Base text for the Centenary years

= BICENTENARY PROJECT = This base text is in process of being copied from the text on the [App. Peru 2021 "Click docs. Click Base text Centenary . . ."  If you do have access to a smartphone you can view the "App" on a webpage.]

Britain & Ireland, the USA and the Centenary years in Peru.

(Base text for the Leguía years)

This project is designed to provide an insight into: the complex triangular relationship at that time between Peru-US-Ireland&UK; the underlying changes from “Civilismo” to the “Oncenio of President Leguía” and the “drift” from British commercial hegemony to that of the US.

The opening shots for the bicentenary could be said to have been fired on the 150thanniversary of the birth of Leguía, 19 February, 2013. Some notes about that and the general background to 1921 follow.

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Three talks about the life and times of ex-President Leguía on and around his exact birth day, 19 February, were held at the Cultural Centre Inca Garcilaso of the Ministry of Foreign Relations between 13-27 February 2013. All three talks can be viewed on YouTube. [See entry Cultural Centre Inca Garcilaso in the bibliography.] An exhibition on the theme of Leguía was held at the Casa Mariateguí and a double mesa conference with five specialist speakers has been held at the Instituto Riva Aguero in Jiron Camaná.

The talks mark 150 years since the birth of Augusto Bernardino Leguía y Salcedo in 1863 who came to be Minister of Finance, Prime Minister and then President for the greater part of the years 1903 to 1930, enjoying much of Peru's second great bonanza period, which at its extreme stretched from 1892 to 1932. And at the end of the 150th anniversary year a conference was held at the Universidad del Pacífico. . ..

THE HISTORICAL BACKGROUND to the Leguía years
This article offers an assessment of Leguía in the context of history as Peru starts wish-listing the major works for its bicentenary celebrations only 8 years away . The centenary celebrations in 1921 and those for the Victory of Ayacucho in 1924 were seen as amongst the high points in Leguia's Presidency. The talks by Antonio Zapata (the broad brush) and Juan Luis Orrego (specifics of Lima 1921/24), plus material cited in the section “Bibliography”, form the focus for this walk through history.

'''A boom-time President '''

It is well to remember that throughout the overall period considered here (1903 to1930 – termed the “long” Leguía years) the Peruvian elites (at least, during the Oncenio there was a shift in power from the oligarchy to the upper middle class) enjoyed the bounty of an ongoing “complex” boom, that is one which was interrupted by a year or so readjusting to the “shock” of the WWI and, around the same time, to a switch from traditional sugar, cotton, wool and rubber to copper and oil. As Toledo, García II, and Humala (so far) might testify, being a boom and bonanza President is a tad easier than otherwise. For more about Peru's bonanza periods see Peruvian Times Jan 31, 2013. So Leguía had the good fortune to preside when, at least initially, there was money around “to do things”. Further he was lucky not to be President 1912-1919, Peru's point – or rather period - of relative downturn.

Relative downturn and readjustment 

On the trade front, things had been going well for Peru. They continued to do so but they slowed down in some sectors, almost into reverse gear, before continuing their upward advance (in other sectors) and mostly this slow-down occurred after Leguía's first Government and before his second. The cause of this relative downturn or “inflexion” was multiple: Income from rubber declined as Britain “moved production” to Malaya; the opening of the Panama Canal favoured disproportionately New York over Liverpool; WWI at first deprived Peru of markets in Europe, then came a burst of wartime demand from the US followed by overproduction and a slump in prices for agro-exports; the US comes to replace the UK as the main trading partner and then main investor. Most of these factors produce hiccups and switches between sectors rather than overall socio-economic disaster. Other factors are considered below. .

Internal political pressures
To understand the political situation at the beginning of this period (1903) focus for a moment on the main groups with economic and social punch and also on the disenfranchised. Leguia had to balance the interests and power of (a) the old elite “Civilistas” who were typically sugar-planters, cotton growers, hacendados, gamonales and so on. Old money, but often not that old! The Civilistas had started well with their objective of installing Peru's first civilian president (Manuel Justo Pardo y Lavalle, president 1872-1876) but by the time of Leguías first government they had become a reactionary force. (b) the newly emerging urban industrialists and labor sindicalists, weakened by the downturn & “economic abortion” in that sector following 1908 – a quick comparison with Japan's rapid industrialisation might serve well here (easier to be rentiers than producers) -  and (c) the miners and oil people, who often were foreigners. At the time seventy percent of Peruvians were Quechua speakers, 10 percent spoke other languages other than Spanish including Aymara, Shipibo, & other Peruvian languages and “immigant languages”: Italian, German, Japanese, Cantonese, etc. But few of these had the vote, effectively disenfranchised (see Paniagua), nevertheless the Presidency had to find a way of keeping a lid on their demands. In Puno this meant repressing the frequent peasant uprisings.

Leguia in his first term came to power on the backs of the Civilistas (see (a) above), in his second term he played populist street politics with the new urban classes (see (b) above) but after about 1923 was accused of selling out to foreign mining and oil interests (see (c) above). True or false? To what extent was he visionary in his policies regarding the disenfranchised seventy percent? Was he a closet protestant within a catholic country? Did he not deal favourably towards “indigenismo” and the ''indigenistas? ''On the other hand did he not sell out to US capital at the expense of the national industrial middle class and the old elite?

This photo, taken by Walter Runcie in 1929 at Cerro de Pasco (mine) as Leguia's Oncenio was drawing to a close, prompts various interpretations. The workers in the photo could be local Andeans recruited into the mine. As Klarén (2000 see Bibliography) explains the Cerro de Pasco Corporation “proletarianized” the previous peasant population of the Mantaro and adjacent valleys. Under Leguía this US based Corporation came to monopolize mineral production, and the route ahead for “these grandfathers of today's new middle class” was not going to be easy, If Peruvians could have owned the wealth beneath their feet these guys in the photo above would be Peru's equivalent of gulf-state millionaires. As it was Leguía's ambitious plans for his new fatherland (la Patria Nueva as he called it) were focused on a magnificent expansion of Lima. Was the splendor of Avenida Leguía (now Avenida Arequipa see photo below) a necessary, almost inevitable, step in the progress from an Aristocratic Republic or a cruel expropriation of wealth. (see note re Avenida Arequipa.)

A traditional conflict between city and the mining and agro-export areas

The problem for the miners (and for Peru's economists) was and is that they produced the hard currency (pounds sterling until1930, thereafter dollars – see Box 1) whereas the city-dwellers – especially the elites – were the big spenders. Thus creating a “spatial disequilibrium” between mining regions (earners) and the urban areas (spenders). A characteristic which of course exists to this day, though in a less vicious form. In colonial times the mines paid for Spain's military adventures in Europe, the import of luxury goods from France and more besides.

Minerals and oil versus agro-exports

Cerro de Pasco Corporation along with another U.S. firm, accounted for more than 97 percent of Peru's mineral exports. Cerro came to have a stranglehold on the central Andes mining sector. This corporation and the oilfields in the north (Talara - Lobitos) – during Leguia's administration - contributed an increasing share of Peru's hard dollar spending power as the previously dominant wool, cotton, sugar and rubber sectors declined (though still dollar earners). Lima, Arequipa and some other towns contributed financial, self-consumption and entrepot services but the cities themselves – given the failure of industrialization and labor policies after 1908 – contributed little.

It seems at some point in the early twenties Leguía turned away from the populist policies on which he was elected to more elitest / pro US and (thus) more repressive ones. Several historians locate the turning point in 1923, when a “project by Leguía to consecrate the nation to the Sacred Heart of Jesus backfired. The reaction by students and radicals produced street protests. These were put down with a mano dura.” External forces, the Mexican and Russian Revolutions conspired with the illegitimacy of Leguía's later government to produce two of Peru's most enduring but troubled political movements: APRA (vascillating from left to right) and the Communist Party (frequently splitting).

[Caption for photos]

The areas which got to spend the pounds & dollars were those in the following two photos: (1) the then fashionable Plaza de Armas de Lima (1931) and the surrounding shopping streets, notably the Jirón de la Unión and (2 now located on page 8) an aerial view of Leguía's Patria Nueva Lima, c.1929 - the area fanning out from the new Moorish Arch (a gift from Spain in gratitude for 1821 / a project to provide an Arc de Triomphe for Lima / a reminder of the Moorish roots of Spain – which?) along the 28 de Julio. In the photo the parallel Avenidas Petit Thouars, Leguía (now Arequipa) and Arenales with Salaverry barely surveyed (nesr Leguía's racecourse extreme right). [End captions]

 

Copper and Oil take over

Social and political power before the mid-twenties rested on landed wealth which in general was derived from cotton, sugar, wool, and (later in the East) rubber production. For varying reasons their values as a percentage of total exports declined and with it the decline and fall of the Aristocratic Republic. The old guard hoped that the perceived wizardry of Leguía could halt the fall – instead he seems to have fallen for the indiscreet charm of US capital particularly in the extractive sectors of oil and copper. For this he was roundly condemned as entreguista.

'''Arrested development – industrial development crowded out?'''

[AMD1] Even as the first green shoots of industrialization were appearing, agents of the “resource curse” and perhaps also America-philia were smothering them at birth. From railway workshops in Arequipa to soap factories in Lima it seems that Leguía’s experience of the US economy could not alert him to the market distortions of 'entreguismo. 'He had learnt the lessons of the US civil war (where for the “old South” read the plantation-base of the Civilistas and for the Yankee-North read modernized Peru). However there was a contradiction. The Yankee-North proved to be an emerging industrial power which came to rival Britain within 30 years of the War, whereas Leguía’s extractive sector Peru was hardly going to provide the counter-balancing industrial powerhouse.

And if industrialization was going to be seen as a “whitening of the Andeans” then it would be doomed to disaster. . . . . .It would take decades before politicians followed industrialists in daring to talk of “inclusiveness” in the workforce.

 

[Caption of image above]

Cover of the second issue of'' Industria Peruana, November 1931, “revamped” periodical of the Society Nacional de Industrias. Source: Drinot (see bibliography). Orig. BNP. “Now post-Leguia – just - industrialization, more than an economic project, emerges as a cultural aspiration.” ''

Indigenismo

On aspect of the US model which simply did not fit was (a) the different social and ethnic composition as between the US and Peru. In the US the model was not explicit regarding the inclusion of Native Americans, Mexicans, Afro-Americans and (b) the heavy constraints on entrepreneurial activity and scientific invention imposed by society and religion in Catholic Peru. Peru's flourishing community of Leguía émigré-critics characterized the ideology which justified the extreme inequalities and their link to ethnicity as “positivist / social darwinism” during the nineteenth century period of “British capitalism” (see the “imperialism of free trade”) and pointed out that the shift to US capital seemed to coincide with a scarcely improved characterization as “marginality / marginalization”. One response to this by Peruvian intellectuals was the development of'' indigenismo. ''The intellectuals were Criollo or mestizo, seldom indigenous, and based their demand for better treatment of the Andean or other native inhabitant not on an essential human right [which would not have been acceptable to the hegemonic mind-set at that time] but on an appeal to past glories, for example by referring to the splendor and high moral values of the Inca Empire – even if these needed to be over-hyped. The art of Sabogal, whom Leguía used to help design the Parque de la Reserva, the literature of Valcarcel (a newly oriented history of ancient Peru), the pages of Amauta and the Puno-based literature of the Orkopata group all helped lay the foundations for a more genuine “Arguedian” literature. The first book “Agua” of José María Arguedas was published only 5 years after Leguía was toppled from power by the army officer Sanchez Cerro.

 

 

Entreguismo

Selling out or selling off one's national patrimony, often in the form of concessions at what his Civilista critics considered give-away prices is an almost inevitable sin in resource-rich Peru. The Guano era set the pace. The Grace Contract followed in which the Peruvian Corporation (trains, land, ports etc) became virtually a (foreign) state within a (Peruvian/civilista) state and then under Leguía, as we have seen on page 1, the Cerro de Pasco Corporation  greatly increased copper production by the construction (1922) of a huge new smelter and refinery at La Oroya in the central Andes. Metal production shot up fifty percent. Smaller independent plants closed down and Cerro de Pasco established a quasi-monopoly. The story goes that after polluting land up to 30 kilometers away the Corporation was able to buy up the pasture etc at minimal cost, becoming in the process the largest landowner in Peru displacing the Civilista sugar barons in the terrateniente league. As owner of virtually everything in the region the Corporation printed its own money which it seems employees were compelled to spend in company stores.

 

Standard Oil

In the north Standard Oil of New Jersey took over an ailing British Peruvian petroleum company which was in long-standing trouble with the tax authorities. Standard Oil locally used the name, the International Petroleum Company and, in nationalist circles, that became a byword for monopoly market exploitation. Forty years later Cerro, the Peruvian and the International were prime targets for nationalization when Velasco's left-of-centre military government took over in1968. Leguia's vision of development following the US model seems to have been ill-founded.

As a general comment and perhaps a further view '''The Peru Reader has it this way''':

“Leguía's Oncenio or eleven-year rule, blocked radical change. The former treasury minister promised to detain "the advance of Communism . . . and its dreadful consequences" and opened the country to further investment by U.S. companies. Opposition leaders were deported including the young Haya (de la Torre). To back efforts to expand public works, urbanization and the middle classes, Leguia mixed armed repression, electoral gerry mandering, and savvy stagecraft, like his appeal to popular religiosity through the showy dedication of the republic of Peru to the Sacred Heart of Jesus. His rallying cry was a "New Fatherland." Yet the country continued to rest on the unstable foundation of the export of raw materials to the wealthy northern countries. The lucrative profits filled the coffers of foreign companies and their allies in the national elite under the neocolonial brand of capitalism.” (p229)