The Dreyfus Contract

During this period, Piérola negotiated with the Dreyfus Company of France, a dominant guano trader. Mssrs Dreyfus and Co., headed by Auguste Dreyfus, advanced loans based on the extent of the guano deposits offshore. The Dreyfus Company's ambitions overshadowed those of other bondholders and its influence extended into the highest levels of the French aristocracy. On the 17th of August 1869, the Dreyfus contract was signed, but it wasn't until the 11 of November of 1870 that the contract was approved by Congress. This contract effectively shut out access to the guano trade formerly enjoyed by Peruvian merchants.

The money from the contract was to be used for the construction of railroads. Having not enough money to pay the contractors the government began to ask for advances from Dreyfus, securing these advances with the anticipated receipts from the guano trade. New docks were built on the coasts, as well as grand avenues and bridges in Lima. Dreyfus loaned 60 million soles. (Dobyns, 1976, p. 192) The loan from the Dreyfus Company gave them virtual monopoly of all guano exported until two million tons had been exported (Williams, 1938, p. 591)

Resources
Dobyns, Henry F. And Paul L. Doughty. 1976. Peru: a cultural history. New York, Oxford University. 336 pp.

Williams, Mary Wilhelmine. 1938. The people and politics of Latin America. Boston: Ginn. 889 pp.