EDUCATORS’ PERSPECTIVE
century led to a huge increase in demand
for the product. Guano, especially Peru-
vian guano, promised to revitalize worn
out land in Europe, as well as the United
States. Farmers struggling to increase pro-
duction and feed growing populations
without wearing out the soil on their
farms clamored for more.
Historian Gregory T. Cushman argues,
“Marine bird excrement is at the root of
modern existence.” Without guano, the
amazing economic growth of the 19th and
20th centuries and “the development of
global industrial capitalism” could not
have happened.
The US Congress passed the Guano
Islands Act of 1856 because of the strategic
importance of guano to American agricul-
ture. The Act allowed any US citizen to lay
claim to any guano island not under the
jurisdiction of another government and
authorized the President “to employ the
land and naval forces of the United States
to protect the rights of said discoverer
or discoverers or assigns, as aforesaid.”
Scores of Pacific islands became posses-
sions of the United Stated under this Act.
When the Peruvian government real-
ized the potential value of guano exports,
it laid claim to all of the guano in Peru
and began to grant monopolies to foreign
companies for the export of guano to
certain areas of the world. The House of
Gibbs, for instance, entered into a contract
with the Peruvian government that gave
the firm a monopoly to export guano to
Great Britain and the United States.
This contract enriched the company’s
coffers over the 20 years it was in force.
However, it embarrassed the company to
benefit so substantially from the export
of bird poop. European merchant bank-
ers generally considered themselves to be
above the sniff of common dung, and the
House of Gibbs went to great lengths to
distance themselves from the inescapable
fact that they had grown rich, as one wag
put it, “by selling turds of foreign birds.”
A young Irishman by the name of Wil-
liam Russell Grace had no qualms about
making money in the guano trade. At 14,
Grace ran off to sea. His seafaring adven-
tures led him to New York City, a city that
would later elect him as its first Roman
Late 19th century advertisement for guano as a fertilizer.
Catholic mayor. When he finally returned
to Ireland and made amends with his
peeved father, James, it looked like Grace
was ready to settle down to the unspec-
tacular life of a counting house clerk in
Liverpool. However, the potato famine
brought new opportunities to this restless
young man.
10 FINANCIAL HISTORY | Fall 2017 | www.MoAF.org
James Grace owned a small estate in
Ireland when the potato famine hit. He
struggled to keep his workers employed,
but he eventually gave up and found a
job as a tax collector in Dublin. Neverthe-
less, James remained concerned about
the plight of the landless poor who were
starving to death. In 1851, James organized