The congressionalists then established their headquarters at Iquique, and took possession of the immense revenues derived from the export of nitrate. With this cash they purchased the most modern arms and equipments. Balmaceda, although having means, was unable to get modern rifles, so that his troops were not so well armed as those of the revolutionists. The two torpedo boats, which remained loyal to the government succeeded in sinking the Blanco Encalada, and also in doing other damage to the navy, but not enough to cripple its effectiveness. Blockades of the ports cut off all of Balmaceda’s outside supplies. Balmaceda attempted to purchase ironclads in Europe, but the revolutionists outbid him and he was unable to build up a navy. The long seacoast was also a disadvantage to him, since it was impossible for him to transport his troops by water as the revolutionists could. It was not many months until all the northern provinces were under the control of the revolutionists, but no engagements had taken place in the central or southern provinces. The revolutionists were encouraged by these successes, and public opinion was undoubtedly changing because of the high-handed and arbitrary methods of Balmaceda. Suspected persons were arrested, and many of them executed without trial. The value of human life seemed to sink into insignificance, and a reign almost of terror followed. In one instance a guerilla band composed of young men, some of whom were not more than sixteen years of age, and all belonging to the best families in Santiago, were captured by the government force at a farmhouse. Eight were shot at once and the others, after a court martial, were sent back to the place where they were captured to be executed. This led to a storm of execration against Balmaceda. Furthermore, he had chosen Señor Claudio Vicuña as his successor, and the latter was declared elected after a farcical contest in which no opposing candidate appeared. The congressionalists decided to carry the war into the heart of the enemy’s country, and a large army was embarked at the various northern ports under their control.

On the 18th of August, 1891, the revolutionary fleet of seventeen vessels suddenly appeared at Valparaiso with the entire revolutionary army, consisting of a little less than ten thousand men, aboard. This force was to oppose an army of forty thousand government forces. The former, however, were volunteers, while the latter was known to contain large numbers of disaffected ones. Two days later these troops were landed at Quinteros, not far from Valparaiso, and near the mouth of the Aconcagua River.

At this place the river flows through a flat valley, which is from six hundred to eight hundred yards in width, and is bordered by lines of hills from four hundred and fifty to six hundred feet in height. The government forces numbering six thousand, three hundred and twenty-two men, were located on the southern bank of the river at Concon, where their line was about three miles in length. They were armed with old rifles, while the troops of the revolutionists were provided with Mannlicher rifles of the newest pattern. General Korner, who was in charge of the congressists, did not hesitate before this formidable position. He divided his forces into three parts. One forded the icy-cold waters of the Aconcagua at Concon bajo and attacked the flank of the enemy. The second and third brigades engaged them from the opposite side of the river, and then crossed the river higher up. The ships of the navy also directed their fire against the Balmacedists. The battle was begun on the morning of the 21st. The government troops ran short of ammunition and began to give way. After four and one-half hours of fighting the battle was won. Retreat soon turned into a rout, and the defeated forces fled in every direction. The government loss was seventeen hundred killed and wounded, and fifteen hundred men and all their artillery captured. The revolutionists had only eight hundred and sixty-nine casualties. The result was a decided victory for Balmaceda’s enemies.

Of the Balmacedist troops only two thousand could be mustered after this disaster. But thousands of other troops were hurried to Valparaiso before railroad communication was severed. A slight repulse was given the congressists near Viña del Mar. The army then took a wide detour in order to attack Valparaiso from the southeast. The government forces took possession of the heights at Placilla and awaited the expected battle. Each army at this time exceeded nine thousand men and were evenly balanced. But the government forces were disheartened, even though they occupied an exceptionally strong position. Their cavalry seems also to have been untrustworthy, for they gave no intelligence of this expected move of the enemy. No less than four hundred cavalrymen actually deserted and joined the other army. The country through which the congressists marched was broken, full of small streams and marshes. Hundreds of weary stragglers slept out under the trees. They reached Las Cadenas on the 27th and rested during that night. Early on the morning of the following day they started for the Balmacedist position on the heights, and this seems to have been the first knowledge that army had of the presence of the foe. The revolutionists began the engagement with artillery fire. The advance was stubbornly resisted, but a bayonet charge carried an outpost. A hand-to-hand conflict ensued until the defenders finally threw down their arms. Generals Alcerrica and Barbosa fought valiantly until killed. A horrible slaughter followed and the troops of Balmaceda fled in all directions. The casualties on both sides were heavy. Although the fighting only lasted four hours the government loss in killed and wounded was three thousand, three hundred and sixty-three, and the victors lost eighteen hundred. That same night Valparaiso was occupied, and a night of carousal and lawlessness and bloodshed ensued. Houses were set on fire, and ruffians shot at the firemen as they attempted to put out the flames. The soldiers and mob seem to have been entirely beyond control. The next morning four or five hundred dead bodies were found on the streets.

This battle was the deciding point of the civil war. When the news reached Valparaiso, Balmaceda realized it was useless to continue the struggle. He decided to resign and turn his office over to General Baquedano, a friend of the revolutionists. He issued a proclamation beseeching the citizens to preserve order during the crisis, in order to prevent bloodshed and plunder. On the 29th he turned the office over to General Baquedano in a short and dignified speech. That day being his wife’s saint day, the President had invited in several of his friends to dine. Notwithstanding the changed conditions Balmaceda did not recall the invitations, but acted during the whole evening as a generous host. As soon as his visitors had left, he walked over to the Argentine legation and took shelter. For several days the revolutionists believed that he had escaped the country and fled in disguise. No one suspected that the defeated President was at the house of the Argentine Minister, Mr. Uriburu, afterwards president of Argentina. On the 18th of September, the day upon which his legal term as president expired, the country was shocked to hear that Balmaceda had shot himself that morning at the home of his friend.

Balmaceda feared that his friends might be embarrassed by his presence, and he furthermore believed that his own death would make easier the position of those who had supported him during the trying times of the civil war. It is quite probable, also, that his pride could not brook the idea of a public trial and the humiliation necessarily attending it. To die, also, was to pose in a sense as a martyr. “I could escape,” he said in a letter to his brother, “but I would never run the risk of the ridicule any disaster to such an attempt would entail, and which would be the beginning of vexatious humiliation that I could not endure for myself or my family.” It was, indeed, a tragic end, and was done in a more or less tragical way, as he believed that he thus offered himself as an expiatory sacrifice. He left a message for his friends, which might be called his political testament, in which were these words: “Whenever you and the friends remember me, believe me that my spirit, full of the tenderest love, will be amongst you.” General Baquedano ruled the country for three days until the revolutionary junta reached Santiago, when he relinquished his authority to them. A short time later at a special election Jorge Montt was chosen as Balmaceda’s successor, although Vicuña had previously been selected by the following of the deceased executive. As was to be expected, after such a desperate struggle, Congress was composed of members having a common political platform. It had been decided that the executive should be advised by and rule in harmony with the legislative majority. President Montt accepted the situation and appointed a cabinet acceptable to the majority.

Confidence was soon restored and business quickly adjusted itself. The new President proved to be conservative and non-aggressive. The country was in a bad financial condition, but the nitrate revenues were large. The Balmacedists were gradually brought under amnesty laws, until all were finally permitted to return to Chile. Having been a sailor President Montt took steps to build up a stronger navy, in order to be ready for impending trouble with Argentina. For two years the new administration kept a majority, but a new election gave the Balmacedists the balance of power amidst the warring factions. Montt soon began to experience the same trouble as his predecessors. No party had a majority, and by new combinations of factions the dominating groups were changed. A new cabinet became necessary every few weeks, and no definite policy or program was possible. On the whole this administration was very satisfactory in view of the difficulties under which it laboured. Agricultural and mining depression further embarrassed his administration, but for these no government could be held responsible. President Montt retired from office with the respect of all.

At the election in 1896 Señor Federico Errázuriz, son of a former president of the same name, was elected over his opponent by a majority of one. The new congressional elections still further complicated matters. The liberal groups became more divided than ever. Cabinet crises grew even more frequent, and it was only when Congress was not in session that a ministry could remain in power any length of time. The result was an absolute confusion in legislation. The most serious foreign question was the dispute with Argentina. Excitement in both countries ran high. Warlike speeches were made, and the public mind was unduly excited. Preparations were made for the mobilization of an army of fifty thousand men, and a declaration of war was expected almost daily. President Errázuriz finally took the matter upon himself and asked that the matter be submitted to arbitration. Argentina at last consented. The northern part was to be decided by the representative of the United States in Argentina, Mr. W. I. Buchanan, and the southern section by Queen Victoria, of England. If Errázuriz had done nothing else during his term of office this one act places the whole country greatly in his debt. President Errázuriz died just before his term of office ended, and the duties of the office were filled by the Minister of the Interior, Señor Zañartú, until the inauguration of his successor.

Señor Jerman Riesco was chosen president for the term beginning November 18th, 1901. The same confusion continued during the greater part of his term, so that much useful legislation was rendered impossible. It was not possible for the executive to select a cabinet that would be responsive to his will, but he was obliged to take one selected for him by the legislative body. As President Balmaceda said: “Only in the organization of a popular representative government with independent and responsible powers, and easy means to make that responsibility effective, will there be parties of a national character, derived from the will of the people and ensuing harmony between the different powers of the state.” The several presidents since Balmaceda have realized this condition, but the serious lesson of the civil war has prevented any radical step being taken by the occupant of that office.

At the election in 1906, Pedro Montt, son of Manuel Montt, was elected to the office of President of Chile. President Montt had served his country in many ways, having been a member of Congress for a long time, had held positions in several cabinets, and had also represented Chile as minister to the United States. Owing to his dark complexion Montt was once taken for a negro in Washington and refused admission to a hotel. He proved to be a conservative and able president, who had at heart the best interests of his country. On few occasions, however, did he have the legislative body with him, and many of his good projects failed. He had ability, tact and honesty of purpose, but met the same obstacles as his predecessors. In July, 1910, President Montt visited the United States. He spent a few days in this country while on his way to Europe to secure medical attention, and was shown numerous official courtesies. He was a spectator of the shooting of Mayor Gaynor on board a steamer in New York harbour. Soon after reaching Europe President Montt was attacked by heart failure, and died in Bremen, Germany, on the 16th day of August, 1910. Señor Elias Fernandez Albano, Minister of the Interior, assumed the office of executive on the death of President Montt. In poor health at the time Acting-President Albano survived less than one month after his inauguration, and died on the 7th of September.

On the 15th of November, 1910, Dr. Ramon Barros Luco was elected President of Chile, and assumed office on the 23rd of December, 1910. Dr. Luco was born in 1835, and has had a long and honourable career in politics. He held the office of Minister of Finance and Minister of the Interior under several different administrations. He has also been President of the Senate, and has filled numerous other responsible positions. He now has the opportunity to round out a long life, which has already passed the scriptural limit, with the highest office in the gift of his countrymen.

CHAPTER XVII
PRESENT CONDITIONS AND FUTURE POSSIBILITIES

Nitrates have heretofore formed the chief wealth of Chile, and will continue to do so for some time in the future. But agricultural and industrial development will eventually overshadow all else—even the saltpetre deposits. The great central valley will be the chief centre of a permanent and growing population. In this region all kinds of farming, fruit-growing and stock-raising, flourish. Temperate and semi-tropical products grow, for the orange and the grape, the pear and the apple are found side by side. It not only grows enough for home consumption, but large quantities of grain are exported. The raising of live stock, especially cattle and hogs, is continually on the increase. Agriculture in this valley is susceptible of very great expansion. The proprietors of the large haciendas are satisfied with comparatively small returns from their lands, and this fact retards the development through its lack of encouragement to the small farmer. There is no doubt that small farms would add greatly to the production of this fertile valley, because the effectiveness of each acre would be increased. More than sixty thousand acres are set out in grapes alone. The beet root has been introduced and is said to grow very well.

Then come the forest lands of the southern provinces, which must certainly prove a source of great natural riches in the not distant future. Tierra del Fuego promises great things in the way of sheep-raising. Sheep grow an especially fine quality of silky wool there, which brings a good price in the market. There are already several million head of sheep in that district.

Chile still has a wealth of undiscovered mineral treasures within her boundaries. The labour, transportation and fuel problem have heretofore been the drawbacks, as well as isolation from the world’s consumption. In the northern part of the republic, at the coast ports, coal costs almost ten dollars per ton, a price that does not stimulate its use. In the interior it is still higher because of the cost of transportation. The government has enacted very favourable mining laws. A discoverer of a new claim is entitled to fifteen hectares, or about thirty-six acres. An ordinary mining claim is only one-third as large. No person can file more than one claim at a time in a district, but other names are oftentimes substituted in order to group claims together. Development of a claim is not compulsory, and the tax upon undeveloped claims is very low, so that it is not a burdensome proposition to hold a claim as long as the law allows. Many wildcat companies have been organized in Chile, as elsewhere, and there has been much speculation in these stocks. It is not difficult to interest the Latin people in any form of gambling or speculation.

Chile promises great development in manufacturing. In fact, Chile is more likely to become a commercial nation than any republic of South America. There are already more than eight thousand industrial establishments of all kinds. Tanning of leather, making of shoes, refining of chemical products, woollen and cotton mills, etc., are included in these. The government policy has been one of protection and, in some instances, of actual bounties. Sugar refineries have thus been built up which refine the raw product imported from Peru. They now grind much of their own wheat. Some of the railway equipment used on the national railroads is made in the country. The roto seems to make a competent workman in the factories. The coal mines and prevalence of water power almost everywhere gives Chile a great advantage over her neighbour, Argentina, in the way of manufacturing advantages.

Although the operation of the national railways has been unprofitable, and permeated with gross mismanagement and graft, yet the dogged persistence with which the parallel iron rails have been spread over the country has been most commendable. The longitudinal railway has been pushed little by little each year, and sometimes at the expense of national sacrifice. The first transandine railway is now an accomplished fact, and another route now occupies national attention. After the settlement of the boundary question with Argentina, the vast sums that had been expended annually in preparing for war were diverted to internal development. The beneficial results can easily be traced in both cities and country. The fearful earthquake of 1906 caused a severe back-set, as the government was obliged to step in and aid in the rebuilding of its principal port, Valparaiso.

The government in Chile is rather different from that of most of the Latin-American countries. In form it is like unto that of the United States; in fact, it is a government of a few of the leading families. In theory the President is the executive head; in practice, that official is very much of a cipher. Absolute powers for the executive, that prevailed for the first half century of the republic, have been abolished, and Congress is now the real ruling power. Whether the country is ruled or misruled the blame must be placed on that body, for its authority is very broad. In it a small group of families, generally said to be one hundred, always predominate. Among these will be some who have become rich through banking or commercial development, but most of them are landowners in families that have been prominent for generations. All the honours and emoluments are kept within this small circle. To it may be added the power of the Church, for that organization has been most powerful in political matters. It has been in times past simply a part of the political system. In recent years the government has insisted on the right to name the Archbishop, and Rome has been practically forced to concede this privilege. As a rule the influence of the Church has been in favour of what might be termed the reactionary element.

As has been stated elsewhere the President is assisted by a body of advisors, the majority of whom are chosen by the parliamentary body. This has led to frequent and oftentimes ridiculous ministerial crises. These numerous cabinet changes embarrass an executive in whatever policy he may be trying to develop. But he is helpless under the theory of parliamentary government that has grown up. Whenever the President proposes a certain cabinet, he is met by a counter proposition from some group or other in the legislative bodies. Sometimes he may gain a little temporary majority by a coalition or fusion of some of the groups represented in Congress. Selfish interests or jealousies, however, soon break the union. It is at times embarrassing to diplomatic representatives, for no sooner have they completed negotiations with one cabinet official than he is succeeded by another. No vice-president is elected, the executive office, if vacated by death or resignation, is filled temporarily by the Minister of the Interior, who is usually a member either of the Senate or House of Deputies. The Congress will then select a new executive. A change in this system, which would make the executive more independent, and provision for a different succession might work marvels. This was the trouble with that able and progressive President, Balmaceda. To carry out his beneficial policies he defied Congress, and a bloody civil war followed.

Politics in Chile seem very much complicated and confused to an American. Instead of two or three parties, the small voting population of the country are divided into no less than seven or eight, with other combinations under new names appearing every year or two. At the present time one can distinguish the following: Conservadores, Liberales, Radicales, Democratas, Balmacedistas, Montinos and Liberales-Democraticos. Of these the most extreme are probably the Radicales, who occupy about the same position in Chile that the Socialists do in our own country. At least they contest for that position with the Liberales, who claim to be the most radical of any of the political parties in Chile.

The Conservadores are the old church party, and are made up of the wealthy land owners, and those who have grown rich in mines, railroads, etc. This party was formerly the strongest political organization, and ruled the country for a long period; but, within the last two decades, it has greatly lost its grip, and the only way in which it cuts much of a figure in the government is when it enters into combinations occasionally with some of the stronger elements. The Democratas are made up principally of the labouring classes, who loudly proclaim what they will do for the downtrodden labouring man, and they are blamed for the strikes and riots in recent years. The Liberales-Democratas are, as the name indicates, in a midway position between the two parties after whom they are named.

The Balmacedistas are those who stand for the things that Balmaceda stood for; that is, for an enlarged power in the executive. This party, it seems to me, is bound to grow because every president is confronted with the domination of the legislative body. The Montistos are made up of the followers of the Montt family, who have been prominent in the country since the downfall of Balmaceda. They include those who favour the rule of the country by Congress.

Politics are no doubt more or less corrupt in Chile, as in many other countries. In this respect the country is neither unique nor original. If one was to believe the statements made in opposition press, just as if one was to believe all such statements made in the sensational “yellow” press of our own country, you would think the entire government was rotten from President down to the lower officials. Free speech and a free press run riot in Chile. There is an inclination to make wild charges, and editorial writers certainly say more than they actually mean.

Elections are oftentimes almost farcical. Nominations for Congress are made very much as with us. Candidates are named, and a campaign is carried on by means of meetings, placards and newspapers. Manifestos and appeals to voters are issued by the various candidates and their supporters. The side that gets control of the election machinery, however, is in a much better position than the one that merely has the votes. They are then counted as the ones in charge desire, and this method is considered proper and legitimate by all parties. Bi-partisan boards and an Australian ballot system are unheard of and unthought—and, furthermore, an undesired innovation. What is the use of having the election machinery in your control and not using it for your candidate? This is the average Chilean view of the subject, and the losers usually acquiesce more or less good naturedly. In this respect the situation is very similar in all the republics south of the Rio Grande River.

In business deals the Chilean is about as honest and reliable as in other countries. Many think the Chilenos are robbers and cut-throats. But it is not so. Those engaged in business in the country give the Chileans a good reputation for honesty. They are procrastinating and slow sometimes in meeting obligations, but they do not attempt to avoid payment; and they are always willing to pay current rates of interest on overdue accounts. My personal experience in Latin countries in that respect has been good, as I have never lost anything whatever from thieves or purloiners in hotels, stations or elsewhere. Many instances of the honesty of hotel servants, cab drivers and other workers are told by foreigners, who have been in Chile. The lottery and bull-fight have both been abolished in Chile, and this speaks well for another form of honour among the Chilenos. The bull-fight has disappeared from a number of the republics, but Chile stands alone in prohibiting the lottery which is one of the curses of all her neighbours. The lottery-ticket vendor is usually one of the first persons seen in a Latin-American country.

Military service in Chile is compulsory. It is not a crushing burden, however, for the regular army does not exceed fifteen thousand men. This proves that military service is not enforced very strongly, as that number would include only a small proportion of those subject to duty each year. One year is supposed to be spent with the colours, after which the conscript passes to the first reserve for nine years, and is then included in the second reserve until he attains the age of forty-five years. Any child born in Chile is subject to this service, so that foreigners sometimes grumble. The instructors in the army are often German officers, and the tactics are strictly Teutonic as well as the costumes. In every way the German influence is noticeable. The personnel of the army is good. The men are hardy, active and vigorous. Their courage has been proved on the field of battle many times. The country is divided into five military zones with headquarters at Santiago.

Chile has always possessed a good navy. The naval fleet at the present time is composed of forty vessels, among which are nine ironclads and protected cruisers, five gunboats and torpedo cruisers, thirteen torpedo boats, four destroyers, etc. The finest ship is the Esmeralda, which is a boat of seven thousand and thirty tons and capable of a speed of twenty-one knots. She carries two 8-inch and sixteen 6-inch guns. Then come the O’Higgins, Ministro Zentano, Chacabuco, and President Errázuriz—all of them protected cruisers. The Capitan Prat is a battleship of six thousand nine hundred and sixty-six tons and twelve thousand horse-power and a nominal speed of eighteen and three-tenths knots. This boat was built in 1890. The cruisers were mostly constructed from 1896 to 1898 in British and Italian shipyards. Chile has recently placed an order for a Dreadnaught of the latest design, which will still further add to the efficiency of the Chilean navy. In this respect she is following the lead of Brazil and Argentina.

The United States could and should have a much greater proportion of Chile’s trade. Too many manufacturers depend wholly on business houses conducted by English or German merchants—men who naturally prefer the goods made by their own countrymen. Others send representatives who are illy adapted to deal with Chileans and other Latin Americans. An American bank would work wonders in developing trade. It seems strange that American capitalists hesitate about investing their money in such an institution. Foreign banks established in South America have paid good dividends. Among those in Chile are the Anglo-South American Bank, Bank of London and the River Plate, German Transatlantique and the Banco Italiano. The figures of exports and imports given below are in themselves eloquent testimonials of the value of Chilean trade. Branch houses in charge of hustling Americans, or agencies placed with American importers should be the aim of every manufacturer who intends to push the trade into Chile or any of the other republics of Latin America. At the present time there are very few citizens of the United States resident in Chile—probably less than five hundred in the entire republic.

“Why do you not buy your steel work in the United States?” I asked of a wealthy Chilean gentleman who was building a large modern block in Santiago.

“I wanted to do so,” he answered, “but your manufacturers would not grant the terms that were gladly and voluntarily offered me in Europe. As a result, I bought all my steel for this building, which will cost more than a half million dollars gold, in Belgium. The only equipment for the building made in the United States will be a half dozen elevators.”

This simply illustrates one phase of the shortsightedness of our manufacturers in dealing with South America. The field is a large one, and a discriminating one as well. It is humiliating at times to an American to travel throughout the length and breadth of South America, and see the trade that legitimately belongs to us slipping away to Europe, even when some of our own factories in that particular line are idle because of lack of orders. There has been an awakening in the past few years, but there must still be much progress before the American business man catches up with the British and German in the pursuit of the world’s trade.

Chilean trade has reached very respectable figures in recent years. The total exports for the year 1910 amounted to $115,792,811, of which $98,234,035 were mineral exports. Of this nitrate comprised the greatest item. Great Britain took nearly one-half the exports; the United States purchased $24,680,278, slightly more than Germany, which was a decided increase over the preceding year. The imports amounted to $108,627,188. Great Britain sent almost one-third of this, Germany was second with less than one-fourth, and the United States was third with goods valued at $13,369,774, or about one-eighth of the whole. Next in order came France, Argentina, Peru and India. Spain, the mother country, furnished less than one per cent. of the whole. This shows a large per capita importation, amounting to more than $30.00, which is exceeded only by Argentina and Uruguay, and shows a trade well worth looking after. Of the goods imported textiles were one-fourth of the whole. Mineral products, including coal, oil products, etc., are a third, and machinery constituted about eleven per cent. of the whole. Machinery and petroleum products are the principal importations from the United States.

The American firm of W. R. Grace & Co. occupy a prominent position in the commercial world along the west coast of South America, where it is the largest firm engaged in business. Its founder, Wm. R. Grace, was born in Ireland, but came to Peru in his youth. After making a success in business there he went to New York and established the head offices of his company. He became a citizen of the United States, and assisted the government on several occasions. Mr. Grace became very prominent in that metropolis. He was twice elected mayor, and gave a very creditable administration. Mr. Grace died in 1904. W. R. Grace & Co. took over the Oroya Railroad in Peru and completed it. They recently constructed the Chilean end of the Transandine Railway, and have been engaged in many other important public works in Chile, Peru and Bolivia. The foundation of the fortune of Grace & Co. was guano and nitrate, and a line of boats are run between the west coast and New York, although flying the English flag. Branch houses are established in the principal cities of Chile, and an immense business is done in importation and exportation. The principal offices are still maintained in New York, although one of the members of the firm lives in London.

Chile’s dependence upon the sea renders foreign trade an essential element in her prosperity. She has a hardy seafaring population, and thousands are employed in that occupation. She is probably destined to have a much larger part in the coast carrying trade in the future. Next to the national steamers, the British have the biggest share in the carrying trade of Chile.

The foreign debt of Chile is in the neighbourhood of $100,000,000, most of which is held by the Rothschild interests. Much of this debt was contracted during the period of military expansion. Great quantities of paper money were issued by various administrations, and, as a result, the peso dropped in value. The gold peso has a fixed value of thirty-two cents in United States currency, and the paper peso is worth about twenty-one cents. The gradual drop in value of the currency has made railroad travel on the government lines and postage the cheapest in South America. It has also prevented much internal development. At the present time a number of cities are installing hydraulic electric plants, which are very practical for this country. Several schemes are under consideration for port developments, of which the work at Valparaiso will be the most important. Concepción, Talcahuano and Corral, Iquique and Antofagasta, will also come in for their share. Several irrigation projects are now being constructed which will add almost two hundred thousand acres of irrigated land suitable for agriculture. The electrification of the state railroad between Valparaiso and Santiago will also doubtless be one of the developments of the near future.

The postal and telegraph systems of the republic are good. There are more than one thousand post offices, and the amount of mail transported is very large. Newspapers circulate absolutely free, and domestic postage is lower than in the United States. Foreign letters only cost three cents for postage. There are more than eighteen thousand miles of telegraph wires stretched across the country. A wireless telegraph station has been opened at Valparaiso with a radius of eight hundred miles, and others will be opened very soon at other places, including the Straits district, where the wild and undeveloped nature of the country makes the stretching and maintenance of overhead wires difficult.

Like all the South American republics Chile is greatly in need of immigration. With such a variety of climate it could afford congenial homes for people from almost any country. A few thousand of immigrants come in each year, from three to five, but that number is paltry. Tens of thousands could be assimilated if they were agriculturalists. Argentina, with her broad level acres, is too near, and draws twice as many as all the other republics of South America together. Wages are higher there, too, and the Italians and Spaniards, who comprise the greater proportion of those seeking new homes in South America, are drawn there. A few Boer colonies were established in Chile after the war in the Transvaal, but the total number was not large.

One unfortunate condition in Chile is the unusually high death rate. This has been placed as high as seventy per thousand, but this rate would only be in exceptional instances. It is a fact, however, that the cities of Santiago, Valparaiso and Concepción will frequently show a mortality rate of fifty to the thousand of population. The average for the whole republic is about thirty-five per thousand, which is nearly double the death rate for countries in the temperate zone. As Chile is not in the torrid zone, it is not subject to epidemics of yellow fever or other tropical scourges. Foreigners who live there find the climate, especially in the central part, not only delightful, but healthful, and very old people are quite common. The reason for this condition of affairs is the indifference to personal comforts and sanitation of the roto. This leads to a frightful mortality among the children. Occasionally there are severe epidemics of smallpox, and the measles has caused great ravages among children.

Statistics show that in some years, even with the large birth rate among the lower classes, the births exceed the deaths by only a few thousands. It is a condition that demands action by the state, for the government is paternal in its character, and is depended on by the people to look after these things. The sturdiness of the roto may be due to the law of the survival of the fittest, for only those who possess a sound constitution reach manhood. One who can survive the lack of comforts and harsh conditions of life to which he is subjected, and reach manhood, is at least robust if not cultured or refined. There is, indeed, much room for improvement in the sanitary conditions of the cities in the sections occupied by the poor, and some measures have been taken in recent years. For the nation it would be a good economic policy, as the decrease in the death rate would aid in giving the population so much needed for the development of the country.

Chile dates her independence from Spain from the 18th of September, 1810, and last year was celebrated as her first centennial. On this day, in the year 1910, was laid the corner stone of a great monument in commemoration of that event. This was participated in by the President of Argentina and other officials of that neighbouring republic. This was but natural, for the soldiers of both countries fought and bled side by side at Maipu, Chacabuco and other places. A notable historic parade, with the costumes and military characteristics of that period, was a feature of the celebration. It represented the march of the victorious patriot army into Santiago after its evacuation by the Spaniards. The granaderos, a military organization in Buenos Aires which wears the same uniform as in the time of San Martin, came over from that city to take part. The parade halted in front of the statue of San Martin and saluted that noble hero. Solemn religious services and social events made up a day that will long be notable in the Chilean capitol. Elaborate decorations had been erected all over the city, and especially on the Alameda where the parades took place.

Almost the entire month of September was given up to the festivities incident to this national centennial throughout the entire republic. There was scarcely a town or village that did not have its local fiesta. Horse races, theatrical performances, fireworks, torchlight processions, etc., were all included in the list of events. A naval review was held in Valparaiso, in which four ships of the United States took part with those of Chile and other nations. An industrial Exposition was held in Valparaiso, and an Exposition of Fine Arts in Santiago. The death of President Montt and his successor, both within a month preceding the beginning of the festivities, cast somewhat of a gloom upon the occasion, but it could not mar the festal spirit in a very marked degree.

The relations between Chile and the United States have, in a number of instances, been considerably strained. As a result there was for many years an existant prejudice against the Yanqui. The first occasion arose during the war between Peru and Chile, when the United States offered its mediation, which was resented by Chile because that country desired to reap the spoils of war. Another instance happened during the Balmaceda administration. During his term, and the struggles which resulted between himself and Congress, the sympathies of the United States were with the President. A minister sent to the United States by the revolutionists, after they had established a junta at Iquique, and were in possession of the customs throughout northern Chile, was refused recognition by President Harrison. The steamship Itata, belonging to the Chilean line, which at that time ran as far as San Francisco, was seized and held for some time because she was loaded with arms and ammunition intended for the revolutionists. Although the vessel escaped it was followed by a United States cruiser and overtaken at Iquique, where the revolutionist junta turned it over to the cruiser and it was taken back to San Francisco. This kept the opponents of the government out of much-needed supplies.

Later arose what is known as the “Baltimore incident.” Admiral Schley, in charge of that gun boat, had been sent to Chile to protect American interests. He sailed freely in and out from one port to another, and was charged by the revolutionists with giving information to the government party of their movements. As the navy was all on the side of the revolutionists, they claimed that only in this way could the other party on land have secured certain information. Admiral Schley denied the accusations, and all of these charges were afterwards proven to be false. Near the close of that internecine struggle a number of sailors and others from the Baltimore had gone ashore at Valparaiso. While in a rather disreputable saloon in that city an altercation arose between some Chilean soldiers and the party of American marines. One of the Chileans was knocked down, and a general fight resulted in which the Yankees were assaulted with clubs, knives and revolvers. One American was killed instantly, another died from his injuries a short time later, and a score of others were more or less seriously injured. In the diplomatic correspondence which followed, an indemnity was courteously demanded by the United States, to which an almost insulting reply was made by Chile. International trouble threatened for a while, but Chile made apologies and paid the sum of $75,000 as compensation. The matter was then dropped, but the anti-American feeling did not evaporate as quickly as the war-cloud.

Only a little over a year ago another controversy arose through the demand made by the State Department of the United States for the settlement of a claim which had been in dispute for many years. As a result much anti-American comment appeared in the newspapers of Chile, as though the United States was trying to enforce a rejected claim against a weaker nation. The visit of President Montt to the United States, while on his way to Europe to seek medical advice, only a few months afterward, however, seems to presage that the government of Chile has buried all difficulties and good will is again restored. It was not necessary for President Montt to come this way, and he undoubtedly did it in a spirit of amity and good will.

A great many erroneously place strong reliance upon the favourable effect of the Monroe Doctrine in South America. As a matter of fact the Monroe Doctrine at no period has caused the sale of a dollar’s worth of merchandise in those markets. It has, on the other hand, through misinterpretation of its intended beneficence, caused ill feeling, and, perhaps, prevented the sale of American goods in many instances. If the United States adheres to this doctrine, the completion of the Panama Canal will increase the responsibilities of the United States instead of lessening them. We, of the great North American republic, know that the action of the United States under this doctrine has always been intended for the welfare of the other Americans. Those who should feel kindly toward us, because of it, as a matter of fact rather resent its effect. They feel able to fight their own battles without the aid of the powerful republic on the North American continent. The visit of the United States fleet a few years ago at the various ports of South America, and the trip made by Elihu Root, then Secretary of State, did more to encourage a kindly feeling toward the United States and to develop a Pan-American spirit than anything the United States has ever done. It now needs only a wise and diplomatic policy to strengthen and extend the good feeling engendered by those events.

Chile, like all the west coast republics, is becoming very much interested in the Panama Canal, and the effect that its completion will have upon the country. Unlike the North American, the South American does not become impatient over the probable date of the completion of the canal, for it does not make much difference to him whether it is ten years or twenty-five years hence. The only question in his mind is what may be the ultimate effect of the canal. It is, perhaps, of more interest to a North American, because the North American is interested in the possibilities of trade development with that coast. At the present time there are perhaps 11,500,000 of people living in the republics of Ecuador, Peru, Bolivia and Chile, which have a foreign commerce, including both exports and imports, in excess of $300,000,000. In addition to this there is the trade with the Pacific coast of Colombia. Then there is added to this the question of the probability of future development of those countries, which are in themselves larger than any European kingdoms, except Russia. The enthusiastic Chilean, for instance, will tell you how many times larger is his country than Holland, and estimates the immense population that his country could support at the same density per mile as that little European kingdom. This, of course, is absolutely impossible, because such large sections of the country are untillable. Furthermore, there never has been as yet such rapid increases in population in any of the west coast countries as the United States, Canada, Argentina and Australia can show. Hence it is not well to think of this section as being likely to have sudden growths of population, but there will doubtless be a slow and steady increase in each of the countries mentioned.

One advantage that will accrue from the completion of the canal will be better transportation between all the ports of the west coast and New York. A direct line of steamers between Valparaiso, and possibly ports farther south, to New York is sure to be established, for business conditions will not only demand, but warrant such a line. By this route the distance from New York to Valparaiso will be only fifty-one hundred miles, including the stops at several intervening ports. When this distance is compared with that from Valparaiso to Liverpool, by the way of the Straits of Magellan, which is ninety-five hundred miles, it shows that New York will be several thousand miles nearer to Valparaiso than European ports by the same route, and the difference becomes greater as you journey along the coast toward Panama. If British steamers should use the Panama Canal it would still make New York nearer to all the ports on the west coast by almost three thousand miles. As it is there are no boats flying the American flag which visit Chilean or other west coast ports, except an occasional tramp lumber schooner which comes down from Seattle, or a boat which comes through the Straits of Magellan now and then from New York for a load of nitrate. Much of the traffic is obliged to go to Callao, Peru, and there be transferred to another steamer to be taken to Panama; then it is shipped by rail across the Isthmus, and again loaded on another steamer destined either for New York or New Orleans.