" Lima is the heaven of women, purgatory of men, and the hell of asses." -- T. J. Hutchinson
In colonial times Peru was the heart of Spanish South America, and Lima, its capital, was not only an administrative nerve center but also the commercial metropolis of the west coast. During the last quarter of the eighteenth century, the increase in the volume of trade which was characteristic of Spanish America as a whole was especially noticeable in Peru. Although Lima imported more from the west coast and Buenos Ayres than she exported to those areas, heavy shipments of silver to Spain tipped the balance of trade in favor of Peru with the result that by 1800 Lima itself boasted a "commercial capital" of fifteen million dollars.
Well aware of the value of Peruvian commerce and of the mineral riches of Peru, the British, North Americans, and other foreigners followed the progress of the revolt against Spain with the closest attention. Even before San Martin liberated Callao and Lima in 1821, the British had begun their activities in Peru; at least ten millions in gold and silver was carried away in British vessels before the fall of Lima, and General Miller complained bitterly that British merchants dealt as willingly with royalist as with patriot during this period. Captain Richard Cleveland, in the employ of John Jacob Astor, served the royalists well in 1819 and 1820: he operated a number of ships in the coastwise trade which brought food to Callao and large profits to himself.
The patriot successes in 1821 and the following years resulted in an exodus of the "old Spaniards" who had been the principal merchants in Peru. Taking with them their ready cash, they fled the country, and their places were taken principally by British merchants. The Robertsons and others, who already had mercantile establishments in Buenos Ayres or Valparaiso, now opened shop in Lima. By 1824 there were reported to be no less than twenty British commercial houses in the city, while North Americans, French, Dutch, and Germans were also in evidence.
British manufactures enjoyed great popularity. "On entering a house in Lima, or in any other part of Peru that I visited, almost every object reminded me of England; the windows were glazed with English glass . . . the brass furniture and ornaments on the commodes, tables, chairs, &c. were English . . . the chintz or dimity hangings, the linen and cotton dresses of the females, and the cloth coats, cloaks, &c. of the men were all English: . . . the tables were covered either with plate or English earthenware, and English glass, knives, forks, &c.; and even the kitchen utensils, if of iron, were English; in fine, with very few exceptions, all was either of English or South American manufacture."
It was not long, however, before supply exceeded demand. The market was glutted by the British dumping policy which had already ruined markets in the United States as well as in Brazil, Argentina, and Chile. At the end of 1826 the British consul in Lima reported the Peruvian commercial situation unfavorable. Unsettled conditions, shortages of mules and mercury, and an uncertain labor supply had so crippled mineral production that Peru could not pay for large imports from Britain. The sugar and wine industries, which might have bolstered Peruvian exports, were also on the decline because the emancipation of slaves had deprived them of their chief source of labor.
The British had strong competitors for Peruvian trade, too. North American "domestics" were supplanting the native cottons (tocuyos) and rough baizes (bayetas toscas), and United States flour was imported in large quantities:
"Although wheat has been produced . . . in Peru, the quantity is wholly inadequate to the demand . . . Formerly the requisite supplies were obtained from Chile, but during the troubles of that country in 1823 and 4 the wheat produced scarcely equalled its consumption; and as the crops sometimes fail from blight, the North American found that he could introduce his flour to advantage into Peru. His machinery for drying flour, and his ability from the cheapness of wood to pack it in oak barrels, are a security against injury notwithstanding the distance of the voyage."
The French and Dutch, though active, did not arouse as much apprehension in the British mercantile mind as did the North Americans. The commerce of both France and the Netherlands in the area appeared to suffer from "heavy expenses and bad management" as well as "carelessness" combined with "want of activity and intelligence."
The coastal trade of Peru was a lively one. It had developed during the colonial period and was now being conducted mostly in British ships: ". . . from Valparaiso, wheat, barley, beans, indian corn, cheese, and dried fruits of various kinds, such as almonds, raisins, nuts, etc., also dried beef and tallow. The same articles, with the addition of boards, planks, and heavy wood, come from Concepcion, Valdivia, and Chiloe. From Guayaquil there is an extensive trade to various ports in Chile, Peru, and Mexico; the exports are cacao, straw hats, cordage, planks, native tar, etc. From Huanchaco and Lambayeque, the ports of Trujillo and San Pedro, the exports are sugar, rice, beans, etc. From Pisco Peru is supplied with white brandies, some wine, etc. From California with tallow, and some salted beef; and Sonsonate and Costa Rica send to Peru and Chile, indigo, mats, sugar, etc."