Nicholás de Piérola

In May of 1868 a yellow fever epidemic took control of Lima. Many of the largest and most prosperous shops were closed due to the death of their owners and their employees. One wholesale house lost all fourteen of its clerks. In one case all members of an extended family of 25 people died in one house. Anyone who could was fleeing Lima. The steamers from Callao were laden with passengers. The American Minister took his family to Chile.

Also in 1868, Nicolás de Piérola left his job as a newspaperman to take charge of the treasury under then president Colonel José Balta. Piérola was born in the Department of Arequipa, the son of an eminent naturalist and minister of finance under General José Rufino Echenique, president of Peru in 1851. Of medium stature, straight posture and well-dressed, Nicolas had a ruddy complexion. He was an aristocrat in both conduct and gestures.

Piérola continued Peru's disastrous policy of borrowing heavily from foreign sources for large public works. This increased incentives for foreign governments to interfere in Peru's domestic policies. As President Balta's finance minister, Piérola's reorganization of the guano contract system helped finance the railroads. One goal of the railroads was to diversify its economy by improving access to resources previously out of reach. The newly built railroads provided needed transportation routes along the coast and would soon link the coast to the vast interior of Peru.