The Peruvian state's increasing reliance and ultimate…

The Peruvian state's increasing reliance and ultimate dependence on foreign loans, secured by the guano deposits, which, however, are a finite and increasingly depleted natural resource, proves a greater problem in the short term.

These loans help finance an overly ambitious railroad and road-building scheme in the 1860s designed to open up Peru's natural, resource-rich interior to exploitation.

Under the direction of American railroad engineer Henry Meiggs (known as the "Yankee Pizarro"), Chinese workers construct a spectacular Andean railroad system over some of the most difficult topography in the world, but the cost of constructing some twelve hundred and forty kilometers of railroad, together with a litany of other state expenditures, causes Peru to jump from last to first place as the world's largest borrower on London money markets.