for a further period of four years. During that one guaranteed year Quiroz Allier & Co. were given the right to export as much guano as they wished.48
In return, they were required to lend 287,000 pesos to the government immediately, receiving a free cargo of guano as interest. They had also to purchase two vessels out of sales proceeds, although no final date was fixed for their delivery. The ships were to be used to protect the guano islands, and so would be of service to the merchants, and if the contract was terminated after only one year, the total expense of purchase was to be borne by the government. Finally, whereas before the contractors had been able to take all the profits themselves, they were now obliged to hand over 64 per cent of net receipts to the government during the first year of the contract, and 66 per cent during any subsequent years.49 For the government, this represented a very substantial improvement on the 1840 arrangement, even if the terms agreed were not quite on the scale of generosity that Gibbs Crawley had supposed. It could now claim roughly two-thirds of the profits, and could expect to receive a loan of between £50,000 and £60,000 in advance of sales.
The contract was supposed to run for at least one year, but the situation in Peru respecting guano was still highly unstable. The fertilizer’s initial success in Britain had powerfully impressed both the government and the merchants in Lima. Government in the past had been virtually paralyzed by military conflict, inside and outside the country,50 and by the trifling scale of tax revenues.81 The mercantile community for years had been laboring painfully and not very remuneratively within the narrow confines of a backward and sluggish economy.52 For both, guano seemed to offer new hope for the future. The resultant excitements had produced a very fluid situation in Peru. One contract had already been tom up, and another, with the same people, put in its place very shortly after. Much maneuvering had occurred in between. There was nothing to guarantee that the second contract would be any more durable than the first: in fact, it proved to be considerably less so. The relationship between contractors and government appears to have been highly personal, and the government itself was in some measure acting as a medley of self-interested individuals. To talk of a contract between a government and a company is to imply a perhaps unreal degree of formality and legalism. Circumstances were such that annulments could be accepted and new postures assumed without too much difficulty. Binding agreements might be put down on paper, but considering the devious ways in which they had been arrived at in the first place, no one could be greatly surprised or dismayed if the paper was tom up a few weeks later.
Precisely why and how the December 1841 contract came to be scrapped within less than three months and replaced by a new one involving the fusion of Quiroz Allier & Co. with Gibbs Crawley and their associates is not altogether clear. Some fragments of explanation can, however, be gleaned from the Gibbs correspondence.
On December 23 Gibbs Crawley & Co. reported that the French house with whom they had been connected in their tardy bid for the second contract, Puymerol Poumarroux & Co., had just managed to secure a contract for guano exports to the United States. Quiroz Allier & Co. complained that their own contract had been infringed. Their case, however, was not a strong one, for although there was no clear statement in their document forbidding them to export to the United States, the words privilejio exclusivo de exportar huano a Europa had been inserted, and the government could easily insist that this was a confining clause.53 Quiroz Allier & Co. were, nonetheless, upset by a decision which granted rival parties a legitimate role in the trade. Their contract had not been infringed, but their monopoly had. The episode produced two effects. By revealing the flexibility of the government’s position it served first of all to reactivate the grander ambitions of the merchants left out of the December 8 contract; and secondly, it helped weaken Quiroz Allier & Co.’s attachment to that contract. Gibbs Crawley wrote to their parent concern in mid-January 1842 that they had “always sought an interest in the many proposals to Government hoping to get you this capital business after the obligatory year to Quiroz Allier. Backed by Puymerol Poumarroux & Co. Candamo, and Montané,54 and the Tabaras but opposed by Cano the Minister of finance in the interest of Quiroz Allier & Co. Have not yet succeeded—but may.”55 Shortly after, they were able to inform London that Quiroz Allier had decided to unite with the other interested parties and had done so “because Puymerol Poumarroux & Co. opposed them so vehemently and because they felt that their contract being only binding for one year . . . might be upset if Puymerol Poumarroux & Co. chose, and moreover it was only for Europe. In the end an agreement was formally signed between them and the others.”56
The main factor causing the disintegration of the second contract, then, appears to have been the continuing challenge which Quiroz Allier and their colleagues had to face from other mercantile interests in Lima. Unquestionably these latter made as much use as they could of any friends they had or could acquire in high places, as the Quiroz group itself had been doing (with Cano, for example). In a situation in which the relative power of one’s friends and one’s enemies was usually difficult to determine, Quiroz Allier & Co. clearly considered that the most prudent course of action would be to join forces with their adversaries. If the main parties could unite, and offer yet more ample oblations to the government, a potentially more durable contract could be arranged and the dangers and uncertainties arising from competition averted. The new consortium thus came into being and made its proposals to the government. These were made public on January 29, 1842, and nine days—later extended by a further eight—were allowed for others to come forward with better offers. No party, however, was able to improve on the very large loan which the Quiroz-Gibbs group had proposed.57 With the war against Bolivia still in operation, and Peru faring badly, such loans were a crucial consideration; they were, in the government’s words, “of Vital Interest to maintain the Army.”58
A third contract therefore was finally drawn up. It was dated February 19, 1842. Its first article referred to the establishment of a corporation comprising the Peruvian government, Quiroz Allier & Co., Puymerol Poumarroux & Co., and Gibbs Crawley & Co. According to Gibbs Crawley the merchant houses of Candamo and Tabara, both of which had been on their side in the past weeks, were also involved, although their names did not appear in the public document.59 If one examines the terms of this contract—again granting world-wide trading rights, and due this time to run for five years—one can see that there had occurred a further and quite striking improvement in the government’s position. The promise which Quiroz Allier & Co. had made under the second contract to advance 287,000 pesos was reincorporated in the fresh contract (and indeed much of this had already been forwarded), as well as their undertaking to secure two vessels for the protection of the guano islands. In addition, the new parties were to advance an extra 200,000 pesos within three months, thus giving a total loan of just under half a million pesos. As interest, the contractors were to receive 1,300 tons (register)60 of guano. From the net sales proceeds the government was to take the first £6 per ton (receiving this as soon as the guano was embarked), and 75 per cent of any profits in excess of that figure.61 If proceeds were £6 or less, the government would take the entire amount: a full 100 per cent. If they amounted to £7, the contractors could expect 5s. per ton (3.6 per cent); if £8, 10s. (6.3 per cent); if £9, 15s. (8.3 per cent), and so on. If losses resulted, these were to be divided in the same proportion as profits.62
For the contractors, these were harsh terms.63 They indicate heady optimism regarding guano’s selling power, an optimism no doubt intensified by the hot-house atmosphere surrounding the whole contract issue in Lima. The merchants took upon themselves all the entrepreneurial functions in the trade; they were committing themselves heavily64 over a number of years to a commodity as yet largely unknown and untested in Europe and North America, and they had agreed to lend, in advance of sales, very substantial sums of money to a government whose record as a debtor had hitherto been a pretty black one.65 If the enterprise proved profitable they could only claim a return for their efforts when net proceeds exceeded £6 per ton. Assuming a continuation of the 1841 level of intermediate costs, this required a selling price of over £12. Such a figure was, in fact, well above the average wholesale price of guano for the duration of the contract.
There were, however, features of the arrangement which, in the immediate future at least, more or less guaranteed some income for the contractors. In the first place, there was the sizable amount of guano which they were allowed to remove on their own account as interest on their loans. (On the other hand, this hardly imposed any strains on the government, involving as it did no effort or monetary outlay on its part.) Secondly, there was a clause in the contract which permitted the merchants to remit up to £3 of the funds due to the government on each ton in the paper of the national debt, this to be accepted at par value.66 As the government was then defaulting on both its external and internal obligations, the bonds could be bought at very low prices.67 Accordingly the contractors could expect to make a fair amount of money out of sales nominally unprofitable for them. It would be wrong, however, to point to this one clause in the contract as evidence of government weakness and mercantile strength. Whatever happened, the government was hardly going to suffer. By accepting a portion of its earnings in bonds it was of course conducting a form of indirect debt-retirement. The method chosen was a costly one, as the government was in effect paying at the full face value. But it would have been even more expensive in the long run not to have begun retiring the debt, for in the event of a full settlement of bondholders’ claims—something very much in the air in the early 1840s—the government would have had to start paying back not only the principal but also the arrears of interest due to its creditors.68
Having thus considered the events leading up to the three contracts which marked the start of the guano trade, and having briefly examined the changing format of these contracts, we can now attempt to answer the three questions raised earlier.
On the first question, concerning the monopolistic organization of the trade, there is no need for a very detailed answer. Monopoly rights were actively sought by the merchants who obtained the first contracts, for the most obvious of reasons. The government was prepared to confer these; they were in conformity with Peruvian tradition and were being granted quite generously in other fields at the time in order to increase state revenues. And once the government itself became party to the trade, standing to gain the main share of the profits, restrictive arrangements became attractive for a different reason, appearing as they did to eliminate competition and guarantee the highest possible returns from sales overseas.
As for the second question—why were foreigners so prominent in the trade?—the answer here must be argued out at greater length. One cannot cite production costs as a factor of very great significance. European merchants in Lima were certainly larger and wealthier on the whole than their Peruvian counterparts, and could more easily tap funds of capital in the main financial centers overseas. They could also use their parent concerns to acquire the necessary shipping capacity. But these advantages counted for little in the digging, carriage and loading of the guano. Compared with the mining industry and plantation agriculture, still largely in Peruvian hands, production and internal transport costs in guano were trifling. Exploitation methods, moreover, were not such as to require great entrepreneurial skills. Equipment and housing on the guano islands were primitive and inexpensive; the labor force was small and ill-rewarded; no part of the islands was distant from the sea. The costs of removing and loading the guano, according to the 1841 estimate already cited, totalled only 11s, 6d. per ton, of which by far the largest component was expenditure on bags. There was nothing about guano as such which made it absolutely essential that its physical exploitation be undertaken by moneyed foreigners. As for the expense of getting the fertilizer to the overseas markets, that certainly was very considerable, but such costs were also quite high for other Peruvian exports, large quantities of which were currently being consigned to foreign importing houses on Peruvian account.69 It cannot be argued either that foreigners were helped into the trade by diplomatic pressure. Belford Wilson, the British chargé d’affaires, was certainly eager to get the Peruvian government to arrange things in such a way that money would be made available for the repayment of British bondholders,70 but he was no supporter of monopolies, even though these might be connected with some debt-settlement scheme.71 He had, he wrote in 1841, “been instructed that, whatever may be the pretence under which the Government near which he is accredited may propose to establish a Monopoly, that it will be his duty, at all times, to use his best endeavours to dissuade that Government from entertaining or encouraging any such Project.”72 A decade or so later, writing of his attempts to have the trade thrown open, he recalled that his efforts had been foiled by two factors: the government’s desire to arrange contracts whereby it could obtain the large loans required for the prosecution of the war against Bolivia, and “the personal and pecuniary interests of the then corrupt Administration of Peru and of the wealthy Foreigners who desired to obtain the Monopoly.”73
It would seem that the single most important reason for the prominence of foreigners—apart from the fact that it was they who had taken the first crucial initiatives to set the trade in motion—was that they were, as Wilson pointed out, able to provide the government with large and immediate cash advances. In this respect, given the sums involved, they had very clear advantages over Peruvian rivals.74 They had, for one thing, substantial liquid assets in Peru. Gibbs Crawley & Co. recorded a profit of over 80,000 pesos for their last financial year of the 1830s.75 They could also draw bills on their associates and parent concerns in Europe with considerable ease. An examination of Antony Gibbs & Sons’ accounts with their Lima branch for the early 1840s reveals that the value of sterling bills drawn in 1842, the year of Gibbs Crawley’s entry into the trade, amounted to £48,210 (or about 240,000 pesos), compared with £24,670 in 1841.76 As the preceding discussion has made clear, the question of loans was the really fundamental determinant of contract allocation. This was so principally because of the expenses of war with Bolivia, but also, taking a broader view, because of the eagerness of people in government to cash in at once on guano after long years in the financial wilderness. “The available resources,” writes C. A. McQueen of the pre-guano period, “hardly sufficed for the maintenance the simplest form of government.”77 By being prepared to place fresh resources at the government’s disposal, foreign merchants were, in the physical sense at least, able to take over the running of the trade.
Finally, our third question: what was the relative power within the trade of contractors and government? From the evidence that has been presented, there can be little doubt that the latter was the stronger and the more secure party. The monopoly-contract system had been devised on the initiative of the merchants, but the government had succeeded in quickly reshaping it to ensure that its own interests were guarded and advanced above all others. It became the undisputed owner of the deposits; it was required to perform no entrepreneurial functions in the trade; it had secured for itself the lion’s share of any ensuing profits; and it had acquired loans amounting to hundreds of thousands of pesos in advance of sales. It had, in short, managed to get the better of the contractors, and appears to have done so largely by stimulating competition among groups eager to participate in the trade and by making the fullest use of its position as owner of the commodity and the powers of patronage which that conferred. Thomas Crompton, one of the British consuls in Peru, was probably correct when he wrote that the government simply “took advantage of the avidity of the Monopolists and Speculators.”78
It might be noted, if further proof is needed on this point, that the government made no further proposals, for the present at least, concerning any alteration of basic contract arrangements. Some of the contractors and their associates in Britain, on the other hand, did quite quickly come to regret their participation on the terms set out in 1842. The principal consignees at the market end were Myers of Liverpool and Gibbs of London.79 As suppliers of capital (in the sense that their friends in Lima had been given substantial drawing rights), as the parties who would have to take up most of the required shipping, and as sellers of the new fertilizer, their commitments and responsibilities were large. In the late spring and early summer of 1842, Myers, the man who could claim much of the credit for getting the trade started,80 was making desperate attempts to extricate himself from it, trying to pass his share of the business first on to Gibbs, then on to the Peruvian consul in Liverpool, and finally on to some merchant houses in London.81 He failed with all of them and in the end, with some assistance from financial associates, decided to stick with the trade.82 Antony Gibbs & Sons, when they heard of the annulment of the first contract and of Gibbs Crawley’s desire to become party to a new one, wrote of guano: “we have so little confidence in it that we would not risk 10 farthings a ton, on consignment.. . . It is a comfort to think the Government demands are so absurd that you can’t accede; and we hope they may continue in the same state of mental delusion, so as to give you time for reflection.”83 Two weeks later, now fully informed of the various offers made to and suggested by the government, and of Gibbs Crawley’s disappointment over their exclusion from the second contract of December 8th, 1841, they wrote: “Congratulate you sincerely on your failure . . . your non success a great relief to us.”84 By this time, of course, Gibbs Crawley had already taken up engagements within the third contract. When they learned of this in May, Gibbs sent off a number of highly intemperate letters to their branch. “I had hoped,” commented William Gibbs, the head of the London house, “the maximum of madness had been reached! Nothing but mental delusion produced by Myers & Co.’s sanguine and exaggerated statements85 could have induced you to forsake the sound mercantile principles we have ever inculcated! Impossible to say what the loss will be.”86 Receiving such letters in Lima, Gibbs Crawley themselves began to have second thoughts. “I fear we have gotten into a serious scrape,” wrote John Hayne, the manager of the firm, in August 1842.87 Eight months later he was still in penitent mood: “we will never get into such a scrape again,” he promised. “It is our first error of consequence.”88
There were very real grounds for such misgivings. The terms of the 1842 contract have already been discussed (a contract, incidentally, which did not finally expire until December 1847).89 Moreover, the price of guano in Britain was experiencing a marked fall.90 The high levels of 1841 were never regained. By the end of 1842 the minimum wholesale price was as low as £10 per ton.91 During the remainder of the 1840s most of the alterations in price carried the level below £ 10 rather than above it.92 There were also problems of competition from currently quite popular fertilizers such as bones and nitrate of soda, and the danger that competition would increase with the growing production of artificial manures,93 or with the possible discovery of exploitable guano deposits in other parts of the world. Guano, it ought also to be remembered, was a new and relatively untried manure. Praise from a few agriculturists and chemists in 1841 and 1842 did not provide a really adequate guarantee for future success. Farmers as yet knew little about how best to apply it, and whatever virtues it possessed could easily be obscured, initially at least, by misuse.94 Doubts too were entertained regarding the trustworthiness of the Peruvian government. It is clear that Antony Gibbs & Sons in London found it extremely distasteful to be in a form of indirect partnership with a government of proven unreliability and uncertain durability. A contract with any government, they wrote to Gibbs Crawley, was by its very nature “deficient in those characteristics we have always laid down for your speculations—Caution, prudence, circumspection etc.”95 Together with Myers, they made unsuccessful representations in 1843 to the Foreign Office in London requesting that the contract rights of their associates in Lima be protected by the British government. In particular they were worried about the repayment of the loans that had been made.96 As it turned out, many of Gibbs’ doubts and fears proved fully justified.97 They did not, however, abandon the trade, and in the end their perseverance was rewarded. Disaster often threatened, but never quite materialized. In the market there were modest commissions to be earned on the sale of guano.98 Gibbs’ total net receipts from commissions and brokerage averaged out at £ 16,980 per annum in the 1840s, compared with only £6,296 in the preceding decade.99 In Lima, on the other hand, net sales proceeds were rarely high enough (i.e., above £6)100 to entitle the contractors to any share in the profits. For earnings, they had to rely almost entirely on the opportunities for bond speculation which the contract allowed them. “Keep us supplied with Bonds,” Gibbs Crawley asked their parent house, “for our profit mainly depends on the rate you buy them at. If Huano is generally used people will surely speculate in them, and we should be early in the field.”101
It has been argued here that the government ultimately became the stronger party in the contractual relationships which it entered in the early 1840s. And this, it should be stressed, established a pattern for the long-term future. It would, nevertheless, be foolish to end on this note, for we should be ignoring the fact that the government’s position was, in certain respects, quite problematical. This brings us back to the whole issue of the defects in the organization of the trade which were alluded to at the beginning of the article. In particular there is the question of the large advances made to the government. These were splendid, up to a point. They were a clear reflection of the government’s considerable bargaining power, and in the short run at least they could relieve certain acute financial difficulties. They did, however, help create a form of organization and a set of relationships which could easily become self-perpetuating, and, therefore, a possible source of embarrassment in the future.102 We may at this juncture step forward into the 1850s to observe the remarks of a Peruvian foreign minister, Gómez Sánchez.
The importance of Huano having been discovered in foreign countries at a time when Peru was involved in a National War, the Government was forced to enter into a contract with the propagators of that manure to advance funds to meet the urgencies of that situation. The first step having been taken, the increasing necessities of the Country obliged it to proceed without stopping in this new and untried line and to contract on each occasion fresh obligations; and although it is true that in the course of fourteen years, the revenue of the country has considerably improved, the method employed up to the present day has taken such deep root and the obligations of the Government with each one of the Consigners are so complicated and so important that if they were to attempt to make an immediate change in this respect the entire Nation would be placed in a Crisis which perhaps it could not overcome although it might exercise all its energy.103
In addition, by being able to raise with facility such large sums of money in a period when their grasp of the levers of power was usually uncertain, when they were obliged through expediency to give financial and other rewards to their supporters, and when they were liable either by design or misfortune to be frequently engaged in external and internal wars,104 Peruvian governments were always faced with irresistible temptations to dissipate the funds they acquired in unproductive expenditures105 and in the prosecution of schemes likely to enlarge rather than diminish their budgetary problems. As has been observed, the form of the 1841 and 1842 contracts was to a considerable degree shaped by the exigencies of the war with Bolivia. It was this connection of the guano trade with the financial—and more basically, the political—difficulties of Peruvian governments that was the principal defect of the arrangements as concluded. To level vague accusations of economic imperialism against the foreign merchants who formed the main link in this connection not only implies overestimation of their power, but detracts attention from the central weakness of the contract system. For this weakness, the main responsibility must lie with the Peruvian government. It was a flaw which was to plague the trade in the future and seriously jeopardize its success.106
D. K. Fieldhouse, “ ‘Imperialism’: An Historiographical Revision,” Economic History Review, 2nd ser. 14:2 (1961), 202.
Fredrick B. Pike, The Modern History of Peru (London, 1967), p. 98.
Heraclio Bonilla, “Aspects de l’histoire économique et sociale du Pérou au XIXè siècle” (unpublished doctoral thesis, Paris, 1970), p. 210.
J. V. Levin, The Export Economies (Cambridge, Mass., 1960), in particular pp. 68-73.
See, inter alia, ibid., pp. 91-108; C. A. McQueen, Peruvian Public Finance (Washington, 1926), pp. 36-40, 85-88; Emilio Romero, Historia económica del Perú (Buenos Aires, 1949), Ch. 15; Marie Robinson Wright, The Old and the New Peru (Philadelphia, 1908), pp. 285-286; Edwin M. Borchard and William H. Wynne, State Insolvency and Foreign Bondholders (New Haven, 1951), II, 109-123.
Lodged in the Guildhall Library, London. The most useful material is contained in “Antony Gibbs & Sons, Ltd., merchants and foreign bankers, of 22 Bishopsgate. MS 11, 047. Extracts of correspondence between the London head office and others concerning the firm’s guano business”. References to these extracts will take the form GGC (Gibbs Guano Correspondence), with date.
For accounts of the formation of the deposits and their exploitation before 1840, see William Walton, “Guano, Its History and Uses Among the Peruvians,” Journal of Agriculture, October 1844, 592-637; Robert Cushman Murphy, Bird Islands of Peru (New York and London, 1925), pp. 28-93, 157-181; Preston E. James, Latin America (London, 1959), pp. 191-192; Levin, Export Economies, pp. 29-30.
C. W. Johnson, “On the Guano,” Farmer’s Magazine, 2nd ser. 4 (1841), 266; Robert Craig, “The African Guano Trade,” The Mariner’s Mirror, 50 (1964), 26; GGC, February 4, 1842.
Public Record Office, London, Foreign Office Archives, Peru (cited hereinafter as FO 61 or FO 177), 61/82, Wilson to Palmerston, April 15, 1841; Levin, Export Economies, p. 49; Bonilla, “Aspects”, p. 204.
J.-P. Faivre, “Le début des exportations de guano péruvien (1841-1849),” Revue d’histoire économique et sociale, 37 (1959), 118.
Ibid.; Levin, Export Economies, p. 50; Bonilla, “Aspects,” p. 204.
GGC, February 4, 1842; Faivre, “Le début des exportations,” p. 118.
FO. 61/82, Wilson to Palmerston, April 15, 1841.
Ibid; see also FO 61/71, Wilson to Palmerston, April 30, 1840.
Bonilla, “Aspects,” pp. 204-205; see also Faivre, “Le début des exportations”, p. 118.
Ibid; Bonilla, “Aspects”, p. 205.
Contemporary evidence indicates that these were payments, not loans as some authors have implied. See, for example, FO 177/16, Wilson to Palmerston, December 18, 1841; FO 61/81, Wilson to Palmerston, December 22, 1841; FO 177/68, Sulivan to Clarendon, May 12, 1857.
FO 61/82, Wilson to Palmerston, April 15, 1841; FO 61/81, Wilson to Palmerston, December 22, 1841; Bonilla, “Aspects”, p. 205.
FO 177/16, Wilson to Palmerston, December 18, 1841.
Assuming, that is, that Allier had acquired the paper in the first place by buying it at the low market rate for purposes of speculation.
F. M. L. Thompson, for example, calculates that in the periods 1832-36 and 1837-42, the annual average quantities of imported bones available to farmers were 16,900 and 46,390 tons respectively. “The Second Agricultural Revolution, 1815-1880,” Economic History Review, 2nd ser. 21:1 (1968), 75.
Quoted in The Times, July 30, 1841, p. 4.
James Johnston, “On Guano,” Journal of the Royal Agricultural Society of England, 11 (1841), 319.
See GGC, July 1, October 1, October 15, November 23, December 17, 1841; February 4, 1842; Johnston, “On Guano”, p. 318; Levin, Export Economies, p. 52.
See Levin, Export Economies, p. 86.
FO 61/81, Wilson to Palmerston, December 22, 1841.
GGC, November 16, 1841.
Levin, Export Economies, p. 52.
Basically because it provided the Peruvian government with the security necessary for borrowing, not only from the guano contractors, but in the home and overseas money markets as well, leading to the rapid accumulation of debt commitments of massive proportions by contemporary Latin American standards. For relevant statistics see McQueen, Peruvian Public Finance, pp. 5-9, 85-88; L. H. Jenks, The Migration of British Capital to 1875 (London, 1938), pp. 421-423; William Clarke, Peru and Its Creditors (London, 1877), passim.
FO 61/81, Wilson to Palmerston, December 22, 1841.
See Robert N. Burr, By Reason or Force. Chile and the Balancing of Power in South America, 1830-1905 (Berkeley and Los Angeles, 1965), pp. 64, 67; Pike, Modern History of Peru, pp. 84-85.
FO 177/16, Wilson to Peruvian foreign minister, December 1, 1841.
Quoted in ibid.
Ibid. See also GGC, December 18, 1841, in which Gibbs Crawley & Co. report: “Government want all their revenues for military purposes.”
Mentioned by Antony Gibbs & Sons in a letter of March 1842. They had, they told their Lima branch, seen a report carrying this information but considered it “impossible you could be concerned in such a proposal.” GGC, March 15, 1842. See also Faivre, “Le début des exportations,” p. 119.
GGC, December 17, 1841.
Levin, Export Economies, pp. 52-53.
GGC, December 17, 1841.
Or at least an important faction within it.
GGC, December 17, 1841.
Backed again by Myers. See GGC, August 21, 1842.
GGC, December 17, 1841.
Directly from the Peruvian president.
GGC, December 17, 1841. See also FO 177/16, Wilson to Peruvian foreign minister, December 18, 1841.
GGC, April 9, 1842. See also FO 177/16, Wilson to Peruvian foreign minister, December 18, 1841.
The 20,000 limit would only apply in the unlikely circumstance of a government survey of the Chincha Islands revealing that supplies of guano were deficient and likely to be exhausted within a short period of time. See clause 14 of the contract, as reproduced in the British Parliamentary Papers (hereinafter cited as PP), (1852), LIV, 132.
GGC, December 17, 1841; FO 177/16, Wilson to Peruvian foreign minister, December 18, 1841; PP, 1852, LIV, 129-135.
“No State in South America, since the declaration of independence, has suffered more from anarchy than Peru,” commented Charles Darwin when he visited the country in 1835. Journal of Researches into the Natural History and Geology of the Countries visited during the Voyage of H.M.S. “Beagle” round the World (London, 1890), 266. See also Pike, Modern History of Peru, Ch. 3, and Sir Robert Marett, Peru (London, 1969), Ch. 6.
McQueen, Peruvian Public Finance, pp. 4, 37.
See, inter alia, John Arthur Gibbs, The History of Antony and Dorothea Gibbs (London, 1922), pp. 384-386; Charles Milner Ricketts’ Consular Report from Peru, FO 61/8, December 27, 1826, reproduced in full in R. A. Humphreys, British Consular Reports on the Trade and Politics of Latin America, 1824-26 (London 1940); FO 61/26, Wilson to Palmerston, January 15, 1834; FO 61/53, Wilson to Palmerston, September 29, 1838; FO 61/71, Wilson to Palmerston, April 30, 1840; FO 61/82, Wilson to Palmerston, April 15, 1841; Samuel Haigh, Sketches of Buenos Aires, Chile, and Peru (London, 1831), pp. 380-382; Archibald Smith, Peru as it is (London, 1839), II, 13-24, 172-173; J. J. von Tschudi, Travels in Peru During the Years 1838-1842 (London, 1847), pp. 283-284, 307-315, 329-342; Jean Piel, “The Place of the Peasantry in the National Life of Peru in the Nineteenth Century,” Past and Present, No. 46 (February 1970), p. 122; Bonilla, “Aspects,” p. 25.
PP, 1852, LIV, 129; GGC, December 23, 1841.
For information on Michel Montané, a French merchant with wide commercial and financial interests in Peru, see Faivre, “Le début des exportations,” p. 121.
GGC, January 13, 1842.
GGC, precise date not given. The remarks come from one of a number of letters of January and February 1842, which Henry Hucks Gibbs (who compiled the “Extracts of correspondence”) lumped together and presented in précis form. Reference hereinafter: GGC, abstract, January/February 1842.0
Tenders were submitted by the British firms of Maclean Rowe and Hegan Hall, and by a Chilean named Ramos. Ibid, and GGC, February 15, 1842. See also FO 61/88, Sealey to Aberdeen, March 9, 1842.
Quoted in FO 61/88, Sealey to Aberdeen, March 9, 1842.
GGC, abstract, January/February 1842. Michel Montané, acting in association with Puymerol Poumarroux, was probably also party to the agreement. See GGC, January 13, 1842, and Faivre “Le début des exportations,” p. 121.
“Tons register” was the aggregate official tonnage of the carrying vessels. This was something less than the weight of the guano itself: “tons effective”. The ratio of “register” to “effective” was roughly 3:4. See GGC, September 22, 1847, and February 17, 1849.
GGC, abstract, January/February, 1842; FO 61/88, Sealey to Aberdeen, March 9, 1842.
The latter proviso is somewhat obscure. It does not indicate exactly what would happen to the £6 handed over to the government when the ton of guano was first shipped.
It is interesting to note that most of these contractors also tendered for a monopoly in Bolivian guano (a much less consequential trade, as it turned out) at about the same time, and that the arrangement they arrived at with the Bolivian government was considerably more attractive from their point of view. All the proceeds of sales, it seems, were to be shared out between government and contractors on a 6:4 ratio. A figure of £6, therefore, which would grant the contractors no profits whatever in Peru, would yield £2,8s. to them in Bolivia. See FO 126/11, Masterton to Bidwell, March 15, 1842.
The contract obliged them to dispose of at least 120,000 register tons.
See, for instance, W. M. Mathew, “The First Anglo-Peruvian Debt and Its Settlement, 1822-49,” Journal of Latin American Studies, 2:1 (May 1970), 81-87.
FO 61/88, Sealey to Aberdeen, March 9, 1842.
Internal debt paper was fetching only 10-12 per cent of its face value on the market. (See retrospective remarks in FO 177/88, Sulivan to Clarendon, May 12, 1857). Bonds of the foreign debt were selling in London in March 1842 at 16½ per cent. GGC, March 15, 1842.
See Mathew, “The First Anglo-Peruvian Debt”, pp. 86-98; Levin, Export Economies, p. 57.
Immediately prior to the start of the guano trade Antony Gibbs & Sons had accounts with over forty correspondents in Peru. Their names suggest that the great majority were Peruvian, and from a considerable number commodities were received on consignment. The goods included bullion, copper ore, tin, nitrates, bark, hides and skins, wool and cotton. Some of the accounts, as for example with Marcó del Pont of Arequipa, were very large. Antony Gibbs & Sons, Ltd. MS 11,053. Business archives; London head office general ledgers, First series, Vol. 8.
See Mathew, “The First Anglo-Peruvian Debt,” pp. 83-86.
See Ibid. pp. 86-87.
FO 177/16, Wilson to Peruvian foreign minister, December 1, 1841.
FO 61/137, Wilson to Stanley, June 9, 1852.
Levin also makes this point, but in saying that loans put the trade “even further out of the reach of local Peruvians” (my italics) he implies that that it was already beyond their capacity to handle. Export Economies, p. 53. See also his remarks on the inadequacies of Peruvian capital supplies and entrepreneurship (pp. 34-39; 41-44).
Antony Gibbs & Sons, Ltd. MS 11,032. Business archives: South American branches. Lima, Peru. Accounts, 1819-1883. File 2. 1837-1847.
Ibid. MS 11,053. Business archives: London head office general ledgers, First series, Vol. 9.
McQueen, Peruvian Public Finance, p. 37.
FO 61/94, Crompton to Aberdeen, December 14, 1842. And this position of strength was no transient achievement. For a detailed account of the relationship between government and contractors over the two decades that followed, see the present author’s forthcoming book Gibbs and the Guano Trade.
And their main business was focused on the British market. “Holland, Germany and the continent won’t take much,” Gibbs wrote in May 1842. “The Antwerp cargo won’t sell at all . . . England the only market.” Two weeks or so later they commented: “No farmer in France will take it as a gift.” GGC, May 13 and June 1, 1842. The United States, according to one estimate, took no more than 300 tons in the first three years of the trade. Littell’s Living Age, 8 (1846), 374.
“When we consider that the great body of the English agriculturists were ignorant of its existence—that it was the opening of a new trade—under circumstances of at least some doubt and risk, the greatest credit is due to the Messrs. Myers, by whose exertions, and through whose instrumentality this new and valuable auxiliary has been obtained.” A. MacDonald, “To the Farmers of the United Kingdom. Guano,” Farmer’s Magazine, 2nd ser. 4 (1841), 197.
GGC, May 16, June 2, July 12, 1842.
GGC, July 12, 1842; see also December 14, 1842 and June 29, 1844.
GGC, March 15, 1842.
GGC, April 1, 1842; see also April 7, 1842.
His reports to Lima concerning sales and good prices in Britain in 1841. See GGC, August 28, September 30, December 17, 1841; February 4, May 13, August 21, 1842.
GGC, May 16, 1842.
GGC, August 8, 1842.
GGC, April 8, 1843.
Under the original agreement, it ought to have ended in December 1846. In September 1843, however, a three-year extension was granted by the government. (See GGC, January 5, July 15, August 14, September 13, September 16, 1843). This was annulled in 1844 following a change of government. (See GGC, October 16, 1844). After a protracted period of negotiation, a new arrangement was arrived at, guaranteeing a one-year extension in February 1846: this time, however, on the condition that the contractors advanced a further loan of 300,000 pesos. The episode reveals again the considerable strength and bargaining power of the Peruvian government. (See GGC, April 28, August 4, September 3, December 3, 1845; January 31, February 7, April 16, August 26, 1846).
GGC, March 1, April 1, April 15, May 13, July 11, August 13, September 10, September 29, November 2, 1842.
GGC, December 15, 1842 and January 2, 1843.
See GGC, March 8, March 16, 1843; March 15, May 3, 1845; April 24, April 29, May 1, 1846; January 29, November 4, November 16, 1847; April 17, May 16, August 16, 1849.
Competition, wrote Antony Gibbs & Sons in 1843, “is our chief danger for it is plain agricultural Chemistry is in its infancy, and it is impossible to say what discoveries in it may be made”. GGC, May 2, 1843. For a list of some of the manufactured fertilizers already available, see “Synopsis of Manures,” Farmer’s Magazine, 2nd ser. 9 (1844), 266-267.
In the first year of guano’s importation into the United States “every person,” in the words of one commercial journal, “set it down as a humbug.” One of the earliest purchasers had, apparently, applied a destructively large quantity to his grass crop and had threatened to prosecute the seller. De Bow’s Commercial Review, 33 (1855), 762. Writing of Irish experiments, Cuthbert Johnson noted in 1843 that they had been “attended with all the disadvantages arising from a first attempt with a new manure.” “On Guano,” Farmer’s Magazine, 2nd ser. 7 (1843), 173.
GGC, December 6, 1842.
FO 61/101, Gibbs and Myers to Sandon, March 24, 1843; see also Canning to Sandon, May 20, 1843.
See, for example, the tussle over contract-extension rights referred to above, note 89. The greatest problems of all arose from competition with African guano, imports of which began in 1843 and achieved quite massive proportions by 1845. For an account of the African trade, see Craig, “The African Guano Trade”.
The level varied somewhat, but the most usual rate appears to have been 4 per cent of gross sales proceeds, part of this representing a straight sales commission, part of it “delcredere” guarantee. (See GGC, May 13, 1842; April 3, December 13, 1843; January 18, October 16, 1844; October 10, 1846). The consignees were also entitled to pay themselves a small (½ to 1 per cent) brokerage rate if the services of brokers were not employed. (See, for example, GGC, October 24, 1845).
Antony Gibbs & Sons, Ltd. MS 11,053. Business archives: London head office general ledgers, First series, Vols. 5 to 13.
GGC, January 12, July 1, 1844; October 10, December 24, 1846. Official Peruvian figures indicate a net return on all overseas sales over the period 1841-56 of just over £4,15s. (See Pedro Dávalos y Lissón, La Primera Centuria, IV (Lima, 1926), 118; Hunt’s Merchants’ Magazine, 42 (1860), pp. 99).
GGC, October 28, 1843. See also guano accounts in Antony Gibbs & Sons, Ltd. MS 11,032. Business archives: South American branches. Lima, Peru. Accounts, 1819-1883. File 2. 1837-1847.
See Levin, Export Economies, pp. 72-73.
FO 61/144, Gómez Sánchez to Sulivan, 10 October, 1854.
In the early 1840s there occurred, in Fredrick Pike’s words, “a series of incredibly complex insurrections and insurrections within insurrections” in the course of which several men held the presidency for short periods. Modern History of Peru, pp. 87-88. See also Marett, Peru, p. 90; José Rufino Echenique, Memorias para la historia del Perú, 1808-1878 (Lima, 1952), I, 119-140; A. J. Duffield, The Prospects of Peru (London, 1881), p. 91; FO 61/108, Adams to Aberdeen, February 8 and May 18, 1845; FO 61/154, Sulivan to Clarendon, April 11, 1855.
See McQueen, Peruvian Public Finance, pp. 5-6. In so far as enlarged military and administrative outlays helped on occasions to strengthen the position of the incumbent government, they can be viewed perhaps as having had the desirable effect of promoting political stability. See fuan Maiguashca, “A Reinterpretation of the Guano Age 1840-1880” (Unpublished Oxford D.Phil. thesis, 1967), pp. 41-43. The Peruvian body politic did enjoy a short spell of relative peace under Ramón Castilla’s first presidency (1845-51), but it remains to be demonstrated that this was principally the result of increased government revenues from guano. Pike seems to hold the view that Castilla’s strength lay not in the money at his disposal but in his considerable skill and cunning as a politician. Modern History of Peru, pp. 93-94.
See, for example, W. M. Mathew, “Peru and the British Guano Market, 1840-1870,” Economic History Review, 2nd ser. 23: 1 (1970), 112-28.
The author is Lecturer in Economic History at the University of East Anglia. The Research Board of Leicester University supplied funds necessary for the preparation of the article. It is based on a seminar paper delivered in 1970/71 at the Centres of Latin American Studies at Cambridge, Liverpool and Oxford, and has benefited considerably from comments offered in the subsequent discussions.