After nearly three centuries of being administered from Spain, the native-born people of the Peruvian viceroyalty began to itch for independence. News of the American revolution in 1776 and French revolution in 1789 filtered to Peru and encouraged a groundswell of reform that was inspired by the European Enlightenment.

The descendants of Europeans born in Peru, known as criollos, were increasingly resentful of the privileges according to Spaniards, or españoles, who held all the powerful positions in the viceroyalty. Colonial society was rigidly classified into a hierarchy that attempted to make sense of, and control, the uncontrollable mixing between races in colonial Peru. The main categories included mestizo (European-Indian), mulato (European-African), negro (African), zambo (Indian-African), and indio (Indian). Dozens of labels were applied to all the possible combinations and proportions of different ethnic mixtures, and some categories even included bizarre animal names such as lobo (wolf), which was used to describe certain types of mulatos. Despite the apparent rigidity, recent scholarly work has revealed that racial lines in the viceroyalty were surprisingly fluid and had more to do with wealth than skin color. Wealthy mestizos were usually considered criollos, for instance.

When Napoleon forced Spain’s King Charles IV to abdicate in 1808, independence movements erupted across South America. By 1820, the last bastion of Spanish control was Peru, which for centuries had served as the main Spanish port and administrative center for South America. After liberating Chile, Argentine general José de San Martín routed the royalist forces from Lima in 1821 and proclaimed the symbolic independence of Peru. But he ceded control over the independence struggle to Venezuelan general Simón Bolívar, whose troops won two separate battles in Peru’s central highlands in 1824 against the last strongholds of Spanish forces.

Bolívar envisioned a grand union of South American states known as Gran Colombia, which was modeled on the United States. After serving as Peru’s first president for two years, he returned to Bogotá, Colombia, in a last-ditch attempt to hold the federation together. Bolívar’s scheme fell apart as the former colonies bickered among themselves, and Peru plunged into a half century of chaos. During the four decades following Bolívar’s departure, more than 35 presidents came and went.

Despite the chaos, Peru’s rising class of merchants found new opportunities for making money besides mining. The biggest business was guano, the huge piles of bird droppings that covered the islands off Peru’s coast. This natural fertilizer fetched exorbitant prices in Europe. The guano boom helped finance the ambitious project, spearheaded by American entrepreneur Henry Meiggs in 1870, to build a railroad line into the steep valleys above Lima to La Oroya mine. Following the abolishment of slavery in the mid-19th century, hacienda owners in the north began importing large numbers of Asian indentured workers, or coolies, to work on cotton and sugar plantations.

Despite all the abundance, Peru was devastated by the War of the Pacific against Chile (1879–1883), during which time Chilean armies sacked most of Peru’s major cities. After surrendering, Peru was forced to cede an entire southern province to Chile—Tarapacá—which contained valuable fields of nitrate, used to make fertilizer. After the war, Peru plunged into bankruptcy and had to negotiate with its British creditors, who agreed to forgive the debt in exchange for 200 million tons of guano and a 66-year concession over the country’s railroads. The British-owned Peruvian Corporation was set up in Arequipa in 1890 and built the current railroads that lead to Arequipa and Cusco. British families poured into Arequipa at this time to grab a share of the booming alpaca wool business. Following the completion of the Panama Canal in 1904, U.S. investors set up a series of mines and factories in Peru, including the Cerro de Pasco mine in the highlands above Lima.