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Chilean Elites and Foreign Investors: Chilean Nitrate Policy, 1880–82

Published online by Cambridge University Press:  05 February 2009

Thomas F. O'brien Jr
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Extract

Chile's seizure of Peru and Bolivia's nitrate regions during the War of the Pacific (1879–83) opened a new and unprecedented era of prosperity for the Chilean economy. During the next forty years the export duty on nitrates fuelled a rapid increase in government revenues, and the entire domestic economy benefited from the development of the industry. Yet the incorporation of the nitrate industry into the national economy also appeared to signal a decline in the dynamism of the Chilean economic elite. Despite the dominant role which Chilean entrepreneurs had played in the development of the national economy prior to the war, 69 per cent of the nitrate industry was in British hands by 1890.

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Articles
Information
Journal of Latin American Studies , Volume 11 , Issue 1 , May 1979 , pp. 101 - 121
Copyright
Copyright © Cambridge University Press 1979

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References

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24 Blest Gana to Pinto, Paris, 3 May 1878. F.N. Tomo 413, Pieza 14a.

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26 It was not until after the outbreak of the War of the Pacific in 1879 that Congress approved a watered down version of this direct tax legislation. Sater, ‘Economic Nationalism ’ pp. 324–6.

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40 Salisbury to Pakenham, Foreign Office, 12 Dec. 1879. Bondholders, p. 18.

41 Russell to Tenterden, London, 35 Dec. 1879, Salisbury to Blest Gana, Foreign Office, 5 Jan. 1880. Bondholders, p. 19.

42 ‘Declaration made on behalf of the Supreme Government of Chile …’, Paris, 30 Jan. 1880. Copy encl, in Blest Gana to Salisbury, Paris, 31 Jan. 1880, Pakenham to Amun´tegui, Valparaíso, 29 Jan. 1880. Bondholders, pp. 20–21, 23.

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46 Matte to Rafael Sotomayor, n.p., 6 Feb. 1880. Quoted in Bùlnes, Guerra, 2, p. 60.

47 Pakenham to Salisbury, Valparaíso, 17 Jan. 1880. F.O., Chile, 56/207.

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55 William Gibbs & Company (cited hereafter as WGC) to Pakenham, Valparaíso, 2 Feb. 1880, Pakenham to Amuníso, 3 Mar. 1880, Amunátegui to Pakenham, Santiago, 8 Mar. 1880, Pakenham to Amunátegui, Valparaíso, 8 Mar. 1880. Copies end, in Pakenham to Salisbury, Valparaíso, 24 Mar. 1880. F.O. 16/207.

56 Pakenham to Amunátegui, Valparaíso, 19 Mar. 1880. Copy end, in Pakenham to Salisbury, Valparaíso, 24 Mar. 1880. F.O. 16/207.

57 Amunátegui to Pakenham, Santiago, 23 Mar. 1880. Copy encl, in Pakenham to Salisbury, Valparaíso, 26 Apr. 1880. F.O. 16/207.

58 WGC to Pakenham, Valparaíso, 30 Mar. 1880. Copy end, in Pakenham to Salisbury, Valparaso, 26 Apr. 1880. F.O. 16/207; Amunátegui to Pakenham, Santiago, 4 May 1880, WGC to Pakenham, Valparaíso, 12 May 1880. Copies encl, in Pakenham to Salisbury, Valparaíso, 22 May 1880. F.O. 16/207.

59 Billinghurst, Capitales salitreros, p. 39.

60 Antony Gibbs & Sons (cited hereafter as AGS) to WGC Lima Valparaíso, London, 20 May 1880. GMS 11,471/9.

61 WGC to AGS, Valparaíso, 10 Feb. 1880, WGC to AGS, Valparaíso, 24 Feb. 1881. GMS II,470/4.

62 Smail to Bohl, Oficina Limeña, 6 July 1880, Smail to Comber, Oficina Limeña, 22 Nov. 1880. GMS II,472/4.

63 Thomas Morrison to George Rose Innes, London, 19 Nov. 1880. GMS 11,471/10. W. T. Morrison was the Bank's manager and Innes was an English merchant involved in trade with Chile.

64 George Gibbs to Comber, London, 16 Mar. 1880. GMS 11,471/9.

65 Hernández, El salitre, pp. 102–3, 114, 116; Solar, Carlos Aldunate, Leycs, decretos i documenros relativos a salitreras (Santiago, 1907), Part I, p. 75.Google Scholar

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67 Aldunate Solar, Leyes, decretos, Part I, p. 75.

68 Spencer St John to Phillip W. Currie, London, 10 Nov. 1882. F.O. 61/357. St John was the former British Minister to Peru and Currie was an Assistant Under Secretary of State.

69 Reprinted in El Mercurio (Valparaíso), 18 Aug. 1879.

70 Consular Report (Caldera) (P.P. 1880), 74, 1522.

71 El Mercurio (Valparaíso), 6 Feb. 1880.

72 Consular Report (Valparaíso) (P.P. 1881), 91, 1453.

73 Gormaz, Francisco Vidal, Estudio sobre el puerto de Iquique (Santiago, 1880), p. 14; WGC to AGS, Valparaíso, 27 02 1881. GMS 11,470/5.Google Scholar

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75 Bermúdez, ‘ El salitre de Tarapacá’, p. 154.

76 Chile, Congreso, Boletin de las sesiones ordinarias de la cámara de diputados de 1880 (cited hereafter as SOCD …) (Santiago, 1880), p. 472.

77 Ibid., pp. 470–1.

78 Ibid., p. 465.

79 Ibid., p. 383.

80 Ibid., p. 461.

81 This figure is based on data contained in Delegación Fiscal en Tarapacá, 1880. Santiago, Archivo Nacional, Archivo del Ministerio de Hacienda, Tomo 1091; Archivos Notariates de Valparaíso, 1872–8. Archivos Notariales de Iquique, 1872–8. For a more detailed treatment of this question see O'Brien, ‘Nitrate Entrepreneurs’, pp. 59–92.

82 SOCD 1880, P. 471.

83 SOCS 1880, p. 315.

84 Ibid., pp. 269–71; James Hayne to George Gibbs, Valparaíso, 14 Feb. 1879, Hayne to Gibbs, Valparaíso, 28 July 1879, Hayne to Gibbs, Valparaíso, 12 Aug. 1879. GMS, 11,470/3.

85 Hernández, El salitre, pp. 97., 552, 115, 117; Semper, E. and Michels, E., la industria del salitre en Chile (trans. and augmented by Gandarillas, Javier and Salas, Orlando Ghigliotto, Santiago, 1908), pp. 13–7, I40 SOCD 1880, p. 625.Google Scholar

86 Serious efforts to remove the export duty on mineral products began in 1878. In 1879 the House of Deputies agreed to delay consideration of this reform until the nitrate question had been resolved. See Vicuna Mackenna, El libro del cobre, p. 519; SOCD 1879, pp. 157–8.

87 La Patria (Valparaíso), 17 July 1880.

88 J. R. Brown noted that the danger of foreign domination was raised in the congressional debates, but denies it was a reality at that time. See Brown Nitrate Imperialism, p. 393.

89 Billinghurst, Capitales salitreros, pp. 39–40.

90 Brown ‘Nitrate Imperialism’ p. 383.