Silver Production in the Viceroyalty of Peru, 1776-1824

Historians who have turned their attention to economic conditions in late colonial Peru have tended to accept, with varying degrees of emphasis, the opinion of contemporary commentators that the loss of Upper Peru to the new viceroyalty of the Río de la Plata in 1776 and the opening of the port of Buenos Aires to direct trade with Spain in 1778 condemned the old viceroyalty to economic decline or, at best, to economic stagnation.¹ My own previous research has suggested that this economic crisis was not quite as serious as critics of government policies claimed, for the first generation of intendants encountered some success in their attempts to stimulate local economies, but there is little doubt that by the end of the eighteenth century many influential Peruvians could justifiably complain that Spain seemed incapable of providing them with the economic stimulus that they sought for the exploitation of the viceroyalty’s wide range of natural resources.² Peru’s basic problem was that it was geographically isolated, so that high costs of transport to the European market, combined with difficulties of internal communication and inefficient methods of production, made it impossible for its agricultural producers to compete with those in more accessible parts of the empire. Its textile industry, too, declined in the last quarter of the eighteenth century, as cheap, high quality European manufactures, imported through Buenos Aires, made their way into the provinces of Cuzco and Arequipa in exchange for agricultural produce supplied to the mining centers of Upper Peru. Before 1776 these foodstuffs had been paid for almost entirely with bullion; in the period we are considering some of Potosí’s silver was still used in this local trade between Upper and Lower Peru, but the bulk of it flowed to Buenos Aires rather than Lima for export to the metropolis.

After 1776, therefore, Peruvian agriculture stagnated, and industry declined. But what of silver mining? Immediately before the division of the old viceroyalty, Upper and Lower Peru together were producing an estimated 1,000,000 marks of silver a year, of which some 700,000 marks—a mark was worth 8 pesos 4 reales—made their way to the mint.³ The ailing Potosí, although still the most important mining center, no longer monopolized the industry, for, according to figures supplied by Viceroy Manuel de Amat, its share of total output had fallen to 40.6 percent by 1776. But silver registration elsewhere in Upper Peru—at Oruro, Carangas, Chucuito and La Paz—accounted for a further 22.5 percent. The viceroy estimated registration in Lower Peru for 1776 at only 295,000 marks, although detailed figures produced subsequently by the tribunal of accounts of Lima showed that the actual total was a mere 274,618 marks, worth 2,334,257 pesos at the mint.⁴ Most commentators have assumed, naturally enough, that, given the weakness of the mining industry in Lower Peru before 1776, the abrupt loss of over three-fifths of its silver output not only drastically reduced the viceroyalty’s trade through Callao—silver usually had accounted for about 90 percent of exports—but also relegated Lower Peru to a relatively unimportant role as a silver producer. Oscar Febres Villarroel wrote in 1954, for example, that the viceroyalty’s “acute economic crisis” in the late eighteenth century, although primarily affecting agriculture, was accentuated by the fact that “mining was declining.”⁵ Marie Helmer, the leading French authority on the economic history of Peru, although somewhat less gloomy about the state of the economy as a whole, stated recently: “The output of silver increases only slightly. . . . Mining activity in Bolivia and Peru stagnated until the end of the nineteenth century.”⁶

In fact, as Figure I and the  Appendix to this article clearly show, a detailed examination of records of silver registration in Peru between 1777 and 1824 makes untenable conclusions such as these.⁷ The loss of Upper Peru in 1776 was followed not by a decline in the mining industry of the old viceroyalty, but by a rise in registered silver production from a mere 246,000 marks in 1777 to over 500,000 marks in 1792. It was to rise even more impressively to a peak of 637,000 marks by 1799. Throughout the period 1792-1805, annual registration was more than double the 1777 figure, and, after a temporary recession in 1806-1807, it returned to a high level in 1808-1809. Although the following year (1810) was a relatively poor one, it was not until 1812 that a prolonged decline in production set in, to be relieved only by exceptional results for a single year, 1820.

Within the period 1777-1812, the fluctuation in silver registration from year to year was often due to difficulties associated with mercury supply and distribution and not to purely internal Peruvian factors. For Huancavelica could no longer supply all the viceroyalty’s needs, and shipments of the vital amalgamating agent from Almadén were usually interrupted when Spain went to war with Great Britain.⁸ No mercury arrived from Spain in 1780-1783, for example, and it thus proved impossible to sustain the modest increase in silver output that had occurred up to 1780.⁹ Renewed warfare from 1796 was initially less serious for the mining industry, since considerable stocks of mercury had been built up during the intervening years of peace, but rationing had to be introduced in 1800, and silver production declined accordingly.¹⁰ The receipt of large shipments in 1803-1805 reversed the trend, but production again declined in 1806-1807, following the viceroy’s decision to prohibit the traditional system of supplying mercury to miners on credit, with the dual purpose of conserving supplies and persuading them to pay off their existing debts to the exchequer.¹¹ A new viceroy reversed this policy in 1807, and silver production once more began to increase.¹² On the other hand, when it declined sharply after 1812, it did so not because of a mercury shortage, although the problem did persist, but as a result of production difficulties at the viceroyalty’s most important silver mining center, Cerro de Pasco.

The 7,425,000 marks of silver registered with the Pasco treasury ministers between 1777 and 1824 represented, as Table I shows, over 40 percent of Peru’s registered production in this period. That registered in Lima and Trujillo together accounted for a further 37 percent, and 14 percent of the balance was delivered to cajas in the intendancy of Arequipa. In the four remaining provinces of the viceroyalty—Cuzco, Huancavelica, Huamanga, and Puno—silver mining, although of varying degrees of importance for local economies, was relatively insignificant in terms of total production. Cerro de Pasco’s dominance of the mining industry dates from 1786. Thereafter the level of silver production in the viceroyalty as a whole was determined—as Figure I indicates—largely by the fortunes of this single center. It is appropriate, therefore, to examine in some detail the factors that stimulated Cerro de Pasco’s remarkable expansion in the late colonial period, and, as a preliminary, to look at the relative position of the viceroyalty’s other important mining centers.

By definition, of course, records of silver registration, which provide the basis for any comparison, can serve only as a guide to total silver production, for they do not include the considerable amount of bullion that escaped registration to enter the channels of contraband trade. This illegal traffic was probably most common along the long, unguarded coastline of the southern province of Arequipa, particularly in the first decade of the nineteenth century when English “whalers” were paying increasing attention to the Pacific coast.¹³ The fall in silver registration at Arica from 1800 undoubtedly reflects not only declining production at Huantajaya but also the fact that more bullion was being smuggled out in exchange for textiles and other manufactures. Mining centers further inland were less accessible to English traders, but Alexander von Humboldt estimated that up to a quarter of the silver produced at Hualgayoc and Cerro de Pasco was exported illegally, and most commentators assumed that a similar proportion was being smuggled out of other mining centers.¹⁴

A second difficulty with records of silver registration is that they do not necessarily provide a completely accurate picture of the relative importance of the different provinces as silver producers. Although miners who registered their own silver would take it to the respective treasuries nearest to the mining centers, some of that handled by silver merchants, who traditionally advanced capital to be repaid in the form of unminted bullion, was probably taken in its crude form to Lima or Arequipa before being declared. Thus the fact that the Lima treasury was the second most important in the viceroyalty for the registration of silver should not be taken as an indication that the mining centers near the capital were second only to Cerro de Pasco. Huarochirí, which lay within the province of Lima, was, in fact, the third largest mining center in Peru, but much of the silver registered in the capital came from areas such as Cajatambo, Huailas, and Cerro de Pasco itself, all of which lay in the adjacent intendancy of Tarma. The calculations that can be made, therefore, from silver registration records probably understate the importance of Cerro de Pasco and other centers in relation to those nearer to Lima. They remain, nevertheless, of great value as a guide to the relative importance of tire various centers, and, notwithstanding the problem of contraband in bullion, an indication of the shifts in the level of silver production from year to year in the viceroyalty as a whole.

More important than Huarochirí was the mining center of Hualgayoc, sometimes referred to as Chota, in the intendancy of Trujillo, which usually accounted for an estimated seven-eighths of the silver registered in the Trujillo caja.¹⁵ Silver was not discovered there until 1771, but the richness of the ore rapidly attracted settlers from Cajamarca and the nearby Cerro de Fuentestiana, where mining was already established.¹⁶ Until 1774 silver from Hualgayoc was taken to Lima for registration, but in that year, with over 2,000 men and women already settled in hastily-erected camps on and around the Cerro de Hualgayoc, registration facilities were provided in Trujillo.¹⁷ In the decade after 1774 the silver taken to Trujillo was usually worth about 500,000 pesos, and by 1792, when 134,000 marks were registered, the figure had risen to 1,140,000 pesos. Until 1785 Hualgayoc was able to challenge Cerro de Pasco for the position of leading producer in the viceroyalty, but thereafter, even though it continued to increase its output for several years, the disparity between them grew. After the peak year of 1792 Hualgayoc’s output tended to fluctuate because of the unreliability of its ores: in 1793, for example, only 73,000 marks of silver were registered at Trujillo, compared with 235,000 at Pasco.

The problem was one that had been encountered in many mining centers: as the rich surface ores that could be exploited at little capital cost were worked out, the need to dig longer and deeper shafts and adits cut into profits, which in any case were declining as yields deteriorated. There is evidence that leading miners did what they could to reach deeper ores, but a combination of technical ignorance and difficulty in obtaining capital from Lima for long-term investment militated against success. In 1790, to give the most important example, Pedro de Rojas revived a plan, first formulated as early as 1771, to cut an adit through the hill on which the pits were located, until he made contact with the main vein, known as La Paz. By 1800 the tunnel, known variously as the socavón de San Miguel, the socavón de Santa Catalina, and the socavón real, was 440 varas long—a vara measured 32.99 inches—and, it subsequently emerged, only 70 varas short of its destination. Rojas, however, had exhausted his capital and was forced to abandon the project after sinking an estimated 130,000 pesos in it.¹⁸ By 1802, when Humboldt visited Hualgayoc, registration of silver at Trujillo was down to 56,000 marks. Although the German traveller was sufficiently impressed to declare that Hualgayoc could become “a second Potosí,” the overall trend thereafter was for production to decline.¹⁹ Much of the ore that was extracted was rich by Peruvian standards, with yields fluctuating from 12 to 100 marks a cajón—the Peruvian cajón was a standard measure of 5,000 pounds of ore, except at Cerro de Pasco, where it was worth 6,000 pounds—but costs were also high. The Hualgayoc miners were simply unable to attract the investment capital required for a major increase in output.²⁰

The problems encountered at Hualgayoc were present in an even more exaggerated form at Huantajaya, in the far south of the province of Arequipa. Ores were traditionally rich there, too—in 1717 the first discoverer, Juan de Loayza y Valdés, obtained 54,000 marks of silver from a single pit, 22 varas long—but the unusual hardness of the local rock made tunneling difficult and expensive.²¹ Even more serious was the fact that Huantajaya lay at the northern end of the Atacama desert, and all its essential supplies, including water, had to be carried over a distance of more than 60 miles. The inevitable expense of this operation meant that miners there could not show a profit unless their ores yielded at least 25 marks a cajón, whereas in more favored centers a yield of 6 marks was considered sufficient to cover costs and one of 12 marks was high.²² The mining tribunal did consider the possibility of constructing a canal to carry water from the Andean foothills to lower land some 28 miles from Huantajaya, but the idea was abandoned in 1807, following the receipt of an unfavorable technical report from a surveyor.²³ There is evidence that the area experienced a moderate revival in the later 1790s, possibly because of the injection of new capital by the Sociedad Mineralógica of Arequipa, established in 1792, which began to work one pit in 1794.²⁴ Silver registration in nearby Arica rose from 28,000 marks in 1795 to 59,000 in 1799, but this period of expansion was brought to an end in 1800 by a new mercury crisis, which, as usual, affected the more remote centers most seriously, and by 1808 registration had fallen to a mere 3,200 marks.²⁵ Thereafter, despite occasional rises, it remained at a low level. There was some compensation for the province in the fact that registration in the city of Arequipa itself, which mainly reflected production in the Condesuyos, Cailloma, and Camaná areas, remained at a higher level until 1812, but there, too, as in the neighboring province of Puno, the overall trend in the final decade of Spanish rule in Peru was for registration figures to fall.

The only major mining center in Peru that succeeded in maintaining the expansion of the 1790s beyond the turn of the century was Cerro de Pasco, in the intendancy of Tarma. Its peak year, in fact, was 1804 when 320,509 marks of silver, worth 2,724,324 pesos at the mint, were registered in the nearby town of Pasco; the legendary Potosí, by comparison, registered 2,713,892 pesos in that year.²⁶ The area around Pasco had begun to produce silver as early as 1567, but Cerro de Pasco itself, an extensive area extending over some 4 square miles and lying 7 miles to the north of the town, did not become important until 1630, when silver was discovered in the mineral of Yauricocha.²⁷ Mining began in the adjacent mineral of Santa Rosa a few years later, and the area’s third important site, Yanacancha, came into production in the 1690s. Although the surface ores at Cerro de Pasco were mainly of the type known as pacos, surface oxides which gave a yield of only 10-12 marks a cajón, they were abundant and easily exploited, and large fortunes were made by a number of early miners.

By the beginning of the eighteenth century, however, many pits, although rarely deeper than 30 varas, had reached the underground water table, and profits fell as drainage costs increased. Some miners tackled the problem crudely and inefficiently by employing teams of Indians to carry water to the surface in buckets, while others used clumsy manpowered whims.²⁸ Neither of these methods permitted them to extend their pits for more than a few yards beyond the natural water level. The alternative was to cut a socavón at an angle beneath the level of a number of pits and thus drain them from beneath. Although a successful adit of this type could bring high profits, the primitive knowledge that existed of the basic principles of mining engineering always made the construction of one a speculative enterprise, requiring the investment of large capital sums, on which there would usually be no immediate return. The first of those dug at Cerro de Pasco was completed in 1760 by José Maíz, who had purchased a number of Yauricocha pits in 1740, and in this case the profits were sufficiently large to enable him to purchase the title Marqués de la Real Confianza, officially bestowed in recognition of the promptness with which he always paid for his mercury.²⁹

Despite the initial success of this venture, however, silver production fell at Cerro de Pasco in the 1770s, as new pits reached the natural water table and those above the adit once again encountered water as they reached its level. The outcome was an agreement in 1780 between fifty leading miners, organized by Félix de Ijurra, Vicente Amavisca and Bernardo Cárdenas, to finance the cutting of a new socavón from the lake of San Judas to the mineral of Santa Rosa. The project was completed in 1786, enabling the flooded Santa Rosa pits to be brought back into production, and in that year silver registration at Pasco exceeded 100,000 marks for the first time since 1771.³⁰ The new ores were not exceptionally rich, but they were plentiful: in 1789, for example, when 120,000 marks of silver were registered at Pasco, the refiners processed 15,000 cajones of ore, weighing 47,000 metric tons.³¹ With production rising at an impressive rate, therefore, the local gremio decided in 1794 to begin work on the even more ambitious project of extending the Santa Rosa socavón to Yanacancha.³² By the end of 1796 the miners had financed the cutting of the first 233 varas of the tunnel—it was an impressive 2 varas wide and 2.5 high—enabling the pits that lay above it to be deepened by 30 varas.³³ They were still an estimated 937 varas short of their destination, however, and in the following year, with costs rising, the mining tribunal in Lima agreed to their request to use part of its revenue from the real en marco, a levy of one-eighth of a peso on every mark of silver registered in the viceroyalty, to meet the estimated annual expenditure on the project of over 20,000 pesos.³⁴

With this guaranteed financial support, and official assistance in obtaining cheap Indian labor, the tunnel advanced steadily after 1796, despite impassioned disputes over the question of whether it was being diverted from the course originally agreed so that particular miners would benefit more than others from it.³⁵ As it advanced, the pits that lay between Santa Rosa and Yanacancha were deepened, and silver production remained high, except in 1806 when, as noted, more stringent regulations for the distribution of mercury caused a temporary dislocation. The tunnel reached the furthest Yanacancha pits in 1811, thus extending the original socavón to a total length of 1,800 varas, and it also had a number of lateral galleries, of which the most important was the ramal of Chaupimarca. The total cost of the project is not known, but it was certainly more than the round figure of 100,000 pesos mentioned by some observers, for 116,000 pesos were spent on it between 1804 and 1811 alone.³⁶

The Yanacancha socavón, sometimes called the San Judas socavón after the lake into which it emptied, was a great success, therefore, for it enabled Cerro de Pasco, and thereby the viceroyalty of Peru as a whole, to maintain its silver output at a high level throughout the first decade of the nineteenth century. Its one crucial drawback, however, was that it was essentially an extension of the adit dug in 1780-1786 and, therefore, relatively near the surface, at an average depth of only 70 varas, or approximately 200 feet.³⁷ Although existing pits were drained by it as it advanced, they soon reached its level, and many miners were again using hand pumps and buckets to raise water to the level of the socavón before it had reached its destination. As the project neared completion, therefore, it became clear that a fall in silver production was unavoidable unless new measures were introduced to enable pits to be extended even further. It was for this reason that in 1808 the local mining deputies began to consider the possibility of cutting a new, even longer adit, some 30 varas deeper than that of Yanacancha, from Lake Quiulacocha to the Santa Rosa mines.³⁸ They encountered opposition, however, from members of the local guild who were likely to derive greater benefit from extending the existing project beyond Yanacancha to Chaupimarca, and it was thus not until 1811 that they were able to obtain sufficient support to make a start upon the Quiulacocha socavón.³⁹

The mining tribunal pledged its financial support for this new project, which the local miners hoped to complete within five years, but the aid that it could give was inevitably restricted by the fact that the fall in silver production at Cerro de Pasco itself after 1811 caused its income from the levy on silver to fall sharply. By August 1816 the adit was 962 varas long, but it was still 600 varas short of Santa Rosa, and a survey conducted in that month revealed that serious errors had been committed by the supervising engineer: the most important were that the tunnel had begun to slope downwards away from its mouth, a fatal error, and that it had deviated by no less than 57 varas from the straight line that it was supposed to follow.⁴⁰ Those held responsible for these mistakes were fined 4,000 pesos, which the tribunal estimated it would cost to correct the deviation, and the work continued.⁴¹ It remained unfinished, however, in 1824. The British-owned Pasco-Peruvian Company extended it to within 94 varas of Santa Rosa in 1828, before going bankrupt, but the project was not finally completed until the middle of the century.⁴²

The sudden decline in silver production at Cerro de Pasco in 1812, as pits reached the level of the Yanacancha socavón, was directly responsible for the fall in total viceregal silver registration to the lowest figure recorded since 1786. It seemed to mark the end of the mining industry’s late colonial prosperity, for by 1814 registered production had fallen to the lowest point since the loss of Upper Peru in 1776. Thereafter it remained below 300,000 marks a year throughout the remaining period of Spanish rule in Peru, except in 1820, when production soared remarkably to 477,000 marks. This most important change of direction was once again a direct reflection of developments at Cerro de Pasco, for registration at Pasco rose dramatically in 1820 to 313,000 marks, 65.6 percent of the viceregal total, and the second highest figure ever recorded there. It was made possible not by the Quiulacocha socavón, which, as noted, remained unfinished, but by the successful introduction at Santa Rosa, Caya, and Yanacancha of three Cornish steam engines. This crucial technical innovation, by enabling miners to pump water up to the level of the Yanacancha socavón, granted them access for the first time to the rich sulphide ores—the pavonados and polvorillas—lying beneath the surface deposits of pacos, that yielded up to 400 marks of silver a cajón.⁴³

The first formal proposal for the importation of steam engines for use in Peruvian mining centers was put to viceroy José de Abascal in 1812 by a company consisting of Pedro de Abadía, a prominent Spanish member of Lima’s mercantile community, his partner Joseph de Arismendi, and an intriguing Swiss watchsmith, Francisco Uville.⁴⁴ Uville had made an exploratory visit to England in the previous year, and, undaunted by the insistence of Matthew Boulton and James Watt, whom he met, that it would be impossible to build engines capable of working in the ratified atmosphere of Cerro de Pasco—at 14,200 feet above sea level—had returned with a model of Richard Trevithick’s high-pressure engine, which he had bought for 20 guineas after seeing it by chance in a London shop window.⁴⁵ In August 1812, after Uville had demonstrated the model at Cerro de Pasco, all but three members of the local mining guild signed a contract agreeing to the installation of at least two full-scale engines at Santa Rosa.⁴⁶ The company under-took to provide the 40,000 pesos deemed necessary for their purchase and transport, and to install them over a pit dug to a depth of 40 varas below the level of the existing socavón, so that water filtering into it from surrounding pits could be pumped up to the tunnel for disposal. Mines that had been put out of action because they had reached the level of the socavón would thus be freed of water, and operations could be resumed in them. The company’s reward was to be 15 percent of all ore mined at Yanacancha and Yauricocha, 20 percent of that from Santa Rosa, Caya Chica and Colquijirca, and 50 percent of any extracted from the drainage pit itself.

With the viceroy’s blessing, and his promise that any machinery he purchased could be imported duty free, Uville left Callao at the end of 1812 with 30,000 pesos. He reached Falmouth in May 1813 and almost immediately made contact with the unsuspecting Trevithick, who lived nearby.⁴⁷ Within two weeks Uville had ordered six engines of various types, and the engineer, having observed that “money is very plentiful with him” had begun work on three of them. A year later, as they neared completion, Uville, who had already ignored his instructions on the number of engines to be purchased, again exceeded his authority by admitting Trevithick as a fourth member of the company in return for £3,000, which was required to meet outstanding bills.⁴⁸

Uville arrived back in Lima in January 1815 with two Cornish craftsmen, an engineer, Henry Vivian, and the first consignment of machinery, which consisted of four 33-horsepower pumping engines, four 10-horsepower winding engines, and a smaller engine for use in the Lima mint.⁴⁹ It took far longer than anticipated to transport this heavy equipment from the capital to Cerro de Pasco, partly because Indian communities in the Huarochirí area steadfastly refused to provide men for the task, and it was thus not until July 1816 that the first pumping engine was installed at Santa Rosa.⁵⁰ When first put to the test, however, it made the wait seem worthwhile, for it emptied a pit measuring 3 varas 24 inches by 1 vara 30 inches, and dug to a depth of six varas below the level of the socavón, in a mere 21 minutes, and, as anticipated, the pit then began to refill with water filtering through from surrounding mines. The prospect of having four such pumps continually at work, together with winding engines to raise ore to the surface, moved the intendant of Tarma, who witnessed the demonstration, to declare the innovation the most significant for the mining industry since the very conquest of Peru.⁵¹

The intendant’s enthusiasm proved, however, to be somewhat premature, for, although silver production did increase slightly in 1816, it was held back by the inability of the Cornish craftsmen to solve a number of mechanical problems that arose with the first set of machinery. It was not until Trevithick himself, who had landed at Callao in February 1817, visited Cerro de Pasco later in the year that the necessary repairs could be effected.⁵² At the beginning of 1818 a second pumping engine was installed under the inventor’s personal supervision, but further difficulties then arose out of rivalry between him and Uville over control of the company, which was becoming desperately short of capital, and, at a different level, over the supply of fuel for the voracious new machines.⁵³ In the following year a solution was found to the latter problem, with the discovery of rich coal seams only a few miles away. By the end of 1819 three pumping engines were installed and working successfully.⁵⁴

The dramatic results of their introduction can be clearly seen in Figure I. Silver registration at Pasco increased by 350 percent in 1820, as the drainage pits at Santa Rosa, Caya, and Yanacancha, although only 15 varas deep instead of the 40 agreed with the miners in 1812, gave access to the rich ores lying beneath the water table.⁵⁵ Just as suddenly as they had appeared, however, the “golden prospects” that seemed to lie ahead for the engine company, the Cerro de Pasco miners, and the viceregal economy disappeared from view as the wars of independence reached the mining center.⁵⁶ On November 27, 1820, as a patriot army under General José Arenales approached Cerro de Pasco, the intendant of Tarma withdrew and allowed the settlement and its mines to be occupied. A royalist force recaptured the area and held it for a few days at the beginning of December, but on the 9th Arenales won a decisive battle fought at Cerro de Pasco itself.⁵⁷ Warfare raged there for the next four years, and the mines changed hands several times, with the conscription or flight of skilled workers and the destruction of precious machinery as inevitable consequences. The decisive battle of Junín was fought only a few miles away on August 6, 1824. In these circumstances silver production was bound to come to a virtual halt, and when mining operations were resumed in 1825, only one of the three pumping engines was still in working order. It operated fitfully until a burst boiler in 1828 put it out of action permanently.⁵⁸

Elsewhere in Peru the decline in silver production that had been underway for several years was intensified during the final years of the wars of independence, although the industry did not grind to a complete halt, since the fact that it was based upon the extraction of ore by hand from shallow pits made it less vulnerable to outside interference than that of Mexico. But Peru’s mining economy was close to total collapse as Spanish rule drew to a close, particularly since merchants began to ship their capital out of Lima in large quantities from 1819, thus depriving miners of the financial support without which many of them were unable to produce silver.⁵⁹ By 1823 the registration of silver had fallen to an almost insignificant 38,000 marks, and there was little improvement in 1824. After the final defeat of the royalist forces in Peru at Ayacucho there was a slow and cautious resumption of activity in some mining centers, and by the mid-1830s Cerro de Pasco had again emerged as an important producer of silver.⁶⁰ But the onset of the guano boom ensured that silver mining was never again to enjoy the dominant position in the Peruvian economy that it had held before the wars of independence. When Cerro de Pasco was finally restored to its key position in the economic life of the country in the first decade of the twentieth century it was not as a center of silver mining but as a producer of copper for a foreign corporation.⁶¹

The wars of independence, then, destroyed both the steam engines at Cerro de Pasco and the prospects of renewed expansion for the silver mining industry in Peru. It is abundantly clear, however, that, contrary to the assertions of many scholars, the late eighteenth century, at least, was not a period of decline. In overall imperial terms, this revival was of limited significance, for the expansion of the industry in New Spain in the same period was on a much larger scale.⁶² It is beyond the scope of the present article to discuss in detail the various structural and administrative factors that determined the size of the industry in Peru, but it is perhaps appropriate to draw attention to the fact that, whereas merchants in Mexico were willing to invest directly and heavily in silver production, capitalists in Lima very rarely advanced funds for long-term projects, such as the cutting of adits.⁶³ Their reluctance is explained partly by the fact that miners in Peru were notorious for their failure to repay loans, but mainly, and more significantly, the explanation lies in the fact that the merchant in the viceregal capital could make quicker, surer profits from indirect investment in mining through local silver merchants known as aviadores. The latter provided miners not only with short-term loans, often for sums ranging from 500 to 1000 pesos for periods as short as a month, in return for contracts to repay in unminted bullion, delivered at a discount, but also with tools, cloth, foodstuffs, mercury, and other goods, much of which they, in their turn, received from the larger merchants in Lima. The aviador, although often criticized by the mining community for his alleged high profits, was an essential link between the mining centers and the mercantile oligarchy in the viceregal capital. It is clear that the increasing willingness of merchants to provide capital through this channel, although inadequate in the eyes of many miners, was one factor that made an expansion in silver production possible. It seems that the rupture of the Lima capitalists’ close links with miners at Potosí, following the creation of the viceroyalty of the Río de la Plata, made them more willing in this period to turn their attention to mining centers in Lower Peru. The expansion of silver production at Hualgayoc and Cerro de Pasco provided a growing market for both imported and domestic manufactures, and thus served to compensate merchants in the capital for the loss of much of their former trade with the corregidores, following the abolition of the repartimiento system in 1784. When it came, however, to finding capital for major technical improvements—with the important exception of the Cornish steam engines—miners were obliged either to provide this from their profits when ores were rich or to compete for the limited funds of the mining tribunal. The overall tendency, therefore, encouraged by the general technical ignorance of miners and the dispersed nature of the industry, was for a continuation of the primitive methods of mining and refining ore that had been in use since the sixteenth century.

The close relationship between miner and aviador, and aviador and large merchant, meant that the welfare of the mining industry was inevitably bound up with that of commerce. The decline in production after 1812, therefore, although essentially reflecting problems at Cerro de Pasco, was accentuated by the disruption of trade in a period of external and internal warfare, which encouraged leading capitalists to hoard their money or remit it to Spain. The supply of labor, unlike that of capital, was less subject to fluctuation. Although miners frequently protested about the difficulties of persuading Indians to work voluntarily in the mines, there is no doubt that the viceroyalty’s permanent force of free workers was large in relation to total population. In 1799, at the height of the boom of the late eighteenth century, this work force numbered almost 9,000, or 1 in 126 of the total population, as opposed to an estimated figure of 1 in 200 in New Spain.⁶⁴ Indian communities in some areas still provided men to perform mita service at Potosí and Huancavelica, or cash commutation, in this period, but silver mining in Lower Peru was basically dependent upon voluntary workers, notwithstanding frequent requests from miners for an extension of the mita system and occasional official willingness to agree to conscript men for particular projects, such as the cutting of the Yanacancha socavón at Cerro de Pasco.⁶⁵

The mining industry provided direct employment for perhaps a mere 1 percent of the population of Peru in the late colonial period, counting both workers and owners. In simple social terms textile production was probably more significant, while agriculture was undoubtedly so. Economically, however, silver remained of crucial importance to Peru, above all because of its dominant role in the structure of trade with Europe. The fact that silver output expanded rather than decfined after 1776 and remained relatively high until 1812—that is, until after Creole opinion and Creole arms had been mobilized to support the royalist cause—may also have been of political significance. It would be rash, and probably incorrect, to suggest that economic difficulties were not, after all, a serious cause of Peruvian discontent with Spanish rule by the early nineteenth century. What is clear, however, is that, if an economic crisis was experienced by the viceroyalty in the late colonial period, the condition of the silver mining industry, far from accentuating or causing it, served as a mitigating factor of considerable significance.

Registered Silver Production in the Viceroyalty of Peru 1771-1824 by Caja (Figures in marks and ounces)

Author notes