CHAPTER XXI_Panama to Patagonia

BOLIVIAN NATIONAL POLICY

_Panama Canal as Outlet for Mid-continent Country--Railways for

Internal Development--Intercontinental Backbone--Proposed Network

of Lines--Use Made of Brazilian Indemnity--Chilean Construction

from Arica--Human Material for National Development--Census

of 1900--Aymará Race--Wise Governmental Handling of Indian

Problems--Immigration Measures--Climatic Variations--Political

Stability--General Pando’s Labors--Status of Foreigners--Revenues

and Trade--Commercial Significance of Treaty with Chile--Gold

Legislation--A Canal View._

Mid-continent country though she is, Bolivia realizes the value to

her of the Panama Canal. For a great many years the larger part of

her exports must be ores and metals. The mineral regions lie chiefly

on the Pacific side of the Royal or Oriental Andes. A portion of

the output in the southern district may find its way profitably

down through Argentina, but the overwhelming bulk of the mineral

products will have the shortest transit, and therefore the cheapest

outlet by the West Coast, through Antofagasta, Arica, and Mollendo,

all within the waterway radius. This also will be the route for

the machinery and the merchandise imported.

The future of Bolivia is so intensely an industrial one, that

the public men who came into power when General Pando became

President keenly appreciated that they must secure the means of

internal development. This could be fostered only by building

railways. In relation to the general subject of rail communication

and transportation the Bolivian plans fit intimately with the

Intercontinental or Pan-American railroad idea. To have a complete

national system of railways it is essential that there shall be

a through trunk line from Lake Titicaca to Argentina, though the

branches toward the Pacific themselves partake of the nature of main

lines. In the political aspect the motive is to secure such domestic

progress as in time will enable Bolivia to obtain a seaport of her

own. Yet a patriotic policy of forethought for all contingencies

forbids her to be dependent entirely on the Pacific outlet. Out

of this feeling grew not only the determination to complete the

connection with the Argentine system, but also the purpose of

combining railroad and water transportation, so that the great river

basins of the northeastern region shall have through communication

with the capital and with the interior of the country, and afford

an Atlantic outlet by means of Villa Bella and the Amazon River.

In this manner Bolivia helps to maintain her independence and

to free herself from too heavily leaning on her Pacific coast

neighbors. Nevertheless, geography decrees that her earlier stages

of development for a quarter of a century, perhaps for half a

century, shall be to obtain the fullest advantage of the extension

of the Panama Canal zone along the West Coast.

The political, geographical, and economic conditions which, in

the view of President Montes and the progressive public men of

Bolivia, are necessary for the development of the nation, involve

the construction of railway lines somewhat as follows:

1. Viacha to Oruro.

2. Uyuni to Tupiza and Quiaca.

3. Oruro to Cochabamba.

4. Cochabamba to the Chimoré River.

5. Chimoré to Santa Cruz.

6. Uyuni or Sevaruyo to Potosi.

7. Potosi to Sucre.

8. Sucre through Padilla and Lagunillas to Santa Cruz and Yacuiba.

9. Tarija to junction with Argentine lines.

10. La Paz to head-waters of the Beni at Puerto Pando.

11. La Paz via Corocoro to Tacna and Arica.

12. Oruro to Potosi.

13. Potosi to Tupiza.

This scheme is very general, yet it has a solid basis. When visiting

Bolivia in the Autumn of 1903 on an official mission, the plans were

explained to me, and the prospective events on which were founded the

expectations of realizing them. Concurring circumstances followed

swiftly. At the beginning of 1905 Bolivia was in the possession of

cash capital of $10,000,000,--the indemnity received from Brazil for

the Acre rubber territory; Chile, for patent reasons of national

policy, by a treaty agreement had obligated herself to construct the

line from Arica to La Paz, and also to advance funds to Bolivia, as

a guaranty for further railway building; the Peruvian Corporation,

to insure its share of future traffic to the Pacific, was engaging

in various projects, and minor enterprises were advancing under

the encouragement given by the government.

A rough calculation of the cost of railway building was $20,000 per

mile in the central plateau, $24,000 in the valleys, and $32,000

in the mountain regions. The latter estimate was too low, but

taking the topography of the country in its entirety and making a

general engineering reconnaissance of the proposed routes with a

maximum grade of 3 per cent, it may be assumed that the 700 miles

of railway which are reasonably sure to be constructed can be built

for an average cost of $35,000 per mile, or $25,000,000. Half that

amount of capital might be said to be in the control of the Bolivian

government at the beginning of 1906. The ultimate extension projected

in order to league all the parts of the country together is about

1,700 miles, but that is a matter of many years.

When the 128 miles of the Pan-American system between Viacha and

Oruro are completed, there will remain only 125 miles from Uyuni to

Tupiza, and then the through links will exist from Lake Titicaca

to Buenos Ayres, for the Argentine government will have completed

the prolongation of its line to Tupiza, the section within Bolivian

territory, 55 miles in length, being constructed and operated under

a special treaty. Three-fourths of the traffic of the Southern

Railway from Puno to Mollendo is furnished by Bolivia, and it is

important for the Peruvian Corporation, which operates that railroad,

to make sure that its Bolivian freight shall not be diverted. The

traffic by way of Lake Titicaca and Mollendo is about 25,000 tons

annually.

The network of railways in project includes the section between

Uyuni and Tupiza, and the line from Uyuni or Sevaruyo to Potosi,

and from Oruro to Cochabamba. The commerce of Cochabamba is

considerable, yet the most pressing national need is to furnish the

Potosi mines with transportation facilities. After the convention

with Chile for the construction of the line from Arica to La Paz

the American engineers who were making the reconnaissance indicated

a preference for the routes from Oruro to Potosi and from Potosi

to Tupiza as the complement of that system.[16]

16 _Reconnaissance Report upon the Proposed System of Bolivian

Railways_, by W. L. Sisson, C. E. La Paz, 1905.

[Illustration: BOLIVIAN RAILWAY ROUTES]

How soon the territory of the Yungas, that is, the head-waters of

the Beni, will be opened up may be a matter of conjecture; but the

very great advantage resulting to the Bolivian government from having

this rich tropical territory developed, which among other things

would help to provide the capital with fuel, insures the building

of a railway of some kind. The success attending the electric road

from the Heights of La Paz down into the city may afford some test

of the feasibility of using the waters of the Inquisivi River as

the means of traction to Puerto Pando, for the water-power of this

stream is almost unlimited. Once the head-waters of the Beni are

reached, the way will be open for navigation to the confluence

at Villa Bella of the Mamoré and the Madre de Dios, which later

reach the Amazon. When the Brazilian government carries out the

long-postponed plan of building a railway around the Madeira Falls,

Bolivia’s course to the Atlantic will be shortened.

This Amazon outlet is likely to become practicable long before the

route by way of the Paraguay and the Plate is opened.

The Antofagasta and Oruro railway, with its 2½ feet gauge for

the whole 575 miles, has been a very profitable enterprise, and

indicates the prospective profit of other railways. The government

guaranteed 6 per cent annually on the cost of the Bolivian section,

that cost not to exceed £750,000, but it never has been called on

to meet the guaranty, the net earnings being sufficient to pay all

fixed charges and handsome dividends. The railway between Viacha

and Oruro, when built, will be of the 1 metre gauge (3 feet, 3⅜

inches) which is the gauge of the line between La Paz and Viacha.

Ultimately the Oruro and Antofagasta line is bound to be widened

in conformity with it.

There may be halts in the policy of the Bolivian government. Changes

may occur. Unexpected obstacles may postpone the fruition of all

these national hopes. Yet during the period when the Panama Canal

is building between $35,000,000 and $40,000,000 is likely to be

employed in railroad construction, and this will mean collateral

expenditures in other directions. It may be guessed that $50,000,000

will be spent in internal development during the next twenty or

twenty-five years. That would not seem much in the United States,

but in a country such as Bolivia it is an enormous sum.

What is the human material for this development, the mineral and

other physical resources being understood? Taking the Acre region

from it, and averaging the territory which will be given Bolivia

in the settlement of the boundary disputes with Peru and Paraguay,

the country may be said to have an area of 400,000 square miles.

A reasonably trustworthy census was taken in September, 1900, and

this placed the total number of inhabitants at 1,816,000. Of these

the classification was made:

Aboriginal Indian race 1,028,000

_Mestizos_, or mixed blood 560,000

Whites 215,000

The remainder was composed of negroes and blended nationalities.

The relative number of inhabitants in the different political

divisions of the country was:

Department Inhabitants

Chuquisaca 196,434

El Beni 25,680

Oruro 86,081

Tarija 67,887

Cochabamba 326,163

Santa Cruz 171,592

Potosi 325,615

La Paz 426,930

Territory of Colonias 7,228

---------

1,633,610

Not enumerated 182,661

---------

Total 1,816,271

A curious circumstance is the even ratio of the sexes. Of the

1,633,610 enumerated population, the males were 819,247 and the

females 814,363. The Indian woman fills so important a function in

the industrial economy of the country that her numerical standing

is of consequence.

This census of 1900 showed that the foreigners domiciled in Bolivia

were few. The total was 7,400, and it was made chiefly of Argentinos,

Peruvians, and Chileans. The Europeans--Italians, Spanish, Germans,

French, Austrians, and English--numbered 1,500. Substantially it

might be said the Republic up to the present is without a foreign

population large enough to influence its national character and

development. The native inhabitants are the economic element of

growth.

The whites are of Spanish origin. The _cholos_ are more Indian than

Spanish, but they have shown considerable capacity for civilization

and progress. The Indians are very largely the Aymará race. Possibly

one-fourth may be of Quichua stock, but certainly not more. Included

in this aboriginal people are a large number of unclassified

Indian tribes, and some of these, particularly the savages, have

no affiliation with Aymarás or Quichuas. The number of savages is

placed at 91,000, though that is hardly more than an estimate.

They are found in the river regions of the East and Northeast. The

Quichuas are in the South along the Argentine border, and in the

North along Lake Titicaca. The great central belt is Aymará, and

the mixed blood there is Aymará and Spanish, somewhat more virile

than the Spanish Quichuas.

The Aymarás, though conquered by Spain and recognizing that they

were vanquished, have resisted absolutely the imposition of more

than the thin layer of Caucasian civilization upon them. They are

said to have aspirations for independence, but the uprisings which

have taken place never have been general and usually have been due

to local causes. Their most marked characteristic is the tenacity

with which they have held to their language. It would seem absurd to

say that a majority of the inhabitants of La Paz do not understand

Spanish, because their intercourse with the Spanish-speaking classes

must be assumed to give them some knowledge of that language, yet

some experiences of my own showed that it was useless to depend

upon Spanish. In the interior there are a few persons among the

Indians who understand the language of the government, but the

mass of them resolutely refuse to know it. The wife of a mining

engineer, whose camp was only a few miles away from La Paz, told me

her experience with the household servants. She had had to acquire

enough of the Aymará tongue to give the ordinary household orders,

and her children had picked up more, so that they got along very

well. But no persuasion had been sufficient to secure the consent of

the Aymarás to learn a little Spanish. In other mining camps there

was the same difficulty. The miners always master a few phrases of

Aymará and get along in that manner.

It is not unusual to hear reports of uprisings, or attempted

uprisings, by the Indians. I witnessed one of these occurrences

at Guaqui, on Lake Titicaca. The Indians were said to be coming

down a thousand strong. But when the local authorities exerted

themselves, and made a show of a few extra soldiers, what had been

a noisy, drunken demonstration quieted quickly. However, there are

instances in which the Indians give trouble, but in most cases the

disturbances are purely local. The testimony is that the Indian

population is to be feared only during periods of political tumult,

when the government is divided into factions, or when one leader

is fighting against another leader, and the bonds of authority are

loosened. Then there is danger. The Indians make a pretence of

joining one faction or the other, but it is only with the purpose

of freeing themselves from restraint.

Considering that the European race is relatively so small a part

of the population, the Bolivian government has handled the Indian

problem very well,--much better than it has been handled in the

United States. Without question, the army, which is an army of

conscription, has been of great benefit, not only in the military

control of the natives, but in the training it gives the Indians

and the _cholos_. Military service is compulsory, but it is evaded

by many of the Aymarás, and discriminating state policy does not

seek to enforce it too rigidly.

In spite of the commonplace and stereotyped talk about the

worthlessness of the aborigines and their laziness, all my

observations led me to believe that the Bolivian Indians are an

appreciable element in the economy of the State, and are capable

of assisting the national development. In the _puna_, or mountain

regions, where most of them are found, Nature has not been so

prodigal that they can live without work. They do labor in the mines,

in tilling the fields, in tending their flocks, and as freighters.

Their endurance is remarkable.

But this native population is not enough for the development of the

mines which may be expected during the next ten or twenty years.

A mining population will have to be brought from other lands, and

if not from neighboring countries, then from Europe, possibly

Galicia, in Spain, and the northern districts of Italy. The white

race endures the cold, and works in the rarefied air of the mines,

12,000 to 15,000 feet above sea-level, without serious impairment

of its vital powers. I noted this from individual experiences and

from what mining superintendents told me.

The Bolivian government has a very liberal policy with respect to

immigration and the public lands. Hopes are entertained that a scheme

of European colonization on an extensive scale will be inaugurated

within a few years. This must come with the development of the

_chaco_, or tropical prairie and forest region, which extends from

the eastern slopes of the Royal Andes to the Paraguay River. Some

of the _chaco_ is swamp desert, and some is baked soil, covered

with thorny scrub; but much of it is fertile, and the climatic

conditions are not unfavorable. Several years ago the government

granted a railway concession, known as _L’Africaine_, to the French

Bank of Brussels, with the special purpose of securing the peopling

of this region. The railway enterprise has not advanced rapidly.

In time it may be carried forward and bring the _chaco_ district

into railway communication, not only with Santa Cruz, which is the

tropical capital, but also with Sucre and the whole network of

railways. Santa Cruz has encouraging possibilities for the European

immigrant.

The agricultural region in the Southeast, of which Tarija is the

capital, is now partly settled, but there is room for a much larger

number of tropical farmers in that locality. In proportion as the

mining population grows, colonization may be encouraged, because

there will be the inducement to the agricultural production which

supplying the mining camps will demand. There also will be an

overflow into farming and pastoral industries.

The climate of Bolivia is so modified by the configuration of

the country that more than a general statement is not possible.

Lying within the torrid zone, the altitudes are to be taken into

consideration as modifying influences. Fully 80 per cent of the

population lives at altitudes above 10,000 feet, and not less than

60 per cent may be said to exist above 12,000 feet. That is the

height above sea-level of La Paz, which is the largest city, and

of the central plateau. The mean temperature between 12,000 and

13,000 feet varies in different years from 57° Fahrenheit to 59°.

Above 15,000 feet it is 43°. The seasons, wet and dry, are of more

consequence than the temperature. The central plain, the regions

of the Cordilleras, and the _chaco_, are all in their climatic

character hospitable to natives of the temperate zone.

There are three distinct climatic belts or zones in the Bolivian

territory, according to the altitude of the respective regions.

These are called _yungas_, or hot valleys; _valles_, or valleys;

and _punas_, or cold lands. _Cabecera de valle_, or head of valley,

is a subdivision of the main valley division. The _puna brava_ is

also a subdivision of the _puna_. The mean temperature and the

production of the several zones are as follows:[17]

+------------+---------+---------+--------------------------------------+

| Zones |Altitude | temper- +--------------------+-----------------+

|------------+---------+---------+--------------------+-----------------+

| | Metres | C. | | |

| | | | | |

| | | | | |

| | | | | |

| | | | | |

| | | | | |

+------------+---------+---------+--------------------+-----------------+

17 _Sinopsis Estadistica y Geografica de la Republica de Bolivia_,

La Paz, 1903.

The average annual rainfall is shown in the following table:

+-----------+-------------+----------+

| Latitude | Temperature | Rainfall |

+-----------+-------------+----------+

| | C. | mm. |

| 0 | 38.00° | 836 |

| 5 | 35.34° | 818 |

| 10 | 32.68° | 800 |

| 15 | 30.02° | 782 |

| 20 | 27.56° | 764 |

| 25 | 24.90° | 746 |

+-----------+-------------+----------+

Bolivia has only had one revolution in a quarter of a century, that

is, since the Constitution of 1880 was adopted. The revolution took

place in 1898, when General José M. Pando, the head of the army,

superseded President Alonso. It was not a very serious affair, and

the tranquillity of the country was not long disturbed. The foreign

interests favored the change, for the one issue was whether the

populous and progressive Department of La Paz should be held back

by the unprogressive sections of the country. Since then the Pando

policy has prevailed, and has been continued by President Ismael

Montes, who was elected as the candidate of the Liberal party with

many evidences of popular approval, and was inaugurated in August,

1904. Previous to that time he had been Secretary of War in Pando’s

cabinet. He has made the policy of railway and industrial development

the principal programme of his administration. Señor Villazon,

the Vice-President, was formerly Minister of Foreign Relations,

and his election was very satisfactory to the foreign interests.

Señor Fernando Guachalla, former minister to Washington and one of

the leaders of the Liberal party, is looked upon as a prospective

president. He has had wide experience in European diplomacy and in

conducting negotiations with neighboring South American Republics,

and enjoys an international reputation. His success at some future

election would be very satisfactory to the foreign interests.

[Illustration: Portrait of Ismael Montes, President of Bolivia]

The president is elected by popular suffrage, or, in case there

is no election by the voters, by the Congress. His term is for

four years. A body of 35,000 electors substantially constitutes

the political power of Bolivia. The vote for president in the last

three or four elections has varied little from these figures. The

Congress is composed of 16 senators and 72 deputies.

The country is divided into eight political divisions, called

departments. These are La Paz, Oruro, Beni, Santa Cruz, Potosi,

Chuquisaca, Tarija, and Cochabamba. There is also the national

territory of Colonias, which is of lessened importance since the

Acre district that was part of it has been yielded to Brazil. The

departments are subdivided into provinces, and these in turn into

cantons or counties. The administration is highly centralized. Each

department is governed by a prefect, the provinces by sub-prefects,

and the cantons by officials known as _corregidores_, or magistrates.

There are also _alcaldes_ in the municipal divisions known as the

vice-cantons. Municipal councils are elective, but the administrative

officials are named by the higher authorities.

The school system I thought, from observations in different

places, a creditable one. The country has 700 schools, with more

than a thousand teachers and with between 35,000 and 36,000 pupils.

It has 15 institutions called colleges, the pupils of which number

2,200. There is also the national university. President Montes hopes

to have an American school established as one of the measures of

his administration, and has been assured by Washington officials

of the coöperation of educators in the United States.

Bolivia now observes only one national holiday. This is the 6th

of August, the anniversary of independence from Spain. The Church

takes many days for its celebrations, and General Pando, when

he was President, thinking that they formed sufficient rest and

recreation for the population, abrogated various occasions which

were celebrated as national holidays.

The Bolivian legislation with regard to foreigners is satisfactory.

They enjoy all the civil rights of natives, and are not subject

to military service. They may acquire political privileges and be

naturalized after a year’s residence in the country. The recognition

of the rights of non-citizens with reference to mining claims is

quite specific in the revised mining code. Foreigners get along very

well in Bolivia, even in the remote localities, when they choose

to adapt themselves to their surroundings.

There is no prejudice against North Americans, who, in fact, are

preferred to Europeans. For a while Englishmen were not welcome,--it

was after one of the dictator presidents had set the English minister

on a donkey, with his back to the animal’s ears, and sent him out

of the country. Great Britain did not feel that she could afford to

land forces and cross the Andes in order to secure reparation for

the insult, but for many years thereafter she refrained from sending

a minister. Diplomatic relations, however, never were suspended,

because the interests of British citizens were looked after by the

ministers of the United States. In 1903 Great Britain accredited

Mr. Beauclerc, her minister to Ecuador and Peru, to Bolivia also.

He presented his credentials and was warmly received. The aggregate

of English investments in Bolivian mines is large. In 1905 Germany

accredited a minister to Bolivia.

The national revenues are derived from internal taxes and from both

export and import duties. The chief source of internal revenue

is alcohol, which is farmed out to a private company as in Peru.

Under this arrangement the government does much better than when it

itself undertook to collect the alcohol duties. As the export taxes

were on the minerals and on rubber, the low state to which they

fell during the world-wide depression of silver and copper is not

difficult to understand. The controversy with Brazil cut off almost

completely the returns from the rubber district. Now that source

of revenue is gone for good, yet there is enough rubber territory

left for Bolivia to expect a fair return from the domestic impost

and the export tax. With the revival of the mining industry, the

country may expect that the financial condition will improve, because

a small export tax on the various minerals will bring in a good

revenue. The weakness of the Bolivian fiscal resources, however,

comes from the nation’s isolated position without a seaport. Under

its treaties with Peru and Chile, their products, both natural and

manufactured, were admitted free of duty, but in 1905 Bolivia gave

notice of her intention to terminate the commercial arrangement

with Peru, this being a result of the convention with Chile for

railroad construction.

The international commercial movement shows a balance of trade in

favor of Bolivia. For a ten-year period, ending in 1905, the total

foreign commerce ranged from 34,000,000 to 54,000,000 _bolivianos_

annually. In a recent year the value of the exports was 25,170,000

_bolivianos_, and of the imports 16,253,000 _bolivianos_, or, on the

computation of 1 _boliviano_ as equal to 42.6 cents, $10,571,000

and $6,826,000, respectively. Germany and Great Britain have even

shares in the foreign commerce, but Germany’s advantage is in the

merchandise she exports to Bolivia. Sometimes the United States does

not appear in statistical abstracts as an exporter, but this is

because consular invoices are made out for the Peruvian and Chilean

ports through which the merchandise is entered. According to the

Bolivian figures, goods to the amount of $400,000 to $500,000 are

imported annually from the United States, but it is doubtful if

this is anything like the full sum. Railway enterprises carried on

by American capitalists would mean largely increased importations

of equipment, mining machinery, and merchandise.

The treaty between Bolivia and Chile which was ratified in 1905 and

put into effect, has a highly important commercial and industrial

significance. By its terms Bolivia formally yielded all claim to

the littoral, or coast strip of territory, which was taken from her

by Chile as a war indemnity in 1881. The principal feature of the

treaty is the agreement of Chile to construct at her own cost a

railway from the port of Arica to La Paz, the Bolivian section to

be transferred to Bolivia at the expiration of fifteen years from

the date of completion, Chile also giving Bolivia, in perpetuity,

free transit through Chile and the towns on the Pacific. Bolivia is

authorized to constitute customs agencies in the ports which may

be designated for her commerce. Under this treaty Chile further

agreed to pay to Bolivia a cash consideration of £300,000, and to

discharge various liabilities recognized by Bolivia for certain

claims both Chilean and American.

Another provision of the treaty is that Chile will pay the interest,

not exceeding 5 per cent, which Bolivia may guarantee on the capital

invested in the construction of railways from Uyuni to Potosi, Oruro

to La Paz, and via Cochabamba to Santa Cruz, La Paz to the region of

the Beni and Potosi via Sucre, and Lagunillas to Santa Cruz. It is

stipulated, however, that Chile shall not be required to disburse

more than £100,000 a year, that the aggregate disbursements shall

not exceed £1,600,000, and that the undertaking shall be void at

the end of thirty years. The terms of this guaranty are somewhat

indefinite, and their vagueness may give rise to controversy in the

future. The present, immediate, and prospective value of this treaty

to Bolivia is in securing a railway outlet from the interior to the

Pacific at Arica, and thus being assured of a commercial artery

which is bound to become a great highway of commerce. Its relation

to the Panama Canal through the port of Arica I have explained in

previous chapters.

In order that the country’s fiscal growth may keep pace with its

industrial and political development, the government has sought to

insure financial stability by recognizing the gold standard, somewhat

after the manner of Peru. An important step in this direction was

taken when, notwithstanding the silver production and the coinage

of the white metal by the national mint, a monetary commission was

created. This body matured a plan for the adoption of the gold

standard. The report was accepted and recommended by the government

to Congress at the Autumn session in 1904, and was enacted into

law.

The financial system of Bolivia, as fixed by this legislation, may

be said to be an approach to the gold standard. The basis of the

currency is the silver _boliviano_ of 25 grammes, 900 fine, and

supposed to equal 100 _centavos_, or cents. In United States terms

the _boliviano_ is equal to 42.6 cents. In a recent year 19,187,610

kilograms of silver were coined into 866,592 _bolivianos_. The law

of November, 1904, fixed the value of Bolivian silver currency in

terms of the English pound sterling. It declared that the pound

sterling, or English sovereign, should thenceforth have a cancelling

value of 12 _bolivianos_, 58 _centimes_; also that from January

1, 1905, 50 per cent of the customs duties should be paid in gold

coin at this rate, or, if a whole or part should be paid in silver,

this quota should be subject to a surcharge of 5 per cent. Amounts

less than one pound sterling may be paid in silver without being

subject to the surcharge. By this law the Executive was empowered

to suspend, should it become necessary, the mintage of silver

coin; the exportation of silver coin was declared free, and its

importation into the Republic was prohibited under the penalty of

confiscation.

This gold approach law apparently caused no inconvenience to domestic

trade, while it was a great help to Bolivia’s international commerce

and to her credit abroad.

In 1905 the outstanding issues of the four banks which had the

authority to emit notes was 9,144,000 _bolivianos_. The paid-up

capital of these banks was 7,350,000 _bolivianos_. German and

Chilean banks established branches in Bolivia in 1905. By a law

passed in November, 1904, an issue of bonds was made to the amount

of 2,000,000 _bolivianos_, to cover government obligations to the

banks. They bear 10 per cent interest, and the amortization, or

refunding, is to be at the rate of 6 per cent each year, 320,000

_bolivianos_ being included in the national budget for interest

and amortization.

The chapter is becoming long. The conclusion shall be short. The

treatment of the topics has been paragraphic. If it were not so,

further chapters would be necessary for the exposition of the

guiding motives of the Bolivian national policy. Much of it is as

yet only national aspiration. But the basis is industrial and,

therefore, sound. Bolivia shares with her West Coast neighbors the

stimulating influence of the Panama Canal. Its economic effect is

her industrial and commercial opportunity.