Chapter 1: 1 January 1836- 1 January 1840
Frederico Utilisante, the sitting president and member of the Liberal Party (LP), was something of a lame duck His party was trailing the conservatives badly, and parliament refused to accept his legislation. He was, in effect, a puppet of Parliament, held hostage by fears of a vote of Confidence. Accordingly, he stuck to universally acceptable policies: a moderate tax rate, increases in the education budget, and promotion of industrial policies.
President Utilisante noted that the military was in pretty poor shape, and increased the budget at the expense of anti-crime programs. Juan Jose Flores, a member of the Conservative Party of Ecuador (CPE), was appointed Commandant of the Armed Forces of Ecuador. He was known to be a strict disciplinarian, and wanted the troops to be in excellent fighting form when they were presented with their first challenge.
On Jan 6, 1837, President Utilisante received news that the Chileans had declared war on Bolivia. Knowing that Iquitos, a Bolivian province nestled deep in the rain-forest, contained a pocket of North Andeans estranged from their homeland, he decided to go to war. While he publicly cited the liberation of oppressed countrymen as his reason for war, he revealed in a letter to Commandant Flores that it was "the best possible chance to expand for the least possible cost." Flores presented the President with a battle plan, which was quickly accepted. Iquitos would be liberated first, followed by Piura.
On 23 September, 1837, after 9 months of enduring Flores's army rampaging through the highlands, Bolivia agreed to peace on favorable terms. It would cede Iquitos and Piura to Ecuador. Flores came to be hailed as a hero, despite not actually fighting in a single battle. The international community was not pleased, however, and Ecuador's reputation paid a steep price for the expansion.
The Jesuit Party, a radical reactionary party popular in the rural reaches of Ecuador, grew rapidly in 1837 and 1838, and by May of 1838 it was the largest party, polling around 65%. This news was terrifying to President Utilisante, who was largely powerless to stop their rise, as it was impossible to lower taxes below the current 40% rate due to budgetary reasons. He requested that the CPE-dominated Parliament support a reform of Unemployment Subsidies, and was surprised when they agreed to support such a measure, undoubtedly out of fear of the Jesuit Party. The planned reforms, due to go into effect in 1841, passed the floor without opposition.
Meanwhile, street gangs terrorized the city of Quito, and it became common practice to carry a knife for self defense. The situation had an adverse effect on the economic well being of the city, as people were afraid to go to the market or bakery.
On August 27, 1838 the Amazonian populace of Iquitos began rioted against perceived racism. President Utilisante took a hard line on these rebels, and ordered Flores to put down the armed mob by any means possible, even if that meant indiscriminate firing into the crowd. The Commandant took that as an endorsement of harsh counter-revolutionary measures, and immediately marched his army towards Iquitos, itching to finally see combat.
Flores vs Rebels:
The battle was longer than expected, and dragged well into January of 1839. On 20 January, at the urging of a secret letter from CPE leaders, Flores left the battle up to his aides and returned to Quito. It was announced that due to the threat posed by the Jesuit Party and the revolt in Iquitos a confidence vote was held. President Utilisante lost miserably, and announced his resignation, effective immediately. The MPs elected Flores president, and gave him greater power to crush the Jesuit Party and the local rebellions plaguing the nation. These emergency measures effectively amounted to proclaiming Juan Jose Flores dictator.
Flores accepted this mandate and immediately began taking steps to curb the success of the Jesuit Party. Much to the surprise of political pundits, he announced he would be implementing the Unemployment Subsidy Reform Act a full two years before it was originally set to go into effect. He also implemented a bold tax policy, lowering the tax rates for farmers and laborers to a measly 22%, while simultaneously raising tariffs.
As 1 January 1840 rolled around, Ecuador was at a crossroads. Some 60% of Ecuadorians still identified as members of the Jesuit Party, while the CPE continued its downward slide. It would take time to see whether Flores's reforms would have an effect - and it seemed fairly obvious to the CPE that their time was quickly running out.