25,000,000 pesos, but this movement indicates soaring prices rather than
increased Chilean consumption. Purchases of yarns for weaving, of
textiles, bags and sacks, and ready-made clothes, all displayed rises in
the same period from 48,000,000 to 123,000,000 pesos; so also did crude
chemicals, particularly essences for nationally elaborated and bottled
perfumes. Imports of machinery, checked during the war period, followed
the same curve as electrical goods, doubling their values in 1919 as
compared with 1914.
Chilean purchases of tools and implements have shown steady increases,
but the whole group of machinery for mining, agriculture and industry,
including motors, boilers and electrical goods, does not far exceed
38,000,000 pesos (less than £2,000,000 at 20 pesos to the pound
sterling), while material for railways and other transport services
costs some 20,000,000 pesos, or about £1,000,000 sterling annually. A
fair average for Chilean purchases abroad may be calculated at
£20,000,000 or inside $100,000,000 U. S. currency, at normal exchange.
_Sales to Foreign Countries_
When one turns to the other side of the ledger, to see what Chilean
merchandise is exchanged for these imports, the dangerously dominant
position of nitrate becomes evident. The total exports rose from
300,000,000 pesos in 1914 progressively to nearly 764,000,000 in 1918
(subsequently suffering violent fluctuations) and of the latter amount
nitrate and iodine accounted for over 532,000,000, with another
109,000,000 placed to the credit of “minerales metálicos en bruto,” of
which the chief if not the sole representative was copper.
Products of livestock farming, chiefly hides and wool, have risen in
export value during the last few years, and may be reckoned as worth an
average of 35,000,000 pesos; vegetable products shipped out, with
cereals predominating, have varied lately between 14,000,000 and
42,000,000 pesos; manufactured foodstuffs (dried or frozen meat, sugar,
cheese, flour) have grown in value since 1914 from 7,000,000 to nearly
24,000,000 pesos; 1,000,000 pesos’ worth of wine is exported; some
pottery, glass and leather; and an increasing quantity of unworked
lumber. But none of the farming, metallic, forestal or manufactured
merchandise groups show signs of growing ability to equal nitrate in
export values. Fortunately, the world needs Chilean nitrate, and there
is no prospect of the rise of a rival which could meet the naturally
produced chemical in price if drastic and feasible cuts were made in
export taxes.
Disorganization of world markets since 1914 has affected the imports of
Chile not only as regards bulk but also origin of supplies. It will
probably not be possible for a judgment to be formed concerning the
trend of trade until after 1922, when the flow of commerce may have
resettled into regular channels. The general effect of the war years was
to send merchandise north and south instead of east and west: a big
increase occurred in the trade relations between North and South
America, while the stride in commerce between the different South
American nations was perhaps even more remarkable.
Intercourse amongst the sister nations has been delayed in the past by
lack of coastal shipping and international railways as much as by laws
of supply and demand. It has been frequently said that the different
Latin-American states have nothing to sell to each other because they
all produce the same class of goods, needing similar commodities only to
be obtained from the advanced manufacturing countries. The latter part
of the contention has a great deal more force than the first; South
America must buy certain classes of goods afield, but a careful scrutiny
of production lists brought to light, after 1914, many prime materials
that could be exchanged, the impetus given to a coastwise traffic
(_cabotaje_) along both Atlantic and Pacific Coasts proving the success
of the new efforts. Several Latin-American states own maritime lines,
but Chile and Brazil in particular aid the new inter-American trade
development with excellent steamship and sail services under national
flags.
Brazil doubled her sales to Chile between 1914 and 1919; Argentina
increased the value of her shipments from under 6,000,000 pesos (Chilean
gold, of eighteen pence each) in 1914 to 31,000,000 four years later;
Colombia and Costa Rica increased their sales of fine coffee (via
Panama); Ecuador sent more cocoa and Peru more fruit and sugar—Peru’s
sales, worth 14,000,000 pesos in pre-war years rising to over 32,000,000
in 1919. Mexico’s sales to Chile rose from a few thousand pesos in value
to over 7,000,000, during the last six years.
Chile at the same time made big increases in her own shipments to
Latin-American countries. Her sales to Argentina rose from 4,500,000 to
26,000,000 pesos at eighteen pence; to Bolivia, from 4,000,000 to
8,000,000; to Peru, from 3,000,000 to 18,000,000; to Mexico sales were
doubled during war years. In some cases, as those of Uruguay and Brazil,
there have been fluctuations so marked that no conclusions can be drawn:
but on the whole the stimulus to inter-American trade has been well
sustained.
With the United States a tremendous development of traffic took place.
Exports from Chile rose from 86,000,000 pesos in 1914 to 489,000,000 in
1918; at the same time Chile’s purchases from the United States,
totalling about 55,000,000 pesos in 1914, soared to more than
203,000,000 four years later. In the case of both exports and imports,
values were inflated and have not been sustained, although the
development of the North American mercantile marine since 1914 is likely
to promote a greater share of commerce with South America than was
normal before the conflict. It is interesting to note that despite the
huge expansion of North American trade with Latin America during war
years, inflation in all directions was so great that the proportion of
business done by the United States with South America remained the same
as it has been for a hundred years—5 per cent of the total exterior
commerce.
A remarkable series of changes has been experienced in the export lists
of Chile during her economic life. In early days one of the most
important exports appeared on shipping invoices as “Bezoar stones,”
those curious concretions, forming in the bodies of certain
vegetable-feeding animals, which were considered medicinally potent in
the Middle Ages. Faith in the Bezoar stone and supplies came from the
East to Europe, but after the discovery of the Americas it was found
that the llama and guanaco also formed the precious object, and trade
grew brisk.
Once upon a time Chile shipped the bulk of her copper to India, taking
Oriental cottons and other merchandise in exchange; this trade has long
been discontinued, although Hindu as well as Japanese retailers are
reviving business with Chile. Up to 1887 Chile was still exporting the
skins of vicuña, now vanished from her confines, and the beautiful
chinchilla, also practically extinct in Chilean uplands.
The trade with the eastern side of the Andes in Yerba Maté received a
blow when with Independence it was possible for freer commerce to offer
Indian and China teas to the former colonies of Spain; but the peasant
classes of Chile are still faithful to the maté and the bombilla, and a
decreased but steady import continues.
_Foreign Firms in Chile_
Commercial conditions upon the West Coast of South America are sharply
distinguished from those of the Atlantic and the Caribbean by the
establishment of a number of powerful firms doing both import and export
businesses, owning and operating factories, and possessing widely
extended branches.
Several of these houses are British, their foundation dating back to the
early days of Chilean independence more than a hundred years ago; much
of the mercantile enterprise, as well as the milling and nitrate
refining industry, is indebted to these companies for capital and
inspiration. With European alliances also is a strong North American
firm, interested in general business, factory development and nitrate,
and running a line of steamers between North and South America, while
still more recent newcomers are the important Jugo-Slav firms operating
all the way from Punta Arenas to Antofagasta, and rapidly increasing
their interests in nitrate and other extractive industries.
The largest of the British firms operates sixty branches or agencies
throughout Chile, and while importing machinery, tools and agricultural
implements, hardware, sacks, rice, coffee, etc., also buys and ships
country produce. Another house deals largely in textiles, and a third is
chiefly although not exclusively interested in the nitrate country,
where in addition to refining and exporting the _salitre_, the firm is a
big supplier of machinery, foodstuffs, and all supplies for the
town-camps in the nitrate fields.
These large houses do not secure a monopoly of business; side by side
are numbers of smaller local firms of various nationalities: but their
existence and system of operation is a salient fact in the foreign trade
of Chile. The repute of the majority of these strongly entrenched houses
stands high; their representatives are men of character and ability, and
the organizations have not only created and built up Chilean commerce in
the past, but are of great value today. Their services are never more
strikingly proved than in such times of stress as those of 1921, when
small and inexperienced firms broke under the storm that the big
organizations were able to meet with all the strength of long usage and
wide credit.
It is sometimes complained against this array of impregnable commercial
castles that their influence tends to render the West Coast a territory
offering but a cold welcome to the newcomer in trade. I have heard the
establishment of the heavy tax upon commercial travellers in Chile
charged against the suggestion of the big houses. But even if there is
foundation for these complaints, there is something to be said on the
other side—for instance, that the old-established firms, having sown for
several generations, are not likely to be enthusiastic when a brand-new
reaping hook makes an appearance. Thinking of their long cultivation of
the soil, big investment, and big overhead charges, they are apt to
regard the débutant travelling salesman as a raider, and are not
extraordinary in looking askance at comprehensive plans launched during
the last few years for direct selling to consumers by groups of home
manufacturers.
As a matter of fact Chile is not singular in levying a heavy tax upon
the commercial traveller, and its assessment may be regarded as partly
due to the pressing need of Latin America during recent years to
discover new sources of revenue. Few American countries have even
attempted to face the difficulties of the direct tax, and with their
chief source of revenue derived from import and export dues, are
affected immediately by every change in the commercial barometer. In
times of stress all possible founts are examined and in the course of
this search the foreign commercial traveller himself has come to be
regarded as amongst the imports. It is true that he is still rather a
necessity than an article of luxury, and it is recognition of this fact
that may help to account for the frequent evasion of payments of the
tax.
Chilean law requires travellers representing foreign firms to buy in
each province visited a _patente_ (licence) costing 1000 pesos; with the
paper peso at an exchange value of one shilling, this is equal to £50,
so that in order to traverse Chilean commercial towns from Valdivia to
Coquimbo the traveller would have to spend £400 or £500 on licences. The
consequence is that visits are either confined to a strictly limited
number of cities—perhaps, to Santiago and Valparaiso only—or an
arrangement is made by which the trade representative carries the
business card of a local house, and is thus not subject to taxation, or
rents an office in Valparaiso, pays the normal trading tax imposed on
all businesses, and operates freely from that central point. Chile does
not trouble the temporary visitor with the host of small charges and
restrictions that exhibit local ingenuity in many parts of South America
during the last few years, and which include prohibitions against the
entry of a typewriter except under a heavy tax; permits to depart from
the police or port captains; demands for new vaccination and other
medical certificates; inspection and re-stamping of passports; charges
upon samples and catalogues, and, worst trial of all, removal of baggage
to customs houses for leisurely future inspection. In Chile one is as
free of this bureaucracy as in England before the war.
From commercial rivalry, whether between different groups of foreigners
or between foreigners and the Chileans who have for the last twenty-five
years taken so vivacious an interest in trade, Chile in general is bound
to benefit. The effect of time tends to take retail business more
conspicuously than wholesale or big import and export trade from foreign
hands and into Chilean, not only on account of ability but because a
house beginning life as an exotic has often become Chilean through the
domestic ties of its founders. The children of an enterprising foreigner
who marries, as so many foreigners have done, a Chilean wife, are
generally Chilean-born and educated, and cling in later life to the
pleasant land of their birth; a rapid naturalization of blood and of
capital is one of the outstanding features of Chile’s economic history.
_Trade-marks_
The question of trade-marks in Chile is attended by the same
difficulties which merchants offering goods from manufacturing countries
encounter in many young lands where national rights in discoveries and
inventions present few home problems. Broadly, Chilean law gives rights
in a trade-mark to the first person registering the mark; and it is not
unusual for a foreign maker or agent, entering the country with some
special product for sale, to find that his emblem has been already
registered by some enterprising and unscrupulous person, who must be
bought out if any business is to be done by the original owner.
Litigation has raged about this matter, but the only safeguard consists
in speedy registration in Chile—and all other parts of the Americas
where no international convention is in force—of the trade-marks of any
article which is likely to be sent here for sale.
Chile has had a patent law since 1840, but that in force today was
decreed by Barros Luco in 1911; it is modelled upon similar laws in
other lands, but there is a time limit of two years within which the
patent must be “worked.” In practice, however, the patentee as a rule
obtains a ten-year extension of the term within which his rights are not
liable to forfeit in case no active use is made of them.
[Illustration: The Post Office, Santiago.]
[Illustration: Santiago, with the Snow-capped Andes in the Eastern
Distance.]
[Illustration: Subercaseaux Palace, Santiago.]
CHAPTER XI
TRANSPORT SYSTEMS
_Railroads.—The Transandine Line.—Sea Transport.—Rivers and
Lakes.—Roads._
Chile possesses 8600 kilometres or 5375 miles of railways, of state and
private ownership that, running throughout her main territorial length
north and south, and connected with the sea by a number of transverse
lines, serve her better than any other South American country is served.
The rule all over the continent is that the seaports are the chief
points where population is grouped and that from these ports railways
have been driven inland as pioneers opening new country. Many of the
regions thus served are immense, as a glance at the map shows; great
fans of steel rails spread from Buenos Aires, S. Paulo and Montevideo,
for example. But these lines were built to serve, and do almost
exclusively serve, the needs of special localities lying inland from a
coastal point, and only in a few instances are these regions
systematically linked to the rest of the country.
The construction of Chile’s great longitudinal services was forced upon
her, luckily, by the peculiar topographical form of this part of South
America. All the long folded ribbon of the Central Valley is a natural
highroad, and the railways follow very ancient trails.
From Tacna, in 18° of south latitude, lines run almost continuously to
Puerto Montt at the edge of the Gulf of Reloncaví in 41′ 50″ of south
latitude, a distance of about 1500 miles. From this great main artery of
traffic touching all the important producing regions of the Central
Valley, branches run west from thirty different points to the Pacific;
the length of these connecting links is short, averaging 30 to 50 miles.
To the east a number of small lines extend to serve mining or
agricultural regions, and three long arms have been flung across the
mountain barrier of the Andes. One of these, the Transandine line, forms
the only existing railway system connecting the Atlantic and Pacific
Coasts of South America, the distance from Valparaiso to Buenos Aires
totalling 1444 kilometres, or 896 miles, the journey taking two days.
The second line climbing the Andes is that extending from Antofagasta to
La Paz in Bolivia, 863 kilometres or 518 miles. The third also runs to
La Paz, from the former Peruvian port of Arica, a distance of 433
kilometres or 260 miles.
The policy of the Chilean Government as regards railways had its
beginning in 1852, when President Manual Montt inaugurated construction
of a line to unite Santiago and Valparaiso, a cart road built by Ambrose
O’Higgins then serving these two important and growing cities. In a
straight line the distance between Santiago and the port does not exceed
55 miles, but the coastal range rises in this region to unusual heights,
and in order to negotiate the crest a curve was made northward passing
by Limache, Quillota and Llai-Llai, the length totalling 187 kilometres,
inclusive of the section now forming a part of the great longitudinal
system. The first part of the line completed, between Valparaiso and
Viña del Mar, was opened to traffic in 1855; the extension to Limache,
in 1856; to Quillota, in 1857; construction of the San Pedro tunnel,
together with delays resulting from the revolutionary troubles of 1859,
held back completion of the extension to Calera until 1861; Llai-Llai
was reached in 1862, and the whole line opened to traffic through from
Valparaiso to Santiago in September, 1863. A new line is now planned to
follow a shorter route via Casablanca.
At the same time that this sea-to-capital link was commenced the
Government authorised the construction of a main line running south by a
private company, the Ferrocarril del Sur, while in the north a number of
railway enterprises were also undertaken by individuals or companies,
chiefly with the object of serving mineral regions. The majority of
these companies were capitalised in London, although the concessions
were in some cases obtained by American promoters such as Henry Meiggs,
afterwards well known in connection with Peruvian railroad building, and
the genial William Wheelwright. Hundreds of young British and American
engineers entered Chile at this period of early construction, while
native-born Chileans still lacked technical training, and scores of them
remained in the country permanently, settling and founding families. It
was a tremendous era of building which lacked coherence but nevertheless
was intelligent and forceful; every strip of line had its sound _raison
d’être_, served its immediate purpose, and not only marked an industrial
movement but remains today as a permanent contribution to the transport
needs of Chile.
Actually the first railway line to operate in Chile was the Copiapó line
running from that celebrated and then flourishing copper mining centre
to the little port of Caldera, 55 kilometres distant. Construction was
begun in 1850 and the line was opened to traffic in 1852, the Copiapó
railway thus achieving its place as the second oldest railroad in South
America. First place belongs to the Demarara line in British Guiana.
By the time that the Valparaiso-Santiago railway was completed the
southerly trunk line had been pushed as far as San Fernando, with
extensions surveyed to Curicó and Talca. Curicó was reached in 1867 and
was promptly sold by the private constructors to the Government of
Chile, already marking out its continued policy of state ownership of
transportation systems. Until about 1870, when both imported and native
coal began to come into use, the fuel burnt by the locomotives of the
central sections was Chilean wood, a circumstance which was material in
helping to destroy the woodland of Central Chile.
To the north, Carrizal had a mule tramway running thirty miles from the
copper mines to the sea; it was superseded in 1863 by a steam line. The
Coquimbo railway was begun in 1856, afterwards taken into the state
system but originally a mining line; as also was the Chañaral strip,
linking Pueblo Hundido, another of the early pioneers; the Tongoy
railway, begun in 1867, and running to Ovalle; the line connecting Vilos
and Illapel, and that joining Huasco and Vallenar.
By the year 1885 the Chilean Government owned 950 kilometres of railway,
while private companies owned 1254 kilometres. The result of the War of
the Pacific gave a spurt to extension of nitrate railways, several of
which had been begun in the great salitre regions, while the developing
industry brought public revenues to the Moneda, permitting the
acquisition or extension of state lines. Twelve years later the Chilean
Government was operating 2000 kilometres of railways, while private
owners operated about 2300 kilometres.
In 1910 the Government had extended its lines to Puerto Montt in the
south, and ran north to meet the nitrate railways, a gap remaining in
the latter section between Cabildo and Pintados, where the lines serving
the Tarapacá fields reached their farthest southern point. An
arrangement was reached for completion with two British syndicates. The
Government now controls over 4600 kilometres of line, while private
owners control about 4000 kilometres.
The state lines provide comfortable and cheap passenger transport,
carrying goods also at reasonable rates. Travel is an inexpensive
pleasure, the service is punctual, and equipment good. It is doubtful if
more exquisite scenery can be enjoyed anywhere in the world at a like
cost. But, like many richer and more experienced governments, that of
Chile consistently loses money on her national lines. Only during the
busy years of 1915, 1916 and 1917, when depleted steamship service sent
more traffic to the railways, did the state lines show a profit. Since
the Armistice, losses have been increased, 1919 ending with deficits
variously computed at 14,000,000 and 40,000,000 pesos.
Previous to 1918 the private lines always earned profits, but
disorganisation of the nitrate and copper industries, together with the
low rates sustained, caused considerable entries on the wrong side of
the ledger during 1918 and 1919.
With two exceptions the Government lines form a homogeneous network
extending north and south and flinging out arms to vital points. But
there are two isolated lines. One is the strip on the Island of Chiloé,
connecting Ancud with Castro, 98 kilometres long; the second is the
Arica to La Paz railway, 438 kilometres in length, joining this old
Peruvian port to the capital of Bolivia.
This line is of special political interest, besides presenting a fine
engineering feat—for it reaches an altitude of 13,000 feet above sea
level. Forty kilometres are on the rack system. The line was built in
accord with an agreement made with Bolivia after the War of the Pacific,
the same Treaty that deprived Bolivia of her coastal belt promising her
a new outlet to the sea as a seal of peace. The Arica-La Paz railway
cost £2,900,000, was opened to traffic in 1914, and the section
traversing Bolivian soil, 238 kilometres long, is to become the property
of Bolivia in 1928.
The private lines represent an investment of 238,000,000 pesos of
eighteen pence, or £16,800,000, as against the State’s capital
expenditure of 394,000,000 pesos, or £29,550,000. The most important
group of private lines are those serving the great nitrate pampas, and
the largest operators are the Antofagasta and Bolivia Railway Company.
The lines of this English system date their inauguration from 1873,
extend over 925 kilometres, of which 482 lie within Bolivian territory,
and carry traffic from Antofagasta to La Paz at the same time serving a
great nitrate area. Branches run to the salitre of Boquete, to
Chuquicamata, to Conchi Viejo and the Collahuasi mines, within Chilean
confines. Equipment and management upon this line, with its excellent
dining and sleeping cars, are of a high order; total capital invested,
£8,550,000. In addition to this system, the company has since 1916
operated the northern section of the Government’s longitudinal railway,
about 800 kilometres long. Next in importance of the private railways is
a network connecting the nitrate fields of Tarapacá with the ports of
Iquique and Pisagua, owned and operated by the Nitrate Railways Company
Ltd. (London). The first concession for building the line was obtained
in 1860, the total investment amounts to over £2,000,000, and the
company operates 578 miles of line, of 1.43 metres gauge. The services
rendered by this well-equipped line are best realised when the number of
nitrate oficinas utilising the railroad are added up and found to total
sixty-nine.
The Taltal Railway Company, Ltd., is another British line, operates 298
kilometres of track of 1.06 gauge, and links the salitre pampas of that
part of the Atacama desert lying within Antofagasta province with the
port of Taltal. The investment totals £1,050,000.
Also British is the railway connecting a large group of nitrate fields
with the port of Caleta Coloso, the Cia. del Ferrocarril de Aguas
Blancas, with 221 kilometres of track of 1 metre gauge; the network
belonging to the Compañia de Salitres y Ferrocarril de Junin, operating
89 kilometres of 0.76 gauge track and serving oficinas near the coast of
Tarapacá; the lines of the Cia. de Salitres y Ferrocarril de Agua Santa,
uniting nitrate works at Agua Santa, Negreiros and Huara with the port
of Caleta Buena, 109 kilometres; and the Anglo-Chilean Nitrate and
Railway Company, Ltd., linking the nitrate pampas of Toco with the port
of Tocopilla, 122 kilometres in length.
Also of British construction, capitalisation and operation is a short
line, dating from 1855, connecting the city of Tacna with the port of
Arica, 63 kilometres of 1.43 metre gauge track; and formerly British,
but sold in 1920 to the Lota Coal-mining Company is the railway
connecting the city of Concepción with the ports of Coronel and Lota and
with the flourishing coal mine of Curanilahue. The British owners were
the Arauco Company, Ltd., operating 103 kilometres of 1.68 metre gauge
track. The line from Los Sauces to Lebu, whose construction was
suspended during war years, is also a British enterprise.
Chilean capital and enterprise is responsible for several private lines,
as the Ferrocarril de Copiapó, whose first conception was due to Juan
Mouat of Valparaiso, in 1845. The original line connected Copiapó with
Caldera Port, 81 kilometres, but extensions were afterwards added to
Pabellón, and thence, after acquiring a mule tramway to the Chañarcillo
mines, to Chañarcillo, another ramification running northeast towards
the Argentine border but terminating at Puquios. The gauge of the line
is 1.43 metres, and the length 231 kilometres. Also Chilean is the
Ferrocarril de Carrizal y Cerro Blanco, uniting Carrizal Port to the
copper mines of Cerro Blanco, due east, with a southerly branch to
manganese deposits near Chañar Quemada and Astillas and another to the
copper mines of Jarilla, the line terminating at Merceditas. The line
with its branches has a gauge of 1.27 metres and a length of 184
kilometres.
The Ferrocarril del Llano de Maipo, running between Santiago and Puente
Alto, 22 kilometres, is Chilean; so also is the electric line between
Santiago and San Bernardo, 15 kilometres, and a similar link between
Concepción and Talcahuano, as well as the short railway connecting
Concepción and Penco. A new Chilean railway runs between Quintero Port
and Cousiño, while the lines serving coal regions of the south are
practically all Chilean today, but their length and direction is subject
to change according to need.
The Ferrocarril Transandino por Antuco is the beginning of an ambitious
Chilean project to cross the Andean barrier into Argentina at a
low-level pass. The line starts from the station of Monte Aguilar on the
state longitudinal railway, in the province of Concepción, runs almost
due east towards the volcano Antuco and Lake Laja, and has a present
extension of about 85 kilometres. It has a metre gauge track, will have
a length of 129 kilometres when it reaches the Argentine frontier, the
mountain pass which it is planned to traverse having a height of but
1862 metres above sea level, or not much more than 3000 feet. Within
sight of this pass the river Neuquen has its rise, and it has been
contemplated to follow its valley southeastward to connection with the
line running from Bahia Blanca.
A Chilean trading and cattle company with headquarters in Valdivia is
constructing a new southerly line, running eastward from the
longitudinal station of Collilelfu, about forty miles from Valdivia, to
Lake Riñihue: here a line of connecting steamers will carry passengers
farther to the east, and a second strip of railway will connect with the
lake of Pirihuaico, whose easterly point almost touches the Argentine
border. About 40 kilometres of this line is open to traffic.
Far south, running from Punta Arenas to the coal mines of Loreto, is
another small Chilean line of nine kilometres.
Of North American construction and operation is a 25 kilometre
ore-carrying line between Caleta Cruz Grande and the Tofo iron mines; a
narrow-gauge private line of 70 kilometres joining the copper mines of
El Teniente (Braden Copper Co.) to Rancagua town; and a link between
Pueblo Hundido and the copper beds of Potrerillos. German interests
(Gildemeister & Co.) constructed a small line, for the exclusive use of
a related copper mining company, from Challocollo to Cerro Gordo, in
Tarapacá, with an extension to La Granja, in 1897, 36 miles of
narrow-gauge track.
Investment in private lines (most of which are open to the public, but
are distinguished from the state-owned railways) is reckoned at a total
of 238,000,000 Chilean pesos of eighteen pence, divided amongst British
companies, 209,000,000 pesos; Chilean, 24,000,000; and North American,
5,000,000. The German investment of two or three millions does not
appear in statistics of Chile since 1916. The former German-operated
tramways of Santiago and Valparaiso have passed into British hands and
are now controlled by S. Pearson & Son, Ltd.
Three new Andes-crossing lines are contemplated in Chile. Two are
planned to the north of Santiago, the third to the south. The latter is
already in construction as part of the state system, running from Cajón
station, just above Temuco, through Cautín province eastwards. The
mountain barrier is here below 5000 feet in height, and negotiation of
the Andean section, plus extension to the Argentine line running west
from Bahia Blanca, presents no difficulties beyond that of finding
sufficient capital for construction. Chile’s eastward extension will
traverse the green fields of the Lonquimay Valley, crossing by the Pass
of Maullin Chileno.
To the north, one project indicates a line extending east from
Antofagasta through Boquete and Huitiquina on the Argentine frontier,
and joining with Argentine systems at Salta; another plans a railway to
continue the branch running out from Coquimbo along the Elqui Valley to
Algarrobal and Rivadavia. Crossing the Andes by the Tortolas pass, the
line would link with the Argentine system of Rioja province. Regarding
the two first-named lines, the Argentine and Chilean Governments have
agreed upon a close mutual policy, and work upon unified plans is being
rapidly advanced.
_The Transandine Line_
Railway lines crossing the South American continent are sometimes said
to be of less pressing importance since the opening of the Panama Canal
rendered the West Coast more readily accessible from the western
seaports of Europe and the eastern coasts of both North and South
America. It is true that certain overseas commerce is served by the
Panama route, exactly as it was encouraged when steam navigation made it
possible for seamen to face the Magellanic Strait without misgiving, yet
no one with knowledge of the internal needs of South America doubts the
necessity for strengthened transcontinental links. Canada, with
8,000,000 inhabitants, built two transcontinental railroads: South
America, with 75,000,000 people, has but one direct cross-country line
completed.
This single railway from sea to sea—connecting Santiago de Chile with
Buenos Aires by a two days’ journey of 900 miles—is a remarkable piece
of work, owing inspiration and accomplishment to the Anglo-Chilean
engineer brothers, Juan and Mateo Clark. It has been open to
international traffic as a through line since 1910, its operation
stimulating not only the commerce of Western Europe and Chile, but
aiding the development of brisk trade between Chile and Argentina. It
was a reopening of ancient paths. Before and to a lessened extent during
colonial times a score of passes over the Andes were in common use and
the interchange of persons and goods continuous. Following Independence
and the creation of sharp and sometimes jealous divisions between the
republics, the countries were separated as never previously; old
transcontinental trails were neglected. This neglect was increased by
the interest taken in South America by the rich countries of Europe, the
establishment of shipping lines to all the ports of the young
communities, and the stream of gold and people directed towards the
development of commerce and public services. For a century each South
American state turned its face to the sea, economically and
intellectually. The creation of the Transandine railway was the first
deliberate conquest of the Andean barrier between eastern and western
nations of the continent. A few miles of construction only are needed to
connect up Bolivian railways with the northerly Argentine system.
Ecuador is planning a link with the Amazonian headwaters to create a
route for merchandise similar to that of North Bolivia, with outlet at
Pará; but lack of population and production through vast interior
regions has acted as a deterrent against transcontinental plans even
more than engineering difficulties. These have been surmounted in South
America in a number of instances, the mountain-climbing lines of Brazil
on the east and of each of the four countries to the west offering
famous instances of response to industrial need. But without the sound
_raison d’être_ of Mendoza’s flourishing existence at the eastern foot
of the Andes the present Transandine line would have waited longer for
its creation.
Juan and Mateo Clark, planning the line, obtained a concession from the
Argentine Government in 1872, and from the Chilean in 1874. Money was
scarce and engineering problems many, so with a view to lightening the
burden the route was divided into four sections, and construction
performed by the group of corresponding companies. The longitudinal line
built by the Chilean Government already had run a branch from Llai-Llai
in an easterly direction towards the mountains, culminating in the
station of Los Andes at 2733 feet above sea level—the old Santa Rosa de
los Andes. This railway followed the ancient mule road towards Juncal
and the Uspallata pass en route for Mendoza and Buenos Aires, and the
eventual construction of the Chilean Transandine practically adopted the
same course from Los Andes to the Argentine frontier in the heights. But
this section, although but 70 kilometres in length, presented the worst
difficulties and was the last completed.[7]
Footnote 7:
On the Chilean side a rack system is employed for 23 kilometres; the
maximum grade is 8 per cent. On the Argentine Transandine the rack
system is employed for 14 kilometres, with grades nowhere reaching
more than 6½ per cent.
Three companies undertook construction of the strip between the
Argentine frontier and Buenos Aires, 1373 kilometres long. The mountain
section to Mendoza (2481 feet altitude) was built by the Argentine
Transandine Company; Mendoza to Villa Mercedes (with a branch running
north to San Juan, site of an ancient post-house), by the Argentine
Great Western Company; and Villa Mercedes to Buenos Aires by a company
subsequently called the Buenos Aires and Pacific Company. Money supplies
came from London, where the companies are domiciled.
The Villa Mercedes-Mendoza link of 356 kilometres was completed and
opened in 1886; the pampas-crossing section between Villa Mercedes and
Buenos Aires, 692 kilometres, in 1888. This was all plain sailing, but
serious difficulties were encountered in the mountain sections. Work
began on the Argentine side in 1887, and upon the Chilean in 1889; in
the latter case the indefatigable Clark brothers gave not only devoted
energy but their own funds, suspending operations in 1892, after 27
kilometres were built, when their capital was exhausted. A year later
part of the Argentine Transandine section was opened to traffic, but the
operation of completed lines on the east had the effect of diverting all
traffic from Mendoza to Buenos Aires instead of promoting international
commerce as had been contemplated.
In 1904 a new firm, the Transandine Construction Company, London
domiciled and financed, took over the Chilean section from the Clark
brothers and their creditors, and finally joined the Argentine
Transandine at the frontier station of Las Cuevas in 1910.
The old cart and mule road crossing the Cumbre rose to an altitude of
14,500 feet, and was, during the period of snow-storms, usually due
between April and October, shut to all but the hardiest travellers. To
obviate this ascent the builders of the Transandine drove a tunnel
through the head of the Andean barrier, at an altitude of 10,521 feet
above sea level; the tunnel “de la Cumbre” traverses a length of more
than 3000 metres, the two Transandine lines meeting within its length,
at an altitude of 10,515 feet. With greater capital to spend, the
Chilean Transandine constructors would have driven the tunnel through
the mountains at a level about 3000 feet lower to avoid the storms
raging about the higher regions, and ultimately this work will probably
be performed: but it entails construction of a tunnel four times the
length of that in existence.
Below the tunnel on the Chilean side the company shields the line with
strong snow sheds, but here again lack of sufficient capital prevents
the additions necessary if the line is to be safeguarded all the year
round; at present there is danger of enforced stoppage as soon as the
first heavy snows fall, blocking the line with twenty or thirty feet of
drift and avalanches. More than once traffic has been suspended for
three or four months.
[Illustration: On the Chilean Transandine Railway.]
[Illustration: Laguna del Portillo: near the Transandine line.]
[Illustration: Santa Rosa de Los Andes: Chilean Terminus of the
Transandine Railway.]
In spite of difficulties, however, the line has proved to be of immense
value to international traffic, has shortened the distance between West
European ports and Valparaiso by over 2000 miles as compared with the
Magellanic route, and 500 miles as compared with the Panama journey.
With the operation of the Panama Canal the route between New York or
Halifax and Valparaiso was shortened so much that it is a saving of time
for a traveller wishing to reach Buenos Aires from a North American
point on the eastern side to journey via the Canal and the Transandine.
Buenos Aires has also been brought into closer touch with the Orient and
Australasia, while Chilean towns are in quick communication with the
markets of Argentina, Uruguay and Brazil.
Brisker traffic in both passengers and merchandise will be developed
when unity in administration is in working order. But this has been long
delayed, owing to the troubles connected with construction days. In 1894
the Argentine Transandine, observing with misgiving the remote prospect
of completion of the Chilean link, formed an agreement by which the
Argentine Great Western operated the section open to traffic, this
arrangement being renewed in 1901 and 1905. In 1907, after some
skirmishing and the commencement of a competitive line to Mendoza, the
Buenos Aires and Pacific Company obtained control of the Argentine Great
Western, and at the same time of the agreement controlling the Argentine
Transandine, which line it guarantees from losses threatened by blocking
of traffic through snow. Thus for many years the Buenos Aires and
Pacific held the reins of all rail operations between the capital of the
Argentine and the frontier of Chile, and was frequently charged with so
arranging freight prices as to send all Mendoza traffic eastwards, while
discouraging commercial interchange between Chilean markets and the
prosperous Mendoza vicinity. The Chilean Transandine constantly pressed
for a revision of management, proposing that the Argentine Transandine
should be separated from the Buenos Aires and Pacific and united with
the Chilean mountain-climbing link, so that a single administration
should operate the line between Los Andes and Mendoza, the terms of the
lease held by the Buenos Aires & Pacific Line allowing of cancellation
at twelve months’ notice.
Chilean and Argentine public opinion agreed upon the matter, the help of
the two Governments was enlisted, special meetings held under the
auspices of the Sub-Committee on Railway Transport of the Pan-American
Conference held in Buenos Aires in 1916, an International Commission
appointed to arbitrate upon goods rates between the two countries, in
1917, and a draft proposition approved in early 1918 between the
diplomatic representatives of Argentina and Chile in London, acting in
consultation with the directorates of the two Transandine companies.
Chile agreed in August of 1918, and, in amicable agreement, the
Government of Argentina, in December, 1919, accepted the proposal in
principle; arrangements were made by which the new contracts with the
Transandine lines should be simultaneously discussed in the Congresses
of both countries. In early 1922 agreements were complete, details of
unification of the railways was decided, provision made for new
financing of the improved system, and tentative arrangements outlined
with a view to new and liberal tariffs between the two countries,
tending to encourage traffic not only via Mendoza, but also between
North Chile and the Salta region, as well as between South Chile and
Eastern Patagonia when the projected new Transandine links are
completed.
_Sea Transport_
As regards sea transport Chile is in an enviable situation with her
immense coastline giving speedy access to all inhabited parts of her
territory. It is true that with a few exceptions, of which Talcahuano is
the most notable, Chilean ports are little more than open roadsteads,
exposed both to the southwesterly gales and to the dreaded “northers”;
but modern engineering is doing much to solve the problem of safe havens
where visiting vessels may anchor in safety. The same difficulty applies
to almost the whole of the South American West Coast, and for centuries
sailing vessels feared the region; during Spanish colonial times it was
so common a thing for a ship to spend from six to twelve months on the
passage between Callao and South Chile that when Captain Juan Fernández,
running out southwest for a thousand miles, and afterwards turning
almost due east for Chilean ports, managed to avoid the cruel coastal
gales and made the passage in thirty days, he was haled before the
Inquisition as a wizard. The Inquisitors, however, after careful
examination of the captain’s papers, set him free, applauding his
sagacity. From that day the group of islands named to commemorate the
navigator’s skill became the beacon for vessels sailing to Valparaiso
from the North, although ships returning to Peru still hugged the coast.
It is not uncommon for sailing vessels to be wrecked off the difficult
southerly coast, with its innumerable indentations and furious storms,
but the worst year of the present century was 1911, when 37 steamers as
well as, by a strange coincidence, an exactly equal number of sailing
ships, were cast away off Chile. That was a year of exceptional storms,
but out of 32 years between 1887 and 1919, only seven passed without a
record of wrecks; it is to the credit of the excellent surveying and
charting work of the Hydrographic Department of the Chilean Navy that
the path of the navigator has been rendered plainer, while the Chilean
Government has in hand a series of plans for the better protection of
ports—lacking only the financial sinews of war against wind and tide.
Of Chile’s fifty-four ports of major and minor importance, perhaps
thirty are visited by international shipping. But of these only about
fifteen display brisk commerce. Arica, visited by 400 foreign ships
annually and over 300 Chilean vessels, connects directly with Bolivia;
Pisagua, Junin, Caleta Buena, Iquique, Tocopilla, Mejillones and its
younger sister Antofagasta, Coloso and Taltal, are nitrate ports,
bustling when nitrate markets prosper and almost idle during the most
depressed period of 1921. The copper ports of Chañaral, Caldera and
Carrizal Bajo have suffered more than Coquimbo, with fruit and other
farm exports to add to her diminished list of minerals. Valparaiso,
chief port of Chile, receives about one thousand national and three
hundred foreign ships yearly, one-third of the whole exports entering
here, although Antofagasta and Iquique are the big exporters. In normal
years, Valparaiso receives 1,400,000 tons of cargo, of which nearly half
is coal. Farther south, Talcahuano, the chief naval base and the port
for flourishing Concepción, receives about 400 vessels annually;
Coronel, exporting and bunkering Chilean coal, receives about 700;
Corral, the port for Valdivia, is visited by some 200 ships yearly; and
Punta Arenas in the Strait of Magellan, does business with twelve
hundred Chilean and about one hundred and thirty foreign vessels each
year.
[Illustration: Coquimbo, the “Capital of North Chile.”]
[Illustration: Ancud, the Port of Chiloé Island.]
[Illustration: Zapallar, a beautiful Chilean Watering Place.]
These ports will probably continue to be the great outlets for Chile’s
most thriving regions, but they are insufficient to serve the needs of a
long list of growing districts, and in spite of much good planning are
still inadequately equipped for the increasing work required. A special
Government Commission, lately considering the question of more sea
gateways, has decided that forty or so of the points along the Chilean
coast should be improved for the reception of international shipping.
The Commission’s recommendations necessitate the expenditure of at least
six million pounds sterling, or let us say the whole of the taxes upon
nitrate exports during one prosperous year. The sum will in all
probability be raised, according to need, year by year, by means of
exterior loans.
According to the projects, Valparaiso will be allotted a further million
and a half pounds; Valdivia, Lebu, Talcahuano and Constitución, about
one million each; Puerto Montt, a preliminary £150,000; Tomé (at the
north of Concepción Bay) and Pichilemu, £40,000 each; with smaller sums
for Iquique and Puerto Saavedra (Imperial Bajo).
Valparaiso port works have been since 1912 in the hands of a British
engineering firm, and have given a good deal of trouble, storms more
than once undoing part of the construction work; in the early months of
1922 there were completed two quays totalling 840 metres in length, a
breakwater of 288 metres, and a coal wharf 200 metres long by 30 metres
wide; work upon the mooring jetty, the extension of the old Fiscal Mole
(dating from 1883, and the only means for transferring passengers and
cargo until the new quays were constructed), the Prat Quay, warehouses
and railway is also well advanced, in spite of long delays caused by the
European War. There is plenty of water—in fact, too much for facile
construction of jetties or breakwaters, the bottom shelving rapidly from
39 feet at the mooring jetty, and offering, less than 200 feet from
shore, nothing but mud as foundation. In consequence, the outer section
of the breakwater cost £560 per linear foot to build. Since 1906
Valparaiso has suffered from no serious earthquake, but slight shocks
are not infrequent and must be taken into consideration in the case of
construction in the sea as well as upon the land. Rise and fall of the
tide at Valparaiso does not exceed three feet.
The Nitrate Ports have earned more money than any other points of
outflow for Chilean products, but safe, adequate modern havens for
shipping are not to be created in a day or even in a decade; and the
same difficulties of the open roadstead and prevailing winds have
delayed the completion of adequate facilities even at that busy
commercial stronghold, Antofagasta. Comprehensive plans are, however, in
course of development, and work has only been delayed by the depression
of 1921.
Port improvements at Talcahuano are being carried out by a French
company, and the main work is unlikely to be completed for a few years,
although it has been attacked. Talcahuano lies within the deeply
indented Bay of Concepción, the best naturally-protected haven upon the
West Coast, and is further shielded from the effects of northerly winds
by the pretty island of Quiriquina, once a rendezvous for pirates, and
during the War the place of internment for several hundred Germans,
including sailors from the _Dresden_. Talcahuano possesses a floating
dock and equipment as the first naval base of Chile, and when the
present plans have been developed this port will be one of the best in
South America.
The creation of a secure port at the mouth of the fine river Imperial,
Puerto Saavedra, will be comparatively easy when the projected cut is
made from Budi Bay through a sandy bank into the river, safe from all
storms. From this point the stream is to be dredged for 20 miles up to
the town of Carahue, where a branch railway connects with Temuco and the
Longitudinal system. Another important dredging work is projected along
the stream of the Valdivia from Corral port. This haven of old
foundation, nestling under its cliffs, has been for centuries of
necessity the stopping-place for vessels with cargo and passengers for
Valdivia City, twelve miles inland, all traffic being transshipped up
river by small steamers, barges, etc. By the new plans a channel will be
deepened to permit the passage of ocean-going steamers to the
beautifully placed riverine city, whence rail connection opens the most
fertile agricultural country, immense forestal zones and a large
coal-mining region.
At pretty Constitución, where the dangerous bar is so much dreaded that
its condition is always signalled to vessels before they venture to
approach, plans include the dredging of a channel and construction of
breakwaters to prevent silting-up.
Puerto Montt, at the end of the Longitudinal, and lying within the Gulf
of Reloncaví, is a recent creation whose equipment as a port receiving
international vessels is still only on paper; this Llanquihue region,
with its lumber and sheep industries, is fast developing, and will
invite a great deal of tourist traffic when its transport facilities are
equal to its glorious scenery. Port construction problems are chiefly
due to the 25-foot rise and fall of the tide. At Punta Arenas, another
new port of remarkably rapid and vigorous growth, vessels are still
obliged to lie out in the Strait while cargo and passengers are
transferred by lighters and small boats, but the steady prosperity of
this zone as well as its position as a port of call for international
steamers render imperative the creation of modern port facilities.
_Rivers and Lakes_
Chile has one hundred and twenty rivers, but can count no more than five
hundred miles as navigable. This navigability is again limited to small
vessels only, to which another five hundred miles of lake waterways are
also open; motor boats and canoes are able to traverse another four
hundred or so of rivers, but these are frequently broken by cascades and
falls.
In pre-Spanish times the lakes and rivers of Chile leading towards the
Andes undoubtedly served as channels for Indian traffic; the Rio Blanco,
Juncal and Aconcagua led towards the mountains into what is today
Argentine territory from the populous Central region of Chile, while the
lower passes were crossed to the south by way of many river valleys and
by such lakes as Llanquihue and Todos los Santos, a short strip only
intervening between the latter beautiful water and the lovely Nahuel
Huapi in East Patagonia. During colonial times, with the depopulation of
the wilder country and the concentration of towns upon the seaboard,
this traffic diminished and commercial exchange was limited to ocean
transport, with, however, an increasing intercourse with Argentina when
the then Chilean provinces of Mendoza, San Luis and San Juan developed
trade with the new colonies of Buenos Aires. But below Chiloé the
territory remained unknown, and it has only been within recent years
that the southern lakes have been visited and surveyed.
[Illustration: Taltal, a Nitrate Port of North Chile.]
[Illustration: Puerto Corral, the Port of Valdivia, South Chile.]
As to the rivers during colonial times, if they were not treated with
equal neglect, their capricious ways were permitted to absolve them from
any great usefulness, and it has only been within the last twenty years
that serious studies have been made with a view to restraining,
preserving and freeing the torrential streams characteristic of the
short, steep slope of Chile. All Chilean rivers are snow-fed, and are
extraordinarily and violently augmented when the Andean snows melt; the
northern floods are more uncontrolled than those of the south, tearing
down from greater heights through open country where nothing but,
eventually, heat and sand offer a check. Many disappear in the desert
while still far away from the sea. The southerly rivers, flowing from
lesser heights and passing through long forestal areas, are more
constant in volume. It is only below Lebu, in 38 degrees of south
latitude, that any Chilean river becomes even nominally “navigable,”
with the sole exception of a dozen miles of the Rapel.
Nevertheless, the longest Chilean river is in the north, flowing across
Chile’s widest province, Antofagasta; this is the Loa, fertilising oases
in the desert and sheltering little groups of people today just as it
offered a livelihood to indigenous folk in pre-Spanish days. The Loa,
sometimes called the Calama, is three hundred miles long, but for half
the year is not more than a thread at the bottom of a wide gully. Its
nearest northerly rival is the Copiapó, about 170 miles, watering
fruitful valleys like the capricious but equally invaluable streams the
Huasco, Elqui, Hurtado, Limari and Petorca. A succession of rivers in
the Central Region are untamed floods in the rainy season—the Aconcagua,
Juncal, Blanco, Volcán, Colorado, Maipo, Mapocho, Cachapoal and
Rapel—none more than 125 miles long. Three or four of these rivers will
be harnessed in the near future to yield hydro-electric force. Below to
the southward, the Mataquito, the Maule of ancient fame, the Itata and
the exquisite Bio-Bio are all outside the navigable list, and the latter
is distinguished by its exceptional length of about 200 miles as well as
its beauty.
First among navigable rivers as one goes from north to south is the fine
Imperial, with a watershed of about five thousand square miles, and a
length of one hundred miles; it has a magnificent and constant flow, but
only fifteen miles are navigable. The Toltén owns six navigable miles;
the Valdivia, 125 for small boats and about 25 for larger craft; the
Bueno is in a different category, for, with a length of not much more
than one hundred miles, it has about 50 miles of navigable channel. The
Bueno, in fact, is the outflow of two lovely lakes, Ranco and Maihue,
and discharges 600 cubic metres of water per second, a flow second to
none among Chilean rivers.
Still farther southward, the Maullín has thirty navigable miles; the
Palena about twenty; the Aysen, no more than twelve. And next comes that
fine and little-known river the Baker, whose length is said to be equal
to that of the Loa in the far north, about two hundred and eighty miles,
of which nearly fifty are navigable. Outside that list are the Bravo,
Pascua and Serrano, except for the canoes of the south-dwelling Indians.
Of Chilean lakes, Llanquihue is the largest, with a superficial area of
1400 square miles; its great depth, averaging 360 feet near the shore,
suggests that this is the crater of an old volcano. Skirted by the south
end of the Longitudinal railway, Llanquihue counts several ports, with
Varas as the oldest-established and the largest. This lake, with its
near companion, Todos los Santos, is traversed by Chilean steamers; and
there is regular traffic upon Riñihue and Ranco. The former lake is
reached by rail to Los Lagos station, horses taking travellers thence to
the edge of Riñihue, about 25 miles; a wild but glorious stretch of
typical Chilean woodland, clothing the sides of a lovely valley, lies
between Riñihue and Ranco, with its brilliant turquoise blue waters, and
abrupt sides covered with ferns, foxgloves, fuchsias and a close growth
of trees of bright green foliage. Small steamers cross the lake to
Llifen, where there are famous curative sulphur baths.
From Puerto Montt southward is a long series of fiords, islands,
indentations and inland channels whose intricacy and extent are
unequalled even by the famous fiords of Norway. For natural beauty the
Norwegian complex cannot compare with that of Chile, for no woodland
exists in Europe that rivals the pathless, luxuriant, flower-hung
forests of Chiloé Island, the Andean spurs of Western Patagonia, the
broken archipelago of Chonos, and the noble mountains of the Strait of
Magellan. Rich ferns and flowering shrubs, wild bamboo and pines and
beeches, reach to the water’s edge. Through the thousand miles of this
complicated chain of inlets and islands between Puerto Montt and Punta
Arenas runs an almost continuous channel, continuation of the long
depression which creates the deep fold of the great Chilean central
valley. Steamers seeking sheltered waters from the Strait of Magellan
northward need not emerge into the open Pacific, but turn north by Smyth
Channel and run inside the barrier formed by Hanover and Wellington
Islands. But at the Gulf of Peñas vessels are forced out to the
turbulent ocean, a thin strip of land barring the way to the calmer
waters of the Moraleda Canal. Chilean engineers have long projected a
cut through this Ofqui bar, joining the mainland to Taitao peninsula;
for it is only 7000 feet wide; no doubt this necessary help to
navigation will be given before long. With this opening effected, small
vessels will be able to pass from Puerto Montt to Punta Arenas and
Tierra del Fuego by a sheltered waterway, passing great forests,
majestic glaciers, frowning snow-capped mountains, stark headlands and a
thousand inlets and islands, a long panorama of splendid beauty.
Vessels of all nations visit Chile, Australasia and Japan sending
regular lines to compete with the shipping of Europe, North America and
Chile’s sister South American republics, the total tonnage of visiting
ships amounting on an average to over twelve million, of which less than
five hundred thousand tons represent sailing vessels. Sea transport on
the Chilean coast has undergone an immense transformation since Cochrane
brought the first steamer ever seen upon the West Coast, the little
_Rising Star_, in 1818. Traffic from North America and Europe comes
today in a considerable proportion through the Panama Canal, but the
next few years will probably witness a development of tourist traffic
through the Magellanic waterway and to such beautiful Chilean islands as
Juan Fernández, with its romantic history and wild beauty—undiminished
by the local lobster “factory” supplying the tables of Valparaiso and
Santiago.
Chile herself performs a fair share of maritime service. About one
hundred large and small steamers fly the Chilean flag, with about 35
sailing vessels chiefly engaged in fishing and the transport of coal and
lumber, the total representing some 75,000 tons. Over 40 per cent of
“maritime movement” of Chilean ports is recorded by Chilean vessels, and
strong support of national traffic was afforded in early 1922 by the
passage of a new law restricting coastwise trade to ships registered in
Chile.
The largest and most important of Chilean steamship companies is the
Compañia Sud Americana de Vapores, Government-supported, with
headoffices in Valparaiso, operating a fine and excellently-equipped
fleet of ten vessels serving Chilean and Peruvian ports, and, since the
War, extending its international service through the Panama Canal to New
York and European ports. Two new vessels of 7000 tons each were added in
1922 to the company’s fleet: the _Aconcagua_ and her sister ship were
built at Greenock, and bring the Sud Americana’s first-class passenger
service to a high standard.
_Roads_
Chilean highways, placed though they are in scenery so lovely that the
traveller’s eyes are directed to mountains and tall trees rather than to
the morass at his feet, need the improvement projected by the Road Law
of 1920, arranging for special taxes to be devoted to the construction
and upkeep of first-class country roads.
Reasons for the long neglect of this means of transport include the fact
that farmers and countryfolk in Chile commonly ride horseback—this is a
land of good horsemen and well-trained animals—and the condition of the
surface if not a matter of indifference is of less concern than if
vehicles were more common. Next, country produce has been in the past,
and in many regions is yet, brought from the farms by heavy ox-carts,
pulled by teams for whose convenience, again, a smooth surface is not
considered a necessity. The third reason, which perhaps should have
foremost place, is the nature of a great part of the Chilean soil.
As soon as one enters the Central Valley of Chile, one recognises a
characteristic of the Pacific Coast, the fertile and extremely fine
soil, as light as face-powder, with its slightly pungent scent. Much of
this soil is volcanic ash, with a mixture of vegetable detritus; it is
extraordinarily fertile, with almost every virtue in the eyes of the
farmer, and undoubtedly this genial soil produces the best food in the
world. But it is difficult to reduce fine dust to the consistency of a
road with a surface hard enough to resist the disintegrating effects of
an eight-months’ drought, followed by tremendous and violent rains.
Between the double row of blackberry hedges, backed by lines of poplars,
a typical road of Central Chile is a deep trough of shifting, floating
dust in the dry season, and a swamp after the rains set in. Once upon a
day in May the writer with a party of friends tried to reach Los Andes
from Santiago in a motor-car: the Chilean chauffeur and the car both did
their excellent best, but a mile or two outside the capital the highway
became a sea of mud, and we finally gave it up when the car skidded upon
the top of the Chacabuco Pass. During the fifty or sixty miles traversed
before we reached a railway station, the only strip of really hard
foundation for the wheels was encountered when we ran in the gravelly
bed of a shallow stream.
This test, however, was not quite fair to Chilean roads; the season and
the route were not chosen with discretion. For even in Central Chile
there are well-made, wide roads, a few hundred miles in each province,
over which motors may pass. The coming of the automobile renders the
creation of better highways an urgent necessity, in fact, the motor
lorry promising a means for getting farm produce to market that is badly
needed in the developing districts.
Antofagasta, with its hard-surfaced nitrate fields, owns about six
hundred miles of first-class roads; a record equalled only by the big
Territory of Magellanes in the far south, where the sheep-farmers of the
newly developed estates have made roads across Western Patagonia. In
each of these two regions the climate, although in the North almost
unbrokenly dry and in the South almost unbrokenly humid, is equable,
lacking the sharp and destructive changes of the Central region. It must
be owned, however, that the proportion of roads to area in great
southern territory is one mile in length to each fifty square miles of
land.
Altogether, Chile is officially stated to have between six and seven
thousand miles of highway in first-class condition, with Coquimbo,
Atacama, Aconcagua, Santiago and Tarapacá following the two provinces
named above in length of highways in good condition. The new law aims at
putting another six thousand miles of road into the same category within
the next few years, out of the total of all classes reaching a mileage
of nearly twenty thousand.
CHAPTER XII
FINANCE
_Conversion Fund.—Currency.—Debts.—Public Revenues._
When the war in Europe broke out Chile was on the point of establishing
a Conversion Office upon lines similar to those followed by Argentina
and Brazil. The object was fixation of the exchange value of paper
currency by the creation of strong gold reserves, and under normal
circumstances Chile’s office would have begun its work in 1915. It has
not been possible, up to the end of 1922, to open the “Caja de
Conversión,” although funds are maintained on deposit with this purpose
in view in Chile, England and, upon a much smaller scale, in the United
States. Funds amounting to over 30,000,000 pesos of eighteen pence were
also lying in Germany when war broke out, but these were, by special
arrangements with the Allies, withdrawn during war years.
The total amount in the Conversion Fund in 1914 was over 108,000,000
pesos of eighteen pence. Of this less than 4,000,000 was held in Chile,
and more than 74,000,000 in the Bank of England, besides the deposit in
Germany. The reserve was increased during the following year, standing
at 111,000,000 pesos at the end of 1915, or about £8,300,000, but was
reduced to 88,000,000 in the following year when the National Congress
authorised the utilisation of £2,000,000. This money was drawn upon to
pay off Treasury Bills issued in conformity with the decree of January,
1914, for the purchase of vessels for the Chilean Navy and the
construction of port works, but has been gradually replaced until in
1919 the total Fund amounted to over 114,000,000 pesos, of which
67,000,000 were banked in Chile and the remainder in England. At the
beginning of 1921 Chile possessed £2,300,000 on deposit in the Bank of
England, or nearly 31,000,000 pesos of eighteen pence; and to the credit
of the Conversion Fund in the Casa de Moneda in Santiago had bar gold,
$400,000 United States gold money, £78,845 of English money, and other
specie, amounting in all to nearly 84,000,000 of pesos.
The withdrawal of funds from the Conversion reserves for special
purposes was not unprecedented. Three years after the inauguration of
the Fund in 1899 (when it was hoped to begin conversion operations in
ten years’ time) 20,000,000 pesos were used for military expenditure,
this sum being practically replaced in 1904 by proceeds of the sale of
certain old cruisers.
Gallant efforts made to bring up the Fund to a point justifying the
opening of the Conversion Office have been rendered abortive by the hard
times of late 1920 continued throughout 1921, but the intention of
Chile’s financial advisers is maintained and appears only to await the
accumulation of sufficient gold.
At the same time the fact that credit and not gold is the true basis of
economic prosperity has been forcibly impressed upon South America since
1914. Countries possessing big reserves of gold have been observed to
suffer from depreciation of their paper currency, and, what is worse
than depreciation, from constant fluctuation in every economic breeze,
despite all the efforts of experienced financial experts; and on the
other hand countries which were able to trade advantageously during the
war and thus to pile up immense stocks of the precious metal have been
seen to experience a demoralising paralysis of their markets—to be
choked with their own gold.
The fact that those countries whose fiduciary issues have sunk to an
apparently ruinous level are on that very account able to export their
merchandise with profit, taking payments in comparatively valuable
currencies and paying their way at home in depreciated paper, is
illuminated by the lesson of the territories with currency maintained at
a high exchange rate by gold backing, which are unable to find buyers of
their products because no outsider can afford to pay the exaggerated
rates of exchange. However, exporters are not the only persons to be
considered, and the general uncertainty of commerce, together with the
natural timidity of foreign capital when invited to lands with
persistently variable currencies, will undoubtedly act as an incentive
towards establishment of the Conversion Office in Chile.
_Currency_
Exchange values of Chilean currency, as well as several other forms of
financial statistics, are officially given in sterling, the use of
English monetary terms resulting from the establishment of financial and
commercial relations with the United Kingdom in the earliest days of
Independence, and from the fact that Chile’s first exterior loan was
obtained from London. The “gold peso” is fixed in exchange value at
eighteen pence, while the paper peso reflects economic conditions from
day to day.
Since 1871 the average value of the Chilean peso in comparison with
sterling has fluctuated from just over forty-six pence in 1872 to seven
pence in the worst days of 1915 and a drop to nearly sixpence in the
slump of 1921–2. For the last fifty years the exchange value has tended
to decrease, due chiefly to repeated issues of the paper money which
replaced the gold and silver coinage of the Spanish colonial régime,
when a peso was worth (1800) the equivalent of four English shillings.
The creation of paper money was, however, unavoidable in the
circumstances, and so long as a country possesses a sufficient quantity
of some recognised form of currency, the material of which it is
composed is not a matter of local importance, although exchange values
may be grievously affected.
All the gold minted into Chilean money has disappeared from circulation,
the finely designed little coins being retained only as curios or
mementos since 1875, when severe depreciation of silver values rendered
gold higher priced as bullion than as currency. The gold peso is today
no more than a financial term. Officially, gold coin has an existence,
as the condor, of 20 pesos; the doblón, of 10; and the escudo, of 5, but
the currency actually in use is paper, well printed, in denominations
from one peso upwards, with silver coins of 1 peso, 20, 10 and 5
centavos, and nickel coins of 20, 10 and 5 centavos. From more than one
country of the Americas, silver has disappeared entirely when the
depreciation of paper has borne down the purchasing power of the peso or
other unit to a point below the market price of the metal, but Chile has
so far escaped this denudation in difficult times. At the beginning of
the present century the value of the Chilean peso stood at 15 to 16
pence until 1906, when the tragic effects of the earthquake that
temporarily destroyed Valparaiso reduced credit.
Between 1907 and 1914 it fluctuated about ten pence, went down to an
average of eight pence during 1915, rose to nine pence in 1916 when
demands for nitrate increased, to about thirteen pence in 1917 and
nearly fifteen pence as the average in 1918; in June of 1918 the peso
soared to an exchange value of over seventeen pence, but dropped quickly
when the Central Powers signed the Armistice. During 1919 the average
remained at about eleven pence, rose to over fifteen pence during the
early part of 1920, and subsequently experienced the falls that
disturbed the Chilean market in 1921, when the peso touched an exchange
value of between six and seven pence.
Despite, or perhaps on account of, the wealth of Chile in copper ores,
no coins made of this metal are actually in use, although they make an
appearance in official records. The reason for this abstention is found
in popular prejudice against a commonly known metal. During the
sixteenth century an attempt was made to introduce copper coinage, a
large quantity of the metal was minted in Santiago, and the objections
of the peasantry were so strong that more than a million piastres’ worth
of the coins were buried or thrown into the rivers in contempt.
Employés in most of the nitrate fields receive at least a proportion of
their wages in special token-money, distributed by various companies
with the chief object of circumventing the underground liquor traffic.
These large discs, specially tinted, and stamped with the name of the
issuing oficina, pass as currency in camp stores and upon the contiguous
railroads, but are without more than curio values outside the nitrate
areas. Such tokens help to relieve the need for quantities of small
money, for Chile, like every other land with a paper currency making
conscientious efforts to reduce inflation, is perennially short of
change in industrial regions.
Chile has in circulation about 4,000,000 pesos in silver coinage, and a
Government note issue of 150,000,000 pesos, which on the basis of
eighteen pence to the gold peso is covered to the extent of 75 per cent
by the Conversion Fund; at twelve pence, the issue is fully covered. But
there is other paper outstanding—treasury “vales,” to the amount issued
to banks and nitrate producers, totalling at the beginning of 1921 about
107,000,000 pesos, as well as 45,000,000 pesos in round numbers, issued
against the gold guarantee. The total paper currency of Chile is
therefore over 300,000,000 pesos, or 75 pesos to each inhabitant, with
one peso of silver and with a quantity of nickel: let us say, about four
pounds sterling, or $20 U. S. currency.
No one is more acutely aware of the dangers of inflation than Chileans,
a people with a marked aptitude for finance. That fine journalist and
courageous editor, Carlos Silva Vildósola of the _Mercurio_, has
repeatedly drawn public attention to important aspects of the monetary
situation, and has declared that Chile is “desperately ill of the
disease of paper money”; a comprehensive study of fiduciary issues has
also been made by Dr. Guillermo Subercaseaux, a Chilean economic expert,
and one of the planks of the Alessandri platform was a promise to
proceed with the fixation of exchange, “so that we can know what we
really possess, and how much we can buy tomorrow with the money we
earned yesterday.”
_Debts_
Chile’s public debt was augmented in early 1921 when $24,000,000 United
States currency was borrowed in New York, but prior to this loan the
exterior obligations of the country had not been heavy in comparison
with its vigorous economic growth; later in the year, another
$20,000,000 (U. S.) was borrowed in New York, and in the first weeks of
1922 the financial markets of London readily took up a Chilean loan of
£1,657,000.
The first Chilean loan was made in 1822, after Independence, by the
Supreme Director, Don Bernardo O’Higgins, through his representative in
London, Don Antonio de Yrisarri. One million pounds sterling was
obtained through the medium of Hullett Bros. & Co., the loan bearing
interest at six per cent; a Sinking Fund of £20,000 the first year, and
£10,000 in succeeding years was arranged for, any bonds remaining
unredeemed in thirty years to be paid off at par. The security agreed
upon was a mortgage upon all revenues of the State, estimated at
4,000,000 pesos or £800,000 annually; also specially pledged were the
net revenues from the Mint and from the Diezmos or Land Tax, expected to
yield 250,000 pesos annually.
Of this premier loan Peru had a share amounting to three-tenths of the
total, or 1,500,000 pesos.
Successive borrowings brought Chile’s exterior debt to £1,500,000 in
round numbers by 1850, and £5,500,000 by 1870. Between 1876 and 1893,
when the war with Peru and Bolivia had been followed by the revolution
against Balmaceda, these obligations rose to nearly £12,000,000
sterling. In 1901 the account had mounted to £17,000,000, and to
£23,000,000 in 1909.
Two years later external loans stood at £35,000,000, but were reduced to
about £34,000,000 in 1913; by the middle of 1921, according to the
Official Message of President Alessandri, this debt had been brought
down to about £28,000,000. The detailed history of Chile’s financial
years since 1884 shows new loans, although as a rule of extremely
moderate sums, occurring almost annually with the exception of a gap of
eight years between 1896 and 1905, when not a penny was borrowed; nor
was any fresh exterior debt incurred between 1912 and 1921. Most of the
Chilean loans bore the modest interest of 4½ per cent.
In 1919 Chile began to negotiate for a new loan, to cover the needs of
the State railways; there was a deficit of 40,000,000 pesos upon the
operation of these lines in 1918, and in addition to another large
deficit, expected in 1919, money was wanted for supplies and equipment
for new work upon the lines, and especially for construction on the
southern part of the “Red Central.” The law passed by the National
Congress authorising the loan also permitted the State railroads to
raise tariffs by 20 per cent. Eventually, in February, 1921, the first
New York loan was made through the agency of the Guaranty Trust for
$24,000,000 United States currency; it bears interest at 8 per cent, and
was issued at 99, a considerable proportion of the sum raised being
spent by arrangement in the United States.
_Public Revenues_
Public revenues in Chile are large in proportion to the population, the
great bulk of the national income coming from import and export dues
and, since the acquisition of Antofagasta and Tarapacá, especially from
the nitrate industry, in the form of exportation taxes, and leases of
deposits, as well as less directly from the entry of immense quantities
of machinery, stores and personnel. In considering the statistics of
Chilean revenues, it must be remembered that taxes are partly paid in
“paper” and partly in “gold”; no gold coin, nor, necessarily,
gold-backed paper actually passes, but what happens is that a proportion
of the dues are paid in paper of a fluctuating exchange value, while the
remainder is paid at the fixed exchange rate of eighteen pence to the
peso.
Since the Chilean Government’s excellent statistical departments figure
out the totals reduced all together in pesos of eighteen pence, however,
or in pounds sterling, the student of Chilean economics is considerably
aided; but in surveying past years one is confronted with the fact that
between 1885 and 1897 the peso was reckoned as being worth thirty-eight
pence. For the reason, therefore, that comparisons with external
currencies would frequently be misleading, it is preferable to retain
the majority of revenue and trade figures in Chilean denominations only.
In 1850 Chile’s national income was still below 5,000,000 pesos yearly:
there was almost invariably a small balance over expenditure in these
early years, and in 1865 this excess rose to the respectable figure of
6,000,000 pesos. It was not until 1868, when revenues had grown to
13,000,000 pesos, that a deficit so large as a million pesos was
recorded, and this was the fourth occasion only, in 65 years, that
expenses had exceeded income.
In the stormy period of the ’seventies, when expenditure on public
services was heavy, and, also, railroad building was developed, deficits
were common; but by 1880 receipts had risen to over 40,000,000 pesos,
and a balance of nearly 13,000,000 over expenditures was left in the
treasury.
In 1891 the public revenues of Chile for the first time reached—and
exceeded by 5,000,000 pesos—the hundred million mark. In 1895 receipts
reached 127,000,000 pesos, with 93,000,000 expenditure, in round
numbers; next year, with an income of nearly 163,000,000 pesos, there
was a surplus of 47,000,000, an agreeable record exceeded in 1901 when,
with revenues of nearly 186,000,000, the balance left in public coffers
amounted to more than 50,000,000 pesos. Both receipts and surplus rose
in the next year, and in 1903 official statistics showed the remarkable
figures of 210,000,000 income, with 91,000,000 on the right side of the
ledger after expenses were paid. A slight drop was experienced in 1904,
but in 1905 receipts went up to nearly 257,000,000 pesos, rising to
373,000,000 in 1907 and 458,000,000 in 1908. In 1911 a tremendous jump
in public income was made, to 796,000,000 pesos: in this year the
surplus rose to nearly 457,000,000 pesos. In the three following years
there was a falling off from this satisfactory record, but the balance
remaining in the treasury was always substantial, and until Chile was
adversely affected by the international upheavals following the European
War her treasury was in a condition that many wealthier nations might
envy. But in 1919 the Government was obliged to record a deficit of over
60,000,000 paper, and in 1920 estimated a deficit of 89,000,000 paper
pesos. The result of these unprecedented difficulties is to bring about
a somewhat hasty series of plans for changing the tax system, with a
view to obtaining larger revenues, and while heavy dues were placed upon
the importation of luxuries, remodelling of the inheritance and land
laws, and of the imposts upon industry and commerce was outlined. The
fall of nitrate prices, and paralysation of the market, emphasised the
fact that this industry is taxed to a disproportionate degree, while
many other forms of activity are exempt. In 1915, for example, out of
134,000,000 paper pesos received in the customs houses, 85,000,000 were
paid for nitrate exports and 1,000,000 for its by-product iodine, while
of the gold receipts, amounting to 30,000,000 pesos, 29,000,000 were
paid for the same output from the salitre fields.
CHAPTER XIII
CHILE’S NAVAL POSITION
_Chile and the World War.—Strength of the Chilean Navy.—The Army._
The geographical situation of Chile, giving her a strip of coast
twenty-eight hundred miles long, renders her acutely interested in the
future of the Pacific. Command of the Strait of Magellan and the
possession of an excellent fleet are guarantees of her ability to
protect this interest.
In the wide affairs of this ocean, destined apparently to be the scene
for the next trials of political if not of physical strength, the
nations of the South American west coast have as yet had no voice, for
while it is accepted as a matter of course that certain European
countries, the United States and Canada, as well as Japan, Australia and
New Zealand, should insist upon having their views heard, neither Mexico
nor the countries of Central and South America are generally regarded as
parties to the questions involved. With the development of national
consciousness and the creation of well-equipped navies, a number of
these countries will figure as coadjutors of increasing importance, and
in the forefront of them Chile will, I am convinced, be found, ready and
able to assume her share in the working out of a common problem.
Chile was physically affected by the great war. Not only was Easter
Island used as a naval base by the German fleet, but her ports were used
as refuges or supply stations by the ships of several belligerents.
German shipping lay in Chilean ports, many German sailors were interned
during the war period in Chile, and although her position was a passive
one it cannot be doubted that the deep interest with which she watched
events in the Pacific and the Magellanic archipelagos was much more than
passive. So far as the Allies were concerned, their cause would have
been little, if at all, served by the entry of Chile into the conflict
against the Central Powers; it was Chile herself, with a possible
post-war claim upon some of the steamers of the Kosmos line lying
interned during the war in her ports, who stood to gain by a belated
entry, and it is to the credit of her scrupulously correct neutrality
that she refrained. A distinguished Chilean writer, Dr. Enrique Rocuant,
published in 1919 a comprehensive study upon “The Neutrality of Chile:
the grounds that prompted and justified it.” I think that no one who
understood the situation, or the feeling that Chile sincerely exhibited,
needed this explanation, however lucid and kindly, detailing as it does
the absence of any such motive as brought Brazil, with her list of
torpedoed vessels, to the Allies’ side, and setting forth the equity of
Chile’s actions when faced by the acts of the belligerents in her
territorial waters. There were, for example, violations of Chilean
neutrality by various units of the German fleet at Easter Island and the
Port of Papudo as well as in Cumberland Bay (Juan Fernandez); against
these violations Chile vigorously protested; when the British _Glasgow_
followed the _Dresden_, escaped from the battle of the Falklands into
Cumberland Bay, found that vessel with flags flying and guns pointed and
promptly sank her, Chile made similar forcible protests. But she
accepted the British regrets and offer of satisfaction with very ready
graciousness.
Two years after the close of the great war Chile became, as a direct
result of her old and cordial relations with the British navy, in an
unprecedentedly strong naval condition.
_Strength of the Chilean Navy_
In August, 1914, two dreadnoughts were building at Elswick for the
Chilean Government, the _Almirante Latorre_ and the _Almirante
Cochrane_, the price of each vessel being £2,800,000. A number of fast
destroyers, also constructed by the Armstrong Whitworth Company, formed
part of the Chilean naval developments, two of these, the _Lynch_ and
the _Condell_, being already in Pacific waters when hostilities broke
out. The dreadnought _Almirante Latorre_ was completed speedily, taken
over for British Government service, and did good work under the name of
H. M. S. _Canada_ during the four and a half years of the conflict; in
April, 1920, she was repurchased by the Chilean Government, which
obtained for the comparatively modest sum of £1,400,000 not only this
fine vessel but three more destroyers, sister ships of the _Lynch_ (the
_Williams Rebolledo_, _Simpson_ and _Uribe_) and a naval tug. About the
same time the British Government also presented to Chile six submarines
and fifty aircraft, a gift associated with British appreciation of the
sympathetic attitude of Chile at the time when the exigencies of war
brought about detention of the vessels under construction.
The dreadnought _Latorre_ displaces 28,000 tons, has a length of 125
feet, beam of 92 feet, and draws 28 feet of water. She carries 30 guns
of 14 inches, 3 inches and 4 inches, as well as a number of machine-guns
and four torpedo tubes. Her speed is 23 knots, and her full crew 1075
men. She burns coal and has a bunker capacity of 1200 tons. The five new
destroyers each displace 1850 tons, are 320 feet long, are armed with
six 4-inch guns, and have a speed of over 31 knots; bunker capacity, 507
tons of coal; crew, 176. These vessels were laid down in accord with the
plans created for the modernisation of the Chilean fleet in 1910, and
their incorporation into the navy of Chile renders this country the
possessor of an excellent fighting squadron, equipped in consonance with
the experiences of the great war.
The possession of good modern vessels of war is one thing; adequate
operation of them is quite another, as more than one young nation has
discovered to her cost. In Chile, however, a traditional naval feeling
has existed for a century, aided by the inheritance of a considerable
proportion of blood from British seamen, and the work of a group of
British naval instructors who were mainly responsible for efficient
development in the service—as the German military instructors moulded at
least the exterior of the army in the years before the war.
When I had the pleasure of visiting Chilean naval vessels in Talcahuano
in 1920 at the invitation of the genial Admiral Fontaine, it was
difficult to realise that the sturdy and well-groomed young officers,
many of them bearers of British names, clad in replicas of the British
uniform, were going to a foreign country when they set out, a few days
later, to fetch back from Britain the new Chilean ships of war.
The Chilean fleet in early 1922 consisted of two battleships, the
French-built _Prat_ (acquired 1890), with a war strength of 466 men, and
the British-built _Latorre_ (1913–20) carrying about 1100 crew; the two
armoured cruisers, the _O’Higgins_ and the _Esmeralda_, were constructed
at Elswick in 1897, carrying nearly 600 men each; three cruisers of
another type, the _Blanco_, _Chacabuco_ and _Zenteno_, were built in the
same yards following the acquisition in 1890 of the French-built
_Errazuriz_. In addition to these large vessels, Chile has two torpedo
cruisers built by Laird in 1890; the _Tomé_ and _Talcahuano_; five
modern destroyers (flotilla leaders) constructed between 1912 and 1914;
seven older destroyers (the _Thompson_, _O’Brien_, _Jarpa Gamero_,
_Orella_, _Riquelme_ and _Serrano_, carrying 88 men each) built at
Laird’s; five torpedo-boats (_Contreras_, _Hyatt_, _Mutilla_, _Rodrigue_
and _Videla_) built in 1896 in the Yarrow yards, carrying 36 men each,
war strength; the six new submarines referred to above, built by the
Electric Boat Company, Ltd., in 1915, needing a total war strength of
108 men; one training ship, the _General Baquedano_, built at Elswick in
1898, a schooner with auxiliary engines, carrying 253 men; three
transports, the _Rancagua_, _Maipo_ and _Angamos_, with a complement of
86 men each; one sailing ship, the _Lautaro_, built in Glasgow in 1896;
ten patrol boats, of which six older vessels were built on the Seine
between 1890 and 1905, while four boats acquired in 1919 were built in
Helsingfors. There is also still upon the list an old ironclad, the
ex-_Cochrane_, built at Elswick in 1875, carrying a crew of 132 men.
Chile reckons the peace strength of her navy afloat and ashore at 8377
men, while the naval expenses amount to about 14,000,000 Chilean pesos;
in war times the personnel would be increased by 1020 men, costs being
brought up to 15,200,000 pesos. Naval reserves are calculated as 35 per
cent over the war footing, as regards personnel, while in the event of
hostilities aid of great practical value exists in the steamers of the
Government-controlled Compañia Sud Americana, transformable into
auxiliary cruisers.
A certain number of men are annually recruited compulsorily for one
year’s service, but as these conscripts only amount to three or four
hundred, the naval forces are chiefly made up of volunteers who enlist
for three to ten years; many conscripts after serving their initial year
elect to remain under this system. In a maritime country such as Chile
seamanship is popular, and the navy never has difficulty in filling the
lists with young men who are developed rapidly into smart and
well-disciplined sailors. The naval schools of Chile are adequate and
well equipped: in Valparaiso is a fine establishment training 200
cadets, of whom 20 to 30 are annually passed as junior naval officers;
the Naval Academy, part of the same building, trains twelve higher rank
officers. Also in Valparaiso is the Navigation School, passing about six
officers yearly, and the School of Mechanics training 120 pupils is
supplying yearly 30 to 40 petty officers. Cadets of the Naval School
receive a second-class midshipman’s certificate after five years’
instruction, and are then sent to the _Baquedano_ for advanced technical
training and a 2000-mile sailing trip, before the first-class
certificate is granted. It is significant of Chile’s high repute as a
trainer of young sailors that cadets from several other South American
countries are to be seen in Chilean naval schools.
Besides the Valparaiso establishments, Talcahuano has a Mechanical
School for naval engineers, with 200 cadets in training; here also young
officers obtain instruction in torpedo work and radiotelegraphy; this
school turns out about 120 seamen, 30 wireless operators, and 20
midshipmen, as well as qualifying an average of 10 officers. On board
the ex-_Cochrane_ is a gunnery school, training 120 men every year; on
the sailing-ship _Lautaro_ is a school for training pilots of the
Chilean merchant marine, as well as for the navy; the corvette _Abtao_
is used as a training school for boys, and here 150 lads are prepared
yearly, with the obligation of serving five years in the navy. The
_Baquedano_ corvette receives boys from the _Abtao_ and midshipmen
qualified from the Valparaiso school for a year’s voyage of instruction
before they assume duty in the regular service.
Chile has four naval bases, at Arica, Valparaiso, Talcahuano, and Punta
Arenas; the latter has none but mobile defences, since the Treaty made
with Argentina at the time when boundary limits were settled stipulates
that the Strait of Magellan shall not be fortified, a decision which
will probably be modified in view of Chile’s undoubted right to protect
the property and lives of her nationals in the rapidly developing
district of Punta Arenas and a number of inlets and islands. No
belligerent or other vessel would be prevented by Chilean fortifications
from passing from Pacific to Atlantic waters or _vice-versa_, since the
Cape Horn route offers open waters.
The Hydrographic Bureau attached to the Chilean navy has been
responsible since its inception in 1874 for constant exploration and
surveying work directed to all parts of the coast, but particularly to
the intricate waterways of the south. Over 150 maps and charts have been
published by this Bureau, constantly in communication with the
equivalent services in the most advanced countries.
The three first-named naval bases possess fixed land defences, as well
as movable and submarine defences; at the chief station, Talcahuano, are
two dry docks, one of 45,000 tons and the older of 15,000 tons capacity,
as well as a floating dock of 1200 tons. Arrangements are also made with
private dockowners in Mejillones (Antofagasta) and Valparaiso for
repairs when needed, the shipyards of Punta Arenas, Chiloé, Valdivia,
and Constitución also offering useful help both as regards construction
and repair work. In point of numerical strength, the Chilean navy is
second only to that of Brazil, while as a matter of fighting record this
service has been conspicuously successful on the three occasions when
Chile has been at war during the last hundred years. Her history is
firmly bound to her maritime tradition, and her political influence in
the future will undoubtedly be considerably affected by her vigorous
command of the sea.
The army of Chile is a citizen army; its strength, year by year, is
under 20,000 men, of whom about half are newly conscripted; but every
healthy man over twenty-one years old is due to receive a year’s
training, and is as a matter of fact very rapidly made into good
fighting material. I have seen extremely smart soldiers turned out in
six months’ time in the training camps of Chile.
There is no doubt that in case of need the country could raise and equip
a hundred thousand men at least partly trained to arms in a few weeks’
time. Discipline is good, the uniform neat, weapons of modern pattern
and well kept. The cavalry is conspicuous for first-class condition in
particular; horses and horsemanship are of a remarkably high quality.
The aircraft branch of Chile’s service is being steadily developed; the
daring and skill of the Chilean aviator was displayed when Lieutenant
Godoy crossed the Andes into the Argentine—the pioneer to perform this
hazardous feat.
CHAPTER XIV
IMMIGRATION
_The First Immigrants of the South.—Araucanian Lands._
Organised immigration efforts began in Chile just before the middle of
the nineteenth century, during the régime of President Bulnes; they
ceased within a few years, and recommenced between 1881 and the end of
the century: thenceforth the flow has been regulated by a series of laws
of strict tendencies. For a number of years the largest contributor of
blood to Chile has been Spain, but there are no colonies such as those
created by the Brazilian system, newcomers of today usually finding
industrial employment in cities, or the coal, nitrate and copper camps.
For several years before 1914, when immigration practically ceased, the
average entry was less than 2000, of whom at least 75 per cent were
Spaniards. Chile’s first batch of regular immigrants arrived in 1850,
following the efforts of an energetic agent in Europe. There were 70
German men, 10 women and 5 children in the party, who sailed round the
Horn, had a passage of 120 days and were landed at Corral. Both Valdivia
and Corral were economically dead at this period; it would perhaps be
more exact to say that they had never lived. The sea-port and the
riverine city had been maintained as frontier posts against pirates on
the ocean and Indians on land during the Spanish colonial days; a small
mixed population had grown up as a result of Valdivia’s utilisation as a
dumping-ground for convicts from all the West Coast. Evildoers were
shipped here as a convenient means of obliteration, and a number never
returned north. For thirty years following independence from Spain
Valdivia languished, the forts decaying and the soldiers indifferent.
There was no connection with the rest of Chile except by sea, for the
land of the unsubdued Araucanians lay, a broad belt of forbidden land,
below the populous towns of the Central region.
Corral had twenty-eight houses when the Germans landed; Valdivia’s plaza
was a rubbish-heap, the streets unmade, the one-story houses of mud had
unglazed windows. To add to the troubles of the agent who had brought
the settlers, governmental negotiations for land on which to plant the
colony had not been completed. Vicente Perez Rosales, the agent, tells
in his memoirs that as soon as immigration to the south loomed in view
as a fact, tracts of land that had been wild and valueless suddenly
acquired owners and a price. Enterprising citizens went forth into the
woods, found some ancient Indian who was willing for a consideration to
swear that such and such a tract was his inheritance from his fathers,
and, for another consideration, to sell it.