San Martin, after the retreat of Canterac, summoned La Mar to surrender, offering honourable terms of capitulation, to which, after some delay, La Mar acceded. The troops were permitted to march out with their arms and standards, the Spaniards being allowed to retire to Arequipa, while the militia dispersed to their homes. Three months were given to the officers and the civil employés in which to find the means of leaving the country if they did not choose to remain.

On the 21st September the Peruvian flag was hoisted on the castles of Callao. La Mar, who as a Peruvian sympathised with the Patriot cause, resigned his rank and honours into the hands of the Viceroy and retired into private life.

San Martin thus won another victory without risking his army. As a Peruvian historian says:—“He overcame a powerful army by the simple force of public opinion and by skilful tactics.” The strongest fortress in South America was now in his power, with several hundred guns of all calibres, thousands of muskets, and great stores of ammunition. He was now free to turn his arms to the north for the liberation of Quito in answer to a request from Bolívar, and could then return with reinforcements to put an end to the war. But the rôle of Fabius is one not generally appreciated; prudence is often mistaken for timidity; the general who prefers the shield to the sword offends the pride of his soldiers. San Martin gained by his policy great fame as a tactician, but he lowered his renown as a resolute soldier.

In the first six months of the Protectorate of San Martin the foundations were laid of the administrative organization and the political constitution of Peru. One of his first measures was to create a national army. Under the name of the “Peruvian Legion” he organized a division, recruited among the natives, composed of a regiment of infantry under Miller, one of cavalry under Brandzen, and a company of artillery with four guns. He reorganized the finances and reformed the commercial system. He abolished the personal service of the indigenous races, the poll-tax, and other oppressive customs. He manumitted all slaves who would join the army, and declared free all who might in future be born of slave parents. Corporal punishment was forbidden in the public schools; a national library was founded; the press was set free from all unnecessary restrictions; torture and excessive punishments were abolished. All which reforms and many others were carried out in pursuance of ideas brought by Monteagudo from the River Plate.

San Martin also issued a decree defining his own powers, and recognised such debts of the late authorities as had not been contracted for war purposes; but he did not draw up any plan for the political organization of the country, leaving that question for future solution.

The Peruvian nobility were left with their titles and escutcheons; San Martin looked upon them as a social influence of which good use might be made. He also instituted a new order, the “Order of the Sun,” in imitation of the “Legion of Honour,” instituted by Napoleon, as had previously been done in Chile by the institution of “The Legion of Merit”; and also a special decoration for women who distinguished themselves by services in the Patriot cause, a gold medal with a suitable inscription, which, however, was distributed with more gallantry than discretion, and gave rise to much scandal, some of which has not even yet died out. All this was in preparation for the establishment of that monarchy, the idea of which was still in the air.

San Martin also decreed to himself an annual salary of 30,000 dols., of which he spent the greater part in presents and in public displays; but even so, this brought much adverse criticism upon him, and contributed to give currency to a report then commonly circulated about him, that he entertained the inane project of crowning himself King. The people in their ballads sang of him as their future Emperor, and it became a habit among the officers of the army to speak of him as “King Joseph.”

Up to that time the American spirit of independence and the love of glory had sufficed to bind together the units of the army; the alloy of gold had not yet destroyed the temper of their swords. Badly fed, badly dressed, with only half their pay when they had any, suffering from all sorts of privation and disease, they had never received any pecuniary reward for their services. The Government of Chile had promised to give the victors of Maipó the land on which they had achieved that crowning triumph, but the promise was never fulfilled. The municipality of Lima now gave to San Martin 500,000 dols., arising from the sale of the properties of Spanish residents which had been confiscated, for distribution among his principal officers, and offered to the rest who should continue in the service grants of land in the provinces yet to be conquered. San Martin distributed the half million dollars among twenty officers—25,000 dols. to each one—which was in those days a fortune; but this, instead of binding them to his cause, produced resentments and jealousies, as is ever the case when self-interest enters into the relations between man and man, of which he was soon to have sad proof.

In October he received information that a conspiracy to depose him existed among the higher officers of the army. He summoned them to a secret council and disclosed the matter to them, but received very unsatisfactory replies.

That such a conspiracy existed appears certain, but it was not yet mature, and the inquiry was sufficient to dissipate it. Colonel Heres, of the Numancia battalion, was removed from his command, with many thanks for his distinguished services, and retired to Columbia, his native land. Las Heras and several other officers resigned their commands, and Alvarado, who appears to have been also one of the conspirators, was named General-in-Chief. San Martin had thus the sad certainty that although the disaffection had not spread among the junior officers, nor among the rank and file, the sympathies of the army were no longer with him as they had been at Rancagua.