The Bird-Dropping Boom That Made Peru a Power

On the Chincha Islands off Peru's southern coast, the Humboldt Current and centuries of nesting cormorants and pelicans had laid down deposits sometimes a hundred feet thick. In 1840, European chemists had just figured out what nitrogen and phosphorus did for soil. The droppings, dry from a near-rainless climate, turned out to be the richest natural fertilizer anyone had ever measured.

The British firm Antony Gibbs and Sons signed the consignment contract a year later. For the next three decades Peru shipped roughly 12 million tons of guano, with sales peaking above $20 million a year in the 1860s. The Peruvian state — through royalties and a shifting set of monopoly contracts — captured about 60% of final sales, close to $500 million in mid-19th-century money.

That windfall let Lima abolish its head tax on indigenous Peruvians, end Black slavery with state-funded compensation to slaveholders, and float more than $32 million in London bonds against future shipments. It also pulled in tens of thousands of indentured Chinese laborers, who did most of the actual digging on the Chincha cliffs.

The US watched all this and decided it wanted in. On August 18, 1856, Franklin Pierce signed the Guano Islands Act, letting any American citizen claim an unoccupied island with guano deposits in the name of the United States. Roughly 94 islands were claimed under the law over the following decades. Ten — Baker, Howland, Jarvis, Johnston, Kingman, Midway, Navassa, Bajo Nuevo, Serranilla, and Swains — are still US territory today.

The Chincha deposits were finite. By the mid-1870s the easy guano was gone, Chilean nitrates were eating the fertilizer market, and London creditors stopped rolling the bonds. Peru defaulted in 1876. Three years later Chile invaded and took the nitrate fields outright in the War of the Pacific. The seabirds kept producing; nobody was paying $20 million a year for it anymore.