The Late Colonial Crises of Southern Peru's Commercial Circuits

Between the last quarter of the eighteenth century and the turbulent three decades following Peru's independence in 1821 a seemingly unending series of events rent asunder the commercial circuits that had brought Azángaro modest prosperity during the mid-eighteenth century, events that inflicted heavy blows on the productive base of the province's livestock economy itself. These events ranged from political acts and administrative decrees, to destruction and dislocation by war and rebellion, to more gradual changes in commercial and economic structures. All contributed to the slow paralysis of the mining economy in the south of the old Peruvian viceroyalty.

The first visible step in this process was the separation of a new Viceroyalty of Buenos Aires from the Viceroyalty of Peru in 1776. It included the Audiencia of Charcas and with it the northern altiplano. For the economic and fiscal interests of Lima, the loss of control over Potosí and the other mining centers of High Peru was a heavy blow. Although the new viceroyalty ostensibly was intended to strengthen Spanish defenses against Portuguese and English military and commercial expansion in the Banda Oriental (modern Uruguay) and on the Patagonian coast, it also corresponded to a shift in the center of gravity of the Spanish Empire in South America from the Pacific to the Atlantic coast.^[32] Since early in the eighteenth century a lively contraband trade had diverted part of High Peru's

silver production from the monopolistic export route via Callao and Portobelo to Buenos Aires, and the latter port imported goods for the interior. This trend strengthened after the 1740s with the authorization of the registro suelto (single, licensed ships sailing outside the fleet system) and the route around Cape Horn, which increased contraband between Buenos Aires and High Peru. Miners and merchants in the southern altiplano favored the imperial reorganization of the 1770s because they could receive European goods more cheaply via the Río de la Plata.^[33]

The economic consequences of this reorganization for the truncated Viceroyalty of Peru and, indirectly, for the immediately bordering area of the northern altiplano became obvious only too soon. In 1777 Viceroy Cevallos of Buenos Aires decreed that the silver and gold production of High Peru could henceforth be minted only in Potosí, not in Lima, and that no unminted silver and gold could be exported to Lower Peru. He thus sought to channel all of High Peru's production of precious metals through Buenos Aires instead of Lima. The decree forced much of Lower Peru's trade with the mining center of High Peru into illegality. Up to 1777 the textiles, cereals, sugar, alcohol, and other supplies that were brought in great quantities from Cuzco, Arequipa, and other parts of Lower Peru to Potosí and Oruro had been paid for largely in unminted silver (plata piña ). Because High Peru's range of exportable products other than precious metals was insufficient to pay for such imports, prohibiting the export of unminted silver and gold contributed to the growing difficulties that now hindered trade between both viceroyalties.^[34]

Azángaro and the whole of the northern altiplano saw its important trade with the regions of Arequipa and Cuzco, now separated from the Titicaca basin by the border between two viceroyalties, seriously affected. Traders and producers on both ends of the commercial circuit between the altiplano and the coastal and inter-Andean valleys of Arequipa and Cuzco were increasingly short of coined money. Although altiplano residents had access to unminted silver from Potosí and mines closer by, they could not use it for purchasing goods from Arequipa or Cuzco, insofar as their trade was controlled by royal authorities. We may assume that during this period of cash shortages, barter again became more important.

On October 12, 1778, King Charles III issued the Ordinance of Free Trade that topped off the trade reforms in the Spanish Empire undertaken at an accelerating pace since the calamitous capture of the ports of Havana and Manila in 1762 by the British. The ordinance allowed direct trade between thirteen peninsular ports and most major Spanish colonial areas, including four ports on the west coast of South America. The ambitious goals of the ordinance were, in the words of John Fisher, "to provide the

combination of freedom and protection which would promote the settlement of empty territory, eliminate contraband trade, generate increased customs revenues, . . . and, above all, develop the empire as a market for Spanish products and a source of raw materials for Spanish industry."^[35] The full effect of the measure was felt only after 1783, when the Peace of Paris terminated hostilities between England and Spain. In the following years European goods flooded Spanish American markets and exerted strong downward pressures on retail prices for manufactured goods. In 1785 imports from Spain into Spanish America had increased more than sixfold over 1778 levels. Against the older notion of a general economic crisis in late colonial Peru, Fisher has conclusively demonstrated that the truncated viceroyalty fully participated in this enormous upswing of transatlantic trade.^[36]

Peru's capacity to import European goods remained tied to its production of precious metals throughout the waning decades of the colonial regime and through the first quarter century after independence. It is not surprising, then, that the vast upsurge of transatlantic trade was accompanied by an impressive growth in silver output. Based on the exploitation of newly discovered lodes at Cerro de Pasco in the central Peruvian sierra and at Hualgayoc in the northern intendency of Trujillo, the silver output of the truncated viceroyalty more than doubled between the mid-1770s and the end of the century, continued on a high level until 1810, and then began a precipitous decline over the next fifteen years. In Upper Peru silver production, after its long depression between the 1630s and 1740s, also recovered until 1802, albeit much less vigorously, and gradually declined to depression levels during the following three decades (fig. 2.1).

Although Lower Peru had accounted for less than a quarter of total silver output in the old viceroyalty during the first two centuries of colonial rule, by the early nineteenth century it had surpassed Upper Peru's production (fig. 2.1). But this second Andean mining boom, comparable in quantity to the first bonanza of the late sixteenth and early seventeenth centuries, did not have the same integrative and vitalizing effect on the whole of the "Andean space." Rather, it served as motor for the growth and entrenchment of distinct and separate commercial spaces in central and northern Peru on the one hand and in the southern Andes on the other. In Lower Peru more than two-thirds of the silver was produced in the central and northern sierra. Livestock producers from Puno and textile manufacturers from Cuzco could not compete with ranchers and obrajeros in the intendencies of Tarma, Lima, and Trujillo for supplying the newly expanded mining camps and the buoyant market of the growing city of Lima. In Upper Peru, particularly in Potosí, the recovery of silver output was

Figure 2.1.
Silver Production in Lower and Upper Peru, 1701–1820
Source: TePaske, "Silver Production."

achieved through more intensive exploitation of mitayo labor while Potosí's population continued its long-term decline.^[37]

Thus, demand for supplies did not grow proportionately with silver output in Upper Peru. More important for the economies of the northern altiplano and Cuzco, the southern altiplano increasingly oriented its trade patterns toward the Río de la Plata, to where the bulk of the silver now flowed and from where the region received European imports, especially textiles, as well as a wide range of locally produced supplies. Although trade with Upper Peru continued to be important for the merchants and producers in Puno, Cuzco, and Arequipa through the last decades of the colonial period and even during the first century after independence, by the mid-1780s the fabric of the erstwhile "Andean space" was wearing thin, and trade flows decreasingly reflected positive mining conjunctures in Potosí or Oruro.

As a consequence of the Free Trade Ordinance, European goods were now sold at lower prices than before 1778, and some of them seriously competed with Peruvian goods. European woolen and cotton textiles turned out by steam-powered factories began to undersell similar Peruvian obraje products. They not only entered Peru through Callao but increasingly were imported into Lower Peru through Buenos Aires. Transport costs lay at the root of the problem. According to Cespedes del Castillo, after 1778 a tercio of Bretaña linen sold in Arequipa cost 337 pesos if shipped from Cádiz via Buenos Aires but 361 pesos if shipped via Callao.^[38] Merchants and textile producers of Lower Peru were not only losing market shares in Upper Peru but increasingly ceding ground to European imports in home markets such as Arequipa and Cuzco.

The fiscal aspects of the Bourbon reforms, carried out by Charles III's enlightened or protoliberal corps of bureaucrats, hit the southern Andes in full force during the late 1770s and exacerbated the disruptions of trade circuits brought about by the establishment of the Viceroyalty of the Río de la Plata. Concerned with increasing colonial revenue for the benefit of the metropolis, Madrid raised the alcabala , a sales tax on most commodities traded by Spaniards and mestizos, from 2 to 4 percent in 1772 and to 6 percent in 1776. In 1778 Viceroy Manuel de Guirior imposed a tax of 12.5 percent on the production of alcohol, Arequipa's major item of trade.

These new revenue measures were seriously implemented only in 1777, after Visitor General Antonio de Areche arrived in Lima, but then the scheme was undertaken with a vengeance. Circulars to the corregidores charged them with collecting the alcabala and enforcing measures against contraband of unregistered silver and gold. The alcabala now had to be paid by persons previously exempted, especially Indians, and was levied on a

broader range of goods, including coca. First in Upper Peru (Cochabamba in 1774, La Paz in 1776) and then in the southern cities of Lower Peru (Arequipa and Cuzco in 1780), customs houses were established to ensure compliance with taxes and fees on trade. Thus, not only were levies on regional trade increased enormously, but enforcement became much tougher in the southern Andes, making it difficult for merchants to elude payment.^[39]

These stringent fiscal measures contributed much to forging the fragile but broad coalition of interests that in 1780 erupted in the complex cycle of social movements commonly referred to as the Túpac Amaru Rebellion, the most serious challenge to Spanish authority anywhere in its American possessions since the conquest. Different social groups in the southern Andes had various causes for dissatisfaction with the political economy of the Bourbon regime, but the drastic increase of the alcabala and the novel, rigorous scheme to collect it through internal customs hurt Indians, mestizos, and creoles alike.^[40]

Originating in the corregimiento of Tinta, close to the southeastern rim of the Cuzco valley system in the very center of obraje textile production, the rebellion soon spilled over into the Lake Titicaca basin, where the struggle reached its greatest intensity, brutality, and duration. José Gabriel Condorcanqui, cacique of Tungasuca, who adopted the name Túpac Amaru II and claimed descent from the last Inca, initiated the rebellion as a means of forcing the viceregal administration to root out abuses against creoles, mestizos, and Indians. Soon after his initial military successes in the Vilcanota valley, Túpac Amaru crossed over into the altiplano with a rebel army measuring in the thousands. Meeting ineffective resistance from the corregidores of Azángaro, Carabaya, and Lampa, he took control of the whole altiplano north of the city of Puno. On December 13, 1780, Túpac Amaru entered Azángaro town, installing his own administrators and taking particular care to destroy the extensive urban and rural properties of the family of Kuraka Diego Choquehuanca, who had staunchly supported the royalist cause throughout.^[41]

José Gabriel Túpac Amaru was captured in April 1781, a scarce five months after the beginning of the rebellion. After a trial he and many relatives were executed in Cuzco with exemplary cruelty on May 18, 1781. But this was not the end of the rebellion. Its focus now shifted to the altiplano, both north and south of Lake Titicaca, where major towns were besieged and several of them, Puno and Oruro, taken by the rebels. The northern altiplano was effectively under rebel control between December 1780 and early 1782, and in some isolated parts peasant warlords continued fighting until the following year.

Diego Cristóbal Túpac Amaru, supreme commander of the northern movement after his cousin José Gabriel's capture, established his headquarters at Azángaro. From there troops were sent and instructions dispatched throughout the altiplano. After April 1781 the movement became more radical, and Indians assumed a growing leadership role as creoles and mestizos withdrew their support, apprehensive about losing social privileges and the possibility of a "race war" unleashed by the mobilized Indian peasantry. Diego Cristóbal never achieved in the northern altiplano the disciplined, hierarchical command structure that his cousin had in his family's base in the Vilcanota valley. In Azángaro and adjacent provinces more or less independent leaders, often minor or disgruntled kurakas with a strong base in peasant communities, increasingly pursued their own local agendas. The Indian peasants ceased to pay tribute, did not perform their mita obligations in Potosí, and abducted livestock from the estates of the church, creoles, and kurakas. With the flight of the corregidores, the forced repartos (distributions of goods to peasants) obviously collapsed.

The clashes between royalist and rebel armies as well as the random killing, destruction, and theft by both armies devastated Azángaro's population, its livestock capital, and productive infrastructure. A Peruvian priest, describing the rebellion two years after its suppression, estimated deaths at around 100,000 Indians and 10,000 peninsular and American Spaniards.^[42] Azángaro was one of the areas where the death toll had been so terrible that "one could not count the dead Indians." The number of peasants just from this province killed either in battle or in punitive actions committed by royalists and rebels alike may well have numbered in the thousands.^[43]

Although small compared to Indian losses, the deaths and permanent emigration among the white and mestizo population were of great consequence for the economy of the northern altiplano. Spanish or mestizo traders, landholders, and crown officials fled with their families, leaving all their belongings behind. From the parish of Arapa alone twenty-three "Españoles," creoles from a largely mestizo ethnic background, emigrated during the rebellion to La Paz, Buenos Aires, and even Spain.^[44]

Destruction of property accompanied the depopulation of the altiplano. The longest-lasting damage to Azángaro's economic base was done by the decimation of the livestock herds. Sheep, cows, and transport animals were requisitioned by both armies from any estate that lay close to their path, with Túpac Amaru's troops purportedly consuming up to four thousand sheep daily.^[45] Many animals were taken by soldiers or peasants from abandoned or inadequately protected estates to enrich themselves. Peasants stocked their own estancias with the stolen animals, while the royalist

troops sent from Arequipa and Moquegua to retake the altiplano sold stolen sheep at a discount in those cities.^[46] When the rebellion was defeated after two long years of bloodshed and destruction, the damage to Azángaro's livestock economy could not be repaired in a few months or even a year or two. In a dramatic plea to Viceroy Jauregui, the corregidores of Azángaro and Carabaya, Lorenzo Sata y Zubiría and Miguel de Urviola, predicted that the impoverished northern altiplano would "exhaust the royal treasury for its sustenance" for a long time to come.^[47] In 1784, more than a year after tranquility had been reestablished, the parish priest in Juliaca, only a few kilometers from Azángaro, described the consequences of the rebellion as follows: "The estates of the churches, convents, monasteries, and private persons are seen today in the utmost decadence; many years will still pass by to rebuild them. Many houses in the towns and other places are burned, through actions of both Indian rebels and Spanish troops, who destroyed the towns. In some places one is caused to cry upon seeing their ruins."^[48]

By the mid-1780s both conjuncture and structure of the commercial circuits that tied the northern altiplano to the wider colonial economy had undergone a major sea change, the outcome of three separate developments: the implementation of reformist Bourbon policies, the penetration of Andean markets by European textiles, and the destruction and power realignments resulting from the Túpac Amaru Rebellion. Contemporaries observed a "notable decadence" of woolen exports from the Cuzco obrajes to High Peru because of the "increased imports of European woolens via the Río de la Plata."^[49] This shrinking control of Cuzco's obrajes over the markets of Upper Peru and even to a degree over markets in the south of Lower Peru was certainly one of the main factors of the Cuzco region's economic decline during the late eighteenth century.^[50] It had a similarly depressing effect on stock raising in the northern altiplano, whose wool production found its outlet largely through the Cuzco obrajes. After 1782 the scarcity of circulating currency, the flooding of markets with cheap European imports, and the obstacles to trade between the viceroyalties of Peru and Buenos Aires prevented a strong recovery of Cuzco's obraje production and the northern altiplano's livestock economy from the ravages of the rebellion.

The authorities in Lima and Madrid showed increasing concern about the economic decline of what is today the southern Peruvian sierra and in particular the Intendency and City of Cuzco, a decline dramatized by the destruction wrought by the Túpac Amaru Rebellion. In 1788 an audiencia was established in Cuzco to attempt to halt this decline and to revitalize the city and surrounding rural areas by focusing more government attention on the region and by making long and costly appeals of litigation

to the distant Audiencia of Lima unnecessary. Azángaro, Lampa, and Carabaya provinces became judicially dependent on the Audiencia of Cuzco, whereas the remaining provinces of the Intendency of Puno stayed under the jurisdiction of the Audiencia of Charcas. The three northern altiplano provinces were thus judicially and ecclesiastically dependent on Cuzco in the Viceroyalty of Peru while administratively still belonging to the Viceroyalty of Buenos Aires. The awkwardness of this arrangement, realized as early as the mid-1780s by Visitador Escobedo, persuaded the crown to reintegrate the Intendency of Puno with the Viceroyalty of Peru on February 1, 1796.^[51] But this change merely shifted the dividing line between the two viceroyalties from the altiplano's northern rim to the southern shore of Lake Titicaca. The administrative barrier splitting the northern altiplano's commercial space did not disappear.

In 1801 a plan drawn up by Francisco Carrascón y Sola, prebendary of the Cathedral in Cuzco, suggested a quite different administrative arrangement for the altiplano. The cleric proposed the creation of a new viceroyalty centered in Puno to cover the whole territory of the Audiencia of Charcas and the intendencies of Puno and Cuzco.^[52] Carrascón saw the major advantage of such a far-reaching administrative change as improved political and military control over the densely populated area of the northern altiplano, whose unruly indigenous population had produced the fiercest rebels during the uprising of Túpac Amaru. But more important, the plan demonstrates that the whole of the altiplano, with an extension into the adjacent parts of modern southern Peru, was still conceived as one culturally, socially, and economically unified region. Any border that split this region into two, whether it ran across the altiplano at the Río Desaguadero, close to the southern end of Lake Titicaca, or at the northwestern rim of the altiplano basin, failed to correspond to long-standing trade and settlement patterns.

While expressing shifts in the political and economic power structure on the axis between Lima and Buenos Aires, any such administrative division tended to marginalize the altiplano areas lying on both sides of the border. The project for a new viceroyalty centered at Puno was soon forgotten, and the administrative division of the altiplano was not reversed and took on a much more serious character with the establishment of the independent republics of Peru and Bolivia in the 1820s.

During the remaining three decades before Peru's independence in 1824 the northern altiplano's trade continued to be affected by great instability. International war, rebellions, and military campaigns fought nearly continuously in one area or another of the southern Andes between Cuzco and Potosí since 1809, as well as a series of devastating droughts, led to

short-term fluctuations of prices and access to markets. Trade based on peasant production seems to have withstood this instability better than did that based on commercial goods from Spanish and creole enterprises.

In 1803 the Consulado of Lima reported that the woolen cloth production of the obrajes around Cuzco had declined to about 700,000 varas per year from a level of 3,000,000 varas only thirty or forty years earlier. This decline necessarily depressed the wool production of Azángaro and the neighboring provinces. In addition to the continued presence of European woolens in the markets of Lower and Upper Peru, beginning in the 1790s Cuzco's textile production encountered growing competition from obrajes in La Paz, La Plata, and Córdoba.^[53]

There are indications that textiles produced by Indian peasants on the looms in their own homes did not decline as drastically as did those of the obrajes in the waning decades of the colonial era.^[54] The cheap woolens produced by home industry were not yet affected by competition from European imports. Another factor may have been that these dispersed production sites suffered less destruction during the Túpac Amaru uprising than the large obraje plants had. Whatever the reasons, in the early years of the nineteenth century the Intendency of Puno maintained a lively trade in "flannels, quilts, ticking, coarse baizes, blankets, friezes, homespun cotton cloth, and carpets" produced by Indian peasants with various places on the coast, "particularly the city of Arequipa, where these textiles are bought up for the use by poor folk, and these goods even make their way to Lima."^[55] The economic situation of the peasants was not as severely affected by the dislocation and disruptions that plagued the livestock operations, textile industry, and commercial networks controlled by the upper strata of northern altiplano society from the last quarter of the eighteenth century well into the republican era.

Only about thirty years after the Túpac Amaru Rebellion had been quelled, Azángaro saw itself embroiled in another uprising that represented the beginning of the struggle for political independence in the southern Peruvian sierra. During the Pumacahua Rebellion, initiated in 1814 by the creole citizenry of Cuzco against peninsular officials in that city, the rebel leaders again directed their military campaign southward and occupied most of the Intendency of Puno. Their forces were strengthened by Indians from Azángaro and Carabaya provinces, "some of whom had served in the Túpac Amaru rebellion and wanted to carry out revenge against the Spanish."^[56] Although rapidly suppressed by royal forces under Marshal Ramirez, the Pumacahua Rebellion had much the same devastating effects on Azángaro's rural economy as had the movement headed by Túpac Amaru. The province found itself again in one of the centers of the uprising

and subsequent royalist military operations, which continued in Azángaro months after the rebels' rout at Umachiri in March 1815.^[57]

After mid-1815 the intelligent administration of Viceroy Abascal—seizing on the turn of the tide in Europe after Waterloo favorable for legitimist forces—was able to recapture lost ground for the royalist cause in Peru and some adjacent colonial territories. But the structural depression facing southern Peru's commerce, textile production, and livestock-raising operations could not be overcome until the end of the colonial era. When Abascal wrote his report to his successor, Joaquín de Pezuela, in 1816, he was keenly aware of the persistence of these problems.

The rough cotton and woolen textiles provided the towns of the whole country with cheap clothing and the surplus was exported in considerable quantity to the Kingdom of Chile. After the [royal decree of free trade of October 1778] the [production of] woolen textiles decayed because of the better quality and lower prices of the common cloth of Spain and lately also [the production of] cotton textiles has decayed because of contraband. As a consequence, having lost their markets, estancias which produced the primary goods and the obrajes which elaborated the textiles have simultaneously entered a state of ruin.^[58]

The military campaigns that led to Peru's independence from Spain between 1820 and 1825 affected southern Peru's commerce in varying ways. After the occupation of much of the coast between Arica and Payta by the insurgents in late 1820, the Spanish army under Viceroy La Serna withdrew to the southern sierra, making the intendencies of Cuzco and Puno the staging ground for repeated forays into regions controlled by the insurgents. The royalist army relied on provisions from the region's haciendas and textile sweatshops, and most of its soldiers were recruited here, a pattern established since the first campaigns against the rebellions in Upper Peru and the invasions by the Río de la Plata insurgents in 1809–10.^[59]

At the same time, the northern altiplano briefly regained unlimited access to its precrisis markets. After several attempts by patriot armies from Buenos Aires to occupy Upper Peru had failed, the southern altiplano once more became part of the Viceroyalty of Peru between 1818 and the royalists' defeat in late 1824. Woolen cloths, hides, and dried meats could again pass without restrictions from Cuzco and the northern altiplano to Potosí and other urban and mining centers of Upper Peru. The competition that Cuzco and Puno had suffered prior to 1810 from textile producers in the interior provinces of Argentina and imports from Europe via Buenos Aires was reduced to the level of clandestine trade.^[60] The Spanish merchant De

la Cotera, resident in Arequipa and privileged in the trade with Upper Peru "due to his influence with Viceroy La Serna," annually sold close to 500,000 pesos worth of woolen textiles from Cuzco's obrajes in Potosí between 1820 and 1824, a level of sales considerably higher than that in 1791.^[61] José Domingo Choquehuanca must have been referring to these years when he wrote in 1831 that Azángaro's "sales of black and colored baizes, blankets, bags, and ponchos to High Peru before the revolutions for Independence were very lucrative."^[62]