The Cerro de Pasco Corporation, which emerged as the brainchild of American investors in 1902, was for half a century the dominant force in Peruvian mining. By the 1960s it had been joined by two other enterprises, SPCC (Southern Peru Copper Corporation) and Marcona, that together controlled between 80 and 90 percent of the mineral output of the country. In fact, these three formed a class by themselves in Peruvian mining law called "la gran mineria". Cerro de Pasco was responsible for producing a third of the copper, two-thirds of the lead, and 60 percent of the silver and zinc as well as quantities of minor metals such as bismuth, of which it was the world's largest supplier. Furthermore, in the mid-1950s it gained control of a portion of its rival, SPCC. By the end of World War II Cerro de Pasco was the biggest employer in Peru after the government itself. Cerro also owned a network of haciendas on which it raised sheep to produce milk, butter, and meat for local consumption as well as wool and meat for export. But much of the land utilized for sheep grazing had been acquired cheaply by Cerro after its mining operations had polluted the soil so badly as to make agriculture impossible, and the company later consolidated its grazing land by expropriating the property of local communities. Cerro was therefore accused of having created a pool of unskilled labor for itself by forcing local people off their land. By the late 1960s the company was facing increasing opposition to its hacienda system and its labor practices, while the United States was coming under fire for its foreign policy. It is perhaps a fitting epitaph for Smith and his long career at Cerro that 1968, the year following his death, was the last year in which the company made large-scale investments in Peru. [For more on Cerro de Pasco, see Dirk Kruijt and Menno Vellinga, _Labor Relations and Multinational Corporations: The Cerro de Pasco Corporation in Peru (1902-1974)_, Van Gorcum, 1979, and Charles T. Goodsell, _American Corporations and Peruvian Politics_, Harvard UP, 1974.]
Smith witnessed many twists and turns in Peruvian politics during the years covered by the diaries. The dictatorship of General Manuel A. Odria (1948-1956) was a period of conservative rule during which communists and members of the APRA (Alianza Popular Revolucionaria Americana, or American Popular Revolutionary Alliance) were ruthlessly persecuted. But Odria did restore stability after a time of political unrest and economic upheaval. The Korean War brought increased exports and a boom in foreign investments, but the new prosperity was built on foreign capital.
President Manuel Prado (1956-1962) was elected by the efforts of the newly formed National Coalition Party that included APRA. Unrest seethed in the mountains as Indians squatted on private hacienda lands. The government did little to address their grievances. In July, 1959, Pedro Beltran became prime minister and minister of the treasury, and attempted to win the confidence of the business community by lowering taxes. He failed, however, to lower government expenditure or to deal adequately with social problems.
On July 18, 1962 a military coup led by General Ricardo Perez Godoy canceled the results of an election that had given APRA leader Victor Raul Haya de la Torre the slimmest of pluralities. The army claimed to want a genuine reform administration but believed that none of the contending parties promised this. The junta foresaw free elections in June 1963, and in the meantime attempted to begin agricultural reform and instituted a development plan. In March,1963, other members of the junta deposed Perez Godoy, either because he wished to rule as a dictator or because he had outstripped their ideas of reform.
Fernando Belaunde Terry (1963-1968) took the presidency with the support of the Popular Action party (Accion Popular). His program was similar to that long espoused by APRA, which encompassed the nationalization of foreign firms, freeing Peru from its economic reliance on foreign capital, the guarantee of personal liberties, integration of the Indians into the mainstream Peruvian population, and the improvement of conditions for city workers. The new president's watchwords were reform with moderation and compromise. An Agricultural Reform Law was passed in 1964, but June of 1965 saw a severe outbreak of guerrilla activity in the country, and when the United States failed to deliver promised economic aid, a fiscal crisis ensued. On October 3, 1968 a military coup ended Belaunde's term of office. Smith did not live to see this, having died almost a year before.