CHILE 1075 



tically ceased by the end of 1909 while accumulations of goods, imported in great haste 

 and undue quantity after the earthquake, were rapidly absorbed. The Government 

 had intended to return to gold currency in January 1910, but a new law was passed 

 deferring the conversion for & further five years. ' 



The condition of the nitrate industry at this time proved very unfavourable, the 

 trade combination, restricting the output, having terminated at the end of April 1909, 

 and the efforts to renew it having failed. Ther: price fell steadily to |- a quintal. 



The Republics of Chile and Argentina celebrated their centenaries in 1910, and the 

 Presidents of the respective States exchanged visits. At the Chilean celebration Great 

 Britain was not represented owing to national mourning, but a special mission of 

 congratulation was subsequently sent to Chile, being entrusted to two British warships. 

 The diplomatic rupture with Peru continued, the Peruvian Minister being recalled from 

 Santiago, while the proposals formulated by Chile in March 1910, for carrying out the 

 disputed plebiscite in accordance with the Treaty of Ancon .were left unanswered. In 

 December 1912 however a settlement was said to be in sight. 



On August 16, 1910, President Jorge Montt, while on a visit to Bremen, Germany, 

 succumbed to heart complaint. His successor, Senor Elias Temandez Albano, Vice- 

 President, also died at Santiago, September 7th. The vacant presidency was filled by 

 the election of Don Ramon Barros Luco, November 15, 1910. His nomination was 

 unopposed, being a matter of compromise between the different Liberal factions, and 

 meeting with the benevolent neutrality of the Conservatives. The political atmosphere, 

 however, was much disturbed at this period, two measures advocated by the Government, 

 but strongly opposed by Congress, being under consideration. These measures were 

 the extension of State primary education, rendering it compulsory, and the Sanitary 

 Code, destined to include compulsory vaccination. The Government was also faced 

 with a heavy deficit, 1 $64,ooo,ooo, such amount being due on account current to the 

 Bank of Chile, and borrowed at the highest legal rate, 6 per cent per annum. In spite 

 of the financial stringency existing, the Department of Public Works entered upon an 

 especially wide programme of new undertakings, including railway extensions and the 

 construction of port-works at Valparaiso, San Antonio, Iquique and Talcuhua.no. 



On July 5, 1911, the award made by King George V, acting as aimable compositeur 

 in the Alsop case dispute between the United States and Chile, was signed and published. 

 This was the second occasion upon which a British sovereign had been appealed to by 

 Chile, the previous award settling the boundary dispute between Argentina and Chile 

 being made by King Edward VII. The Alsop claim had its origin in a certain con- 

 cession made by Bolivia to Dom Pedro Lopez Gama, a Brazilian, who came to Chile in 

 1860, and married a Chilean in 1882, dying in 1883. Previous to his death he had 

 mortgaged his concession from the Bolivian Government to Messrs. Alsop & Co., a Val- 

 paraiso firm, which included a number of American citizens. After the war of 1879 

 between Chile and Bolivia, the former State took over the liabilities in connection 

 with the Alsop claim against Bolivia. Being unable, however, to arrive at a compromise, 

 Mr. Secretary Knox of the United States in November 1909 sent Chile an ultimatum 

 demanding that " the sum of $1,000,000 (200,000) should be paid to the claimants 

 within 10 days," or alternatively that the matter be submitted to the Hague tribunal in 

 terms to be dictated by the United States. Eventually it was decided to refer the matter 

 to the friendly arbitration of King Edward VII, and on his death the office devolved 

 upon King George V. The original amount of the claim was 600,000 with interest; 

 the sum offered by Chile (in 1904) was 90,000, while the sum adjudged by the 

 arbitrator to be paid by Chile to the claimant through the United States was 187,000. 



The financial position of Chile, which had appeared satisfactory in 1909, caused 

 some misgivings towards the middle of 1910, the foreign debt at this period amounting 

 to 25,636,000. In the following year (Nov. 1911) a further 5,000,000 was bor- 

 rowed, in addition to a sum of 2,000,000 which had been raised towards the end of 1910 

 for the reconstruction of the Valparaiso harbour and the completion of the Arica-La Paz 



1 One Chilean gold $ = is. 6d. 



