RECOVERY AND GROWTH, 1883-1930
The New Militarism, 1886-95
After a period of intense civil strife similar to the political chaos during the immediate postindependence period half a century earlier, the armed forces, led by General Andrés Avelina Cáceres (1886-90, 1894-95), succeeded in establishing a measure of order in the country. Cáceres, a Creole and hero of the guerrilla resistance to the Chilean occupation during the War of the Pacific, managed to win the presidency in 1886. He succeeded in imposing a general peace, first by crushing a native rebellion in the Sierra led by a former ally, the respected native American varayoc (leader) Pedro Pablo Atusparía. Cáceres then set about the task of reconstructing the country after its devastating defeat.
The centerpiece of his recovery program was the Grace Contract, a controversial proposal by a group of British bondholders to cancel Peru's foreign debt in return for the right to operate the country's railroad system for sixty-six years. The contract provoked great controversy between nationalists, who saw it as a sellout to foreign interests, and liberals, who argued that it would lay the basis for economic recovery by restoring Peru's investment and creditworthiness in the West. Finally approved by Congress in 1888, the Grace Contract, together with a robust recovery in silver production (US$35 million by 1895), laid the foundations for a revival of export-led growth.
Indeed, economic recovery would soon turn into a sustained, long-term period of growth. Nils Jacobsen has calculated that "Exports rose fourfold between the nadir of 1883 and 1910, from 1.4 to 6.2 million pounds sterling and may have doubled again until 1919; British and United States capital investments grew nearly tenfold between 1880 and 1919, from US$17 to US$161 million." However, he also notes that it was not until 1920 that the nation fully recovered from the losses sustained between the depression of 1873 and the postwar beginnings of recovery at the end of the 1880s. Once underway economic recovery inaugurated a long period of stable, civilian rule beginning in 1895.
The Aristocratic Republic, 1895-1914
The Aristocratic Republic began with the popular "Revolution of 1895," led by the charismatic and irrepressible José Nicolás de Piérola (1895-99). He overthrew the increasingly dictatorial Cáceres, who had gained the presidency again in 1894 after having placed his crony Colonel Remigio Morales Bermúdez (1890-94) in power in 1890. Piérola, an aristocratic and patriarchal figure, was fond of saying that "when the people are in danger, they come to me." Although he had gained the intense enmity of the Civilistas in 1869 when, as minister of finance in the Balta government, he had transferred the lucrative guano consignment contract to the foreign firm of Dreyfus and Company of Paris, he now succeeded in forging an alliance with his former opponents. This began a period known as the Aristocratic Republic (1895- 1914), during which Peru was characterized not only by relative political harmony and rapid economic growth and modernization, but also by social and political change.
From the ruins of the War of the Pacific, new elites had emerged along the coast and coalesced to form a powerful oligarchy, based on the reemergence of sugar, cotton, and mining exports, as well as the reintegration of Peru into the international economy. Its political expression was the reconstituted Civilista Party, which had revived its antimilitary and proexport program during the period of intense national disillusion and introspection that followed the country's defeat in the war. By the time the term of Piérola's successor, Eduardo López de Romaña (1899-1903), came to an end, the Civilistas had cleverly managed to gain control of the national electoral process and proceeded to elect their own candidate and party leader, the astute Manuel Candamo (1903-1904), to the presidency. Thereafter, they virtually controlled the presidency up until World War I, although Candamo died a few months after assuming office. Elections, however, were restricted, subject to strict property and literacy qualifications, and more often than not manipulated by the incumbent Civilista regime.
The Civilistas were the architects of unprecedented political stability and economic growth, but they also set in motion profound social changes that would, in time, alter the political panorama. With the gradual advance of export capitalism, peasants migrated and became proletarians, laboring in industrial enclaves that arose not only in Lima, but in areas of the countryside as well. The traditional haciendas and small-scale mining complexes that could be connected to the international market gave way increasingly to modern agroindustrial plantations and mining enclaves. With the advent of World War I, Peru's international markets were temporarily disrupted and social unrest intensified, particularly in urban centers where a modern labor movement began to take shape.
Impact of World War I
The Civilistas, however, were unable to manage the new social forces that their policies unleashed. This first became apparent in 1912 when the millionaire businessman Guillermo Billinghurst (1912-14)--the reform-minded, populist former mayor of Lima--was able to organize a general strike to block the election of the official Civilista presidential candidate and force his own election by Congress. During his presidency, Billinghurst became embroiled in an increasingly bitter series of conflicts with Congress, ranging from proposed advanced social legislation to settlement of the Tacna-Arica dispute. When Congress opened impeachment hearings in 1914, Billinghurst threatened to arm the workers and forcibly dissolve Congress. This provoked the armed forces under Colonel Oscar Raimundo Benavides (1914-15, 1933-36, and 1936-39) to seize power.
The coup marked the beginning of a long-term alignment of the military with the oligarchy, whose interests and privileges it would defend up until the 1968 revolution of General Juan Velasco Alvarado (1968-75). It was also significant because it not only ended almost two decades of uninterrupted civilian rule, but, unlike past military interventions, was more institutional than personalist in character. Benavides was a product of Piérola's attempt to professionalize the armed forces under the tutelage of a French military mission, beginning in 1896, and therefore was uncomfortable in his new political role. Within a year, he arranged new elections that brought José de Pardo y Barreda (1904-1908, 1915-19) to power.
A new round of economic problems, deepening social unrest, and powerful, new ideological currents toward the end of World War I, however, converged to bring a generation of Civilista rule to an end in 1919. The war had a roller coaster effect on the Peruvian economy. First, export markets were temporarily cut off, provoking recession. Then, when overseas trade was restored, stimulating demand among the combatants for Peru's primary products, an inflationary spiral saw the cost of living nearly double between 1913 and 1919.
This inflation had a particularly negative impact on the new working classes in Lima and elsewhere in the country. The number of workers had grown sharply since the turn of the century--by one count rising from 24,000, or 17 percent of the capital's population in 1908, to 44,000, or 20 percent of the population in 1920. Similar growth rates occurred outside of Lima in the export enclaves of sugar (30,000 workers), cotton (35,000), oil (22,500), and copper. The Cerro de Pasco copper mine alone had 25,500 workers. The growth and concentration of workers was accompanied by the spread of anarchic ideas before and during the war years, making the incipient labor movement increasingly militant. Violent strikes erupted on sugar plantations, beginning in 1910, and the first general strike in the country's history occurred a year later.
Radical new ideologies further fueled the growing social unrest in the country at the end of the war. The ideas of the Mexican and Russian revolutions, the former predating the latter, quickly spread radical new doctrines to the far corners of the world, including Peru. Closer to home, the indigenista (Indigenist) movement increasingly captured the imagination of a new generation of Peruvians, particularly urban, middle-class mestizos who were reexamining their roots in a changing Peru. Indigenismo (Indigenism) was promoted by a group of writers and artists who sought to rediscover and celebrate the virtues and values of Peru's glorious Incan past. Awareness of the indigenous masses was heightened at this time by another wave of native uprisings in the southern highlands. They were caused by the disruption and dislocation of traditional native American communities brought about by the opening of new international markets and reorganization of the wool trade in the region.
All of these social, economic, and intellectual trends came to a head at the end of the Pardo administration. In 1918-19 Pardo faced an unprecedented wave of strikes and labor mobilization that was joined by student unrest over university reform. The ensuing worker-student alliance catapulted a new generation of radical reformers, headed by Víctor Raúl Haya de la Torre--a young, charismatic student at San Marcos University--and José Carlos Mariátegui--a brilliant Lima journalist who defended the rights of the new, urban working class--to national prominence.
The Eleven-Year Rule, 1919-30
The immediate political beneficiary of this turmoil, however, was a dissident Civilista, former president Augusto B. Leguía y Salcedo (1908-12, 1919-30), who had left the party after his first term. He ran as an independent in the 1919 elections on a reform platform that appealed to the emerging new middle and working classes. When he perceived a plot by the Civilistas to deny him the election, the diminutive but boundlessly energetic Leguía (he stood only 1.5 meters tall and weighed a little over 45 kilograms) staged a preemptive coup and assumed the presidency.
Leguía's eleven-year rule, known as the oncenio (1919- 30), began auspiciously enough with a progressive, new constitution in 1920 that enhanced the power of the state to carry out a number of popular social and economic reforms. The regime weathered a brief postwar recession and then generated considerable economic growth by opening the country to a flood of foreign loans and investment. This allowed Leguía to replace the Civilista oligarchy with a new, if plutocratic, middle-class political base that prospered from state contracts and expansion of the government bureaucracy. However, it was not long into his regime that Leguía's authoritarian and dictatorial tendencies appeared. He cracked down on labor and student militancy, purged the Congress of opposition, and amended the constitution so that he could run, unopposed, for reelection in 1924 and again in 1929.
Leguía's popularity was further eroded as a result of a border dispute between Peru and Colombia involving territory in the rubber-tapping region between the Río Caquetá and the northern watershed of the Río Napo. Under the United Statesmediated Salomón-Lozano Treaty of March 1922, which favored Colombia, the Río Putumayo was established as the boundary between Colombia and Peru. Pressured by the United States to accept the unpopular treaty, Leguía finally submitted the document to the Peruvian Congress in December 1927, and it was ratified. The treaty was also unpopular with Ecuador, which found itself surrounded on the east by Peru.
The orgy of financial excesses, which included widespread corruption and the massive build-up of the foreign debt, was brought to a sudden end by the Wall Street stock market crash of 1929 and ensuing worldwide depression. Leguía's eleven-year rule, the longest in Peruvian history, collapsed a year later. Once again, the military intervened and overthrew Leguía, who died in prison in 1932.
Meanwhile, the onset of the Great Depression galvanized the forces of the left. Before he died prematurely at the age of thirty-five in 1930, Mariátegui founded the Peruvian Socialist Party (Partido Socialista Peruano--PSP), shortly to become the Peruvian Communist Party (Partido Comunista Peruano--PCP), which set about the task of political organizing after Leguía's fall from power. Although a staunch Marxist who believed in the class struggle and the revolutionary role of the proletariat, Mariátegui's main contribution was to recognize the revolutionary potential of Peru's native peasantry. He argued that Marxism could be welded to an indigenous Andean revolutionary tradition that included indigenismo, the long history of Andean peasant rebellion, and the labor movement.
Haya de la Torre returned to Peru from a long exile to organize the American Popular Revolutionary Alliance (Alianza Popular Revolucionaria Americana--APRA), an anti-imperialist, continent-wide, revolutionary alliance, founded in Mexico in 1924. For Haya de la Torre, capitalism was still in its infancy in Peru and the proletariat too small and undeveloped to bring about a revolution against the Civilista oligarchy. For that to happen, he argued, the working classes must be joined to radicalized sectors of the new middle classes in a cross-class, revolutionary alliance akin to populism. Both parties--one from a Marxist and the other from a populist perspective--sought to organize and lead the new middle and working classes, now further dislocated and radicalized by the Great Depression. With his oratorical brilliance, personal magnetism, and national-populist message, Haya de la Torre was able to capture the bulk of these classes and to become a major figure in Peruvian politics until his death in 1980 at the age of eighty-six.
SOURCE: Area Handbook of the US Library of Congress