The Porfirio Diaz of Peru was at hand, a little, quiet, rough, and unpretentious soldier, who for twenty years had been modestly doing his duty, observing events and slowly maturing in character. All Peruvians knew him as one of the heroes of Ayacucho, but none appreciated his latent possibilities, and he had been pa.s.sed by while his more showy companions of that historic day had pushed themselves to the front.

Ramon Castilla had been a colonel on Gamarra's staff at Ayacucho, and was rewarded by being appointed prefect of his native province--Tarapaca, the most southern part of Peru. About 1830 he began to take part in the civil wars, but he never started a revolution on his own account, and always seems to have chosen the side that best promised stability and respect for the Const.i.tution. To Orbegoso. Castilla was long faithful but abandoned him when he made alliance with the Bolivians. He went into exile when Santa Cruz was victorious, and returned with Gamarra and the Chileans. At the battle of Yungay he commanded the Peruvian contingent of the allied cavalry, and when Gamarra became president gave him his adhesion; but was taken prisoner at the fatal battle of Yngavi, where his chief was killed. Returning from captivity he found Peru torn to pieces by the armed rivalry of contending generals, and Menendez, the legal president, a fugitive.

Unhesitatingly he threw himself into the conflict against those whose claims rested on their own p.r.o.nunciamentos. Landing at Arica with only five men, his cool audacity saved his life in the first attack; his little band increased; Vivanco's partisans were confounded by the rapidity of his movements; their opponents hastened to join him.

Castilla obtained control of Arequipa and Cuzco, and finally, in July, 1844, completely overthrew Vivanco's army, putting an end to the civil war. The first use he made of his victory was to declare a general amnesty; the second to restore Menendez to the position of acting president. The latter called a convention, and ten months later Castilla was elected president of Peru without opposition.

The country realised at once that it was in the hands of a master--a man strong enough to be generous, but with whom it was not safe to trifle.

Almost instantaneously commerce felt the impulse which a.s.sured peace always gives. The turbulent military leaders found their occupation slipping away, while the orderly elements of the community grew in power. At heart the vast majority of the people were law-abiding, and the cla.s.s which promoted revolutions was numerically an insignificant element of the population. But it was not alone Castilla's personal force of character, his shrewdness as a politician, his prestige as a general, his popularity so n.o.bly won by generosity and moderation, which made his position secure. At the moment he a.s.sumed supreme power bountiful Providence placed in his hands riches untold. Holding the strings of a purse into which poured the millions from the guano and nitrate deposits, he could reward his friends, keep his troops contented by regular pay, relieve agriculture of taxation, place the disordered finances on a sound footing, and promote general prosperity by works of public utility. Europe suddenly realised the value of the bird manure found on the desert islands of the Peruvian coast, and soon hundreds of ships were coming annually to load the precious fertiliser.

Instead of squandering this fairy gift on the enrichment of his creatures, or on the creation of a vast, useless, and wasteful swarm of office-holders,--the hardest of all temptations for a South American politician to resist,--Castilla paid interest on the foreign debt which Peru had incurred during the war of independence, and refunded it, with the accrued interest, that already amounted to more than the princ.i.p.al.

The internal debt was also consolidated, care being taken to admit no fict.i.tious claims; telegraphs and railways were constructed; steam vessels added to the navy; and all legitimate branches of the administration adequately provided for. But the moment Castilla's strong hand was removed, extravagance and corruption grew to alarming proportions. Under General Echenique, his successor, public offices and pensions were multiplied; concessions were granted not to promote honestly new industries, but to favourites to be sold for what they would bring; and finally a measure was rushed through congress to extend the time fixed by Castilla for presenting claims to be funded in the internal debt. It was openly charged that the ministerial ring had arranged to put themselves on the roll of national creditors. Public opinion was scandalised, and the discontent and jealousy soon showed itself in open revolt. The first insurrection was suppressed, but in the beginning of 1854 Castilla decided to put himself at the head of the movement against Echenique. Though the government regulars were better armed and provided than the militia which rallied around Castilla, the latter advanced from one position to another and finally overthrew the president in the decisive battle of La Palma. Echenique fled the country and Castilla a.s.sumed the reins of power once more, not to lay them down until 1862, when he voluntarily retired to private life. His second administration was as orderly as his first except for a local insurrection at Arequipa. He was not, however, so successful in restraining the predatory disposition of the Peruvian politicians and was unable to restore the administration to its old economical basis.

The eighteen years of almost uninterrupted peace which elapsed between the beginning of Castilla's first administration and his retirement changed the face of Peru. A generation had grown up to whom the early years of independence were only a tradition. War, age, banishment, discouragement had thinned the ranks of the Ayacucho veterans, and the days were gone when one of them had merely to issue a p.r.o.nunciamento to be forthwith hailed as president, dictator, supreme chief, protector, regenerator, by a turbulent soldiery and a fickle, ambitious Creole aristocracy. Peru's subsequent troubles have been financial, not military.

In 1860 the Const.i.tution which still governs the country was adopted.

Framed under Castilla's influence it retains the centralised system of provincial government through prefects appointed from Lima, and gives the executive preponderant powers, although it is liberal and humane in its guaranties to the citizen. Slavery and Indian tribute, which continued to exist until 1855, are forbidden; forced recruiting, the scourge of old revolutionary days, is a crime; all Peruvians who can read and write, who own property or pay taxes, are ent.i.tled to vote.

Castilla was succeeded by his old friend and companion in arms, General San Roman, a straightforward soldier who resembled his chief in his unquestioning obedience to lawful authority, but whose unfortunate death six months after his inauguration prevented him from demonstrating whether he possessed the same statesmanlike qualities. Vice-President Pezet peacefully took his place. Castilla had encouraged foreign immigration into the coast valleys, so admirably adapted to cotton and sugar, but where labour was scarce. Chinese coolies had come in large numbers, and the flattering offers had also attracted some Europeans.

Among the latter were seventy Basque families, who shortly claimed that they were badly treated. Making a protest against a breach of contract committed by the proprietor of the estate on which they were working, they were attacked and some of them killed. The criminals escaped punishment, and the Spanish government made an international question of the affair, finally demanding an apology and three millions of dollars as indemnity. This being refused Spain broke off diplomatic relations and sent a powerful fleet, which seized the Chincha guano islands. Too weak alone to bid defiance to the Spanish ships, Pezet temporised, meanwhile asking Chile for help, and hoping for the early arrival of war-ships ordered in Europe. But the Spaniards pressed him so hard that he thought himself forced to yield to their demands. He concluded an agreement derogatory to the national honour, and a terrific outburst of public indignation followed. Prado, prefect of Arequipa, made preparations to march on Lima and depose the pusillanimous president; the Chileans, who had meantime determined to join in resistance to Spanish aggression, supported the insurrection; the terrible old Castilla went himself to the presidential mansion and gave Pezet a sound rating. The latter gave in and offered his resignation. Prado became supreme chief, issued a declaration of war against Spain, and signed a treaty of alliance with Chile. During the absence of the Spanish fleet the batteries at Callao were heavily reinforced, and an immense force of volunteers flocked to man the guns. When the Spanish ships appeared and, gallantly running into range, opened fire on the 2d of May, 1866, they were met by a determined resistance. Though the Peruvians suffered most severely--two thousand being killed and wounded--their opponents were unable to effect a landing or obtain the slightest concession, and their ships were so badly damaged that they abandoned further hostilities.

Prado now found that the unconst.i.tutional character of his position had only temporarily been ignored when he attempted to hold the power against General Canseco, second vice-president, who was Pezet's lawful successor. Castilla, now over seventy years old, landed in his native province, determined to unseat him. But the enfeebled frame of the aged warrior was unable to withstand fatigues and he died of exposure on the march. Canseco, however, roused Arequipa. Prado failed to take the place by a.s.sault, and gave up further opposition. Meanwhile Colonel Balta had headed a formidable insurrection in the north, and though Canseco was allowed to fill out his legal term, Balta's friends controlled the electoral college, and he was inaugurated president in August, 1868.

With his accession Peru entered definitely upon a new era. The race for fortune absorbed the energies of the ruling cla.s.s; cane and cotton planting, nitrate mining, railroad building under foreign direction, opened up vistas of profit without labour; social and civil intrigue replaced fighting and p.r.o.nunciamentos. Castilla's liberal refunding of the old debt, the scrupulous regularity with which international obligations had been met, and the immense and increasing revenue from nitrate and guano, gave Peru credit in the money markets of Europe.

Balta and his advisers were full of schemes for the material progress of the country and their own enrichment. A great railway system was projected and more than two thousand miles constructed at a cost of near forty million pounds. Enormous sums were spent on port works; expensive moles and piers built in the wave-lashed roadsteads which are Peru's only harbours; for the first time serious efforts were made to explore and develop the forested plain east of the Andes; the city of Iquitos was built at the head of deep-water navigation on the Amazon; office-holders multiplied; and new parks and public buildings embellished the cities. English capitalists eagerly took the bonds which the Peruvian government recklessly issued, and the foreign debt increased from five millions sterling to forty-nine millions before the end of Balta's term--a sum upon which two-thirds of the gross revenue would hardly suffice to pay interest. Such a debt was truly stupendous for a country most of whose population of scant two millions and a half was poor, non-commercial, non-industrial, and without other resources than a rude agriculture. Leaving out the proceeds of the guano monopoly and the nitrate royalties, the total revenues could not pay the interest.

[Ill.u.s.tration: STATUE OF BOLIVAR--LIMA, PERU]

Don Manuel Pardo, Peru's first civilian president, had already been const.i.tutionally selected as Balta's successor, and the latter was within a few days of the end of his term, when a terrible catastrophe happened. Among the poor relations whom the luckless president had preferred to positions in the army were four brothers named Gutierrez--the sons of a muleteer near Arequipa. Suddenly one brother appeared at the head of his battalion and took possession of the great square in the centre of the capital, while another forced his way into the president's study, revolver in hand, arrested the chief of state, and locked him up. Warned in time the president-elect escaped on board a man-of-war, and the eldest Gutierrez was proclaimed supreme chief. The people of Lima soon recovered from their stupefaction and a scene of terrific street-fighting followed. One of the conspirators was shot by the mob as he went to the railway station on his way to Callao. His brothers retaliated by murdering the captive president, but they soon fell before the rifles of the populace. Their bodies were hung up in the cathedral by the infuriated people, while the president-elect returned and a.s.sumed his functions.

Pardo's four years were one continual struggle against impending bankruptcy. Though he brought some order into public accounts, it was only by all sorts of expedients that he managed to keep up interest payments. He easily suppressed an insurrection led by Pierola in 1874; his intellectual and moral force united about him the educated and property-holding cla.s.ses in a party which survives to this day; and he left the reputation of having been the best president who ever ruled Peru. However, no efforts could avail more than merely to put off the evil day of reckoning. The rapid exhaustion of the guano deposits precipitated the disaster. Payment of interest was suspended in 1876 and the same year Pardo turned over the government to General Prado with the currency at fifty-per-cent. discount and Peruvian bonds selling in London at twelve.

CHAPTER VII

THE CHILEAN WAR AND LATTER-DAY PERU

The nitrate region extends along the narrow desert coast of the Pacific for three hundred and fifty miles. Peru owned the northern one hundred and fifty, and prior to 1866 Bolivia claimed the remainder. After the discovery of the precious mineral the industrious and energetic Chileans crowded up the coast, while the Bolivians were shut in behind their high Andes. Chile insisted that her true boundary lay as far north as the 23d degree, and took vigorous measures to safeguard the interests of the Chilean nitrate companies. In 1866 Bolivia reluctantly made a treaty by which the 24th degree was agreed upon as the formal boundary, although the Chilean miners were allowed to continue their operations in the productive regions north of that line and their taxes were not to be increased without their government's consent. This treaty gave rise to constant disputes, and as the nitrate, silver, and copper business of the neutral zone became more profitable, the Bolivian government pressed harder for a larger revenue. The Peruvian government had planned to secure a control of the output by the state purchase and operation of nitrate properties, and such a trust would prove ineffective unless the Bolivian government had a free hand with the Chilean companies. In 1872 Peru and Bolivia made a secret treaty of alliance. Its provisions soon became public, and Chile not unreasonably believed it to be aimed especially at her miners' operating on Bolivian soil. She promptly began purchasing iron-clads. It was a favourite saying of old Marshal Castilla that when Chile bought a battle-ship Peru should buy two, but the Lima government was too poor to follow the good advice, and the fatal year of 1879 found her naval force inferior to that of her rival.

At this juncture the Bolivian congress voted not to ratify a treaty negotiated with Chile four years before, and pa.s.sed a law imposing heavy taxes on the nitrate business. The Chilean companies protested and resisted; their government backed them up, and sent a fleet to protect their interests. Enraged at the seizure of her ports, Bolivia declared war in March, 1879. Peru could not be expected to remain quiet. Not only was she bound by the solemn agreement of the treaty of alliance, but she had an imperative selfish interest in preventing the disputed nitrate territory from falling into Chile's hands. She began to gather an army on the southern frontier, but she was illy prepared for war and Chile knew it. Her offers of arbitration were promptly rejected; the Chilean government had determined to strike both allies at the same time, and presented an ultimatum, demanding that Peru abrogate the secret treaty, cease warlike preparations, and remain neutral in the war with Bolivia.

Failing immediate and categorical compliance war was declared in April.

What had proven true in the time of Pizarro, San Martin, and Santa Cruz, was still true--the successful invasion or defence of Peru depended on the control of the Pacific. Whichever power should obtain a naval preponderance would surely get the nitrate territory--a rainless, cropless region where an army must be sustained by supplies brought by sea--and then could attack the other at its capital. Chile had two new iron-clads, the _Cochrane_ and the _Blanco_, besides two good cruisers and several gunboats. The two Peruvian iron-clads, the _Huascar_ and the _Independencia_, were older, though their speed was superior. The Chileans opened the war on the ocean by blockading the Peruvian ports in the extreme south, but Miguel Grau, the able seaman and intrepid fighter who commanded the Peruvian fleet, at once attacked the Chilean cruisers which were lying off Iquique. The _Huascar_ rammed and sank the _Esmeralda_, but while his other iron-clad was pursuing the _Covadonga_, she ran upon the rocks and was lost. This was in reality a deathblow to Peru, but the gallant Grau devotedly determined to see what his single ship, rapidly manoeuvred, could do to make unsafe the embarkation of a Chilean army. For four months he terrorised the coast from Antof.a.gasta to Valparaiso. Chile could not take a step until she had disposed of Grau and his dreaded _Huascar_. The blockade of Iquique was abandoned as useless; the iron-clads ordered back to Valparaiso to be cleaned and repaired so that they might match the _Huascar_ in speed; new officers were put in command; and on October the first the Chilean fleet set sail from Valparaiso on a systematic chase for the Peruvian iron-clad. On reaching Antof.a.gasta it was divided into two squadrons, the _Cochrane_ leading one and the _Blanco_ the other, and they immediately began patrolling the coast.

The _Huascar_, accompanied by a consort, the _Union_, was cruising in the neighbourhood, and at daylight on the 8th of October the first Chilean division sighted her. Grau fled, and was gradually drawing away from his pursuers when, to his horror, three columns of smoke appeared on the horizon directly forward. He was caught between the two Chilean squadrons. The _Union_ had speed enough to slip by the enemy, but the _Huascar_ was too slow. Grau's only chance was to close with the _Cochrane_ before the _Blanco_ could come up astern, and he went straight for the former. At half past nine the _Huascar_ fired the first shot, the distance being about three thousand yards. It fell short and only the fourth shot took effect. The _Cochrane_ then replied, and though the practice on both sides was wild, the two ships soon came so close that the machine guns were brought into effective play. A shot disabled the _Huascar's_ turret, and in desperation Grau tried repeatedly to ram, but was foiled by the quick turns which the _Cochrane's_ twin screws enabled her to make. Just half an hour after the action began a sh.e.l.l struck his conning-tower, blowing the heroic Peruvian into atoms. A few minutes later the _Blanco_ came up and added her missiles to the storm of shots which the _Cochrane_ and the smaller consorts were pouring upon the doomed _Huascar_. Nevertheless no one thought of striking. Hardly had Grau been blown to pieces than the executive officer had his head taken clean off by a sh.e.l.l from the _Blanco_, and the officer next in seniority was severely wounded. A few moments later the lieutenant who succeeded to the command was killed, and his successor, in turn, was wounded before the end of the action.

When the ship finally struck, an hour and a half after the first shot was fired, one of the juniors was in command, and sixty-four of the complement of one hundred and ninety-three officers and men lay killed or wounded on the deck.

The Chileans were now in absolute control of the sea, and could land an army when and where they pleased. The Bolivian sea-coast, inhabited almost exclusively by Chilean miners, and inaccessible overland from Bolivia proper, had fallen into Chile's hands at the opening of the war, but Grau's success in immobilising the Chilean navy had been taken advantage of by the Peruvians to ship nine thousand troops to their own nitrate province, where they could conveniently attack the Chileans who occupied the Bolivian territory to their south, or defend their own most valuable piece of property. But although this army was in Peruvian territory the naval victory of the Chileans isolated it almost completely. A hundred miles of rough, rainless desert, intercepted by deep ravines transverse to the coast, separated it from Tacna, where fertile valleys begin and communication with the rest of Peru becomes possible.

By the end of October the Chilean army embarked at Antof.a.gasta ten thousand strong and well provided with cavalry and the most modern artillery. Of Iquique and Pisagua, the two princ.i.p.al ports of the Peruvian nitrate country, the latter, which lies forty miles north of the former, was chosen as the less likely to be defended in force. Only a thousand men were found, who, in spite of a gallant resistance from their two small batteries and their rifle pits, were unable to prevent the landing of the Chileans protected by a tremendous fire from the fleet. Driven from the town the Peruvians could not even hold the top of the precipitous bluff until the arrival of reinforcements from Iquique.

The Chileans relentlessly pushed their advantage and soon were in possession of the railroad for fifty miles into the interior and had six thousand men entrenched on a hill called San Francisco. Abundantly supplied with provisions and water they could afford to wait, while the allies, cut off from communications, must either attack at once or abandon the province. The Peruvian general chose the former alternative, but his troops arrived in front of San Francisco exhausted and thirsty after a twenty-miles' march across the dry desert. Only a small part of the army took part in the a.s.sault, and it was easily repulsed.

Disheartened the allies fell back to the foot of the giant range which inexorably barred their way to the east, and after a few days of suffering from hunger and thirst, took their way north among the barren foothills. The enemy sent a detachment to hara.s.s their march, but they turned on their pursuers and defeated them, and reached Tacna province hungry, ragged, half-armed, and generally demoralised.

Not only was the great nitrate province, the treasury of Peru, irretrievably lost, but every point on the coast, including Lima itself, laid open to attack. President Prado left the army at Tacna, went to Lima, and thence sailed for Europe, announcing that he was going to buy iron-clads. Hardly was he on board ship when a revolution broke out in the capital, and the restless Pierola, who had headed the latest attempts at insurrection, declared himself supreme chief. The Bolivians also deposed their unsuccessful president. Peru's revolutionary government, rushed into power on a wave of wounded national pride, embodied the more than Spanish haughtiness of the Creole aristocracy, and refused all concessions. The allies still had a large army at Tacna, not too demoralised to make a creditable resistance, although it was cut off from easy communication with the rest of Peru and Bolivia, and stood badly in need of arms, clothing, and ammunition. The Chilean ships blockaded Arica, the Tacna port, but the fast _Union_ again showed her heels to the enemy's whole fleet, ran the blockade, and landed stores which put the allied army on a fighting footing.

Late in February, 1880, the Chileans disembarked a fine army of fourteen thousand men at a seaport sixty miles north of the allies' main position, and lost no time in occupying the interior as far as Moquegua at the foot of the Andes. Their first object was to cut the allied armies off from any communication with their respective countries. A small Peruvian force made an attempt to hold Torata, a point strategically important because it commanded the entrance into the Andes from Bolivia and Peru, but was unsuccessful. The allied armies were now bottled up in a little valley where provisions would surely shortly fail. The Chileans advanced south across the desert upon Tacna, and the allies took a strong defensive position on a ridge, flanked by steep ravines, with a sloping glacis in front. Vastly superior in artillery, though only slightly outnumbering the allies, the Chileans thought themselves justified in a.s.saulting the position. They opened the battle by a cannonade in which their magnificent Krupp guns did terrific execution, and under cover of the fire the infantry advanced in four columns of twenty-four hundred men each. Approaching the trenches they were met by a storm of rifle bullets through which they charged bayonet in hand.

Meanwhile the allies on the crest of the sand-hills suffered terribly from the plunging artillery fire. The Bolivians, holding the weakest part of the line, bore the brunt of the attack. Once the Chileans wavered, but a supporting cavalry charge quickly drove back the advancing enemy, and after two hours of desperate fighting the st.u.r.dy Bolivian Indians gave way, their position was carried, and the allied army fled all along the line. Though the Chileans had lost over two thousand, the losses of the allies were greater. No way of retreat lay open; they scattered in confusion; and their army virtually ceased to exist. A couple of thousand Peruvians held out in Arica for a month, deliberately devoting themselves to certain death, but the place was carried by an a.s.sault in which quarter was neither given nor asked.

Peru now lay helpless at the mercy of the Chilean armies and fleet. The ports were blockaded and bombarded, while expeditions ravaged the fertile coast valleys. Nevertheless the Peruvians would not yield. The United States offered her mediation, and plenipotentiaries met to see if terms of peace could be arranged. Chile demanded the formal cession of the nitrate territory and an indemnity. The Peruvians refused such hard terms, hoping against hope for foreign intervention. This pa.s.sive obstinacy enraged the Chilean government, and after a delay of several months it was determined to capture the capital and dictate terms at Lima. Late in December, 1880, a splendidly equipped army of twenty-six thousand men landed a short distance south of Lima and marched on the city. Only a few fragments of the Peruvian regular army had survived the defeats in the south, but the population rallied _en ma.s.se_ to resist the invaders. At Chorrillos, a few miles south of Lima, the militia waited behind a hastily constructed line of defence. The a.s.sault of the Chilean regulars was irresistible; four thousand Peruvians perished, and as many more were taken prisoners. The survivors fell back on a second line of defence, only six miles from Lima, and were there defeated in a second battle in which two thousand were killed and wounded. The Chilean losses in the two fights reached five thousand. On the following day the mayor of Lima formally surrendered the city, and on the 17th of January the Chilean army took possession. The helpless citizens were required to make up a contribution of a million dollars a month; the customs duties were confiscated, and the Chileans violated all the rules of civilised warfare by wantonly destroying the great and valuable public library--the best in South America.

Pierola escaped to Guamanga, but succeeded in rallying no forces. He gave it up and went to Europe. It became necessary to organise a government which could treat for peace. The citizens of Lima, with the consent of Chile, made Garcia Calderon provisional president, but when the discussion of terms began the Chileans repeated their demand for the unconditional cession of the nitrate territory, and Calderon did not dare a.s.sent. The enemy sent him prisoner to Santiago, while Iglesias in the northern departments, Caceres in the centre, and Carrillo in the south each kept up an independent resistance with a few militia. The Chileans made no serious attempt to conquer the interior, contenting themselves with pocketing the Peruvian customs revenues. This situation lasted two years and a half, until Iglesias came to the conclusion that peace could only be obtained by complete submission. Caceres was, however, resolved upon further resistance and quarrelling with Iglesias, advanced into the latter's territory. He was intercepted by a Chilean expedition and his forces destroyed. This left Iglesias a clear field; he declared himself president and entered into negotiations with the Chileans, arranging a treaty of peace which was signed on the 20th of October, 1883. Five days later the Peruvian flag was once more hoisted in the capital. Sporadic risings against Iglesias were easily suppressed by Chilean bayonets; four thousand men remained to see that the treaty was ratified, and a convention finally ratified it in March. Its provisions differed little from the demands made by Chile three years before. The money indemnity was waived and half the guano proceeds were left to Peru's creditors. On the other hand, the provinces of Tacna and Arica were to be held by Chile for ten years, and at the end of that time a popular vote would decide who should retain them, the losing country receiving ten million dollars from the other. Better far for the interests of permanent peace had the fate of the provinces been definitely determined. Chile and Peru have never been able to agree upon the terms under which the plebiscite should be conducted; the former still retains the provinces and the latter still agitates for their recovery.

No sooner had the Chilean army left than Caceres began a civil war to oust Iglesias. For eighteen months the fighting continued with varying fortunes, but in December, 1885, Caceres surprised Lima when undefended; Iglesias resigned; a general amnesty was proclaimed, and peace was restored to the distracted country. A junta a.s.sumed power and in the election which followed Caceres was chosen president, and in the middle of 1886 he entered upon the dreary task of re-organising Peru. The treasury was empty, the population had been decimated by a horribly destructive war during four years, the flourishing coast valleys with their cotton and sugar plantations had been laid under contribution, the mines had ceased to be worked, the guano and nitrate revenue was gone, the country was weighed down with a debt which could never be paid, and foreign creditors pressed for a settlement utterly beyond the abilities of the impoverished country. Rigid economies were enforced in all departments of the administration, but the most that could be hoped was to meet ordinary expenditure.

Peru had nothing to offer towards the immense foreign debt except her railways, and the British creditors finally agreed to the Grace contract, by which she was released from all responsibility for a sum amounting to over fifty millions sterling, in return for the cession of the state railways, the payment of eighty thousand pounds annually, and certain rights to the guano deposits, mines, and public lands. British pressure induced Chile to give up a large proportion of the guano proceeds, and in 1890 the contract was ratified and the "Peruvian Corporation" took over the vast properties conceded. Though disputes have arisen from time to time, the corporation has made some progress in extending lines to open up the mineral wealth on the plateau, and a successful beginning has been made toward the exploitation of the rubber forests of the Amazon plain. It cannot be doubted that the industrial development of Peru must be greatly aided by the existence of this gigantic private enterprise which will apply the energy and economy characteristic of individual enterprise to undertakings governmental in magnitude.

[Ill.u.s.tration: GENERAL DON ANDRES A. CACERES]

Caceres made no change in the centralised system of government by prefects,--and the administrative fabric survived, substantially untouched, the horrors of the Chilean war and the fighting between rival chiefs. Liberal tendencies were shown in efforts to place the Indians on an equal political footing with the Peruvians of Spanish descent, although naturally the Creole aristocracy still dominates by reason of its intelligence. Considerable dissatisfaction was felt with Caceres'

management of finances, but in 1890 he was succeeded by his friend, Colonel Bermudez, who continued his policy. Unfortunately for the peace of the country the latter died in 1893. His legal successor was Solar, first vice-president, but an intrigue in the cabinet prevented the latter's peaceable recognition. Caceres' influence was dominant in the administration, and a semblance of an election recalled him to power.

General Pierola, who had led two unsuccessful insurrections--those of 1874 and 1878--and who had got power in 1880, only to lose it after the fall of Lima, saw his opportunity. Solar joined forces with him and revolt broke out against Caceres. The latter had completely lost the popularity won as the most determined champion of the national rights against Chilean aggression; his administration was bad; the public employees were unpaid; the meagre resources of the country were wasted on his favourites. Though his troops were at first successful against Pierola's and Solar's hasty levies, the revolution recovered from each defeat until finally the insurrectionists entered Lima itself. The enemies of Caceres within the town arose and for two days its streets were the scene of b.l.o.o.d.y barricade fighting. Rarely does a civilised city pa.s.s through such a frightful experience as Lima on the 18th of July, 1895. There had been no time to extinguish the street lamps, and all night long the bands of revolutionists advanced, fighting by the lights which brightly illumined the carnage except where extinguished by rifle b.a.l.l.s. Though his forces were gradually driven back, Caceres stubbornly refused to resign, and at last only yielded to the urgent representations of the foreign ministers, leaving power in the hands of a junta.

With his withdrawal peace was restored, except for the resistance which his partisans kept up for a short time in Arequipa, and this peace has never since been disturbed. The junta served until an election could be held, in which Pierola was chosen president by an overwhelming and really popular majority. In 1899 he was succeeded by Romana, an engineer who had been a member of the outgoing ministry, and he, in his turn, had as successor, Senor Candamo, who took his seat in 1903. Historically the new president represents the old aristocratic party founded by Pardo--a party which had been pushed to one side in the financial confusion which preceded and the civil disorders which succeeded the terrible Chilean war by the more radical and democratic elements known as Pierolistas and const.i.tutionalists. The return to a partic.i.p.ation in affairs of elements which include so large a proportion of the intelligence, self-respect, and wealth of the nation is one of the most hopeful signs of the times.

The Peruvian aristocracy has learned its lesson in the hard school of adversity, and vies with the commercial cla.s.ses in sober, serious attention to industrial and governmental matters. Each division of the people seems to wish to bear its share in the financial, political, and moral regeneration of their country.

Peruvian politics are conducted _en famille_. Economic and social questions are discussed and settled amicably among the ruling coteries and do not as in Europe and North America form the basis for the organisation of political parties. Though the country is steadfastly Catholic, clericalism is not, as in Ecuador, Colombia, and Bolivia, regarded as a menace by those who hold liberal views, and the provinces have never made any insistent demand for a larger share of autonomy, as in Argentina and Colombia. As a rule the elections are free and translate the popular will. Peru has long since pa.s.sed the stage of p.r.o.nunciamentos and military government; since Castilla's time the successful revolutions have been few, and have always been undertaken for the maintenance of the regular const.i.tutional order--not its overthrow--or have been inspired by national feeling when the fatherland was in danger.

[Ill.u.s.tration: PERU]

CHILE

CHAPTER I

THE SPANISH CONQUEST

About a century before Pizarro landed, Tupac Yupanqui, the greatest of the Inca conquerors, crossed the rough mountains, bleak plateaux, and waterless deserts which lie between the habitable part of Bolivia and the irrigable valleys of northern Chile, and rapidly overran the coast for six hundred miles. As one goes south the plain broadens, the short rivers flowing from the mountains grow larger, the rainfall and the area available for cultivation increase, and from Santiago a wide valley, the heart of Chile, stretches between the Andes and the coast range, sustaining a dense population. As far south as the river Maule, the limit of Tupac's conquests, irrigation is necessary for crops. In all these valleys dwelt various tribes whose system of agriculture and civilisation was similar to that of the Incas. Only the southern peoples inhabiting the rainy and forested regions beyond the Maule refused to submit. Huaina Capac, Tupac's son, was once obliged to undertake a campaign to consolidate the Inca power, but Chile north of the Maule became thoroughly attached to the Cuzco dynasty.

Little resistance was encountered when Almagro invaded this country just after Pizarro's entry into the Peruvian capital. He advanced as far as the Maule, finding everywhere a population probably as dense as that of the present day. Agriculture was highly developed; the people were clothed in substantial stuffs of their own manufacture; they mined copper, tin, and lead, and possessed excellent arms and tools. The tribes all spoke the same language, but each enjoyed a degree of autonomy under its own chiefs. Their habits were democratic; they loved freedom and independence; the Inca socialistic system did not prevail; and each farmer owned his own field and could transmit it to his children. The race was large and vigorous, the selected survivors from among immigrants who had been greatly improved by countless generations of struggle in the more rigorous climate. As one approached the cold and rainy mountains of southern Chile their characteristics became more p.r.o.nounced and south of the Maule warlike, half-savage tribes proudly maintained their independence. Almagro's sole pre-occupation was gold, but he vainly searched the valleys as far as the southern boundary of the Inca empire. Here he encountered serious resistance from the independent tribes, and though victorious in his fights, concluded that it was not worth while remaining in such a cold and goldless country. He abandoned Chile and returned to Peru, there to meet his death at Pizarro's hands.

[Ill.u.s.tration: BRIDGE ON THE ROAD BETWEEN SANTIAGO AND MENDOZA.]

Pizarro soon took measures to extend the Spanish conquests to all parts of the Inca empire, and for Chile he selected his quartermaster, Pedro de Valdivia, an active and experienced soldier. Late in 1540--the summer season in those lat.i.tudes--Valdivia, with two hundred Spaniards and a large number of Indian auxiliaries, crossed the Andes and arrived at Copiapo, the northernmost inhabited valley. Like Almagro he met no opposition as he pushed his way south for four hundred and fifty miles.