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Published online by Cambridge University Press: 05 February 2009
Chile's seizure of Peru and Bolivia's nitrate regions during the War of the Pacific (1879–83) opened a new and unprecedented era of prosperity for the Chilean economy. During the next forty years the export duty on nitrates fuelled a rapid increase in government revenues, and the entire domestic economy benefited from the development of the industry. Yet the incorporation of the nitrate industry into the national economy also appeared to signal a decline in the dynamism of the Chilean economic elite. Despite the dominant role which Chilean entrepreneurs had played in the development of the national economy prior to the war, 69 per cent of the nitrate industry was in British hands by 1890.
1 O'Brien, Thomas F. Jr, ‘British Investors and the Decline of the Chilean Nitrate Entrepreneurs, 1870–1890’ (Ph.D. dissertation, University of Connecticut, 1976), p. 276.Google Scholar
2 For examples of these interpretations, see Billinghurst, Guillermo, Los capitales salitreros de Tarapacá (Santiago, 1889), pp. 39–40;Google ScholarEncina, Francisco A., Historia de Chile desde la prehistoria hasta 1891 (20 vols., 2d. ed., Santiago, 1955–1970), 18, 284–92;Google ScholarMiral, Oscar Berúdez, “El salitre de Tarapác y Antofagasta durante la ocupación militar chilena’, Anales de la Universidad del Norte (Antofagasta), No. 5 (1966), p. 152;Google ScholarBrown, J. R., ‘The Frustration of Chile's Nitrate Imperialism’, Pacific Historical Review, No. 32 (Nov. 1963), pp. 383–96.CrossRefGoogle Scholar
3 Véliz, Claudio, Historia de la marina mercante de Chile (Santiago, 1961), p. 265.Google Scholar
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8 Véliz, marina mercante, pp. 79–90.
9 Chile, , Dirección General de Contabilidad, Resumen de la hacienda pública de Chile desde 1833 hasta 1914 (London, n.d.), p. 94.Google Scholar
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11 Mackenna, Benjamín Vicuña, El libro del cobre i del carbón de piedra en Chile (Santiago, 1883), p. 528.Google Scholar
12 Approximately 76 million pesos of such obligations were redeemed between 1865 and 1919. Bauer, Rural Society, p. 120.
13 Pike, Fredrick B., Chile and the United States, 1880–1962: the Emergence of Chile's Social Crisis and the Challenge to United States Diplomacy (Notre Dame, Indiana, 1963), pp. 5–6;Google Scholar Bauer, Rural Society, pp. 206–7.
14 The Statist, 19 Jan. 1889.
15 Fetter, Frank Whitson, Monetary Inflation in Chile (Princeton, 1931), p. 17.Google Scholar More recent research has produced conflicting evidence on the timing and intensity of problems in the agrarian sector. See Bauer, Rural Society, pp. 67–73, and Sater, ‘Economic Nationalism’, pp. 389–20.
16 Fetter, Inflation, p. 25; Encina, Historia de Chile, 16, p. 66.
17 Consular Report (Coquimbo) (P.P. 1878), 75, 1464.
18 Encina, Historia de Chile, 16, pp. 72; Martner, Daniel, Estudio de politica comercial chilena e historia económica nacional, 2 vols. (Santiago, 1923), 2, 342–54.Google Scholar
19 Miral, Oscar Bermúdez, Historia del salitre desde sue origenes hasta la Guerra del Pacifico (Santiago, 1963), pp. 290–97.Google Scholar
20 Encina, Historia de Chile 16, p. 110.
21 Martner, Estudio de politica comercial, 2, p. 360; Encina, Historia de Chile, 16, pp. 70–71.
22 Chile, Dirección General de Contabilidad, Hacienda Pública, pp. 26–7.
23 Alberto Blest Gana to Anibal Pinto, Paris, 25 Jan. 1878. Santiago, Archivo Nacional, Fondo Nuevo ‘Varios’ (cited hereafter as F.N.) Tomo 413, Pieza 14a.
24 Blest Gana to Pinto, Paris, 3 May 1878. F.N. Tomo 413, Pieza 14a.
25 Fetter, Inflation, p. 27; Encina, Historia de Chile, 16, pp. 75–6.
26 It was not until after the outbreak of the War of the Pacific in 1879 that Congress approved a watered down version of this direct tax legislation. Sater, ‘Economic Nationalism ’ pp. 324–6.
27 Blest Gana to Pinto, Paris, 13 Dec. 1878. F.N. Tomo 413, Peiza 14a.
28 Encina, Historia de Chile, 15, pp. 134–5.
29 Búlnes, Gonzalo, Guerra del Pacifico, 3 vols. (Valparaiso, 1911–1919), 1, 37–9;Google ScholarBurr, Robert N., By Reason or Force: Chile and the Balancing of Power in South America, 1830–1905 Berkeley and Los Angeles, 1965), pp. 118–19.Google Scholar
30 Burr, By Reason or Force, p. 124.
31 Ibid., p. 130.
32 Ibid., pp. 113–14.
33 cf. La Feber, Walter, The New Empire: an Interpretation of American Expansion, 1860–1898 (Ithaca, New York, 1971), p. 60.Google Scholar
34 Nor was enthusiasm for the war necessarily shared by the general populace who were called upon to do the actual fighting. Sater, William F., ‘Chile During the First Months of the War of the Pacific’, Journal of Latin American Studies, 5 (05 1973), pp. 135–40.CrossRefGoogle Scholar
35 Bader, Thomas McLeod, ‘A Willingness to War: a Portrait of the Republic of Chile During the Years Preceding the War of the Pacific’ (Ph.D. dissertation, University of California, Los Angeles, 1967), pp. 194–506.Google Scholar
36 Burr, By Reason or Force, p. 141.
37 El Ferrocarril (Santiago), 5 Jan. 1880; El Mercurio (Valparaíso), 17 Jan. 1880.
38 Blakemore, Harold, ‘Limitations of Dependency: an Historian's View and Case Study’, Boletin de Estudios Latinoamericanos y del Caribe, No. 18 (06 1975), pp. 78–9.Google Scholar For an enlightening discussion of the Peruvian side of the Bondholders' question, see Miller, Rory, ‘The Making of the Grace Contract: British Bondholders and the Peruvian Government, 1885–1890’, Journal of Latin American Studies, 8 (05 1976), pp. 73–100.CrossRefGoogle Scholar
39 Consul J. de V. Drummond Hay to the Marquis of Salisbury, Santiago, 30 Aug. 1879, James Fergusson and George Henry Hopkinson to Salisbury, London, 2 Dec. 1879, Sir Charles Russell to Lord Tenterden, London, 31 Dec. 1879. Correspondence Between Her Majesty's Government and the Governments of Peru and Chile Respecting the Claims of the Peruvian Bondholders (cited hereafter as Bondholders) (P.P., LXXXI, 1882), 81, 14–15, 17, 19. Fergusson and Hopkinson were trustees for the Bondholders and Russell was the chairman of their committee. Lord Tenterden was apparently a Foreign Office official. The Bondholders had put forward a claim to Peru's nitrate fields as early as 1877. Blakemore, ‘Dependency’, p. 79.
40 Salisbury to Pakenham, Foreign Office, 12 Dec. 1879. Bondholders, p. 18.
41 Russell to Tenterden, London, 35 Dec. 1879, Salisbury to Blest Gana, Foreign Office, 5 Jan. 1880. Bondholders, p. 19.
42 ‘Declaration made on behalf of the Supreme Government of Chile …’, Paris, 30 Jan. 1880. Copy encl, in Blest Gana to Salisbury, Paris, 31 Jan. 1880, Pakenham to Amun´tegui, Valparaíso, 29 Jan. 1880. Bondholders, pp. 20–21, 23.
43 Russell to Salisbury, London, 23 Jan. 1880. London, Public Record Office, Foreign Office Archives (cited hereafter as F.O.), Peru, 61/323.
44 ‘Motions Passed at Meeting of Bondholders’, London, 2 Feb. 1880. Copy encl, in Russell to Salisbury, London, Feb. 1880. F.O. 61/323.
45 Amunátegui to Pakenham, Valparaíso, 8 Feb. 1880, Bondholders, 23–4.
46 Matte to Rafael Sotomayor, n.p., 6 Feb. 1880. Quoted in Bùlnes, Guerra, 2, p. 60.
47 Pakenham to Salisbury, Valparaíso, 17 Jan. 1880. F.O., Chile, 56/207.
48 ‘Contract between the Supreme Government of Peru and the Société Générale de Crédit Industriel et Commercial …’, London, Jan. 1880. Copy annexed to memorandum of J. Paunceforte, Foreign Office, 23 Jan. 1880. F.O. 61/323.
49 Millington, Herbert, American Diplomacy and the War of the Pacific (New York, 1948), p. 98;Google ScholarDennis, William Jefferson, Tacna and Arica: an Account of the Chile-Peru boundary dispute and of the arbitrations of the United States (New Haven, Connecticut, 1931; reprint ed., Hamden, , Connecticut, 1967), p. 146;Google Scholar Pike, Chile and the United States, p. 49.
50 Pikex, Chile and the United States, p. 49.
51 On the Peruvian expropriation, see Bermúdez, Historia del salitre, pp. 309–54; Greenhill, Robert G. and Miller, Rory M., ‘The Peruvian Government and the Nitrate Trade 5873– 1879’, Journal of Latin American Studies, 5 (02 1973), 107–31.CrossRefGoogle Scholar
52 Bermúdez, ‘El salitre de Tarapác ’, pp. 132–3, 137; Cornejo, Roberto Hernández, El salitre: resumen histórico desde su descubrimiento y explotación (Valparaíso, 1930), p. 100.Google Scholar
53 Bermúdez, ‘El salitre de Tarapacá ’, p. 139; John Smail to Thomas Comber, Iquique, 18 Dec. 1879. Antony Gibbs and Sons Papers, Guildhall, London (cited hereafter as GMS), 11, 472/3. Smail, Comber, James Hayne and Alfred Bohl were partners in William Gibbs and Company, the west coast branch of Antony Gibbs and Sons. See Maude, C. W., Antony Gibbs & Sons Limited: Merchants and Bankers 1808–1958 (London, 1958), pp. 127–31.Google Scholar
54 Smail to Comber, Oficina Limeña, 28 Feb. 1880; Smail to Comber, Iquique, 8 Mar. 1880. GMS 11, 472/3; Bermúdez, ‘El salitre de Tarapacá ’, p. 140.
55 William Gibbs & Company (cited hereafter as WGC) to Pakenham, Valparaíso, 2 Feb. 1880, Pakenham to Amuníso, 3 Mar. 1880, Amunátegui to Pakenham, Santiago, 8 Mar. 1880, Pakenham to Amunátegui, Valparaíso, 8 Mar. 1880. Copies end, in Pakenham to Salisbury, Valparaíso, 24 Mar. 1880. F.O. 16/207.
56 Pakenham to Amunátegui, Valparaíso, 19 Mar. 1880. Copy end, in Pakenham to Salisbury, Valparaíso, 24 Mar. 1880. F.O. 16/207.
57 Amunátegui to Pakenham, Santiago, 23 Mar. 1880. Copy encl, in Pakenham to Salisbury, Valparaíso, 26 Apr. 1880. F.O. 16/207.
58 WGC to Pakenham, Valparaíso, 30 Mar. 1880. Copy end, in Pakenham to Salisbury, Valparaso, 26 Apr. 1880. F.O. 16/207; Amunátegui to Pakenham, Santiago, 4 May 1880, WGC to Pakenham, Valparaíso, 12 May 1880. Copies encl, in Pakenham to Salisbury, Valparaíso, 22 May 1880. F.O. 16/207.
59 Billinghurst, Capitales salitreros, p. 39.
60 Antony Gibbs & Sons (cited hereafter as AGS) to WGC Lima Valparaíso, London, 20 May 1880. GMS 11,471/9.
61 WGC to AGS, Valparaíso, 10 Feb. 1880, WGC to AGS, Valparaíso, 24 Feb. 1881. GMS II,470/4.
62 Smail to Bohl, Oficina Limeña, 6 July 1880, Smail to Comber, Oficina Limeña, 22 Nov. 1880. GMS II,472/4.
63 Thomas Morrison to George Rose Innes, London, 19 Nov. 1880. GMS 11,471/10. W. T. Morrison was the Bank's manager and Innes was an English merchant involved in trade with Chile.
64 George Gibbs to Comber, London, 16 Mar. 1880. GMS 11,471/9.
65 Hernández, El salitre, pp. 102–3, 114, 116; Solar, Carlos Aldunate, Leycs, decretos i documenros relativos a salitreras (Santiago, 1907), Part I, p. 75.Google Scholar
66 Chile, Congreso, Boletin de las sesiones ordinarias de la cámara de senadores de 1888 (cited hereafter as SOCS …) (Santiago, 1888), pp. 226, 243; Aldunate Solar, Leycs, decretos, Part I, pp. 83–7.
67 Aldunate Solar, Leyes, decretos, Part I, p. 75.
68 Spencer St John to Phillip W. Currie, London, 10 Nov. 1882. F.O. 61/357. St John was the former British Minister to Peru and Currie was an Assistant Under Secretary of State.
69 Reprinted in El Mercurio (Valparaíso), 18 Aug. 1879.
70 Consular Report (Caldera) (P.P. 1880), 74, 1522.
71 El Mercurio (Valparaíso), 6 Feb. 1880.
72 Consular Report (Valparaíso) (P.P. 1881), 91, 1453.
73 Gormaz, Francisco Vidal, Estudio sobre el puerto de Iquique (Santiago, 1880), p. 14; WGC to AGS, Valparaíso, 27 02 1881. GMS 11,470/5.Google Scholar
74 La Patria (Valparaíso), 17 June 1880.
75 Bermúdez, ‘ El salitre de Tarapacá’, p. 154.
76 Chile, Congreso, Boletin de las sesiones ordinarias de la cámara de diputados de 1880 (cited hereafter as SOCD …) (Santiago, 1880), p. 472.
77 Ibid., pp. 470–1.
78 Ibid., p. 465.
79 Ibid., p. 383.
80 Ibid., p. 461.
81 This figure is based on data contained in Delegación Fiscal en Tarapacá, 1880. Santiago, Archivo Nacional, Archivo del Ministerio de Hacienda, Tomo 1091; Archivos Notariates de Valparaíso, 1872–8. Archivos Notariales de Iquique, 1872–8. For a more detailed treatment of this question see O'Brien, ‘Nitrate Entrepreneurs’, pp. 59–92.
82 SOCD 1880, P. 471.
83 SOCS 1880, p. 315.
84 Ibid., pp. 269–71; James Hayne to George Gibbs, Valparaíso, 14 Feb. 1879, Hayne to Gibbs, Valparaíso, 28 July 1879, Hayne to Gibbs, Valparaíso, 12 Aug. 1879. GMS, 11,470/3.
85 Hernández, El salitre, pp. 97., 552, 115, 117; Semper, E. and Michels, E., la industria del salitre en Chile (trans. and augmented by Gandarillas, Javier and Salas, Orlando Ghigliotto, Santiago, 1908), pp. 13–7, I40 SOCD 1880, p. 625.Google Scholar
86 Serious efforts to remove the export duty on mineral products began in 1878. In 1879 the House of Deputies agreed to delay consideration of this reform until the nitrate question had been resolved. See Vicuna Mackenna, El libro del cobre, p. 519; SOCD 1879, pp. 157–8.
87 La Patria (Valparaíso), 17 July 1880.
88 J. R. Brown noted that the danger of foreign domination was raised in the congressional debates, but denies it was a reality at that time. See Brown Nitrate Imperialism, p. 393.
89 Billinghurst, Capitales salitreros, pp. 39–40.
90 Brown ‘Nitrate Imperialism’ p. 383.
