Foreign Contractors and the Peruvian Government at the Outset of the Guano Trade
IT IS THE PURPOSE of this article to examine in detail the way in which the Peruvian guano trade was launched and the form which it initially took. The decisions which were made and the shifts which occured in the early 1840s, it can be argued, conditioned to a very considerable degree the future course of the trade. In this period one can detect many of the flawed structures which were to produce serious commercial and financial problems in the years ahead. The defective arrangements included the government's ownership of the guano and its ability to exercise a high degree of control over the conduct of the trade; a system of exporting by which certain merchant houses were, through a number of contract arrangements, given exclusive rights of sale in certain overseas markets in exchange for large loans to the government; and the government's use of these contracts and the loans accruing from them as a means of dealing with short-term budgetary difficulties. The trade, almost from the moment of its inception, was intimately bound up with Peruvian financial problems, and by offering monetary temptations to the Peruvian government and opening up new possibilities for military, bureaucratic, and other largely unproductive expenditures, it served in the long run to aggravate rather than alleviate these problems. The movements of the trade and its ancillary parts hinged, as the above remarks imply, on one central relationship, that between the government and the foreign merchant houses who were the main guano contractors. Three questions can at once be posed. Why was exporting