Reality can turn the preconceived policy of any leader into painful misconception. The overall policy of General José San Martín in his attempt to liberate Peru seemed entirely reasonable in the context of its day, and was the product of a clear vision and a mind unobstructed by either hatred or megalomania. It was to establish a beachhead on the coast of Peru, to gain control of Lima, which he considered the key to Peru, and to use the city as his economic support and as a base for subsequent operations. Furthermore, the acquisition of Lima itself and the absorption of territory beyond it was to be the result of the free acceptance by Peruvians of the idea of independence. San Martin confirmed in private conversation with Captain Basil Hall a short time before his entry into Lima that his policy was “not to advance a step beyond the gradual march of public opinion.” Declaring that he would use public opinion as the “engine” for the establishment of independence, he remarked, “Of what use would Lima be to me, if the inhabitants were hostile in public sentiment? How could the cause of Independence be advanced by my holding Lima, or even the whole country, in military possession?”1

This principle of political action seemed to bear fruit when, after nearly a year of waiting for public opinion to crystallize in his favor, San Martin was able in July, 1821 to occupy Lima, following its abandonment by Viceroy José de la Serna, and with the apparent backing of nearly all of the capital’s important citizens, to proclaim the creation of an independent republic. A total of 3,136 signatures was affixed to the Act of the Declaration of Independence when it was set out for the public to sign. But almost instantly, reality converted what should have been the gradual and stately confirmation of a victory already won, into a prolonged and agonizing crisis of confidence, resulting in eventual failure through inaction, rather than through military defeat. The chief reality, the one upon which military and political events would come to depend, was Lima’s bankruptcy. Secondary to it, and still more important to the eventual outcome of events than were any of the more specific political and military problems shortly to be encountered, was the fact, already suspected by the royalists, that Lima was not the base from which independence could be won.

The powerful and more solidly based royalists had been bitterly divided themselves over the question of Lima’s role as their base of operations. Substantial evidence given by a variety of royalist officials indicates that the core question leading to the army’s overthrow of Viceroy Joaquín de la Pezuela in January, 1821 was the dispute over whether Lima should be abandoned.2 Antonio Vacaro, returning commandant of the naval forces at Callao, said that the royal army was divided into sharply opposing camps on this question, with Pezuela convinced that only Lima’s contacts with the sea held definite promise of aid, while General La Serna and José Canterac, together with most of the professional officers, felt certain they could no longer afford to wait upon the possibility of reinforcements from a confused and weakened Spain. They insisted that the capital’s exposure to both sea and land attack, the difficulty of supplying it while Lord Cochrane’s naval blockade existed, the cost of maintaining a civil government not suited to the state of siege under which Peru lived after San Martín’s disembarkation at Pisco, and the drift of public opinion toward some as yet undefined brighter light, all made it a liability.3 Another supporter of La Serna reported that in June, 1821 Lima was so poorly supplied with food, prices were so high, and the cost of maintaining its militia force so great, that it was only the weakness of the rebels that had thus far kept them from taking all of Peru.4 When La Serna announced to the people of Lima that he and his troops had abandoned the capital, he offered the same reasons, saying that only by falling back to the interior with his troops intact could he rid the coast of the rebels.5

The rebels’ acquisition of Lima benefited them politically, of course, by making the Declaration of Independence possible and by allowing them the semblance of territorial control necessary to proclaim a republic. But the enrollment of a civil population of more than 60,000 under the banner of independence was of no automatic benefit. Now they, as well as the army, had to be fed and governed. If they had provided the fuel for the furtherance of independence, then Lima’s acquisition would have done what San Martín expected it to do. But they did not; indeed, they were an immediate drain on the patriots’ dangerously limited physical and spiritual resources. Although it was totally unforeseen, in terms of their ability to wage war, the patriots’ acquisition of Lima was a liability.

Why? Essentially because when the royalists abandoned the capital they took with them everything necessary for the establishment of a functioning government. They carried into the mountains or deposited at Callao all the bullion in the Casa de Moneda, the treasury itself, the minting machines, the printing presses, the arms and supplies needed to wage war, and even many of the first families of the city. San Martín found Lima truly bankrupt. Within days of his arrival both the cabildo and the Consulado informed him of their insolvency.6 The capital was on the verge of starvation because it was not being supplied with the Chilean wheat it depended upon, the interior was now closed to it, and the neighboring haciendas were disrupted by the runaway of slaves and loss of work animals.7 Just before Lima’s surrender to the rebels, a special agreement between La Serna and San Martín, effective in the beginning of July, allowed for the emergency provisioning of Lima with 3,000 fanegas of wheat and a thousand lots of rice,8 but La Serna calculated that the city needed 4,000 fanegas of wheat a week just to survive.9 Some indication of the food shortage at this critical moment is provided in the report of a royalist writing from Lima just before its occupation by the patriots. He said that 3½ ounces of bread cost one real, as did “three small sweet potatoes,” and he bought two white potatoes the size of eggs, he said, for half-a-real.10 A loaf of bread at this rate might cost the incredible price of one contemporary U. S. dollar. Captain Basil Hall reported provisions so scarce in Lima that in early August he had to sail to Huacho to find both food and water for his ship.11 In addition, circulating specie had almost disappeared, and Lima had absolutely no commerce by sea until the surrender of Callao by the royalists on September 21. On this weak base San Martín proposed to anchor the emancipation of Peru. Lima would not only have to support itself and the army, something it was having great difficulty in doing, but it would also have to support the army’s advance, if there was to be any.

Because of their poverty, now exacerbated by the insupportably high prices, no direct financial aid could be expected from the mass of Lima’s population, the very people who apparently accepted independence with something resembling enthusiasm. Rather, fiscal survival would depend upon the confidence of the capitalists, a group of the population not automatically disposed towards independence and, in addition, very limited in numbers. A royal census drawn up in 1820 showed a total of only 1,463 property owners in all of Lima, and that number included institutions.12 Many of these people, however, were Spaniards or American royalists, and their outright persecution by San Martín’s minister Bernardo Monteagudo caused the virtual decimation of the capitalist class. Many of these families fled to the royalist-held castles at Callao, to the interior, or in a surprisingly large number of cases, back to Spain by sea—usually via Rio de Janeiro now that Panama was independent too. On August 2 the Consulado reported that forty-three Spanish merchants had already fled the city.13 In letter after letter, the refugees attested to the disruption of this class in Lima, “the place where confusion and horror had fixed its throne,” according to Manuel Pardo, former Regent of Cuzco.14 The ship Especulación arrived at Cádiz in March, 1822, carrying on board former Viceroy Pezuela, the Archbishop, two brigadiers, five oidores, the intendant, the prior, the contador, the tobacco monopoly director, one inquisitor, two consuls, and twenty-three merchants, all from Lima.15 After Monteagudo began a policy of forced expulsion of Spaniards, the numbers increased.16 Three hundred were expatriated to Spain on board the Laura, Mercurio, Pacífico, and the Sara. While five hundred were sent to Chile on board the Monteagudo, four hundred more persons waited in Lima to be expelled.17 A refugee officer newly arrived at Cádiz reported that between November 8 and 29,1821, the English ships Gallen, San Patricio, Lord Lindoch, and Cleopatra, and the French Estafeta, left Callao carrying Spanish families, while the American Carabana was receiving more passengers ready to sail.18 The Consul in Rio reported that refugees paid up to 500 pesos for their passports from San Martín, and 2,500 pesos for passports from Cochrane.19 By January, 1822 the government’s official policy was to require all Spaniards—later restricted only to unmarried men—who had not acquired a letter of citizenship, to leave the country, giving up half their goods to the state.20

Although there is no method of estimating how many loyalists fled Lima, Gaspar Rico, a royalist in the sierra with the viceroy, said in 1824 that the total number of Spaniards expatriated or massacred by the revolution in Peru in the last three years was over 12,000.21 While this figure has only the spirit of partisanship to substantiate it, there is no question that the capitalist class in Lima was severely disrupted. In July, 1821, only a week after taking Lima, San Martín found so many merchants had fled that he ordered all business establishments owned by Spaniards to reopen within three days or face confiscation.22 Basil Hall testified that by July, 1822 “the ruin of the old Spaniards was complete.”23

This forced flight of the Spaniards and other loyalists was a political error that caused widespread bitterness and terror and eventually resulted in the popular overthrow of Monteagudo. It was also an economic catastrophe that threw into disarray the most economically active portion of the population, wiping out the accumulated value of properties, businesses, and haciendas. This in turn, nearly strangled the republic’s tax base. Every royalist food supplier or hacendado wiped out was one vital part of the economy that had been weakened. Most unfortunate is the fact that the widespread expropriations and confiscations of royalist property did not directly benefit the republic in its principal task of paying the expenses of an army. Not only could the value of these properties not be converted into usable form, but many of the haciendas involved were no longer producing because of the loss of slaves due to runaways and conscription into the army. By January, 1822 San Martín’s forces included perhaps a majority of slaves (one contemporary estimated 4,000-5,000), and in the previous year the royal army had conscripted another 1,500 slaves. All of these were from the Lima region.24 Most of the slaves conscripted by San Martín were destined to make up the civil militia; later a Batallón de Cívicos Pardos was created. In times of crisis, as in September, 1821 when General Canterac’s army drew near Lima for the first time, the slaves in general were armed.25 The slaves of Spaniards who fled were automatically to be incorporated in service and given their freedom.26 And in April, 1822 the government called up a fifth of all the capital’s slaves and a tenth of those in the environs, promising to reimburse their owners within two years.27

The effect of this use of the slaves was easily foreseeable. In March, 1822 a group of hacendados in the Valley of Cañete complained to the government that seizure of some of their slaves by a patriot expeditionary force had caused their remaining slaves to flee, leaving the land unworked. The administrator of the estate of a Lima city council member wrote with the simplicity of an unlettered man to testify that the patriot army took two out of every ten slaves and almost all the oxen in one sweep south of the capital, and the haciendas were consequently ruined.28 Even though conscription was supposed to result in eventual freedom, the remaining slaves almost invariably ran away. This immense disruption affected far more people than might be supposed, for the region around Lima, unlike the rest of Peru, contained a large slave population. In 1814 the royal government estimated there were 12,263 slaves in the environs of Lima (partido del cercado), and 30,000 slaves (⅕ the total population) in the province as a whole.29

Even when the government managed to confiscate haciendas that were still being worked, the impossibility of finding buyers for them meant that it made no cash profit from them. Some haciendas were put to work supplying food and livestock for the army, as for instance the two haciendas of the religious order of Buenamuerte, whose Father Provincial was ordered to turn over all their produce to the state.30 Another compromise was to use haciendas still privately held to graze the extensive herds confiscated from others. In December, 1821 the Gaceta published a list of seven large haciendas whose owners had taken a total of over 8,500 head of state-owned cattle to graze.31 Another group of valuable properties, with a total value of over 500,000 pesos, was distributed in December, 1821 as reward to various leading rebel officers. Distribution by lots was undertaken by the Lima cabildo, although many of the officers renounced their gifts.32 But most of the properties were merely abandoned and did not directly benefit the war effort. Consequently, it may not be presumed automatically that the seizure of even certain unusually valuable properties, such as the hacienda of José Antonio Prada (an American who refused to sign the Declaration of Independence), valued at 700,000 pesos, or the very valuable haciendas and urban properties (including 307 slaves) of Juan Bautista Lavalie (intendant of Arequipa), was of any direct benefit to San Martín’s regime financially.33 It largely represents, rather, politically motivated but economically unwise despoilation of much of the capital value of the foremost properties around Lima. Basil Hall declared that, although the persecution of the Spaniards was largely Monteagudo’s doing, San Martín himself still had to bear the blame, for “it will not avail San Martín’s friends to say they were the acts of another, for he was notoriously the main-spring of the whole government.”34

As a result of this disruption of the haciendas, Lima’s food costs remained very high, though considerably reduced over the levels in the last months of royalist control, and imports of wheat by sea from Chile or coastal Peru were the chief source of bread. Within a month after San Martín’s occupation of Lima the cabildo set the price of bread at ten ounces a real. At first the bakers did not cooperate, and stiff penalties were set for suppliers who sold at higher prices.35 In the last part of 1821 the price of bread was published monthly in the Gaceta for the information of consumers.36 The cabildo, which received the revenue from duties paid on wheat sold in the city, complained that wheat merchants were not reporting accurate figures so as to avoid entry duties.37 As a whole, it seems that the government’s very rigorous attention to the provisioning of the capital led to an overall improvement in supply—as compared to the period before September, 1821 when Cochrane’s fleet blockaded Callao—but that prices remained very high, especially in view of the dangerous shortage of specie. It was not until October, 1822 that the Gaceta could editorialize, in response to royalist propaganda saying that Lima was starving, that “provisions abound at present in Lima, we eat good bread and not yuca coils or maize pies as in the time of Spanish dominion.” When it added “that never have more consumer goods been seen in Lima, nor at more comfortable prices,” it overstated the case considerably, for while prices may have been lower, they were not low, and the shortage of specie meant the poor were very hard pressed.38 A common soldier enrolled in the Batallón de Cívicos Pardos, for instance, was paid two reales a day.39 At official prices, it would thus require his entire salary to buy only 20 ounces of bread a day, hardly enough to feed dependents if he had them, much less to buy anything else.

Owing to their commitment to public opinion the patriots published monthly reports in the Gaceta of the income and expenses of the public treasury, and the authenticity of their individual items is often to be confirmed by nonpublic statistics found in the documents. Their publication in the official propaganda organ is all the more striking because the figures show how startlingly weak the new state was. The first published figures, representing September, 1821, show total income to be only 130,659 pesos. The point to be emphasized, however, is that only about 30,000 pesos of this was produced by what we might call regular or dependable state sources of revenue—in this case from leftover sums in the customs at Lima and Cerro de Pasco, and from the administration of tobacco—while all the rest derived from private donations, confiscations, subscriptions, sales, and other non-renewable or irregular sources. The expenses, however, went for essential and regularly expected items, hard realities. On the average, four-fifths of government expenditures were for military purposes, listed under one heading or another.40

This continued to be the essential weakness of the treasury until long after San Martín retired from the scene. Figures for September, 1822, his last month as Protector, show the same problems. While income had been considerably expanded, totalling 203,949 pesos, at least half of it was still coming from irregular and even what might be called “artificial” sources, for credits extended to the government by the Paper-Money Bank were counted as revenues, and so were some pledges of contributions, whether or not actual payments were forthcoming.41 The hard reality of the cost of maintaining a military and civil government was often covered up by transfers of funds from one branch of the government to another, which was then counted as revenue.

The truth of this only became evident when, after San Martín’s resignation and the accession of Congress to power, the Minister of Hacienda, Hipólito Unánue, informed Congress in December, 1822 that actual income from ordinary means, without donations and other irregular sources, for the last six months of 1822 was 735,000 pesos, while actual expenditures were 1,526,000 pesos. Of this expenditure, over 1,200,000 pesos, or 80 percent of the total, was for military purposes.42 In other words, what Unánue termed “actual ordinary revenue” covered less than half actual expenditures. Furthermore, the number of these budgetable and renewable sources was remarkably limited. They consisted only of the profit from the Casa de Moneda, income from customs, income from the Cámara de Comercio (the renamed Consulado), income from the tobacco monopoly, funds used by the state from the Dirección de Censos (the ancient trust fund for the Indians), income from the state auction house organized a few months earlier, income from the free presidencies (departments of the republic), and income from some traditional taxes on officeholders. It is no wonder that the government, a month after proclamation of the republic, offered a reward of 2,000 pesos to the person presenting the best plan by which to regularize the economy of Peru.43 There is no indication anyone was able to do so. It should be noted that with expenditures of about three million pesos a year, the republic was spending as much, despite the restricted territory it controlled, as the viceroyality spent on the average under Viceroy Abascal. Since revenue contributions from the other free presidencies were so small, almost the entirety of the republic’s revenues had to be derived from the presidency of Lima.

For the republic, as for the viceroyalty, the greatest single regular source of revenue was customs duties. Reopening and regularizing foreign and Peruvian trade at Callao was top priority. The surrender of Callao in September, 1821 by Canterac, while it seemed to prove the royalists’ public claim that they did not need or want Lima or Callao, permitted the reopening of the Pacific trade that Lima depended upon. San Martín immediately declared the port open to all ships, estabfishing a customs duty of 20 percent for foreign ships, 18 percent for Chilean, Argentine, and Colombian, and 16 percent for Peruvian.44 Duties on specific foodstuffs were very small to encourage their trade. Occasionally prejudicial duties were levied to encourage domestic production, as when foreign liquors were ordered to pay 80 percent customs, while liquors from Pisco and Nasca were taxed at from 7 to 20 percent.45 Very low duties were set for the Peruvian coastal trade. In May, 1822 the need for foodstuffs was still so great that the Supreme Delegate of San Martín, the Marqués de Torre Tagle, ordered all foreign and domestic ships introducing wheat, meal, rice, meat, or feeds, to pay only the duties imposed on the coastal trade.46 Lima’s absorbing interest in foreign trade was indicated by the fact that the Gaceta published, whenever it received them, complete copies of the trade regulations of such newly independent South American states as Mexico, Panama, and Chile.

The bottleneck at Callao having been broken, Lima’s trade did experience an immediate rush of activity. Immediately following the royalist surrender of Callao, from September 28 to October 15, a total of twenty ships anchored. From October 16 to November 12 twelve more arrived, but thereafter the trade became more irregular.47 It cannot be said to have been really brisk except for that one brief period, and this sudden influx probably consisted of ships that had been cruising off the coast for some time waiting for the insurgents to extend their control to Callao. Of the ships whose arrival was publicly announced in the Gaceta, most carried foodstuffs. There is only one vessel listed that carried the even more desperately needed armament to supply the war effort. This was the Anglo-American Mercurio, from Valparaiso, carrying 11,000 muskets, 6,000 sabers, and 500 artillery rifles on contract to the government.48 This trade was one way, however, for when the ships leaving Callao were listed, they often carried only ballast. Revenues from customs duties thus remained agonizingly irregular amounts ranging from nothing in August, 1821, to 100,000 pesos in April, 1822, but with most months averaging under 40,000 pesos.

The scarcity of dependable revenue sources, as we have seen, required San Martín’s republic to depend upon voluntary and forced contributions for half its income. This, of course, was the sort of revenue base that was actually counter-productive, for the bitterness it often aroused among all but the most enthusiastic supporters of independence was politically damaging to the cause. Donations that were genuinely voluntary accounted for very small sums. Most of those that were listed in the Gaceta as voluntary were the result of social and political pressure. While slaves might volunteer their services, convents and housewives offer their skill as clothiers, hacendados their produce, and gentlemen their cash, it was at all times clear that this was a situation in which anyone not actively with the republic was to be considered against it. In January, 1822, for instance, the government announced that persons who intervened on behalf of the interests of Spanish nationals, or who bound themselves through personal ties with such enemies of the state, would have their names published in the Gaceta, so that the public might know those who prefer personal affections to the high interests of justice and of politics.”49

Nothing that could be of benefit to the army was ever rejected when offered. Convents were assigned quotas of shirts to sew, supposedly following an offer to that effect made by them.50 Voluntary cash subscriptions were constant, and to add some way of collecting pledges the government in June, 1822 reminded citizens that debtors to the state would be denied their vote in the upcoming congressional elections.51 The cabildo organized direct donations in money and kind for the immediate benefit of soldiers, and lists of donors were maintained by the alcaldes of the barrios—and frequently published.52 On one occasion the Marqués de Torre Tagle asked for voluntary cash subscriptions with no total goal in mind, as long as donors would actually fulfill their pledges.53 The Conde de Montemar put on a series of public bullfights to raise funds for the state,54 and the Coliseo de Comedias gave the income from one of its presentations.55 But voluntary contributions, no matter how heartwarming to enthusiasts of the cause, produced far too little revenue.

Forced contributions of almost every description were therefore essential. The groups from which the largest sums were required were the merchants and the Spaniards. In August, 1821 San Martín ordered the Consulado to collect a loan of 150,000 pesos for the government within six days, but since it could not comply, the government simply confiscated 105,000 pesos outright.56 Cash contributions from the members of the Consulado appeared in nearly every monthly financial statement, always in addition to the revenues the state normally acquired from that tribunal. The cabildo, after being assigned a quota of 30,000 pesos, complained that it could not collect such a sum from leading citizens except by “extortion.”57 In April, 1822 the Spaniards still living in the city were forced to give a contribution totalling 110,000 pesos.58 This constituted real extortion, for the Spaniards lived under a constant threat of persecution. Just after Congress took power a huge contribution of 400,000 pesos was levied against the merchants.59 Rather than pay their assigned portion of this levy, the entire community of British merchants in Lima asked for their passports, through the good offices of Captain H. Prescott, senior officer of the British fleet in the Pacific, whose flagship was then anchored at Callao. This would have constituted a real disaster, for Peruvian representatives were even then in London negotiating for loans. Ultimately the British merchants agreed to settle for a quota of 73,400 pesos instead of the 100,000 pesos assigned them, but the government insisted that their nationality did not exempt them from future contributions.60

At times the government even resorted to outright violence, as in August, 1821 when soldiers were sent to raid the convent of San Francisco, where a cache of money was falsely reported to be hidden in the basement.61 More often, soldiers were sent out to sweep down on neighboring haciendas and confiscate oxen and other livestock. This was done so often that it threatened the city’s food supply.62

The government also found it necessary to retain various methods of taxation from the days of the viceroyalty. For instance, San Martín decreed that the sale of indulgences and cruzadas would continue unchanged, as a right of the people granted by the Papacy and unaffected by the overthrow of the Spanish government. The Spanish media annata, the tax on holders of public office, continued in effect also. And while the ancient tax on ecclesiastical offices, called the anualidad eclesiástica, was abolished, it was replaced by a new contribution from clerical salaries.63

All these taxes and contributions were imposed only at the political peril of the state, for there was a widespread attitude on the part of the common people that independence would mean the abolition of nearly all taxes and duties.64 To them, indeed, that was the only immediate purpose of freedom from the yoke of Spanish tyranny.” The most significant Spanish tax abolished by San Martín was the Indian tribute, which had, however, been abolished under the rule of the Cortes and therefore lost much of its propaganda appeal.

But no matter how severe the problem of revenue was, from the first to the last moments of San Martín’s presence in Lima the overriding economic difficulty was the almost total absence of circulating specie, metal money. It was caused by such things as the Spaniards’ removal of the Casa de Moneda reserves when they fled Lima, by the destruction of the mining industry and the fact that the interior was largely closed to the republic, and by the flight of loyalist families before controls on the export of specie from Lima could be established. Finally, the seizure by Lord Cochrane of the republic’s bullion reserves—which had been removed for safekeeping to Ancon in September, 1821 when Canterac made his first approach toward Lima—was a stunning blow. It constitutes proof, as Cochrane claimed, that the republic was not paying the navy what it had promised. More important, these metal reserves, valued at perhaps 400,000 pesos and belonging almost entirely to the state, constituted nearly everything San Martín had been able to scrape together. The royalist propagandists seized with glee on this indication of dissension within the patriot ranks,65 while the government in Lima was so shocked that it even published in the Gaceta an itemized list of what Cochrane had stolen.66 Months later the Ministry of Finance still blamed Cochrane for the inability of the Casa de Moneda to produce sufficient coins.67

No number of emergency measures, adopted by the government both before and after the Cochrane seizure, could solve this fundamental problem of a shortage of specie. The government prohibited anyone from leaving Lima with more than 100 pesos without authorization, and even seized 10,000 pesos from the Consulado to permit the Casa de Moneda to purchase what little bullion there was available from miners.68 In December, 1821 it established penalties of five years in the presidio and confiscation of all goods for any person hoarding even the smallest quantities of bullion.69 Duties were placed on the approved export of minted gold and silver, but the export of bullion and worked gold and silver was prohibited. To create a purchase fund totalling 100,000 pesos, inversions of capital in the Casa de Moneda were invited by the offer of 6-months bonds at 6 percent. The mint set an attractive and firm purchase price for bullion (16 pesos the ounce of gold), and promised full payment in 25 days or less, with no tax on the sale.70 All these were unusually vigorous restrictions and concessions, but they did not help significantly because there was simply too little silver available.

Everyone recognized that only mining could provide the silver they lacked, and great attention was paid to the attempt to reactivate the industry. The production of the mines was nearly cut off, owing to the abandonment of many of them, the disappearance of the chief capitalists (one Spaniard who fled Peru, for instance, owned 420 mines), the dispersion of workers, the loss of animals, the shortage of mercury, and the devastation of provinces like Pasco that had been major producers. San Martín issued a statement in October, 1821, in which he made it clear that he considered the mines central to his success. Calling them the “patrimony of Peru,” he announced the creation of a General Directorate of Mines in Lima to replace the old Mining Tribunal. Chief priority was the creation of a system of exchange banks for the state purchase of bullion at Pasco and Huancavelica.71 Dionisio Vizcarra, first director-general of mines, published his plan for the reform of the industry and the creation of the exchange banks in November.72 Since unusually large investments were required, letters of Peruvian citizenship were offered to any Spaniard who would invest in these banks. Even if the republic’s control of the highlands had been more secure, however, no immediate improvement in revenues from mining could have been expected, for to get the industry producing again, would have required years of massive investment well beyond the capacity of Peru.

The shortage of specie made the purchase of everyday goods, much less the payment of contributions and duties, nearly impossible. Unless the most extraordinary measures were taken, the state would collapse. The situation was so desperate that Chilean coins were declared legal tender at face value in Lima.73 By the beginning of 1822—all attempts to acquire a reserve of metal having failed—the republic was noticeably in trouble. Not only had the navy deserted over the failure to be paid, but the troops were reported by royalists to be extremely discontent with the government, many of them having not been paid in some time. Widespread desertion lowered troop levels to as few as 4,800 men, and some observers thought that nearly the entire army was composed of slaves. San Martín’s leadership was widely questioned by many of his officers, and he himself had retired to the former viceregal country residence Magdalena, where he lay dangerously ill. The government was entirely in the hands of his ministers. No more than 500 of the original contingent of Chilean troops remained. The soldiers, reported Ramon del Valle, a royalist, “are badly paid and most are barefoot.” Former audiencia member Juan Bazo y Berri sniffed Siempre son soldados de pintura y nada más.”74

In this grave crisis, only five months after the proclamation of independence, Hipólito Unánue, the Minister of Finance (who had the extraordinary characteristic of being non-aligned in most of the petty squabbles that rent the rebel command) announced the creation of Peru’s first bank. Its purpose was to issue paper money—artificial money —by which the state hoped to salvage its credit and compensate for the lack of metal. Called officially the Banco Auxiliar del Papel-Moneda, it was the boldest, and least successful of the San Martín government’s attempts to rescue itself from economic destruction.75

On December 1, 1821 San Martín announced that paper bills to a total value of 500,000 pesos (the equivalent of 500,000 U. S. dollars of its day) would be issued. In the absence of any firm backing, the paper money was to be supported by the good name of the cabildo, Consulado, and Dirección de Censos.76 Owing to the greatly restricted flow of trade, a plan of the Consulado by which the bills would be financed by 6 percent of the customs duties was not accepted.77 Nor were the religious endowments, annuity funds, and other investments of the supporting corporations tapped, since the credit of the cabildo, Consulado, and Dirección de Censos depended upon them. The paper, in other words, had no financial backing. The government gambled on the slender possibility that paper currency would permit the population to carry on daily transactions while grants of paper to the government would be counted as state revenue and used for nonessential purchases, thus reserving metal to pay the troops and buy supplies from foreign ships. Distribution of the paper began on February 1, 1822, with the state paying its debts half in paper and half in coin (except the Casa de Moneda, which for the purchase of bullion could only pay with coin). Private persons were invited to apply for loans in paper as well. The Ministry, which had investigated the whole question of paper currency as carefully as it could before going ahead with the plan, also published a pamphlet explaining to the people its necessity. Basic distribution occurred in bills of 8, 4, and 2 reales, but limited numbers of larger bills, some as high as 500 pesos, were also issued in the first months.

No better indication of the republic’s financial crisis could be found than its decision to resort to the issue of paper currency. Despite a certain air of bravado in public statements—the Bank was once dubbed the primogenitor of Peru’s liberty—everyone recognized that the enterprise involved dangers. The risks they recognized, however, were not the real ones. What they feared most was a lack of public acceptance. Nearly every precedent they knew of had broken up on the rocks of public suspicion. It does not seem to have occurred to them that the real risk was lack of backing for the paper, which in turn caused popular discredit. San Martín himself had seen South America’s only other paper currency, the Argentine experiment of 1817, fail utterly.78 The closest precedent for the operation of a bank was the Spanish Bank of San Carlos, which had collapsed during the Napoleonic invasion with debts of 40,000,000 pesos owing to it. In Peru itself Viceroy Abascal in 1815 had attempted to issue government notes at 5 percent interest, guaranteed by the Royal Treasury and receivable by the viceregal government in payment of all debts. Public suspicion of the financial promises of the government caused these notes to lose their credit instantly.79 Since the Peruvians did not recognize the difference between paper money and bank notes, merely viewing them both as substitutes for money—a mistake made even in the most developed European nations—the absence of backing for the paper did not deter them. As one memo to Unánue put it, this type of currency was widely employed by “all the most advanced countries.”80

How did the public receive the paper currency? Since the patriots themselves were wary in the first months of speaking out against the paper lest it spoil its chances of having a fair trial, our best source is the testimony of royalist refugees stopping at Rio de Janeiro. Antonio Jaraneo testified in February, the same month the paper began to be issued, that it was “without circulation or credit.” The public fear of a flood of paper currency is indicated by his statement that the paper issue was a million pesos, while, in fact, at no time was it supposed to exceed half a million.81 Using this fear, the royalist propaganda sheet El Depositario, published with La Serna’s army, declared that San Martín himself was the agent of “some usurious businessmen with whom he has been associated for four years in the enterprise of ruining our people in order to increase their private fortunes.” The fact that San Martín had recently announced Peru’s recognition of the nonmilitary debt of the former viceregal regime seemed to add strength to the argument that he was now creating artificial funds for its payment.82 The public reaction against paper money, at any rate, was almost immediate, and by October, 1822 even the Gaceta recognized the fact when it declared that it “has given us some small discomfort, but we put up with it with pleasure because it is a method of putting an end to the Spaniards.”83

The principal problem with the whole enterprise is that it was too obviously an example of the government’s trying to get something for nothing. After the Conde de San Isidro became director of the Bank in March, 1822,84 the Bank itself began to urge the authorities to be more responsible. For instance, to encourage use of the paper for everyday activities, the government decreed that all private and public debts of more than ten pesos had to be paid half in paper and half in coin, but state offices were ordered not to receive paper in payment for any debts contracted before February, 1822 when the paper first appeared.85 Although this latter problem was soon corrected,86 the govemment refused to receive paper in payment for the several large forced donations it ordered in April and May, and the High Court of Justice refused paper in payment for fines. Yet the government paid in paper its own costs and some of its salaries (nonmilitary usually).87 This, of course, was the only way the paper could have been made effective; that is, the only way it could have permitted the government to increase its metal reserves, but it also meant the paper would never have credit.

By the end of six months of paper circulation the state’s financial position had not improved. In September, October, and November, 1822 the troops were being paid only two-thirds their salaries, while civil employees were paid only one-half theirs (as they had been since the first month of the republic’s existence).88 By this point the Bank had also fallen so far behind in its collection of loans that it was granted powers to bring suits against its debtors. No one could receive passports to leave Peru without its permission.89 The Bank was also given control over the Montepío de Arinas, a major annuity fund, and was allowed to use its interest to cover expenses.90 Later it was given control over the Dirección de Censos, the nation’s largest single annuity fund, for the same purpose.

In February, 1822, only a month after creation of the paper currency, the government created a new copper coin, valued at two reales, to take the place of the silver cuartillos which had completely disappeared from circulation.91 Meant as a short-term proposition, with the coins stamped “Provisional,” they immediately became the basic medium of exchange in the marketplace. Though they had almost as little value as paper bills, the population preferred them, owing to the fact that copper had some intrinsic value, and they consequently destroyed any possible acceptance the paper might have had. No records were left to indicate the total amount of this copper minted, but Camprubi Alcazar thinks it was less than the total of paper.92 The copper issue was born and died of the same causes as the paper issue, but before it disappeared from the scene completely it was employed to amortize a large portion of the paper in circulation. No matter what else might be said about the state of Peruvian finances, it is surely a signal mark of Unánue’s brilliance that he was able to amortize one artificial currency with another.

The paper currency was so clearly and speedily a failure that the government publicly recognized the fact, and on August 12, 1822 ordered its extinction.93 By then a total of 397,000 pesos were in circulation. Of that sum, 350,000 pesos had been granted to the government, and since the Bank was permitted to charge 2 percent for its expenses, it figured the state owed it 357,000 pesos. Each time the Bank delivered paper to the government a contract specifying time and terms of payment was agreed to (usually calling for half the payment in metal), and by August the state owed the Bank over 180,000 pesos in metal, the remainder in paper.94 Even as a bookkeeping exercise, then, the Bank had failed. As a medium of exchange, paper’s lifetime had not exceeded six months.

But, as the government soon discovered, amortization of the paper was considerably more difficult than putting it into circulation in the first place. The original plan for partial amortization, by which merchants were asked to give the government 140,000 pesos of the paper— to be reimbursed with rights over the customs duties for the next three months—was a total failure. In three-months’ time only 30,000 pesos were amortized, and it all came from one man, Diego de Aliaga.95 The government’s credit was so low, and the number of ships anchoring at Callao so few (as Riva Agüero admitted on August 20)96 that wealthy holders of the paper refused to surrender even a worthless currency for a percentage of custom revenue. The royalist refugee José María Ruybál wrote that the failure of the first amortization scheme clearly proved the San Martín government was totally without probity.97 In terms of national finance it seems to have been true, for the situation was this: although the paper money was not accepted by the populace, the state’s credit was so low that people would not surrender it for anything but metal. But after six months of operation, the currency had so far failed in its objectives that there was still no extra metal on hand. The cabildo, for instance, continued to pay its debts in paper for another year, claiming it had no metal.98 The failure of the amortization scheme was a crippling blow to the government’s credit.

San Martín surrendered the government of Peru to the Sovereign Constituent Congress on September 20, 1822, just as it was clear the first amortization of the paper currency had failed. The remainder of the saga of the paper, which lies outside the time limits of San Martín’s Protectorate, may be briefly summarized. In December, 1822 the government of the Congress ordered the Bank, over the protests of its own directors, to issue a new paper stock to bring the total in circulation to the full 500,000 pesos originally called for.99 Obviously, Congress’s financial crisis was even more intense than San Martín’s had been. In early 1823, following the election of José de la Riva Agüero as President of the Republic, the partial amortization of the paper was again ordered, this time by exchange for copper. Amid widespread disorders and riots of soldiers, direct exchange of paper for copper began in May, 1823,100 only to be violently disrupted by General Canterac’s occupation of Lima from June 16 to July 17. The patriot government took refuge in Callao, where Riva Agüero was deposed by Congress and replaced by the Marqués de Torre Tagle, Supreme Delegate for the Liberator Bolívar. Torre Tagle proceeded to complete the amortization of paper by exchange for copper and by having some government agencies, such as the tobacco monopoly, accept only paper. Meanwhile, the copper itself was collected by ordering its acceptance for payment in other government offices and by exchange at the rate of 75 pesos to each 100 with government notes drawn on the first of the great loans from London just then being finalized. Deflated copper was employed to amortize worthless paper, and then was itself redeemed by exchange at a 25 percent discount on borrowed money. That was really robbing Peter to pay Paul. In December, 1823 both the copper coins and the paper bills were destroyed.

The paper money experiment was a total failure from the very beginning. It was Unánue’s and San Martín’s boldest move, motivated by necessity, and its failure marked the nadir of the fledgling republic’s economic problems. More than that, it marked the public manifestation of the failure of San Martín. There was, however, no lack of initiative here, and no failure to act, on the leader’s part, as the existing historiography would have it. He had acted, and boldly, even daringly, but to no avail. Even as distribution of the paper currency was first getting underway in February, 1822, it was clear to most observers that something had gone terribly wrong with the drive for independence. When the newly formed Patriotic Society announced three topics for an upcoming essay competition, one of them was “An essay on the causes that have retarded the revolution in Lima, compared to its earlier successes.”101 The chief cause was the revolution’s inability to become financially self-sufficient. These economic difficulties were a basic cause of San Martín’s failure, for they prohibited him from undertaking a military offensive, while simultaneously causing the discredit of his government and the loss of popular confidence in independence itself. The much-commented-upon malaise of the San Martín phase of the revolution—which is said to have been his lack of initiative—was perhaps owing to this. It is true that Peruvians had not risen up to join his cause. Why should they? The republic showed itself less able to meet the real needs of the population than the royalist regime had.

It is not so much that San Martín chose not to launch a military offensive against an inaccessible and well-trained royal army. The emphasis should be, rather, on the fact that he could not do so, because the patriots’ inability to find sufficient resources caused the virtual disintegration of the army. The highly skilled and disciplined troops San Martín brought with him had long ago left Peru or been lost in skirmishes with the enemy. The navy, the most competent in existence in the Pacific after the British, deserted after it was not paid, and tire new Peruvian navy was not yet functional. The young republic was left with an army of slaves and conscripts, whose meager salary and upkeep still cost 80 percent of all revenues. Even so, the soldiers were so poorly supplied that they were selling or pawning their uniforms.102 Maintaining this armed but undisciplined military, composed of untrained troops with nothing to do, led to widespread robberies and petty crimes. Public order disintegrated. Such an army was clearly not competent to be launched against La Serna’s veterans, even on the coast, much less in the highlands. The man who forged the Army of the Andes out of his sheer skill and ability knew that.

Meanwhile the government had recognized a national debt of nearly 6,500,000 pesos, a figure arrived at after it refused to recognize another 11,700,000 pesos of the viceroyalty’s standing debt.103 The subsidiary organs of government were even more hard pressed. In August, 1822 the cabildo was forced to refuse to pay the bill of 2, 298 pesos to remodel the apartments in the city palace destined for the offices of the presidency of the department, and it also had to renege on its promise to pay the cost of remodelling a room in the University as a meeting place for Congress.104 It informed Riva Agüero that it was cutting back on all its activities, owing to the almost total disappearance of its most important sources of revenue.105 The capital continued to suffer from food shortages, lack of coinage, and discontent. The government of San Martín had lost the popular confidence and the economic credit it needed to function.

No amount of initiative on the leader’s part could lead this government to expand or increase its territorial control, for it could not support itself as it already existed, much less conquer all of Peru. It was paralyzed! It had nothing to offer the ambitious aristocrat, the oppressed Indian, the mestizo militiaman searching for a government that would give him a chance for recognition as an equal human being. This paralysis had occurred in spite of San Martín’s attempted economic and currency reforms, not because of a lack of initiative in this area. It had occurred because his economic policies were poorly conceived and were too late. It had occurred fundamentally because Lima was the wrong choice as a base of operations. San Martín warrants criticism for error, not for spinelessness.

No wonder he chose to give way to Bolívar. The facts of life led this pragmatist to realize that outside, non-Peruvian, aid was necessary to complete the crusade. Nor was Chilean aid adequate by 1822 for the job at hand. The Bolívar movement, supported as it was by the grudging but nonetheless impressive aid of three countries, remained the best hope. The short public statement San Martín issued on August 24, 1822, after his return from meeting the Liberator at Guayaquil, reflected this unavoidable reality. It stated simply that Bolívar was going to send aid—troops and armament.106 In the context of the moment, that was enough! It was a far more important question than whether San Martín himself was to continue in the leadership. Men, arms, and direction to overcome the paralysis of stalemate into which the revolution had fallen, that is what Bolívar promised Lima.

When Bolívar finally entered Lima on September 1, 1823, a full year after San Martín’s departure, he found conditions even worse than they had been. By then the capital had undergone yet another year of political chaos, and livestock was so scarce that troops were killing oxen in nearby haciendas for emergency rations. So little specie was available that Bolívar began to collect church silver.107 The capital’s support for independence was so weakened that a number of leading “republicans,” including Torre Tagle and the first director of the Paper Money Bank (the Conde del Villar de Fuente), fled to the royalist side in 1824. But Bolívar had resources outside the country, and unlike San Martín he chose not to depend on Lima for anything. In March, 1824 he did not contest the royalists when they again briefly occupied the city. He had learned the lessons of La Serna and San Martín! He confronted the royalists in the mountains, placing minimum dependence upon Lima’s support.

San Martín’s masterplan for Peruvian liberation had failed. Although a republic had been created, it remained but a beachhead along the coast, controlling only a portion of the national territory and population. Its center and chief source of support was Lima. But Lima proved too weak a base for the spread of independence. It lacked men willing to fight; it lacked enthusiasm for the cause; but it abounded in personal ambition, extravagance, and in what Basil Hall strikingly called “an engrossing selfishness.” John Miller provided another explanation when he said, “The people of Lima . . . grew tired of their liberators.”108

But most of all, Lima lacked the resources to finance continuation of the movement for independence. A series of errors on the part of the San Martín government—persecution and destruction of the capitalists, confusion and disagreement in currency reform and paper issuance, misuse of lands and resources—combined with internal disputes among the leadership, dissipated what little economic strength Lima might have had. This also had the effect of converting into bitter disillusionment the promise of independence, which for upper-class Limeños was advancement and position, while for the poor it was freedom from taxes and better provisions. And, for the man who had promised “not to advance a step beyond the gradual march of public opinion” that was fatal. San Martín was not, of course, the only leader of independence who had to face acute problems of financing. They all did! The chief difference between his movement in 1821 and Bolivar’s in, say, 1824, was one of options. By consciously choosing Lima as his base of support—a choice he made at the very moment Viceroy La Serna decided to quit Lima because it could not sustain the royal cause—San Martín limited his options. In effect, he forced his army to depend upon a capitalist market system (and a monopolistic and extraordinarily high-priced one at that), in a day when armies still survived by foraging or bringing their supplies with them. What Lima and environs could not supply had to be imported by sea (and at a time of considerable insecurity and disruption in sea traffic) because the capital was closed off from its interior. Most important, dependence on Lima tied the rebel army’s ability to take the initiative to a civilian population that was disinclined to sacrifice for a cause it had yet to be convinced was worth even minimal exertion. It is in this way that financial problems may be said to have been a cause of San Martín’s failure. Finally, it may be objected that San Martín had no choice but to base his movement on Lima. The example of Bolivar, however, who launched his campaign from the countryside rather than from Lima, suggests the possibility that San Martín did have an alternative and that he erred when he chose Lima.


Captain Basil Hall, Extracts from a Journal Written on the Coasts of Chili, Peru, and Mexico in the years 1820, 1821, 1822, 3rd ed., 2 vols. (Edinburgh, 1824), I, 215-216.


Anonymous letter, no date, “Es de Lima de sugeto fide digno,” Archivo General de Indias, Seville (hereafter cited as AGI), Indiferente 1570.


Jacinto de Romarate to Secretary of Ultramar, Aranjuez, March 30, 1822, AGI, Indiferente 1571.


“Situación política de Lima,” report by Félix D’Olhaberriague y Blanco, Madrid, June 19, 1821, AGI, Lima 1023.


Proclamation of General José de la Sema, Lurín, July 8, 1821, AGI, Indiferente 313.


Cabildo to General José San Martín, Lima, July 17, 1821, Archivo Nacional del Perú, Archivo Histórico de Hacienda (hereafter cited as ANP, AHH), OL 7-1.


Cabildo to San Martín, Lima, July 20, 1821, ANP, AHH, OL 7-3.


Agreement of Peace Commissioners, aboard frigate Cleopatra, Bay of Callao, June 30, 1821, AGI, Lima 800.


La Serna to Peace Negotiators, Lima, June 12, 1821, AGI, Lima 800.


Anonymous letter, “Es de Lima de sugeto fide digno, AGI, Indiferente 1570.


Hall, Extracts, I, 263.


“Lista de los individuos que poseen fincas en esta ciudad,” May 17, 1820, ANP, Superior Gobierno, L. 37, C. 1335.


Conde del Villar de Fuente to General José San Martín, Aug. 2, 1821, ANP, AHH, PL 1-10.


Manuel Pardo to Minister of Gracia y Justicia, Rio de Janeiro, Feb. 12, 1822, AGI, Lima 1619.


“Relación de los individuos que han salido de la ciudad de Lima para la Peninsula,” March 15, 1822, AGI, Indiferente 1571.


The definition of who was a Spaniard and who a Peruvian depended as much, if not more, on the individual’s politics as on his place of birth. All peninsulars were invited to take the oath of allegiance to independence, thereby becoming naturalized Peruvians. Some American-born royalists were, therefore, included among these “Spaniards.” In a sense, Monteagudo called all opponents of independence Spaniards.


Martín de Aramburu to Minister of Ultramar, Rio de Janeiro, Sept. 2, 1822, AGI, Lima 798.


Cristóval Domingo and others to Juez de Arribadas D. Tomás Barreda, Cádiz, March 19, 1822, AGI, Lima 1619.


Unsigned Consular Log, Rio de Janeiro, Dec. 26, 1821, AGI, Lima 1023.


Gaceta del Gobierno, Jan. 2, 1822; Jan. 26, 1822.


Figure reported in letter of La Serna to Minister of Finance, Cuzco, April 2, 1824, AGI, Lima 762.


Decree of General José San Martín, Cuartel General de la Legua, July 19, 1821, AGI, Lima 800.


Hall, Extracts, II, 87.


Report of Ramón del Valle, Rio de Janeiro, March 5, 1822, AGI, Indiferente 313; Anonymous report to Spain, April 30, 1821, AGI, Indiferente 1570.


Gaceta del Gobierno, Sept. 5, 1821.


Ibid., Nov. 21, 1821.


Ibid., Apr. 17, 1822.


Francisco Carrillos, Conde de Vistaflorida, and Francisco de Zea to President of the Department José de la Riva Agüero, Lima, March, 1822, ANP, AHH, PL 2-21.


Viceroy José Abascal to Secretary of Ultramar, Lima, July 31, 1814, AGI, Lima 747.


Order of Supreme Delegate Marqués de Torre Tagle, May 23, 1822, ANP, AHH, OL 29-56.


Gaceta del Gobierno, Dec. 26, 1821.


“Razón de las fincas del Estado que se han distribuido entre los Jefes del Ejército Libertador,” ANP, AHH, OL 7-18. By July of the next year, however, the cabildo had become firmly opposed to the principle of granting rewards to officers, declaring that “nothing is more detrimental to the progress” of liberty. Cabildo to Hipólito Unánue, July 22, 1822, ANP, AHH, OL 45-6.


Expediente concerning José Antonio Prada, 1824, Madrid, AGI, Lima 1024; Expediente concerning Juan Bautista Lavalle, 1821, Lima, ANP, AHH, PL 1-34. The Lavalle property, occupied at the moment of independence by Intendant Lavalle’s mother, Condesa viuda de Premio Real, was probably worth more than the Prada property. In a letter to Unánue the Condesa argued that the property should not be confiscated because her son had no choice in becoming intendant of Arequipa, because he never led royal arms in opposition to the patriots, and because he wanted to retire to private life. Her argument, dubious at best, was further weakened by the fact that her only other living son was a former member of an audiencia in New Spain, while other sons, then deceased, included a royal field marshal, a royal governor, and a royal colonel. It was not for nothing that her husband, a founder of the Company of the Philippines, was granted the title Premio Real.


Hall, Extracts, II, 88. All these confiscations were carried out in San Martín’s name, and often over his signature.


Order of Cabildo, Aug. 18, 1821, ANP, AHH, OL 7-7a.


Gaceta del Gobierno, Nov. 7, 1821: Dec. 5, 1821.


Treasury Administrator to Minister of Finance, Lima, Oct. 15, 1821, ANP, AHH, OL 7. 12a.


Gaceta del Gobierno, Oct. 2, 1822.


Order of Torre Tagle, Feb. 28, 1822, ANP, AHH, OL 29-25.


Suplemento a la Gaceta del Gobierno, no. 27, Oct. 10, 1821.


Ibid., no. 31, Oct. 9, 1822.


“Estado que manifiesta . . . las entradas actuales ordinarias de la Tesorería General de la República,” Jan. 2, 1823, ANP, AHH, OL 30-36.


Gaceta del Gobierno, Aug. 22, 1821.


Gobernación de Ultramar to Minister of State, Madrid, April 12, 1822, AGI, Indiferente 313.


Suplemento a la Gaceta del Gobierno, no. 33, Oct. 31, 1821.


Gaceta del Gobiemo, May 29, 1822.


Ibid., Oct. 20, Nov. 10, Nov. 14, Dec. 1, 1821.


Ibid., October 3, 1821.


Ibid., January 20, 1822.


Ibid., November 3, 1821.


Felipe Alvarado to Minister of Finance, Lima, June 17, 1822, ANP, AHH, OL 45-4.


Expediente about voluntary donations, ANP, AHH, PL 1-1.


Gaceta del Gobierno, May 1, 1822. The semantics are significant. Actually, Torre Tagle ordered a “voluntary” subscription based on quotas.


Order of Torre Tagle, Lima, Feb. 16, 1822, ANP, AHH, OL 29-21.


Cabildo to Unánue, Aug. 31, 1821, ANP, AHH, OL 7-9.


List of contributors to state collection, ANP, Superior Gobierno, L. 38, C. 1370; San Martín to Consulado, Aug. 28, 1821, ANP, AHH, OL 3-6.


Cabildo to Unánue, Sept. 11, 1821, ANP, AHH, OL 7-11; Cabildo to Unánue, Sept. 19, 1821, ANP, AHH, OL 7-12.


Suplemento a la Gaceta del Gobierno, no. 41, May 22, 1822.


Governing Junta to President of Congress, Lima, Oct. 9, 1822, ANP, AHH, OL 49-4.


Secretary of Sovereign Congress to Minister of Finance, Lima, October 19, 1822, ANP, AHH, OL 30-10.


José de Perochena to San Martín, Lima, August 7, 1821, ANP, AHH, OL 20-14.


Cabildo to Torre Tagle, Lima, July 30, 1823, ANP, AHH, OL 85-13.


Decree of San Martín, Dec. 29, 1821, ANP, AHH, OL 1-4a; Decree of San Martín, Jan. 19, 1822, ANP, AHH, OL 29-8; Order of San Martín, Dec. 14, 1821, ANP, AHH, OL 1-18.


Cabildo to San Martín, Sept. 1, 1821, ANP, AHH, OL 7-10.


Consular report from Rio de Janeiro, Jan. 10, 1822, AGI, Indiferente 1570.


Gaceta del Gobierno, Oct. 24, 1821.


Ibid., Dec. 1, 1821.


Ibid., Aug. 15, 1821.


Ibid., Dec. 29, 1821.


Carlos Camprubi Alcazar, El Banco de la Emancipación (Lima, 1960), p. 25.


Decree of San Martín, Oct. 23, 1821, ANP, AHH, OL 1-9a.


Suplemento a la Gaceta del Gobierno, no. 40, Nov. 24, 1821.


Camprubi Alcazar, El Banco, p. 25.


Report of Antonio Jaranco, Rio de Janeiro, Feb. 27, 1822; Report of Ramón del Valle, Rio de Janeiro, March 5, 1822; Antonio Luis Pereyra to Secretary of State, Rio de Janeiro, Feb. 27, 1822, all in AGI, Indiferente 313; Report of S. A. (true name D. J. Cereño, hacendado de Lima) to Minister of Ultramar, Rio de Janeiro, Sept. 9, 1822; Juan Bazo y Berri to Minister of Ultramar, Rio de Janeiro, May 29, 1822, both in AGI, Lima 798.


See Camprubi Alcazar, El Banco. I had largely duplicated this author’s research on the Bank before becoming aware of this little known and entirely authoritative study. The treatment of the Bank, and of the Peruvian finances as a whole, rendered in Alfredo Estevez and Oscar Horacio Elía, Aspectos económicos-financieros de la campaña Sanmartiniana (Buenos Aires, 1961), pp. 203-250, is inadequate. There is scarcely any aspect of Peruvian emancipation so little known or in which so many inaccuracies have been repeated year after year as these currency measures.


Cabildo to San Martín, Dec. 29, 1821, ANP, AHH, OL 7-19.


Cabildo to San Martín, Dec. 7, 1821, ANP, AHH, OL 7-15.


Ángel M. Quintero Ramos, A History of Money and Banking in Argentina (Rio Piedras, Puerto Rico, 1965), p. 29.


Camprubi Alcazar, El Banco, p. 11.


Memo of Antonio Álvarez de Villar, no date, ANP, AHH, OL 48-53.


Report of Antonio Jaranco, Rio de Janeiro, Feb. 27, 1822, AGI, Indiferente 313. In fact the total paper issue finally reached 622,144 pesos, having crept above the determined limit, Camprubi Alcazar, El Banco, p. 105.


El Depositario, no. 52, Huancayo, Oct. 22, 1821, AGI, Indiferente 313.


Gaceta del Gobierno, Oct. 2, 1822.


Antonio Salazar and Antonio Álvarez de Villar to Unánue, March 17, 1822 ANP, AHH, OL 48-10.


Memo of Bank Directors to Unánue, March 14, 1822, ANP, AHH, OL 48-9.


Superior Order, July 16, 1822, ANP, AHH, OL 29-65.


Conde de San Isidro to Unánue, June 1, 1822, ANP, AHH, OL 48-25.


Summary Accounts, Sept., Oct., and Nov., 1822, ANP, AHH, OL 52-44a; 52-49; and 52-50.


Conde de San Isidro to Torre Tagle, April 25, 1822, ANP, AHH, OL 48-16; Riva Agüero to Unánue, April 17, 1822, ANP, AHH, OL 52-20.


Superior Order, July 2, 1822, ANP, AHH, OL 29-62.


Superior Order, Feb. 18, 1822, ANP, AHH, OL 29-22.


Camprubi Alcazar, El Banco, p. 110.


Superior Order, Aug. 12, 1822, ANP, AHH, OL 29-69.


Bank Statements, July 31, 1822, ANP, AHH, OL 48-29a; 48-30; and 48-31.


Conde de San Isidro to Juan Valdivieso, Nov. 3, 1822, ANP, AHH, OL 30-28c.


Riva Agüero to Unánue, Aug. 20, 1822, ANP, AHH, OL 52-30.


José María Ruybál to Antonio Luis Pereyra, Rio de Janeiro, July 27, 1822, AGI, Lima 798.


Cabildo to Treasury Administrator, May 12, 1823, ANP, AHH, OL 85-9.


Isidro Cortazar to Francisco Valdivieso, Dec. 23, 1822, ANP, AHH, OL 48-50. Cortazar was the family name of the Conde de San Isidro. Under official pressure he had formally given up his title of Spanish nobility.


Directorate of Bank to Minister of Finance Mariano Vidal, April 22, 1823, ANP, AHH, OL 77-21; Isidro Cortazar to President Riva Agüero, April 24, 1823, ANP, AHH, OL 77-22; Order of General Andrés de Santa Cruz, April 25, 1823, ANP, AHH, OL 71-261.


Gaceta del Gobierno, Feb. 24, 1822.


Ibid., July 10, 1822.


Ibid., Dec. 1, 1821.


Both bills were eventually paid from the Dirección de Censos, the fund required by law to be spent only on projects beneficial to the Indians whose contributions made it up. The viceregal regime had also dipped into the fund for its own expenses.


Riva Agüero to Minister of Finance, Aug. 20, 1822, ANP, AHH, OL 52-30.


Gaceta del Gobierno, Aug. 24, 1822.


Francisco de Echague to Minister of Government, Feb. 15, 1824, ANP, AHH, OL 109-4.


John Miller, Memoirs of General Miller in the Service of the Republic of Peru, 2 vols. (London, 1828), I, 347.

Author notes


The author, Associate Professor of History, University of Manitoba, gratefully acknowledges the financial support of the Canada Council.