ARGENTINE REPUBLIC. 



both parties. The development of the disputed 

 regions as far as it has proceeded has been ac- 

 complished thus far mainly by Argentinians, to 

 whom the country is more accessible than to the 

 dwellers beyond the impassable Andes, and who 

 have been stimulated by political motives to 

 substantiate by actual possession their claim to 

 the valleys of the Pacific watershed, into 7 of 

 which, out of 9 principal ones, they have grad- 

 ually intruded since 1881. \Vhile the dispute as 

 to the conditions of arbitration and the basis of 

 the respective claims was still acute the two gov- 

 ernments resumed the belligerent preparations 

 which have created financial embarrassment on 

 both sides for many years. In 1900 an under- 

 standing was reached between President Roca and 

 President Errazuriz of Chile not to increase fur- 

 ther the military and naval powers of their re- 

 spective countries. This private agreement ended 

 when President Errazuriz went out of office, and 

 \vas not renewed with President Riesco. The ri- 

 valry of the two nationalities for future influence 

 and empire prompts each one to a struggle for 

 military and naval primacy in South America and 

 for political prestige. This struggle is not likely 

 to end when the burning question of the bound- 

 ary is settled, yet when that phase of it is past 

 it "will be unlikely that either country will go be- 

 yond its definite and distinct sphere to seek a 

 cause of war. Chile having purchased 2 torpedo- 

 boat destroyers and ordered an armored cruiser 

 in the United States, the Argentine Government 

 decided in the beginning of April to order 2 new 

 war-ships in Italian yards, to cost $5,000,000 in 

 gold apiece, which should be defrayed out of the 

 general revenue in two years. This decision was 

 in accordance with the avowed policy of the Gov- 

 ernment to maintain a marked naval superiority 

 over Chile, which on its part adopted the policy 

 of keeping its naval armament equal, but not 

 superior, to that of Argentina, so that in case 

 of arbitration involving disarmament or limita- 

 tion of armaments the arbitrator would find that 

 Chile had pursued a purely defensive policy. 

 Such a competition involved a naval extension 

 that could be checked only by the bankruptcy of 

 one Government or the other. The mediation of 

 the British representatives was offered to bring 

 about an arrangement preventing additional con- 

 struction and dividing the war-vessels that were 

 being built equally between the two countries. 

 K vt-pt upon the sea the danger of a collision 

 Ix-tween the war forces of the two republics is 

 remote unless neighboring countries are involved, 

 because the great Andean chain forms an effect- 

 ive obstacle against a direct military invasion 

 from either side. The total expenditure for naval 

 i-nnstruction incurred by the Argentine Govern- 

 ment amounted to $30,000,000 in currency, which 

 it was proposed to distribute over three years 

 in equal portions. To meet this extraordinary 

 demand a part of the money was to be obtained 

 from the National Bank, which was in liquida- 

 tion, and the remainder to be raised by contribu- 

 tions from lotteries, a duty on real-estate trans- 

 actions, and some increases in internal taxes. 

 At the time when the two additional armored 

 cruisers were ordered there were 2 already build- 

 ing in Italy, to be ready for sea in September, 

 The total cost of the 4 cruisers is close 

 upon $2r>,000,000 in gold, and they entail heavy 

 annual disbursements for maintenance. Chile 

 endeavored to exact from the Argentine Govern- 

 ment as n condition to the limitation of arma- 

 ments a declaration that it would in no event 

 intervene in affairs on the Pacific coast. By 

 giving moral support to the contentions of Peru 



and Bolivia in their disputes with Chile regard- 

 ing the restoration of their lost provinces Argen- 

 tina has to some extent undermined Chilean in- 

 fluence in those countries, where Argentina will 

 not grant to her rival a free hand that would 

 make Chile the dominant political power in 

 South America. Political primacy and domina- 

 tion of the continent is the prize for which the 

 rival powers may wager a conflict that would 

 permanently humble and weaken the loser and 

 result in the destruction of one navy or the other, 

 the payment of a heavy money indemnity, the 

 annexation of the whole of Patagonia by the vic- 

 torious power, and in the event of Argentinian 

 success the restoration to Peru and Bolivia of 

 the ports and nitrate fields seized by Chile in 

 1879-'82. 



The Argentine Government refused to give 

 a pledge to maintain absolute neutrality in ex- 

 isting and future questions on the Pacific coast, 

 but gave an assurance that it had no wisli to 

 intervene in affairs on the Pacific, provided Chile 

 fulfils her treaty obligations toward Peru and 

 Bolivia. The Minister of Foreign Affairs died 

 suddenly on May 5, and Valentin Virasoro waa 

 appointed in his place. Congress was opened on 

 May 8. The Minister of Finance expected the 

 ordinary revenue to be sufficient to cover ex- 

 penditure and further reduce the floating debt. 

 Additional taxation affected articles of luxury, 

 not those of prime necessity, and unless extraor- 

 dinary expenditure occurred it would not be en- 

 forced. Regulations were issued requiring state- 

 ments to be made to consuls regarding the coun- 

 try of origin and the cost of manufacture of 

 goods shipped to Argentina, but on complaint of 

 merchants that these were vexatious they were 

 recalled. Both the Argentine Republic and Chile 

 had made preparations of such warlike character 

 that an outbreak of hostilities might occur after 

 the award of the arbitration tribunal. The Pe- 

 ruvian question might be the cause, but in any 

 event the work of the boundary commission 

 would have gone for naught. Therefore the Brit- 

 ish representatives conveyed a hint that unless 

 means were adopted to preserve peace Jiis Britan- 

 nic Majesty would withdraw from the dispute. 

 A treaty was drawn up the preamble of which 

 contained declarations of the Argentine minister 

 to Chile and of the Chilean Minister of Foreign 

 Affairs which were accepted by the Chilean Gov- 

 ernment as a pledge not to disturb its possession 

 of the Peruvian and Bolivian territories occupied 

 by Chile, but to leave the question of their final 

 disposition to be settled with Peru and Bolivia 

 without intervention, and by the Argentine Gov- 

 ernment were accepted as a promise on the part 

 of Chile not to seek further territorial ajjirran- 

 dizement. A protocol constituting King Edward 

 of England general arbitrator, one for the can- 

 cellation of existing orders for ships and for 

 the equalization of armaments within twelve 

 months, and one recognizing the principle of non- 

 interference with the existing boundaries of the 

 neighboring republics, Chile to retain all rights 

 conferred by treaties, were signed on May 27 at 

 Santiago, and on May 28 a treaty of general 

 arbitration in case of future difficulties was 

 signed, also a protocol for the limitation of naval 

 armaments and one for the demarcation of the 

 frontier after the award of the arbitration trib- 

 unal by a technical commission to be appointed 

 by the arbitrator. The first article of the treaty 

 of general arbitration declares that the high con- 

 tracting parties bind themselves to submit to 

 arbitration every difficulty or question of what- 

 ever nature that may arise between them, pro- 



