98 



CHILI. 



ception, however, to the swelling of taxes, was 

 the abolition of the estanco or tobacco monop- 

 oly, an institution handed down from colonial 

 times, and the suppression of which can scarce- 

 ly fail to tell favorably on the future welfare 

 of the country. The tobacco-plant finds a 

 genial soil in many parts of the republic, as 

 has hitherto been proved by its cultivation in 

 large quantities, notwithstanding the monop- 

 oly, and of excellent quality too, judging from 

 common report. This act, then, sanctions a 

 valuable branch of agriculture, and the de- 

 mand for home consumption may hencefor- 

 ward be met by home production, without 

 the necessity of keeping up the time-honored 

 system of smuggling, which also flourished, in 

 spite of the estanco. Hereafter, the duty on 

 Havana tobacco, in leaf or cut, or in what- 

 ever form imported, is to be $1.50 per kilo- 

 gramme, and, on all other kinds of tobacco, 

 $1 per kilogramme. 



In the foregoing item of expenditure are 

 not included the expenses of the war with 

 Peru and Bolivia. In the absence of official 

 data, these expenses are estimated at about 

 $2,000,000 per month a weighty burden, to 

 be sure, for the Treasury of so small a coun- 

 try. Yet President Pinto, in his message al- 

 ready alluded to, affirms that "the vast ex- 

 penses of the war have been punctually paid 

 with the resources provided by Congress, with 

 an increased revenue due to the growth of the 

 country's wealth, and with the resources which 

 have already commenced to flow in from the 

 territories conquered by the armies of the re- 

 public." The resources "provided by Con- 

 gress" were necessarily derived from increased 

 taxation, and Government issues of a feeble 

 currency, in addition to the bank emission of 

 $16,500^,000 before the commencement of the 

 war.* Of these Government issues, which, con- 

 sidering the absolute necessity of obtaining 

 funds and the general position of affairs, are 

 regarded as one of the best methods that could 

 'have been adopted, another was authorized by 

 the Senate in August, 1880. The bill, as sent 

 up from the Chamber of Deputies, might be 

 considered as empowering the Government to 

 issue $3,000,000 of paper money and obtain 

 some three millions more as an indirect home 

 loan, was so modified by the Senate as to sanc- 

 tion an indirect home debt of $12,000,000, as 

 follows: 



ARTICLE I. The President of the Republic is author- 

 ized, during one year, to emit twelve million dollars 

 ($12,000,000) in paper money of the same character 

 and legal status as that already issued in virtue of the 

 laws of April 10 and August 26, 1879, and of January 

 10, 1880. 



ART. II. Fiscal offices, to be determined by the 

 President of the Republic, shall receive in deposit, but 

 without making use of such deposits, to the amount 

 of twelve million dollars in Treasury bonds or notes 

 referred to in the preceding article. Sums less than 

 one hundred dollars shall not be received. The de- 

 posits shall not be made for less than thirty days, and 

 shall bear interest at five per cent, per annum if made 



* See " Annual Cyclopaedia" for 1879, p. 140. 



for six months, four per cent, if for four months, and 

 three per cent, if for a shorter time. 



ART. III. As often as, in virtue of this law, the sum 

 of one million dollars shall have been emitted in 

 bonds or notes, the President of the Republic will 

 order tenders to be called, for an equal sum, on the 

 terms referred to in the preceding article. Such ten- 

 ders shall be preferred as are made for the shortest 

 term, and therefore gain the lowest interest. 



Taxation, direct and indirect, has been men- 

 tioned as one of the resources provided by Con- 

 gress, and it may not be uninteresting here to 

 explain the allusion already made to the pro- 

 posed increase of duties upon Atacama nitrate. 

 Though Congress was still in session at the 

 end of August, busily engaged in the discussion 

 of that measure, no decision had yet been ar- 

 rived at. The rate of the tax proposed to be 

 levied was equal to one half the market value 

 of the nitrate at the time the bill was intro- 

 duced. u It will be remembered," writes a res- 

 ident of Valparaiso, "that Chili, constituting 

 herself the champion of the rights of her citi- 

 zens, as she was undoubtedly in honor bound 

 to do, undertook the present war in order to 

 protect certain of her subjects (engaged in the 

 nitrate trade) from the illegal exaction, on the 

 part of Bolivia, of an export duty of ten cents 

 per Spanish quintal, and the present action of 

 the Government will strike them as not a lit- 

 tle strange, should they compare this compara- 

 tively trifling tax with the exorbitant one which 

 Chili now pretends to impose; and they may, 

 and probably will, come to the conclusion that 

 the protection which Chili has afforded to her 

 citizens, in this case at any rate, may- prove a 

 very costly one. Chili thus appears in the 

 eyes of the world as compelling those, for 

 whom she undertook the war in order to pro- 

 tect them from the exactions of Bolivia, to 

 pay a hundred or a hundred and fifty cents 

 per quintal on the nitrate they export, as a 

 sort of compensation for saving them from the 

 payment of the trifling duty of ten cents per 

 quintal demanded by the Government of Bo- 

 livia; and should the projected law be passed, 

 the unfortunate nitrate - producers may well 

 say, k Heaven save us from our friends!' " The 

 bill was passed on October 1st, and the duty 

 is payable in specie or its equivalent. A law 

 was passed at the same time, subjecting iodine 

 to a duty of sixty cents per kilogramme, paya- 

 ble likewise in gold. 



Lastly, the " resources which have already 

 commenced to flow in from the territories con- 

 quered by the armies of the republic " the 

 Peruvian guano deposits, and the nitrate de- 

 posits in the Peruvian province of Tarapaca, 

 now in the possession of the Chilians. Special 

 attention, says Senor Pinto, has, since the occu- 

 pation of Tarapaca, been paid to the manage- 

 ment of the valuable sources of revenue con- 

 tained in that province ; and the army has been 

 constantly followed by Government employees, 

 whose duty it was to make arrangements for 

 the collection of revenues which formerly be- 

 longed to Peru. 



