It was sustained on the substantial revenues generated by the export of guano and the strong leadership of president Ramón Castilla.

[citation needed] Agustín Gamarra, named president by Congress, was anxious to once again attempt to unite Peru with Bolivia, however this time under Peruvian governorship rather than by confederation.

Using his extensive military influence, Echenique continued on the progress of Castilla's government to further advance the social and economic aspirations of Peru.

In the battle of La Palma, in the outskirts of Lima, Echenqiue was defeated and Ramon Castilla assumed the presidency for a second time.

The reinstating of Castilla as president brought institutional stability; management of the national economy by establishing fixed budgets; economic prestige abroad by the repayment of foreign debt; internal security; international position on the continent; intellectual and material progress; as well as the initiation of the development of the Amazonia.

[2] To compensate for the lack of workers on the haciendas of the coast, the government of Castilla in 1849 authorized the import of Chinese people to devote to agricultural work.

An exception to this would be a German population which arrived at the port of Huacho and traveled inland to colonize the Pozuzo and Oxapampa regions.

[citation needed] The task of replacing Spanish legislation laws for another, appropriate to modern republican times, had been almost forgotten.

With this objective, in 1848 the First American Congress met in Lima with the goal of to ensure the bases of future peace and security for the nations of South America.

Because Peru was geographically situated in the central part of western South America, with an immense coast (at that time extending from Machala to the Loa River) and with borders with four nations (currently with five), there was a necessity for self-defense.

For the defense of the Amazonia, Castilla began to develop an Amazonian fleet with the purchase of the ships "Morona", "Pastaza", "Napo", and "Putumayo", which were based in the port of Iquitos.

[citation needed] Also during this time was the invasion of Ecuador which caused the Ecuadorian-Peruvian War of 1858–1860 in which Peru emerged victorious.

[citation needed] In 1865, civil war broke out, waged by the forces headed by Colonel Mariano Ignacio Prado against the government of President Juan Antonio Pezet, due to the weakness that he was alleged to have shown in solving the crisis caused by the Spanish occupation of the Chincha Islands, most specifically due to the signing of the Vivanco–Pareja Treaty.

[3] As the economic situation deteriorated and Peru held large overseas debts, the estanco was later replaced by a full state monopoly on production and exports.