Peru's Growth And Government
( Originally Published Early 1912 )
WHEN Honorable James Bryce wanted an apt illustration of the numerous elections in the United States, he compared them in their frequency to revolutions in Peru. The comparison was not unjust. Civil wars have occurred almost as often. The bloodiest drama was enacted as recently as 1895. In that year the streets of Lima were choked with corpses and ran with blood of brother shed by brother. No one today can give a rational cause for it. A few years earlier, when Peru yet was prostrate at the feet of Chile, there were revolutions and counter-revolutions.
But the seeds of revolution do run out after centuries. The soil grows barren. The soil in this case is the mass of aboriginal population, the Indians and the mixed bloods, who have known only blindly to follow one chief or another. Slowly they learned that in the revolving of rulers they were no better off. An English monarchist repeated to me the story of an old Indian at Chosica. He was bent with age and hard work, was in rags and was a beggar. This was after the Spanish power had been broken and independence established. He came one day to the group of political chiefs who were then in control and were controlling for the benefit of themselves. They were eulogizing Liberty and the glory of having done with kingships. The old fellow listened and then meekly remarked: "But, sirs, it is all the same. Under the viceroy I was a beggar. Under the Republic and your Honors I am a beggar. I don't see that Liberty means any-thing to old Juan Martinez."
For the bulk of the inhabitants it has not been quite so bad, because even the republican semblance of government has been better training for them than the monarchical rule. Yet in the uprisings and counter-uprisings they were like the old beggar. Whatever dictator was in and was promulgating high-sounding proclamations of liberty, they were no better off than under his predecessor. They followed one cacique or another, killed one another at his behest, and then settled back in the old way. But of late years the condition of the mass of the Indian and mixed population has improved. I take this statement on the evidence of discriminating foreigners, and not as a conclusion from my own observations, which were made within too short a period to afford a basis for comparison. It is the testimony of the Europeans that more than one ambitious leader has been willing to lead a revolt when his faction lost, but he could not get followers or dupes, and therefore he acquiesced.
It is true also that the educated classes have become more stable and have put forth a stronger influence against political disturbances. Yet over-credit should not be given them, for the hot Spanish blood in all of them has not been brought down to an even temperature. This was very forcibly impressed on me during the spring of 1903, when the presidential election was pending. Senor Miguel Candamo, for several years president of the Lima Chamber of Commerce, was the only candidate who had a political party back of him. He had been an influential supporter of the liberal administration of President Romana. He was the choice of the Constitutionalists and Civilistas. There was another aspirant whose canvass was entirely personal. Besides the Civilistas the only important political organization was the Popular Democrats, who were supposed to represent the popular element, or the masses. They nominated no candidate, but they sought to control the Congress.
One of their leaders, Senor A—, calmly explained to me that they would get control of Congress, would declare the election null and void, and substitute their own man for Senor Candamo. He looked on this as perfectly legitimate politics. Senor A had been educated in the United States in order to have the benefit of free government, had spent his youth there, and after returning to Peru had held important public offices. When he was explaining to me the plans of his faction, the future of Peru hinged on the peaceful succession to President Romana.
After Senor Candamo had been chosen for a faction which had not even proposed an opposing candidate, to seek to prevent his inauguration and put in its own man—who never had made even a pretense of seeking the suffrage of the electors—meant to precipitate, if not actual revolution, a condition fully as bad. It meant to destroy the confidence of foreign capital, and to take from Peru the prestige which she slowly was regaining among South American nations. It was inconceivable how a patriotic Peruvian could harbor a purpose of encouraging such a condition, and yet Senor A—, was intensely patriotic and ready to fight for his country.
The election was held, and some of the hot-heads, among whom was Senor A , did undertake to question the result, and for a brief period the fate of Peru trembled in the balance. It was settled by the stern displeasure of General Nicolas de Pierola, a former president, himself the chief actor in many revolutions and at that time the leader of the Popular Democratic party. He told his radical followers that insurrection against the government would be treason to the nation, and Senor Candamo was inaugurated with his support.
Another test came when, a few months after President Candamo's inauguration, he was taken ill and in May, 1904, died. He had been conspicuously and honorably identified with the history of Peru, had the confidence of the whole people, and especially of the commercial classes both foreign and native. His program had been purely a civilian one. All the political parties had been harmonized and were supporters of his ad-ministration. His death inevitably brought on a contest for the succession. In this struggle there was to be an alignment of political organizations. Again Peru was approaching a crisis which would test her stability, and show the world whether confidence could be placed that the progressive-career on which she had entered would be uninterrupted by domestic dissensions.
Under the Peruvian constitution a first and a second vice-president are chosen, but the vice-president has not exactly similar functions to that official in the United States. The first vice-president, in the absence of the president or his temporary retirement from official cares, discharges the responsibilities of the executive office, and in the absence or disability of the first-vice-president the second one acts. But in the event of the death of the Executive, the vice-president fills the office only until an election can be called and a successor chosen. It happened in 1903 that Senor Acorta, who was chosen first vice-president, died before the inauguration. On the death of President Candamo, Senor Serapio Calderon, the second vice-president, discharged the executive functions and issued the call for the election of a new chief magistrate. If the emergency had been pressing, he could have called the Congress in extra session. After some delay nominations were made by the opposing political parties. The Civilistas united on Senor Jose Pardo as their choice, and the Constitutionalists endorsed him, he be-coming the candidate of this coalition. The Popular Democrats and a political group known as the Liberals named General Nicolas de Pierola, the former president, as their candidate. His career in the stormy periods of Peruvian history for forty years had made him a leading character and he had strong influence with the masses. On his retirement from the presidency he had become the head of a business enterprise in Lima. His old opponent, General Caceres, one of the Constitutionalists, supported Senor Pardo.
Jose Pardo is a member of a distinguished family, one of several brothers influential in the business and politics of the country, sons of the president who founded the Civil party in 1872. He was educated for the law, and had been in the diplomatic service in Europe, but had returned to Peru and was occupied as a sugar-planter when Miguel Candamo was chosen president. He was one of Senor Candamo's active supporters, and entered the latter's cabinet as Minister of Foreign Affairs. He was generally recognized as the coming leader of the Civilistas, and was surrounded by a group of young men who were aggressive in their advocacy of civilian policies_ His speech in accepting his party's nomination was singularly free from the generalities and the apostrophes to Liberty with which presidential candidates and dictators in the Spanish-American republics are accustomed to season their discourses. Instead it was a plea for a school system, internal improvements, railways, irrigation, harbor works, fiscal reforms, and economical administration.
General Pierola also made industrial measures the leading feature of his program.
The campaign caused anxiety, though the tension clearly was less than in the previous year in the period between Senor Candamo's election and his inauguration. Demonstrations by the rival political groups resulted in bad blood, there were collisions with the police in which several persons were killed or injured, and election riots after the manner of some sections of the United States. But these incidents were not numerous enough to show the existence of a revolutionary spirit, and they were dismissed with the euphemistic designation of "electoral effervescences."
Meanwhile the real electoral contest was going on in the newspapers, in meetings, and by manifestos and addresses to the public. It soon became evident that the Civil party with Senor Pardo as its leader would triumph. The Pierolists asked the government for a postponement of the election. This was refused on the ground that under the laws and the constitution no authority existed for such postponement. Then the Pierola ticket was withdrawn by the Popular Democrats and the Liberals, and their followers were advised not to vote. This action was a resort to the minority method practiced in Spain and her offshoot countries in America. It is an admission in advance that the other party will win.
After General PieroIa's withdrawal the Civilistas and their allies exerted themselves against what in the United States we call apathy. To comply with the law and make the election valid, it is necessary to have one-third of the registered vote cast. The proportion of the ballots was much larger than that. Señor Pardo was elected in August and inaugurated in September. He formed his cabinet with young blood tempered by experience. Senor Leguia, who as his colleague in President Candamo's cabinet had been Secretary of the Treasury and had been the warm advocate of the new industrial policy, was called to the Treasury again and became president of the cabinet. Other members of the cabinet selected also had the confidence of the public. The continuance of civil administration and the dominance of civilian measures were reaffirmed, and it was shown that Peru had taken another stride toward stability by the acquiescence of the defeated party. The opposition made no effort to question the election.
The administration of President Pardo was a most successful one, but it is one of the iron-bound rules of South American politics, that no president may serve two terms in succession. It was a very happy circumstance, however, that the Civilistas had still another strong man in Senor Augusto B. Leguia, Secretary of the Treasury under two administrations, who was elected in August, 1908, and on the 24th of September of that year was inaugurated. For four years now President Liguia has splendidly managed Peru's national affairs, and while he has been progressive and determined in his administration, he has still shown that caution exercised by the presidents of Peru for the last twenty years. Under his administration the government has made great progress.
I have given the substance of the spirit of the government of Peru as it exists today, leaving only brief space for an analysis of the form. The constitution now in force was adopted in 1860 and was modeled after that of the United States. Power is centralized, though there is a reasonable measure of local self-government or local administration.. Geographical isolation of the different sections is one cause of the centralized authority. The political division of the Republic is into twenty-one departments, which are subdivided into ninety-seven provinces, and these into 778 districts. The source of administrative authority in each department is the prefect, who is named by the central government. In many of the departments the prefect is an officer of the regular army. Each of the provinces has a sub-prefect, and the districts have their local rulers or governors, depending from the higher power. In the municipalities the alcalde is appointed, but the members of the Council are elected. The Amazon Province of Loreto has a system of administration somewhat different from the other departments. It is more under military administration. The customs administration at Iquitos also requires a close supervision by the national authorities.
The powers of the Executive are defined with clearness. They are complete, though there is something of a limitation in the Council of State, which was created by law in 1896, is in some respects an executive body. When the cabinet is in full sympathy with the President, the Council of State is his instrument.
But when this body is made up of warring political elements, the President is not always able to have his way. The system obtains of having the various political groups represented, and when there is a hostile majority in the Congress that is the only means by which the government can be carried on. Frequently it results in an administration of cross purposes. The Cabinet members may be also members of the Congress, and may be summoned before either branch of that body to give explanations and may take part in the debates. The Peruvian Congress is peculiar in one respect. This is in the election of suplentes, or deputy representatives and deputy senators. When the election is held, it is both for members and for deputy members. Thus it happens that the Congress never need be without a quorum in either branch, and no district or department need be deprived of representation temporarily by the death or absence of the senator or representative. His deputy can be counted on to attend the sessions.
The church is a part of the state in Peru, and has been usually an unprogressive part. The ecclesiastical organization consists of an archbishop, resident in Lima, and eight suffragen bishops for the various dioceses. The church as an institution has opposed movements to liberalize Peru, and has instigated revolutions against reforms.
Roman Catholicism is intrenched in the constitution, not only as a religion of the state, but by the prohibition of other forms of worship. The Protestant congregations are not numerous, and it is still necessary to call their places of worship halls instead of churches. Yet under liberal administrations no real difficulty is experienced by the missionaries who temper good sense with zeal. In remote districts the central government can not always insure protection against local prejudices, but its authority is exerted to that end. The testimonies of the missionaries them-selves is that they are meeting fewer and fewer difficulties, and even in the strongholds of intolerance, such as Cuzco and Arequipa, they are able to carry on their proselyting labors without interference.
In the passing of years the constitution of Peru will be amended so as to welcome Protestantism, though the Roman Catholic Church will remain the state church. This constitutional amendment is some-what cumbersome, since it requires consecutive action by two congresses in order to become effective; but the sentiment in favor of it is spreading and propositions already have been presented to Congress. Wise Protestants do not believe in urging it too rapidly. They realize that with a succession of liberal governments and with the toleration that already is manifest, Protestantism can afford to wait and work.
The provisions of the Peruvian constitution and the laws with regard to foreigners are liberal. Foreigners may be naturalized after two years' residence. The government at Lima through the prefects extends every possible protection to those who are traveling or who seek to engage in mining or other industries.
The government in the laws it has promulgated for the mining industry, for the exploitation of the rubber forests, for irrigation, and for the navigation of the waterways has sought especially to protect and encourage foreign capital and individuals. Foreigners may be members of the deputations and delegations which are provided in the mining code, and they also may serve in the municipal councils. On the alder-manic ticket at Cuzco and other places I found English and German names, and was told that these candidates had not been naturalized and had no intention of being. This provision should be of particular value in colonization movements where communities may be established without the native Peruvians.
In relation to income and outgo there are three sources of revenue,—general, municipal, and departmental. The general revenues are had from the customs import and export duties, from the stamp tax, and from the internal revenues on tobacco, alcohol, sugar, matches, and similar articles of consumption.
Salt is a natural monopoly. The departmental revenues are from the land tax (which is very light), from the imposts on property transfers, from the inheritance tax, and from a variety of industrial sources. The municipal taxes are obtained from local tolls, licenses, surveys, and like means.
Somewhat curiously in this age, the collection of the internal taxes is farmed out by the national government. A joint-stock company known as the National Tax Collection Society, by an agreement with the government, collects all these revenues and turns them in, retaining its percentage and providing loans when needed for current purposes. The stock of this company was taken mainly by the Lima Chamber of Commerce. There is also in Lima a provincial tax collection association, which takes charge of the local revenues in the same manner that the national company collects the general revenues. Contrary to what might be supposed, this system works very well, and is satisfactory to the tax-payers, while the government gets a larger return than if it itself were the collector.
Peru is almost exceptional among the South American Republics for establishing and maintaining the gold standard. This is a brilliant and instructive chapter of financial history. The beginning was made in 1897, following the presidential election in the United States. General Pierola was President and was strongly in favor of the gold basis. Though Peru was a silver-producing country, a law was passed providing that gold should be the sole standard, that customs duties should be thus paid, that there should be no further silver coinage, and that the ratio should be ten soles of silver, equal to the English pound sterling, or the Peruvian pound sterling, which is the exact equivalent in weight and fineness of the English pound and is known as the inca. It also was provided that silver should not be legal tender in amounts greater than $100, that no person should be permitted to bring more than ten soles into the country, and that the export duties on silver should be repealed. Subsequent legislation strengthened this law, and the government by an arrangement with the banks called in and melted into bullion the redundant soles, itself taking the loss. There was opposition, especially in the Cerro de Pasco mining region, where the output of silver was greatest. In the interior also the Indians, who had been accustomed to silver, could not be made to understand gold. But as they have few transactions in which a yellow coin is necessary, this was not a serious drawback.
Paper money, either bank emissions or national notes, is prohibited by the law of 1879. The currency which was in circulation in 1881 was converted into internal debt. This internal debt grew out of the calling in of the paper currency and the liquidation of old accounts. The total is approximately $15,000,000. A small yearly disbursement is required for its service. Part of this so-called internal debt earns one per cent yearly interest, and the remainder receives no interest, being provided for out of a redemption fund which amounts to $125,000 annually. This liquidation has been regularly carried on since the bonds were issued under the terms of the law of 1888. The yearly fund appropriated for interest and the sinking fund remain stationary unless increased by Congress.
In the ten years following 1895, the banking capital of Peru increased at the rate of 150 per cent, while the deposit accounts ran up from $4,500,000 to $14,000,000. The banks pay dividends of 14 to 16 per cent. Volumes might be written about the causes which are leading to the commercial and industrial prosperity of the country and contributing to the political stability. The convincing evidence of the fact is the growth in the bank deposits. In these chapters on Peru I have sought to show something of the country and the people, of the resources and the commerce, of the economic prospects and the political conditions, for all of them must be known if the country's future is to be judged. What the joining of the Amazon to the Pacific means, what the new industrial life promises, what the governmental stability signifies, may find an answer in what has been written, for I believe in the destiny of Peru, but not an irridescent, dazzling destiny to be realized within a twelve month or a decade. Instead, a gradual growth to be attained by a plodding policy, sympathetic to the popular aspirations yet rock-rooted in sound principles of national progress?