112 



CHILE. 



of the Government to attain sound currency, coin- 

 ciding with auspicious commercial conditions, 

 had brought Chilean paper money in three years 

 from a discount of 30 per cent, almost up to par. 

 Then tin-re came a relapse early in 1901. fcx- 

 change went against Chile because the wheat crop 

 had failed, and instead of having a large surplus 

 for export the Chileans imported $.5.000.000 worth. 

 The succession of Sefior Xanartu, the leader of the 

 I arty that prefers 'a fluctuating depreciated paper 

 currency, and the uncertainties of the presidential 

 elect ion* were depressing circumstances, for it was 

 not supposed that Vice-President Xanartu would 

 help a man to be elected who would faithfully car- 

 ry out the law that promised a resumption of spe- 

 cie payments on Jan. 1, 1002, for which purpose a 

 fund of $.30.000,000 was being accumulated. 



International Disputes. The state of tension 

 existing between Chile and the Argentine Repub- 

 lic over the interpretation of the treaty delimiting 

 their respective territories in Patagonia was re- 

 moved by the reference to arbitration. The still 

 unsettled difficulties between Chile and the repub- 

 lics of Peru and Bolivia remain a source of dis- 

 quiet and irritation in South American politics. 

 The district of Atacama was claimed by Bolivia 

 from the foundation of that republic, but being a 

 desert region it was not occupied or inhabited 

 until Chileans began about 1840 to utilize the 

 guano deposits and later the nitrate found there. 

 The Chilean Government then asserted that the 

 coast belonged to Chile almost up to the Bolivian 

 post of Cobija. Bolivia protested in 1866, and a 

 treaty was then made recognizing a sort of di- 

 vided jurisdiction over the territory of Atacama. 

 An assertion of sovereignty on the part of Bolivia 

 led to fresh negotiations, resulting in the treaty 

 of 1H74, which conceded that the territory, includ- 

 ing the nitrate mines and the port of Antofagasta 

 were under the sovereignty of Bolivia, but stipu- 

 lated that for twenty-five years the persons and 

 property of Chileans should not be subjected to 

 any other contributions than those then in force. 

 A quarrel arose in the following year, and Peru 

 joined Bolivia in the defense of her rights against 

 the alleged aggressive designs of Chile. Chile was 

 victorious in the war, and having occupied not 

 only the province of Atacama but the Peruvian 

 provinces of Tarapaca, Arica, and Tacna, it was 

 stipulated in the treaty of Ancon, concluded with 

 Peru in October, 1883, that the nitrate-producing 

 district of Tarapaca should remain a Chilean 

 possession unconditionally and perpetually, while 

 the territories of Tacna and Arica were to be sub- 

 ject to the Chilean laws and authorities for ten 

 jears, at the end of which it w^ould be decided by 

 a plebiscite whether they should remain in the 

 possession of Chile or revert to Peru, the country 

 to which the inhabitants chose to belong having 

 to pay $10,000,000 in silver to the other. A third 

 clause of the treaty provided that the manner of 

 taking the plebiscite and the terms of payment of 

 the indemnity should be settled by negotiations, 

 the settlement thus arrived at to be an integral 

 part of the treaty. No treaty was concluded with 

 Bolivia, but only a truce, because the Bolivian 

 Government could not be brought to assent to 

 nny permanent arrangement except such a one as 

 would give Bolivia ample access to the sea. In 

 the compact of truce Atacama is not mentioned. 

 The only coast district recognized as ever having 

 been Bolivian is the narrow strip extending from 

 1 , Po vian frontier to a point a few miles south 

 of Cobija. The free entry of Chilean products into 

 Bolivia was one of the terms of the truce, the 

 object of both parties being to prepare the way 

 for a stable treaty of peace and amity. The 



plebiscite has not yet been held in Tacna and 

 Arica, nor has a definitive treaty been concluded 

 with Bolivia. Plenipotentiaries have been ap- 

 pointed several times to discuss the terms of a 

 settlement, and all their efforts have led to no 

 result. At first the Chilean Government was dis- 

 posed to favor Bolivia at the expense of Chile, 

 suggesting as the basis of a definitive treaty that 

 the port of Arica go to Bolivia. In case Chile 

 could not dispose of Arica the cession of some 

 other port was discussed, and Bolivia showed an 

 unwillingness to accept any alternative port that 

 Chile was willing to cede. The discussion was so 

 protracted and hopeless that the Bolivians began 

 to consider an alliance with the Argentine Re- 

 public and another appeal to arms for the pur- 

 pose of getting the seaport that they needed. 

 Chile therefore broke off negotiations and began 

 to discuss with Peru the conditions under which 

 the plebiscite should be taken in Tacna and Arica. 

 It was proposed to submit these conditions to ar- 

 bitration. These negotiations, which seemed like- 

 ly to be as futile as the prior ones w r ith Bolivia, 

 were interrupted by a civil war that broke out in 

 Peru. The fund that Peru had accumulated for 

 the purpose of paying the indemnity to Chile in 

 the event of the provinces returning to Peru, 

 which seemed to be the most likely outcome of 

 the plebiscite, was expended in the war, and when 

 peace returned Peru was for that reason in no 

 hurry to resume negotiations. Soon, however, the 

 Peruvian Government did press for the fulfilment 

 of the treaty of Ancon, and the Chileans have be- 

 trayed the greatest reluctance to carry out the 

 terms of the treaty. The arbitration proposals to 

 which the Chilean Government had consented 

 were rejected by the Chilean Congress. The idea 

 was promulgated that the retention of Tacna and 

 Arica was necessary in order to give Chile a sci- 

 entific and strategic frontier. The same reason 

 militates against the concession of a seaport to 

 Bolivia. The adoption of this policy by the 

 Chilean Government was followed by a great ex- 

 tension of the administrative organization in the 

 occupied provinces, and the announcement of 

 schemes of public works that would so strengthen 

 the influence of Chile as to turn in her favor the 

 plebiscite when it takes place at some indefinite 

 future time. When Bolivia urged the renewal of 

 negotiations for a definitive treaty based on con- 

 cession of a seaport the Chilean Minister of For- 

 eign Affairs replied bluntly 'that Bolivia must 

 abandon all expectation of a concession of terri- 

 tory on the seacoast on the part of Chile. The 

 protocol arranged by the plenipotentiaries Billing- 

 hurst and Latorre in 1898, providing for the man- 

 ner of taking the plebiscite in Tacna and Arica, 

 passed the Chilean Senate after having been ap- 

 proved by both houses of the Peruvian Congress, 

 and w r as rejected by the Chilean House of Deputies 

 on Jan. 16, 1901. The attitude of Chile was uni- 

 versally disapproved in South America outside of 

 the Chilean nation. Peru and Bolivia .asked tlie 

 good offices of the United States to induce Chile 

 to submit differences to arbitration and carry out 

 the terms of the treaty of Ancon. The principle 

 of beati possidentes, the idea that might makes 

 right, seemed to Spanish-Americans to have cap- 

 tivated all parties in Chile. This was regarded as 

 deplorable because it marred the harmony of 

 the impending Pan-American Congress. The 'Con- 

 gress of 1890 discussed arbitration for the set- 

 tlement of all disputes between American repub- 

 lics, but the subject was not yet ripe. Since the 

 Venezuela arbitration the idea has gained ground 

 until nearly all the republics in the two Americas 

 are willing to consent to ttru pacific means of ad- 



