The Spanish squadron abandoned the coasts of Peru and dispersed in the Pacific. The island of Chiloe was the last position held by the Spaniards, but soon shared the fate of Callao. The poet of the century, perched in imagination on the summit of Chimborazo, cast his eyes over the New World and saw not one enslaved people.

Bolívar was now at the apogee of his glorious career, his name was famous throughout the world, South America acclaimed him as her Liberator. The exaggerated honours which were paid to him were but clouds of impure incense which could not obscure his real heroism, and which a breath of common sense would have dispersed. He had the power to solve the political problem in a manner which would have made him the equal of Washington, but it was not in his nature so to do. He lacked the moral strength to keep a cool head at the height to which he had attained. As was the case with San Martin, the apogee of his career marked the commencement of his decline.

One of the most noteworthy phenomena of the revolution in South America is the contrast between the qualities of the leaders and the instincts of the masses of the people. Emancipation came in the process of natural evolution, organized and directed by popular leaders, who had only one principle in common with those they led, the instinct of independence. They devoted their attention to mechanical facts, and for the most part knew nothing of the hidden forces of the movement they professed to guide.

The revolution in South America was twofold in its action, internal and external. One force was directed against the common enemy, the other against the elementary organism of the peoples themselves. The spirit of South America was genuinely democratic, so could not be other than republican. The first development was into anarchy, from which was to arise a new national life. To check this anarchy monarchical projects were hatched in the United Provinces, which resulted in their dissolution. The idea of establishing a monarchy in Peru destroyed the moral power of San Martin. The empire of Mexico furnished proof enough of the error of this plan. The prolonged dictatorship of O’Higgins in Chile brought him to the ground. The oligarchical theories of Bolívar, which tended to monocracy, were rejected by Congresses of Republicans, and brought about his fall. The Liberators, with all their power and all their glory, could not turn the revolution from its natural sphere of action; the day they ceased to go with it they were cast aside as obstacles to the march of progress.

When the independence of America was secured at Ayacucho, the mission of Bolívar as a Liberator came to an end. His duty, his honour, and even his interest, called upon him to retire from Peru, leaving the redeemed peoples to work out their own destinies. Monteagudo was the only one to give him such advice. On the night of the 28th January, 1825, Monteagudo was assassinated in a lonely street in Lima. His death is a mystery; by some it is attributed to political enmity, by some to private revenge. Bolívar in person conducted the enquiry into the matter, and kept the secret to himself.

Among the papers left by Monteagudo was found an essay upon the necessity of a general federation of the Spanish-speaking peoples of South America, based upon the plan of the Congress of Panama. An alliance of the republics of the New World was proposed, as a counterpoise to the Holy Alliance of the sovereigns of Europe. Suspicion was thrown upon the designs of the new empire of Brazil; Chile and the Argentine Republic were accused of lukewarmness in the common cause; and it was suggested that an appeal for help should be addressed to Great Britain and to the United States.

Bolívar adopted the idea as a development of his own plan, and again summoned a Congress at Panama, in the hope of organizing it himself. The United States accepted the invitation to send representatives, on condition of being permitted to remain neutral; England also, but only in order to have witnesses of her own to what went on; Brazil as a mere form; and the Argentine Republic and Chile, with reservations. Deputies from Peru, Mexico, Columbia, and Guatemala were the only ones who attended the Congress. When this shadowy Congress escaped from his influence Bolívar compared it to “that fool of a Greek, who, standing on a rock, pretended to guide the ships sailing round him.”

His next step was, for the fourth time, to send in his resignation as President of Columbia. Congress declined to receive it with unanimity, but in silence. At the same time he sent two commissioners to Vice-President Santander to announce his intention of “proceeding to Argentine territory to establish the independence of South America by assisting the Patriots.” Santander replied by reminding him that Congress had only authorised him to carry on war outside the territory of Columbia “for the security of the Republic of Peru.”

His third theatrical step was to resign the dictatorship of Peru, and to accept it again for reasons directly contrary to those on which he had based his resignation, and with the farcical condition that “the odious word dictatorship” should be no longer used. Congress also voted him a million of dollars as a reward for his services, which he refused for himself, but accepted in the name of various charities, to which they were never applied.[22] The servility of the Congress of Peru was repugnant even to Bolívar, and was censured by his Columbian partisans.

The general Assembly of the Provinces of Upper Peru, convened by Sucre, went even further than Congress had done. They declared Bolívar to be “the first-born son of the New World, the saviour of the people,” and on the 19th July, 1825, placed themselves under the protection of his sword and of his wisdom. They declared themselves independent of Lower Peru, called their country the “Republic of Bolívar,” and placed the supreme executive power in his hands so long as he should reside among them, Sucre acting as his delegate in his absence. This Assembly then dissolved, and on the 6th October a Constituent Assembly was convened, which applied to Bolívar for a Constitution, and for a garrison of 2,000 Columbian troops.