Part 14

The election of Balmaceda was bitterly opposed by the Conservatives and dissentient Liberals, but was finally successfully carried by the official influence exercised by President Santa Maria. On assuming office President Balmaceda endeavoured to bring about a reconciliation of all sections of the Liberal party in congress and so form a solid majority to support the administration, and to this end he nominated as ministers representatives of the different political groups. Six months later the cabinet was reorganized, and two most bitter opponents to the recent election of President Balmaceda were accorded portfolios. Believing that he had now secured the support of the majority in congress on behalf of any measures he decided to put forward, the new president initiated a policy of heavy expenditure on public works, the building of schools, and the strengthening of the naval and military forces of the republic. Contracts were given out to the value of £6,000,000 for the construction of railways in the southern districts; some 10,000,000 dollars were expended in the erection of schools and colleges; three cruisers and two sea-going torpedo boats were added to the squadron; the construction of the naval port at Talcahuano was actively pushed forward; new armament was purchased for the infantry and artillery branches of the army, and heavy guns were acquired for the purpose of permanently and strongly fortifying the neighbourhoods of Valparaiso, Talcahuano and Iquique. In itself this policy was not unreasonable, and in many ways extremely beneficial for the country. Unfortunately corruption crept into the expenditure of the large sums necessary to carry out this programme. Contracts were given by favour and not by merit, and the progress made in the construction of the new public works was far from satisfactory. The opposition in congress to President Balmaceda began to increase rapidly towards the close of 1887, and further gained ground in 1888. In order to ensure a majority favourable to his views, the president threw the whole weight of his official influence into the elections for senators and deputies in 1888; but many of the members returned to the chambers through this official influence joined the opposition shortly after taking their seats. In 1889 congress became distinctly hostile to the administration of President Balmaceda, and the political situation became grave, and at times threatened to involve the country in civil war. According to usage and custom in Chile, a ministry does not remain in office unless supported by a majority in the chambers. Balmaceda now found himself in the impossible position of being unable to appoint any ministry that could control a majority in the senate and chamber of deputies and at the same time be in accordance with his own views of the administration of public affairs. At this juncture the president assumed that the constitution gave him the power of nominating and maintaining in office any ministers he might consider fitting persons for the purpose, and that congress had no right of interference in the matter. The chambers were now only waiting for a suitable opportunity to assert their authority. In 1890 it was stated that President Balmaceda had determined to nominate and cause to be elected as his successor at the expiration of his term of office in 1891 one of his own personal friends. This question of the election of another president brought matters to a head, and congress refused to vote supplies to carry on the government. To avoid trouble Balmaceda entered into a compromise with congress, and agreed to nominate a ministry to their liking on condition that the supplies for 1890 were voted. This cabinet, however, was of short duration, and resigned when the ministers understood the full amount of friction between the president and congress. Balmaceda then nominated a ministry not in accord with the views of congress under Señor Claudio Vicuña, whom it was no secret that Balmaceda intended to be his successor in the presidential chair, and, to prevent any expression of opinion upon his conduct in the matter, he refrained from summoning an extraordinary session of the legislature for the discussion of the estimates of revenue and expenditure for 1891. When the 1st of January 1891 arrived, the president published a decree in the _Diario Oficial_ to the effect that the budget of 1890 would be considered the official budget for 1891. This act was illegal and beyond the attributes of the executive power. As a protest against the action of President Balmaceda, the vice-president of the senate, Señor Waldo Silva, and the president of the chamber of deputies, Señor Ramon Barros Luco, issued a proclamation appointing Captain Jorje Montt in command of the squadron, and stating that the navy could not recognize the authority of Balmaceda so long as he did not administer public affairs in accordance with the constitutional law of Chile. The majority of the members of the chambers sided with this movement, and on the 7th of January Señores Waldo Silva, Barros Luco and a number of senators and deputies embarked on board the Chilean warship "Blanco Encalada," accompanied by the "Esmeralda" and "O'Higgins" and other vessels, sailing out of Valparaiso harbour and proceeding northwards to Tarapaca to organize armed resistance against the president (see CHILEAN CIVIL WAR). It was not alone this action of Balmaceda in connexion with congress that brought about the revolution. He had alienated the sympathy of the aristocratic classes of Chile by his personal vanity and ambition. The oligarchy composed of the great landowners have always been an important factor in the political life of the republic; when President Balmaceda found that he was not a _persona grata_ to this circle he determined to endeavour to govern without their support, and to bring into the administration a set of men who had no traditions and with whom his personality would be all-powerful. The Clerical influence was also thrown against him in consequence of his radical ideas in respect of Church matters.

Immediately on the outbreak of the revolution President Balmaceda published a decree declaring Montt and his companions to be traitors, and without delay organized an army of some 40,000 men for the suppression of the insurrectionary movement. While both sides were preparing for extremities, Balmaceda administered the government under dictatorial powers with a congress of his own nomination. In June 1891 he ordered the presidential election to be held, and Señor Claudio Vicuña was duly declared chosen as president of the republic for the term commencing in September 1891. The resources of Balmaceda were running short on account of the heavy military expenses, and he determined to dispose of the reserve of silver bullion accumulated in the vaults of the Casa de Moneda in accordance with the terms of the law for the conversion of the note issue. The silver was conveyed abroad in a British man-of-war, and disposed of partly for the purchase of a fast steamer to be fitted as an auxiliary cruiser and partly in payment for other kinds of war material.

The organization of the revolutionary forces went on slowly. Much difficulty was experienced in obtaining the necessary arms and ammunition. A supply of rifles was bought in the United States, and embarked on board the "Itata," a Chilean vessel in the service of the rebels. The United States authorities refused to allow this steamer to leave San Diego, and a guard was stationed on the ship. The "Itata," however, slipped away and made for the Chilean coast, carrying with her the representatives of the United States. A fast cruiser was immediately sent in pursuit, but only succeeded in overhauling the rebel ship after she was at her destination. The "Itata" was then forced to return to San Diego without landing her cargo for the insurgents. The necessary arms and ammunition were arranged for in Europe; they were shipped in a British vessel, and transferred to a Chilean steamer at Fortune Bay, in Tierra del Fuego, close to the Straits of Magellan and the Falkland Islands, and thence carried to Iquique, where they were safely disembarked early in July 1891. A force of 10,000 men was now raised by the _junta_ of the revolution, and preparations were rapidly pushed forward for a move to the south with the object of attacking Valparaiso and Santiago. Early in April a portion of the revolutionary squadron, comprising the "Blanco Encalada" and other ships, was sent to the southward for reconnoitring purposes and put into the port of Caldera. During the night of the 23rd of April, and whilst the "Blanco Encalada" was lying quietly at anchor, a torpedo boat called the "Almirante Lynch," belonging to the Balmaceda faction, steamed into the bay of Caldera and discharged a torpedo at the rebel ship. The "Blanco Encalada" sank in a few minutes and 300 of her crew perished.

Defeat and suicide of Balmaceda.

In the middle of August 1891 the rebel forces were embarked at Iquique (where a provisional government under Captain Jorje Montt had been set up), numbering in all about 9000 men, and sailed for the south. On the 20th of August the congressist army was disembarked at Quinteros, about 20 m. north of Valparaiso, and marched to Concon, where the Balmacedists were entrenched. A severe fight ensued, in which the troops of President Balmaceda were defeated with heavy loss. This reverse roused the worst passions of the president, and he ordered the arrest and imprisonment of all persons suspected of sympathy with the revolutionary cause. The population generally were, however, distinctly antagonistic to Balmaceda; and this feeling had become accentuated since the 17th of August 1891, on which date he had ordered the execution of a number of youths belonging to the military college at San Lorenzo on a charge of seditious practices. The shooting of these boys created a feeling of horror throughout the country, and a sensation of uncertainty as to what measures of severity might not be practised in the future if Balmaceda won the day. After the victory at Concon the insurgent army, under command of General Campos, marched in a southerly direction towards Viña del Mar, and thence to Placilla, where the final struggle in the conflict took place. Balmaceda's generals Barbosa and Alcérrica had here massed their troops in a strong position. The battle, on the 28th of August, resulted in victory for the rebels. Both the Balmacedist generals were killed and Valparaiso was at once occupied. Three days later the victorious insurgents entered Santiago and assumed the government of the republic. After the batile of Placilla it was clear to President Balmaceda that he could no longer hope to find a sufficient strength amongst his adherents to maintain himself in power, and in view of the rapid approach of the rebel army he abandoned his official duties to seek an asylum in the Argentine legation. The president remained concealed in this retreat until the 18th of September. On the evening of that date, when the term for which he had been elected president of the republic terminated, he committed suicide by shooting himself. The excuse for this act, put forward in letters written shortly before his end, was that he did not believe the conquerors would give him an impartial trial. The death of Balmaceda finished all cause of contention in Chile, and was the closing act of the most severe and bloodiest struggle that country had ever witnessed. In the various engagements throughout the conflict more than 10,000 lives were lost, and the joint expenditure of the two governments on military preparations and the purchase of war material exceeded £10,000,000 sterling.

An unfortunate occurrence soon after the close of the revolution brought strained relations for a short period between the governments of the United States and Chile. A number of men of the U.S.S. "Baltimore" having been given liberty on shore, an argument arose between some of them and a group of Chilean sailors in a drinking den in Valparaiso. Words led to blows. The Americans were badly handled, one of their number being killed and others severely hurt. The United States government characterized the affair as an outrage, demanding an indemnity as satisfaction. The Chilean authorities demurred at this attitude, and attempted to argue the matter. James G. Elaine, then secretary of state, refused peremptorily to listen to any explanations. In the end Chile paid an indemnity of $75,000 as asked, but the affair left bad feeling in its train.

President Jorje Montt.

The close of the revolution against Balmaceda left the government of Chile in the hands of the _junta_ under whose guidance the military and naval operations had been organized. Admiral Jorje Montt had been the head of this revolutionary committee, and he acted as president of the provisional government when the administration of the country changed hands after the victory of the Congressional party. An election was now immediately ordered for the choice of a president of the republic and for representatives in the senate and chamber of deputies. Admiral Montt, as head of the executive power, stanchly refused to allow official influence to be brought to bear in any way in the presidential campaign. The great majority of the voters, however, required no pressure to decide who was in their opinion the man most fitted to administer the affairs of the republic. For the first time in the history of Chile a perfectly free election was held, and Admiral Montt was duly chosen by a nearly unanimous vote to be chief magistrate for the constitutional term of five years. The senate and chamber of deputies were formally constituted in due course, and the government of the republic resumed normal conditions of existence. The new president showed admirable tact in dealing with the difficult problem he was called upon to face. Party feeling still ran high between the partisans of the two sides of the recent conflict. Admiral Montt took the view that it was politic and just to let bygones be bygones, and he acted conscientiously by this principle in all administrative measures in connexion with the supporters of the late President Balmaceda. Early in 1892 an amnesty was granted to the officers of the Balmaceda régime, and they were freely permitted to return to Chile without any attempt being made to molest them. The first political act of national importance of the new government was the grant of control to the municipalities, which hitherto had possessed little power to direct local affairs, and were not even permitted to dispose of the municipal revenues to any important amount without first obtaining the consent of the central government. Almost absolute power was now given these corporations to manage their own concerns, and the organization of the police was placed in their hands; at a later period, however, it was found necessary to modify this latter condition.

President Montt next turned his attention towards the question of how best to repair the damage occasioned to the country by eight months of civil warfare. The plan of public works authorized in 1887 was reconsidered, and the construction of portions of the various undertakings recommenced. The army and navy were reorganized. Additional instructors were brought from Germany, and all arms of the military service were placed on a thoroughly efficient footing in matters of drill and discipline. Several new and powerful cruisers were added to the navy, and the internal economy of this branch of the national defence was thoroughly inspected and many defects were remedied. President Montt then took in hand the question of a reform of the currency, the abolition of inconvertible paper money, and the re-establishment of a gold basis as the monetary standard of the republic. This reform of the currency became the keynote of the president's policy during the remainder of his term of office. Great opposition was raised by the representatives of the debtor class in congress to the suppression of the inconvertible paper money, but in the end President Montt carried the day, and on the 11th of February 1895 a measure finally became law establishing a gold currency as the only legal tender in Chile. In July 1896 the Conversion Act was put in force, a dollar of 18d. being the monetary unit adopted. In 1895 relations with the neighbouring republic of Argentina began to become somewhat strained in regard to the interpretation of the treaty concerning the boundary between the two countries. The treaties of 1881, 1893 and 1895 left doubts in the minds of both Chileans and Argentines as to the position of the frontier line. On the 17th of April 1896 another protocol was drawn up, by which the contending parties agreed to submit any differences to the arbitration of Great Britain, at the instance of one or both governments. President Montt had now fulfilled his term of office, and on the 18th of September 1896 he handed over the presidential power to his successor, Señor Federico Errázuriz, who had been duly elected in the month of June previously.

President Errázuriz.

Crisis with Argentina.

The election for the position of president of the republic was closely contested in 1896 between Señor Errázuriz and Señor Reyes, and ended in the triumph of the former candidate by the narrow majority of one vote. The father of the new president had been chief magistrate of Chile from 1871 to 1876, and his administration had been one of the best the country had ever enjoyed; his son had therefore traditions to uphold in the post he was now called upon to fill. At the beginning of 1897 the public attention was absorbed by foreign political questions. The problems to be solved were the frontier difficulty with Argentina, the question of the possession of Tacna and Arica with Peru, and the necessity of fulfilling the obligation contracted with Bolivia to give that country a seaport on the Pacific coast. The treaty made in 1896 with the Argentine government, referring to the arbitration of disputed points concerning the boundary, became practically for the moment a dead letter, and both Argentines and Chileans began to talk openly of an appeal to arms to settle the matter once for all. The governments of both countries began to purchase large supplies of war material, and generally to make preparations for a possible conflict. In these circumstances no final settlement with Peru and Bolivia was possible, the authorities of those republics holding back to see the issue of the Chile-Argentine dispute, and Chile being in no position at the time to insist on any terms being arranged. So matters drifted until the beginning of 1898. In July of that year the crisis reached an acute stage. Both Chile and Argentina put forward certain pretensions to territory in the Atacama district to the north, and also to a section of Patagonia in the south. Neither side would give way, nor was any disposition exhibited to refer the matter to arbitration under the protocol of 1896. The cry of an acute financial crisis emanating from the fear of war with Argentina was now raised in Chile. The president was advised that the only way of averting the financial ruin of the banking institutions of the republic was to suspend the conversion law and lend from the national treasury inconvertible notes to the banks. Señor Errázuriz weakly gave way, and a decree was promulgated placing the currency once more on an inconvertible paper money basis until 1902. In August of 1898 the Chilean government determined to insist upon the terms of the protocol of 1896 being acted upon, and intimated to Argentina that they demanded the fulfilment of the clause relating to arbitration on disputed points. This was practically an ultimatum, and a refusal on the part of the Argentine government to comply with the terms of the 1896 agreement meant a declaration of war by Chile. For a few days the issue hung in the balance, and then the Argentine government accepted the provisions made in 1896 for arbitration. The dispute concerning the Atacama district was submitted to an arbitration tribunal, consisting of the representative of the United States in Argentina, assisted by one Argentine and one Chilean commissioner. This tribunal, after due investigation, gave their decision in April 1899, and the verdict was accepted unreservedly by both governments. The dispute regarding the Patagonian territory was submitted to the arbitration of Great Britain, and a commission--consisting of Lord Macnaghten, Sir John Ardagh and Sir T.H. Holdich--was appointed in 1899 to hear the case.

The Argentine difficulty was ended, but Chile still had to find a settlement with Peru and Bolivia. The treaty made with the former country in 1893 was not ratified, as it was thought to concede too much to Peru, and the subsequent _ad referendum_ treaty was rejected on account of Peru claiming that only Peruvians, and not all residents, should have the right to vote in the plebiscite to be taken by the terms of the treaty of 1883 for the possession of Tacna and Arica. By the terms of the armistice of 1883 between Chile and Bolivia, a three years' notice had to be given by either government wishing to denounce that agreement. By the protocol of 1895 Chile agreed to give to Bolivia the port of Arica, or some other suitable position on the seaboard. On these lines a settlement was proposed. Vitor, a landing-place a little to the south of Arica, was offered by the Chilean government to Bolivia, but refused as not complying with the conditions stated in the protocol of 1895; the Bolivians furthermore preferred to wait and see if Arica was finally ceded by Peru to Chile, and if so to claim the fulfilment of the terms of the protocol.

After the accession to office of President Errázuriz there was no stability of any ministry. Political parties in congress were so evenly balanced and so subdivided into groups that a vote against the ministry was easy to obtain, and the resignation of the cabinet immediately followed in accordance with the so-called parliamentary system in vogue in Chile. The president of the republic has no power to dissolve the chambers, to endeavour to remedy the evil by one or another political party obtaining a substantial working majority, but must wait to see the results of the triennial elections. As a consequence of these conditions Conservative, Liberal and coalition ministries held office at short intervals. These unsettled political circumstances checked any continuity of policy, and tended to block the passage of all useful legislation to help forward the economic development of the country and inhabitants; on the other hand, the financial situation was better by the end of 1899 than in the previous year, since all proposals for a fresh paper issue had been vetoed; and the elections for congress and municipal office at the opening of 1900 returned a majority favourable to a stable currency policy.

In September 1900 a fresh outburst of hostile feeling against Chile was created in Argentina by a note addressed by the Chilean government to Bolivia, intimating that Chile was no longer inclined to hand over the port of Arica or any other port on the Pacific, but considered the time ripe for a final settlement of the questions connected with the Chilean occupation of Bolivian territory, which had now been outstanding for sixteen years. The foreign policy of Chile, as indicated by this note, was considered by Argentina to be grasping and unconciliatory, and there were rumours of an anti-Chilean South American federation. Chile disclaimed any aggressive intentions; but in December the Bolivian congress declined to relinquish their claim to a port, and refused to conclude a definite treaty of peace. The year closed with a frontier incident between Chile and Argentina in the disputed territory of Ultima Esperanza, where some Argentine colonists were ejected by Chilean police; but both governments signed protocols agreeing not to take aggressive action in consequence.

President Riesco.