No sooner had the Chilean army left than Caceres began a civil war to oust Iglesias. For eighteen months the fighting continued with varying fortunes, but in December, 1885, Caceres surprised Lima when undefended; Iglesias resigned; a general amnesty was proclaimed, and peace was restored to the distracted country. A junta assumed power and in the election which followed Caceres was chosen president, and in the middle of 1886 he entered upon the dreary task of re-organising Peru. The treasury was empty, the population had been decimated by a horribly destructive war during four years, the flourishing coast valleys with their cotton and sugar plantations had been laid under contribution, the mines had ceased to be worked, the guano and nitrate revenue was gone, the country was weighed down with a debt which could never be paid, and foreign creditors pressed for a settlement utterly beyond the abilities of the impoverished country. Rigid economies were enforced in all departments of the administration, but the most that could be hoped was to meet ordinary expenditure.
Peru had nothing to offer towards the immense foreign debt except her railways, and the British creditors finally agreed to the Grace contract, by which she was released from all responsibility for a sum amounting to over fifty millions sterling, in return for the cession of the state railways, the payment of eighty thousand pounds annually, and certain rights to the guano deposits, mines, and public lands. British pressure induced Chile to give up a large proportion of the guano proceeds, and in 1890 the contract was ratified and the "Peruvian Corporation" took over the vast properties conceded. Though disputes have arisen from time to time, the corporation has made some progress in extending lines to open up the mineral wealth on the plateau, and a successful beginning has been made toward the exploitation of the rubber forests of the Amazon plain. It cannot be doubted that the industrial development of Peru must be greatly aided by the existence of this gigantic private enterprise which will apply the energy and economy characteristic of individual enterprise to undertakings governmental in magnitude.
GENERAL DON ANDRES A. CACERES
Caceres made no change in the centralised system of government by prefects,—and the administrative fabric survived, substantially untouched, the horrors of the Chilean war and the fighting between rival chiefs. Liberal tendencies were shown in efforts to place the Indians on an equal political footing with the Peruvians of Spanish descent, although naturally the Creole aristocracy still dominates by reason of its intelligence. Considerable dissatisfaction was felt with Caceres' management of finances, but in 1890 he was succeeded by his friend, Colonel Bermudez, who continued his policy. Unfortunately for the peace of the country the latter died in 1893. His legal successor was Solar, first vice-president, but an intrigue in the cabinet prevented the latter's peaceable recognition. Caceres' influence was dominant in the administration, and a semblance of an election recalled him to power. General Pierola, who had led two unsuccessful insurrections—those of 1874 and 1878—and who had got power in 1880, only to lose it after the fall of Lima, saw his opportunity. Solar joined forces with him and revolt broke out against Caceres. The latter had completely lost the popularity won as the most determined champion of the national rights against Chilean aggression; his administration was bad; the public employees were unpaid; the meagre resources of the country were wasted on his favourites. Though his troops were at first successful against Pierola's and Solar's hasty levies, the revolution recovered from each defeat until finally the insurrectionists entered Lima itself. The enemies of Caceres within the town arose and for two days its streets were the scene of bloody barricade fighting. Rarely does a civilised city pass through such a frightful experience as Lima on the 18th of July, 1895. There had been no time to extinguish the street lamps, and all night long the bands of revolutionists advanced, fighting by the lights which brightly illumined the carnage except where extinguished by rifle balls. Though his forces were gradually driven back, Caceres stubbornly refused to resign, and at last only yielded to the urgent representations of the foreign ministers, leaving power in the hands of a junta.
With his withdrawal peace was restored, except for the resistance which his partisans kept up for a short time in Arequipa, and this peace has never since been disturbed. The junta served until an election could be held, in which Pierola was chosen president by an overwhelming and really popular majority. In 1899 he was succeeded by Romana, an engineer who had been a member of the outgoing ministry, and he, in his turn, had as successor, Señor Candamo, who took his seat in 1903. Historically the new president represents the old aristocratic party founded by Pardo—a party which had been pushed to one side in the financial confusion which preceded and the civil disorders which succeeded the terrible Chilean war by the more radical and democratic elements known as Pierolistas and constitutionalists. The return to a participation in affairs of elements which include so large a proportion of the intelligence, self-respect, and wealth of the nation is one of the most hopeful signs of the times. The Peruvian aristocracy has learned its lesson in the hard school of adversity, and vies with the commercial classes in sober, serious attention to industrial and governmental matters. Each division of the people seems to wish to bear its share in the financial, political, and moral regeneration of their country.
Peruvian politics are conducted en famille. Economic and social questions are discussed and settled amicably among the ruling coteries and do not as in Europe and North America form the basis for the organisation of political parties. Though the country is steadfastly Catholic, clericalism is not, as in Ecuador, Colombia, and Bolivia, regarded as a menace by those who hold liberal views, and the provinces have never made any insistent demand for a larger share of autonomy, as in Argentina and Colombia. As a rule the elections are free and translate the popular will. Peru has long since passed the stage of pronunciamentos and military government; since Castilla's time the successful revolutions have been few, and have always been undertaken for the maintenance of the regular constitutional order—not its overthrow—or have been inspired by national feeling when the fatherland was in danger.
