Ecuadorian debt situation During its
war of independence from Spain, the government of
Gran Colombia had incurred a number of debts to private European creditors. Its three daughter states: Venezuela, Colombia, and Ecuador, split the debts amongst themselves. In 1837, Ecuador assumed responsibility for 21.5 percent of the debt. In the 1850s, a committee of holders of Latin American bonds organized itself and sent several representatives to Ecuador to arrange settlement of the debt. signed a treaty with Ecuadorian
Minister of Finance Don Francisco de Paula Icaza, that gave the creditors rights to several territories in
Esmeraldas; several more on the shores of the
Zamora river; one million
quarter sections in the canton of
Canelos; as well as 410,200 quarter sections near the
Cañar river: a total of 2,610,200 quarter sections, at a value of
£566,900. Ecuadorian sovereignty over the lands would be preserved, but all activities carried out there would be
tax-exempt for a period of 15 years. he had arrived in Quito tasked among other things with seeking to resolve the territorial dispute. Now, he called for the treaty to be declared void: the territories in Canelos being sold off belonged to Peru, based on the boundary laid out by the
Real Cédula of 1802 (a decree ordering the transfer of territories from the
Real Audiencia de Quito to the
Viceroyalty of Peru). He also noted the posture of
uti possidetis adopted by Peru in 1810, as well as the general acts of jurisdiction and possession that Peru had long carried out in the disputed territories. Mata replied to Cavero on November 30, arguing that Ecuador had full rights to the territories, reaffirming Ecuador's view that the Real Cédula of 1802 did not transfer territorial rights to the Viceroyalty of Peru, rendering the claim of
uti possidetis de jure void. According to one source, Mata argued that the Real Cédula of 1802 did not constitute a real Spanish law, because it was never authorized by the Viceroy of Santa Fe, meaning that ownership of territories according to Spanish law remained as it was prior to 1802. That same day, the
Chancery of Quito notified Cavero that relations between Peru and Ecuador were again severed; he was then expelled from the country. While the Peruvian view is that Cavero was justified in any means necessary to achieve the repatriation of the territories, his tactics have been called tactless and belligerent by later scholars, and were contrary to his instructions from Lima and detrimental to his goals. A
blockade of Ecuador's ports was ordered. On November 1, 1858, the first Peruvian ship, the naval
frigate BAP Amazonas, arrived in Ecuadorian waters;
Early 1859: Leadership struggles in Ecuador By 1859, known in Ecuadorian history books as the "Terrible Year", the country was poised on the brink of a leadership crisis. President
Francisco Robles, faced with the threat of the Peruvian blockade, moved the national capital to
Guayaquil, and charged General José María Urbina with defending it. In the wake of this unpopular move, a series of opposition movements, championed by regional
caudillos, were formed. On May 1, a
conservative triumvirate, integrated by Dr.
Gabriel García Moreno, Pacífico Chiriboga and
Jerónimo Carrión (Robles' vice president) formed the Provisional Government of Quito. On May 6, Carrión separated himself from the triumvirate, and formed a short-lived government in the city of
Cuenca; he was deposed the next day by forces loyal to Robles.
August–September 1859: Ecuadorian situation worsens On August 31, 1859, Castilla betrayed his commitment to García Moreno, and came to an agreement with Franco that resulted in the end of the blockade against the port of Guayaquil. Several weeks later, the
Mosquera-Zelaya Protocol, the result of the secret agreement between Peru and Cauca to take control of Ecuador, was signed in
Popayán. however,
Babahoyo,
Vinces and
Daule sided with the Provisional Government. On September 18, an assembly in
Loja named
Manuel Carrión Pinzano military and civil chief of the province; the following day, Carrión Pinzano called a new assembly that established a Federal Government presiding over
Loja,
El Oro and
Zamora. On September 26, Cuenca affirmed its allegiance to the Provisional Government. With the domestic situation at its most tumultuous, and the Peruvian blockade of the rest of the Ecuadorian coast nearing the end of its first year in place, Castilla sought to take advantage of the circumstances to impose a favorable border settlement. On September 20, Castilla wrote to Quito to declare his support for the Provisional Government; ten days later, he sailed from Callao, leading an invasion force. In Loja, Manuel Carrión Pinzano proposed that the four governments vying for control of Ecuador select a representative to negotiate a settlement with Castilla. On November 13, Cuenca was forced to recognize Guillermo Franco's government in Guayaquil; Franco thus became Supreme Chief of Guayaquil and Cuenca. The next day, Franco and Castilla met again aboard the Peruvian ship
Amazonas, and made arrangements for a definitive peace treaty. García Moreno soon became aware of the treasonous pact agreed upon by Franco and Castilla. In an unsuccessful attempt to seek a powerful ally, García Moreno sent a series of secret letters to the
chargé d'affaires of
France, Emile Trinité, on December 7, 15 and 21; in them, he proposed that Ecuador become a
protectorate of the European country. Fortunately for his cause, the agreement between Franco and Castilla had the effect of uniting the disparate governments of Ecuador against their new common enemy;
El Traidor, the traitor Franco, who had betrayed them by dealing with the Peruvians on their terms. The treaty had as its object the resolution of the pending territorial debate. In its first article, it affirmed that relations would be re-established between the two countries. The matter of the borders was established in articles 5, 6 and 7, where the Icaza-Pritchett treaty was declared null, accepted Peru's position of
uti possidetis, and allowed Ecuador two years to substantiate its ownership of Quijos and Canelos, after which time Peru's rights over the territories would become absolute if no evidence was presented. This constituted acknowledgement of the Real Cédula of 1802, which Ecuador had previously rejected. ==Aftermath==