Impact of the Great Depression on Peru and Latin America, 1920s-1930s

Vocabulary flashcards summarizing major economic, political and social concepts from the lecture on how the Great Depression affected Peru and Latin America.

Great Depression (1929)

Global economic collapse that sharply reduced demand and prices for Latin American exports, triggering severe contractions across the region.

Export-Import Model

Economic pattern in which Latin America relied on raw-material exports for revenue and on imported manufactured goods, making it vulnerable to external shocks.

Augusto B. Leguía

Peruvian president (1919-1930) whose ‘Oncenio’ featured heavy borrowing, public-works expansion and rising corruption, ending with his fall during the Depression.

Oncenio

Eleven-year period of Leguía’s rule marked by ambitious infrastructure projects, fiscal deficits and increasing foreign debt.

Fiscal Deficit under Leguía

Gap between rapidly rising public spending and slower revenue growth, financed largely by foreign loans; worsened Peru’s vulnerability in 1929.

External Debt

Foreign borrowing used to fund public works in the 1920s; credit dried up after 1929, forcing Peru to suspend debt service in 1931.

Inestabilidad Política (Political Instability)

Situation in which governments cannot complete mandates or implement policy effectively, often leading to coups or paralysis.

Ingobernabilidad

State of ungovernability resulting from weak institutions, poor leadership or lack of political support, culminating in government collapse or standstill.

Desafíos a la Democracia

Challenges such as unemployment, social unrest, coups and debates over state intervention that tested Latin American democracies during the Depression.

Banco del Perú y Londres

Major Peruvian bank declared bankrupt in 1931, symbolizing the financial crisis sparked by falling export revenues.

Misión Kemmerer (1931)

U.S. advisory team led by Edwin W. Kemmerer that recommended creating a central bank and greater state economic intervention to manage the crisis.

Banco Central de Reserva del Perú (BCR)

Central bank founded in 1931 to stabilize currency and regulate credit after Kemmerer’s recommendations.

Banco Agrícola (1931)

State development bank created to supply credit to agriculture during the Depression.

Banco Industrial del Perú (1936)

Development bank established to finance domestic manufacturing and reduce dependence on imports.

Banco Minero del Perú (1942)

State bank designed to channel credit to the mining sector, reflecting increased state intervention post-Depression.

Luis M. Sánchez Cerro

Army commander who led the 1930 Arequipa revolt, became provisional president, and was elected in 1931; assassinated in 1933.

Arequipa Revolution (August 1930)

Military uprising that toppled Leguía amid economic unrest, ushering in a cycle of short-lived governments.

Ricardo Leoncio Elías

Chief Justice briefly installed as president in 1931 during the political turbulence following Sánchez Cerro’s resignation.

David Samanez Ocampo

Provincial leader who headed a junta in Arequipa and served as provisional president, overseeing elections in 1931.

Óscar R. Benavides

General who assumed power after Sánchez Cerro’s assassination (1933-1939), combining fiscal expansion with repression of opposition.

APRA (American Popular Revolutionary Alliance)

Left-leaning nationalist party led by Víctor Raúl Haya de la Torre; gained mass support among workers but was outlawed and persecuted in the 1930s.

Partido Comunista Peruano (PCP)

Communist Party formed in the early 1930s that, along with APRA, mobilized workers affected by the crisis.

Ley de Emergencia Nacional (1932)

Decree granting Sánchez Cerro powers to arrest, deport and close media, aimed at suppressing APRA and labor unrest.

Tribunal de Sanción Nacional

Special court set up by Sánchez Cerro to prosecute corrupt officials of the Leguía era.

Conscripción Vial

Leguía’s road-labor law requiring unpaid work on highways; its abolition in 1930 boosted Sánchez Cerro’s popularity.

Devaluation of the Sol (1932)

Abandonment of gold convertibility caused the Peruvian currency to fall, aiding exporters but raising import costs.

Deflation in Lima (1929-1933)

Average prices fell about 24 %, reflecting collapsing demand and credit during the early Depression years.

Cotton Boom of the 1920s

Rapid expansion of cultivated area and output that cushioned Peru’s export earnings before the 1929 crash.

Sugar Industry

Export sector that expanded during the 1920s but faced falling prices and labor cuts after 1929.

Cerro de Pasco Mining Corporation

U.S.-owned firm dominating Andean copper and silver; cut jobs sharply as metal prices collapsed.

International Petroleum Company (IPC)

U.S. firm controlling Peruvian oil fields; profits fell during the Depression but ownership remained foreign.

Urban Migration (1920s-30s)

Flow of rural and provincial migrants to Lima and other cities, accelerated by public-works jobs and later unemployment in export sectors.

Smoot-Hawley Tariff (1930)

U.S. law raising import duties, further reducing markets for Latin American exports.

Export Taxes (Derechos de Exportación)

Direct taxes on export earnings that grew in fiscal importance as Peru sought revenue independent of foreign loans.

Suspension of External Debt Service (1931)

Peru halted payments on foreign debt due to lost export income and blocked access to new credit.

United Fruit Company

U.S. corporation profiting from Central American banana exports; cited as emblematic of foreign dominance in Latin American trade.

Patria Nueva

Leguía’s modernizing ideology aiming to build a ‘New Fatherland’ via state expansion, infrastructure and social policy.

Political Uncertainty (1930-1933)

Period labeled “incertidumbre nacional,” marked by coups, provisional regimes and violent clashes undermining democracy.

Price Collapse of Commodities

Sharp decline in world prices for copper, cotton, sugar and other Peruvian exports, slashing foreign-exchange earnings.

State Social Policies (1930s)

Government actions such as worker housing, soup kitchens and labor regulations designed to contain social unrest without altering elite dominance.