Nitrates Chilean Entrepreneurs and The Origins of The War of The Pacific

J. Lat. Amer. Stud.
i6, 337-380 Printed in Great Britain 337
Nitrates, Chilean Entrepreneurs and the

Origins of the War of the Pacific
ORTEGA
Introduction
The Chilean victory in the war against Peru and Bolivia between 1879 and
1884 demonstrated that the country's institutions had reached a high level
of consolidation and maturity. The normal renewal of the legislative bodies
and the presidential election of 1881, along with the uninterrupted
functioning of these institutions throughout the conflict was proof of this,
as was the continuation, without respite, of the customary practice of
political confrontation between government and opposition. From every
point of view, the national mobilization in Chile occasioned by the war
made apparent social cohesion and a deep-rooted sense of nationality.
However, of what significance was the war to the various sectors of
Chilean society? With regard to the popular groups, it constituted an
opportunity to consolidate their ties with the nation, particularly, although
not exclusively, through their incorporation into the armed forces, at that
time the most apparent expression of national identity. For the ruling sec-
tors, it was a formidable test for the social, political and economic system
developed during almost fifty years of organized institutional life. For all,
it was an opportunity to reappraise Chile at a juncture in which its identity
underwent the most formidable challenge of its independent life. However,
a different experience was lived by the ruling sectors in the months prior
to the initiation of the conflict. What was at stake then, as well as during
the war, was the preservation of the nation-state as it had been structured
since the 1830s, but for different reasons. During the four preceding years
Chile had undergone a profound crisis which, towards the end of 1878,
had placed the ruling class at a crossroads, whereby its institutions as well
as its hegemony were at stake. It was due to this state of affairs that a
dispute arose within the Chilean ruling class as to how to confront the
diplomatic crisis with Bolivia, which became critical from November 1878.
This was not the only external problem which the country had to face at
12 LAS 16
https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

338 Luis Ortega
that time, but it was in solving this that the government finally adopted
a policy which would fatally lead to a confrontation with its northern
neighbours. Contrary to what happened in Patagonia, where the govern-
ment opted for a policy of concessions, in the north it acted forcefully and
decisively. What were the reasons for this difference?
The aim of this study is to analyse the factors that contributed to the
elaboration of the Chilean answer with regard to the crisis with Bolivia,
and the background to the legal problems that were under discussion
during 1878 and early 1879. It contends that a group existed within the
elite which favoured a policy of confrontation and, ultimately, of territorial
expansion as the most viable solution to the protracted national crisis. With
that aim, this group exerted a strong political pressure and included
amongst its objectives the incorporation of the nitrate territories into the
national patrimony as one of the permanent solutions to the problems
facing the country.
From that point of view, the discussion of the origins of the War of
the Pacific poses some new questions. First, there is that of the role of the
entrepreneurs and the politicians, or of the politico-entrepreneurs, in the
creation and diffusion of a demand which, originating in private interest,
over a short period of time became a national problem. The actions of this
group in its search for the materialization of this option demonstrates the
reality of an elite fragmented by contradictory, though not antagonistic,
interests. It also demonstrates that, in fact, great differences did not exist
between the 'national interest' and that of the ruling class, or of that sector
within the latter capable of imposing its aims. In that sense, the behaviour
and procedures adopted by a fraction of the elite in order to exert influence
on the formulation of the Chilean diplomatic answer suggest that this was
the outcome of the resolution of a conflict within the oligarchy which made
the restoration of consensus possible. In the search for this consensus,
resorting to values such as honour, sacrifice, heroism and national dignity
was decisive; such values were manipulated to the point of giving them
a social dimension which balanced opposing interests and united those
elements which the crisis had divided.
Secondly, there is the question, which is not new, of the nature of the
Chilean state in the nineteenth century. Certainly, the state as it was by
the end of 1878 did not represent merely the crystallization of the homo-
geneous interests of the oligarchy. Seen from a global point of view, it
appears as an instance where the differences derived from the development
and growth of that social sector were aired, confronted and resolved. It

Chilean Entrepreneurs and War 339
was also there that compromises were reached and practices and projects,
which gave shape to the country, were elaborated. But that is another story.
Chile during the second half of the 1870s
Until the mid-1870s the Chilean economy experienced a period of

expansion which, despite cyclical crises, resulted in an unprecedented
growth of traditional activities and in the development of new ones,
qualitatively different from the former.1 However, this process of growth
did not introduce significant structural transformations to the country's
socio-economic system. Such processes took place within the context of
important changes in the politico-institutional spheres, where for the first
time the order and principles established during the period known as ' los
decenios' were questioned. Changes at both levels influenced each other,
giving rise to a process of superstructural change which, in some areas,
had notable characteristics.2
However, from late 1874 the country entered into a prolonged period
of crisis, perhaps the most serious of its short republican life.3 Previous
growth, at times spectacular, had been based upon the expansion of the
export sector. Now it ceased, and the country underwent a recession, as
a result of an international economic conjuncture in which the prices of
raw materials and foodstuffs experienced a process of sustained decline,
motivated by changes in the international transport networks and by
1
See Arnold J. Bauer, Chilean Rural Society from the Spanish Conquest to 19)0 (Cambridge,
1975), especially chapters 11 to v for the evolution of agriculture. On copper and silver
mining, see Pierre Vayssiere, Un stick de capitalisme miniere au Chili, rXjo-rpjo (Paris,
1980), chapters 1 to vi; the beginning and development of coal mining is analysed in
Luis Ortega,' The First Four Decades of the Chilean Coal Mining Industry, 1840-1879',
in Journal of Latin American Studies (JL.AS), xiv, 1 (1982), pp. 1—32. The first stages
of industrialization are examined by the same author in ' Acerca de los on'genes de la
industrialization chilena, 1860—1879', in Nueva Historia, 1, 2 (1981), pp. 3—54. On the
development of the railway network in the Central Zone see Robert Oppenheimer,
'Chilean Transportation Development: the Railroad and Socioeconomic Change in the
Central Valley, 1844-1885' (unpublished Ph.D. dissertation, University of California,
Los Angeles, 1976), and John H. Whaley, Jr, 'Transportation in Chile's Bio-Bio Region,
1850-191;' (unpublished Ph.D. dissertation, Indiana University, 1974).
a
Julio Heise, Historia de Chile, elperiodo parlamentario (Santiago, 1974), passim, provides
a good overview of cultural, institutional and political changes.
3
A sound discussion is Thomas F. O'Brien, The Nitrate Industry and Chile's Crucial
Transition, I8JO-I8$I (New York, 1982), especially pp. 45-8. See also William F. Sater,
'Chile and the World Depression of the 1870s', in JLAS, xi, 1 (1979), pp. 67-99, a n d
Luis Ortega, 'Change and Crisis in Chile's Economy and Society, 1865—1879*
(unpublished Ph.D. thesis, University of London, 1979), especially chapter vi.

34° Luis Ortega
increased competition from new and more efficient producers.4 In the case
of Chile, the prices of copper and silver experienced a sharp decline, while
those of wheat and flour also fell, although in a less dramatic way. The
effects of such changes upon the entire Chilean economic system were
severe. The crisis in the balance of trade was followed by massive exports
of metallic currency, gold and silver, the ' natural' mechanism for the
coverage of deficits in the balance of payments. Domestically, this resulted
in a pronounced increase in the interest rate and in a serious crisis for the
financial system, which, in turn, added to the problems of the production
system.5
Table i. Average yearly prices for Chilean copper, silver and wheat in London
Silver (pence Wheat
Copper bars per standard (shilling
(£ per ton) ounce) per quart
1870 71 60.6 55-5
1871 73-i 60.; 60.5
1872 91.2 60.3 64
1873 84.8 59-3 63.2
1874 79-5 58.3 58.7
1875 80.9 56.9 49.2
1876 75.6 53-8 49
1877 68.3 54.8 ;8.8
1878 61.3 52.6 j6. 4 t
1879 5 5-6* 51-3* 42.2f
* First three months of the year only.
f Chilean wheat was quoted only in four months in 1878 and only once during the first
three months of 1879.
Source: Columns I and III, The Economist and The Times, 1870-1879; column II, Resumen
de la Hacienda Publica de Chile. From iSjj to 11)14 (London, 1914), p. 142.
The repercussions of these events on the fiscal structure were serious.

Over a period of several years, Chile's foreign debt had increased
substantially, as the state financed its ambitious programmes of public
works with such resources. Towards 1877 such a policy had placed great
pressure on public expenditure, inasmuch as the annual servicing of the
foreign debt comprised over one-fifth of the government's estimated
expenditure. The latter's efforts to overcome the effects of its financial
4
S. B. Saul, The Myth of the Great Depression, ifyj-ifyi (London, 1975), pp. 11-16, 21-7
6
and 28-30. See the works cited in note 3.

Table 2. Some items of Chilean public finances 186J—18J9

(in pounds sterling)
Ordinary Ordinary Servicing of
revenue expenditure foreign debt
1865 '.393.329 2,041,048 201,641
1866 1,203,329 2 , 8 ; 1,221 231.133
1867 1,901,918 1,952,468 400,909
1868 2,052,740 2,316,160 432,033
1869 2,204,377 2,364,251 429,732
1870 2,193,494 2,248,867 348,532
1871 2,232,776 2,246,728 428,697
1872 2,624,017 2,465.438 412,910
1873 2,848,047 2,536,349 450,793
1874 2,862,506 3,°9>.463 559.328
1875 2,908,213 3,121,881 57O.375

1876 I0
2,594,621 3,° .273 574,977
1877 2,397.347 2,920,740 675,507
1878 2,315.49° 2,725.695 4i5,M8
1879 2,192,100 2,097,278 247,5 33
Source: Memoria del Ministerio de Hacienda, 186J-1880. Pesos of each year converted
into pounds sterling according to rate of exchange in London.
problems were hindered by the heavy fall in public revenue, and neither
the reductions in expenditure nor the tariff surcharges were sufficient to
balance the budget.6
In 1878 the government was confronted with a dramatic situation as
a result of the collapse of the first stage of Chile's 'export-led' economic
growth. This was acknowledged by the oligarchy. In a letter to President
Anibal Pinto, Alberto Blest Gana, the Chilean Minister Plenipotentiary to
France and Great Britain, outlined the risks involved in the country's heavy
dependence upon mineral exports. The predominance of archaic mining
methods in Chile led Blest Gana to conclude that the country could no
longer depend upon such exports. According to the diplomat:
We have reached a situation whereby various modifications to ourfinancialsystem
are of the utmost necessity, in order to protect it from the great and disastrous
influence that the price of copper and silver have on it today... this influence
could be lessened and we would be in a position to organize our budget on
foundations less subject to change.7
6
Ibid.
7
Archivo Nacional {AN) Santiago, Fondo Nuevo (FN),' Varios', vol. 413, pieza, 14a;
Blest Gana to Pinto, Paris 25 January, 1878.

342 Luis Ortega
With regard to the prospects for the price of copper, the country's main
export, Blest Gana was not at all optimistic. In his conclusions to a special
report of the subject ordered by President Pinto, he stated:
I fear that this study, however, does not lead us to more practical results than
those reached by looking at the question as a whole. Manufacturing industry
consumes less copper nowadays than before, while the former high price of the
metal considerably encouraged production in other countries. Thus, a greater
quantity than necessary is offered on the market and, naturally, there is a need
to produce more cheaply in order to compete with other producers.8
In other words, for the country's main exporting activity the prospects
on the international market were bleak and could only be improved
through increases in productivity. These required investment, the incor-
poration of technical resources and changes in the organization of
production which exceeded the capabilities of the Chilean entrepreneurs.9
To this problem was added the fall in the price of silver, which originated
mainly in its demonetarization by Germany and the United States, as well
as by increased supplies. In the case of wheat and flour, although not as
dramatic, the fall in price also reflected the presence in the market of new
producers, who were more efficient than the Chilean landowners.
Nevertheless, the permanent closure of the international market to these
products only occurred in the 1880s.10
The repercussions of such a situation in Chile were manifold and
dramatic. Together with the economic decline it caused, there was a
marked social crisis which manifested itself in an alarming increase in rural
and urban lawlessness. The government's ownfinancialproblems prevented
it from upholding the rule of law and order, the mainstays of the oligarchic
conception of the state.11 That the state was incapable of maintaining the
working of the country's administrative structure and the rule of the
principles on which its legitimacy rested gave a further dimension to the
crisis. Although it originated in economic factors, the political and social
expressions of this crisis tended to undermine the validity of some of the
basic principles of the institutional order. The many ministerial changes
8
Ibid.
9
O'Brien, op. cit., p. 46; Vayssiere, op. cit., chapter v, and Ortega, 'Change...', op. cit.,
chapter iv.
10
Bauer, op. cit., chapters iv and v.
11
On lawlessness and crime see Sater, op. cit., and Ortega, 'Change...', op. cit., especially
chapter vi. On the foundations of the political order see Simon Collier,' Conservatismo
chileno, 1830-1860. Temas e imagenes', in Nucva Historia, 11, 7 (1983), pp. 143-63.

in 1877 and 1878 bear witness to the extent of the crisis of political
confidence.12
Inevitably, the elite attempted to find solutions to the crisis. Some were
inspired by traditional ideas and were, necessarily, short-term answers;
some tended to break the oligarchic consensus. The former resulted in the
aforementioned cuts in public spending, in the manipulation of the
customs tariff with the aim of increasing revenue, and in a long wait for
an upturn in the international prices of exports. Moreover, the government
further resorted to the common practice of borrowing, at this stage
domestically. In June 1878 the government raised a loan for 2,250,000
pesos (£371,287) with nine of the eleven existing banks. In return these
institutions were allowed to issue 10,000,000 pesos (£1,650,165) in notes
which were recognized as legal tender by the government. This transaction
increased the pressure upon the dwindling metallic reserves of the banks,
which by mid-July had practically disappeared. Contrary to the principles
and practices hitherto observed in banking, the government intervened
to prevent the total bankruptcy of the system, and on 23 July Congress,
in a secret sitting which lasted all night, approved the suspension of the
'convertibility of bank notes'. 13 This measure was one of the few which
broke the oligarchic consensus during the crisis.
In its desperate search for resources, the government attempted to
introduce a tax reform. Accordingly, taxes on income and capital gains
were introduced for the first time in the country's history, and a provision
was made for a tax on inheritances. These bills, sent to Congress at the
beginning of August, were designed to transform the structure of public
revenue along the lines proposed by Alberto Blest Gana who, following
the advice of J. G. Courcelle-Seneuil, suggested that the government
should resort to 'heroic remedies for the acute disease which affects us',
the levying of taxes on private wealth being one of them. However, the
diplomat was sufficiently realistic with regard to the future of the bills in
Congress. 'How many delays, how many obstacles will this courageous
proposal come up against?' he asked President Pinto. His forecast was not
optimistic, yet prophetic, when he wrote: 'I believe that one does not have
to be endowed with exceptional discernment to predict that these will be
infinite, and that a year will elapse before the first peso raised by these taxes
la
Cristian Zegers, 'Historia polftica del gobierno de Anibal Pinto', in Historia, no. 6
(1967), pp. 7-126.
13
Frank W. Fetter, Monetary Inflation in Chile (Princeton, 1931), still provides one of the
best accounts of the events which led to the 'inconvertibility of bank notes'.

344 Luis Ortega
will reach the nation's empty coffers'.14 And, in fact, only in April 1879
did the legislature approve a watered-down version of the original
proposals. In this sense, the oligarchic consensus proved to be resistant
in matters of taxation and fiscal policy, despite the demands generated by
the crisis. All these factors forced the government to insist on traditional
practices and to pin its hopes on partial solutions to its grave and mounting
financial problems; hence its abortive attempt to raise a £1 million loan
in Great Britain at the end of 1878. According to Blest Gana, who was
in charge of the preliminary negotiations, the difficulties faced in raising
a loan were 'immense', and were mainly due to the excessive volume of
Chile's foreign debt and to the suspension of the ' convertibility' of bank
notes. However, he was also at great pains to point out that the 'English
bankers considered the introduction of new domestic taxes to be an
indispensable part of the negotiations'.15 The dilemma faced by the
Chilean ruling class was, therefore, acute: the short- and medium-term
policy, borrowing, was not viable. Access to the London financial market,
itself undergoing a severe crisis, had a price that the oligarchy was
unwilling to pay. A tax reform was not only unpalatable in principle; it
might have implied a thorough alteration of the prevailing economic and
social order and the political price of such a step was unacceptable.
The critical situation deteriorated further during the final months of
1878. The worsening economic situation, along with the problems of law
and order, contributed to this. The latter even manifested themselves in
'subversive popular demonstrations which the police could barely
contain'.16 However, they did not become as serious as rural banditry and
urban crime, and, as a social phenomenon, they did not constitute a
challenge to the ruling class's hegemony. Moreover, the boundary dispute
with Argentina concerning the territory south of the river Santa Cruz
contributed to the continued climate of uneasiness and pessimism. But was
14
AN. FN., 'Varios', vol. 413, pieza 14a; Blest Gana to Pinto, Paris, 3 March 1878. A
discussion on the aims of the proposed tax reforms is William F. Sater, ' Economic
Nationalism and Tax Reform in Late Nineteenth Century Chile', in The Americas, no.
33 (1976), pp. 311-3;; an alternative interpretation is Luis Ortega, 'Chilean Economic
Policy Prior to the War of the Pacific', in C. Abel and C. M. Lewis (eds.), Latin America.
Economic Imperialism and the State: The Political Economy of an External Connection during
the Nineteenth and Twentieth Centuries (London, forthcoming).
16
AN. FN., 'Varios', vol. 413, pieza :4a, Blest Gana to Pinto Paris, 19 November 1878.
The London money market had undergone a crisis since 1875, cf. Leland H. Jenks, The
Migration of British Capital to ifyj (London, 1927), pp. 291-2.
16
Abdon Cifuentes, Memorial (2 vols. Santiago, 1932), n, 153-4, on street rioting in
Santiago. On the virtual breakdown of law and order in the countryside and the increase
in urban criminality see note 11.

this the hour of proof for the Chilean oligarchy? All the evidence suggests
an affirmative answer as, for the first time in almost five decades, leading
Chilean intellectuals, analysing the causes and effects of the crisis, began to
question the hitherto prevailing belief in the country's continuous progress.
On the other hand, the continuous and incisive criticism of the government's
performance by Congress and most of the press added to a collective
feeling of gloom and uncertainty, and to a crisis of confidence. Yet
eventually the hegemonic interest of the elite rallied and prevailed, and
it was this which allowed the adoption of unorthodox answers to the
banking crisis and why the required steps towards a reform of the fiscal
system were not taken. The former amounted to a desperate way out of
a critical situation; the latter, on the other hand, would have changed the
economic and social foundations of its political rule.
Thus, by the end of 1878, the Chilean elite was living through an
extremely difficult period. There was a serious breakdown in law and order,
and the country was faced with delicate external problems. On the other
hand its export activities did not show signs of a sustained recovery. A
year earlier President Pinto had stated:
The country's economic situation is very bad and the forecast is for a deterioration
rather than for an improvement. The harvest has been abominable and the price
of copper in Europe is falling as never before. Another bad year with a situation
as delicate as this one could have nothing but bad consequences... If a new mining
discovery or other news in the same line does not come to improve our position,
the crisis which has been affecting us for years will get even worse.17
And, indeed, the crisis worsened. In 1878 there was a slight recovery
in agricultural production, yet the international price of wheat continued
its downward trend, as did that of copper, until it reached its lowest level
for decades.18 Not a single mining discovery or 'other news in the same
line' came to the country's aid, although there was an attempt to start the
exploitation of nitrate in the Taltal area, which finally failed. In desperation
the government had even lent its support to a charlatan who promised
to turn copper bars into gold! At that stage of the crisis anything seemed
possible.19 In mid-December 1878, at the close of the annual session of
Congress, the sombre president made reference to the precarious state of
the country, while at the same time severely criticizing the performance
17
Quoted in Francisco Encina, Historia de Chile desde la prehistoria hasta itipi (20 vols.
Santiago, 1940-52), xvi, 41; Pinto's remarks are dated 20 November 1877.
18
Ortega, 'Change...', op. cit., pp. 246, 419 and 427.
19
These were the activities of Alfred Paraf; an account of his endeavours in the press
of Santiago and Valparaiso, July-December 1877. Cf. William F. Sater, 'Chile and the
World Depression...', loc. cit., pp. 88-9.

346 Luis Ortega
of the legislature. His complaints were centred upon the delay in the
discussion of 'the two great measures loudly called for by the present
distressed state of the country, the introduction of an income tax and an
inheritance tax'. These had been 'invariably shelved when presented for
serious discussion, either by the want of a quorum or by some other
parliamentary manoeuvre of evasion'.20
It was against this background that the diplomatic crisis with Bolivia
heightened. And in April 1879 w a r broke out between Chile, on one side,
and Peru and Bolivia on the other; namely, the War of the Pacific.
Crisis in the North

Only three months after President Pinto had launched his criticisms and
made some gloomy predictions in Congress, the collective mood of the
nation, which now comprised the various social sectors that until recently
had shown their profound discontent, changed to an almost euphoric
optimism. From the point of view of material interests, the signs of
positive change intensified, for ' the declaration of war alone initiated an
economic period entirely different from that preceding it, immediately
relegating the crisis into oblivion'.21 Opinions such as this have led some
historians to focus their attention on the economic factors that preceded
and formed the background to the conflict of the Pacific. Thus, Thomas
O'Brien has indicated that the likelihood of war 'brought with it a possible
solution to Chile's declining fortunes', and that the 'oligarchy was not
blind to the possible solution to the problems offered by the nitrate riches
of Peru and Bolivia'.22 Another anonymous and daring author blithely
stated that, in fact, the war represented ' the bourgeois solution aimed at
restoring the economic equilibrium'.23 While the former poses questions
and suggests new areas for research, the latter reflects the ignorance that
still prevails with regard to the socio-economic aspects of the problem and
of their role in the diplomatic crisis which culminated in the war. To some
extent this is the result of the weight of traditional Chilean historiography,
which has consistently favoured the analysis of the legal factors which
preceded the confrontation.24
There were, however, economic and social factors which perhaps bore
20
Sesion Conjunta de las Cameras Legislativas, 15 D e c e m b e r 1878.
21
Guillermo Subercaseaux, Monetary and Banking Policy in Chile (Oxford, 1922), p . 93.
22
O'Brien, op. tit., p . 48.
23
Ranquil (pseud.), Capitulos de la historia de Chile (Santiago, 1973), p p . 8 5 - 6 .
24
Gonzalo Bulnes, GuerradelPacifico (3 vols., Valparaiso, 1911-19), especially vol. 1; Diego
Barros Arana, Historia de la Guerra delPacifico (Santiago, 1914), chapters 1 to in. A recent
example is Manuel Ravest, ha Compania Salitreray la Ocupacion de Antofagasta, 1878-1879
(Santiago, 1983), especially its introduction.

more weight than the strictly legal ones. In fact, a group within the
oligarchy who had strong connections with nitrate interests and the world
of politics was able to exert considerable pressure upon the government,
especially between October 1878 and March 1879. This group used its
influence in order to protect its threatened material interests in Antofagasta.
It thus demanded the adoption by President Anfbal Pinto's government
of an inflexible stance in the negotiations with Bolivia, and influenced the
making of the country's foreign policy. No less important were the
propaganda efforts made by this group, whereby it succeeded in identifying
private sectorial interests as public ones, to a point where its troubles
became a national problem. As a result of this campaign, the acquisition
of all the nitrate territories by Chile became an essential part of the pre-war
dispute and, eventually, the crucial area of discussion during the conflict
itself.
Strictly speaking, the event that unleashed the dispute between Chile and
Bolivia, in which Peru became involved at a later stage, was a decision
adopted by Bolivia's National Assembly, which in the eyes of some
authorities and Chilean entrepreneurs established in Bolivia contravened
the terms of the Boundaries Treaty agreed by both countries in 1874. The
way in which the Chilean government conducted negotiations once the
dispute had started merits a critical revision. Hitherto, most Chilean
historians have referred to it as conciliatory and pacifist, but what were
the real reasons for the dispute and how was Chilean policy towards
Bolivia between February 1878 and April 1879 formulated?
For many years Peruvian nitrates were traded in Valparaiso, and there
had been considerable Chilean investment in Tarapaca and Antofagasta
from the beginning of the 1870s. When the Peruvian government
intervened in the nitrate industry between 1873 and 1875, firstly through
a state monopoly and finally by its nationalization, it caused uproar
amongst Chilean entrepreneurs. Ultimately, this would also contribute to
the escalation of the dispute and of the subsequent conflict. But it was only
after 14 February 1878, when the Bolivian National Assembly authorized
the government to levy a tax often cents per quintal (100 lb.) on the nitrate
exports of the Compania de Salitresj Ferrocarril de Antofagasta (Antofagasta
Nitrate & Railway Company (ANRC)), that the events which eventually
changed the political map of the region, and altered the social fabric of
at least one of the belligerents, began to escalate.25
25
Bulnes, op. cit., i, 106-20. On the social impact of the war in Peru see Heraclio Bonilla,
Un siglo a la dcriva (Lima, 1980), especially the section: ' El problema nacional y colonial
del Peru en el contexto de la Guerra del Pacifico'. On Bolivia see Roberto Querejazu,
Guano, salitrey sangre (La Paz, 1979).

348 Luis Ortega
For almost four decades Chile and Bolivia had been involved in a
diplomatic controversy over the exact location of their common border.
In 1842 the Chilean government unilaterally declared that its northern
frontier ran along parallel 23, a decision which resulted in a swift and angry
complaint from Bolivia. Only as late as 1866 was a Boundaries Treaty
agreed between the two countries, whereby parallel 24 became the
common frontier. Yet in 1872, as a result of the annulment by the new
Bolivian government of all the legislation enacted during the rule of
President Mariano Melgarejo (1865—71), the two countries were forced to
commence new negotiations, which led to the agreement on a new treaty
in 1874. Although parallel 24 was confirmed as the border line, the new
treaty put an end to the sharing of customs revenue accrued in the territory
between parallels 23 and 25, as agreed in 1866. In return, the Bolivians
undertook not to levy taxes for twenty-five years on Chilean businesses
operating in the area. Finally, the 1874 treaty established that any dispute
arising between the two countries with regard to the new arrangement
would be settled by arbitration.26
Once the new treaty was ratified by Congress in 1875, it was assumed
in Chile that the northern border demarcation was a settled issue.
Therefore, the resolution of 14 February 1878 passed by Bolivia's National
Assembly, and introduced as a condition for the ratification of a private
contract signed between ' the Company (ANRC) and the Bolivian govern-
ment on 27 November 1873', was to cause a great deal of confusion in
the already charged political environment of Santiago.
However, the first reaction of the Board of Directors of the ANRC was
marked by scepticism, reflected in the note sent by the agent of Antony
Gibbs & Sons (holder of 34 % of the ANRC's shares in 1878) in Valparaiso
to the parent house in London; according to James Hayne:
The Directors of the Antofagasta Co. did not attach much importance to these
reports, as they could not believe that a majority of the Members of the (Bolivian)
Congress could be persuaded to vote for what would be neither more nor less
than aflagrantact of bad faith and a positive breach of the Contrato de Transaction
26
Bulnes op. cit., i, 106. Ignacio Santa Maria, 'Guerra del Pacffico', chapter m, in Revista
Chilena de Historiay Geografia (RCbHG), xxxi, 35 (1919), p. 70. The terms of the 1866
and 1874 treaties were seen in Chile as involving the cession to Bolivia of the territory
to the north of parallel 24. Neither were they acceptable to many Bolivians; in fact,
in September 1874 the British Minister to Chile expressed his doubts as to whether the
new treaty would be ratified by Bolivia's National Assembly as its terms were seen as
too favourable to Chile. Archives of the Foreign Office (FO), Public Record Office
London, Rumbold to Derby, Diplomatic No. 64, Santiago 15 September 1874, FO
16/181. His assessment was proved right, as the treaty was not ratified.

made with the Bolivian government in November 1873; and even supposing such
a majority could be obtained it was hardly to be supposed that the government
itself would dare to carry into effect the imposition of such a duty, as it would
be a positive infraction of their treaty with Chile.27
However, as a precaution, after finding ' the matter much more serious
than they had imagined', the Directors:
lost no time in placing themselves in communication with the Chile government
on the subject, pointing out to them that if the Bolivian government were allowed
to carry out such an act of spoliation, not only would the Chile shareholders in
the Company be greatly prejudiced, but that such an act would be a direct
infraction of their treaty with Bolivia.28
The Chilean government had not yet been officially informed of these
events, but in any case issued instructions to its Minister in La Paz to
protest 'if it is true'. 2 9
The Board's reaction, apart from being a legitimate attempt to protect
its interests, is also explained by the way in which it had agreed the 1873
Contrato de Transaction with the Bolivian government (a private agreement),
as well as by the fact that the contract had never been ratified by that
country's legislature. In any case of legal dispute this put the ANRC in
a vulnerable position. Yet the Board reacted confidently, knowing, as
Hayne put it, that:
Fortunately we have several very influential Chileans amongst our shareholders,
and should the government not carry out the promise made to take immediate
action on the matter, strong pressure will be brought to bear on them in Congress
and no doubt they would be compelled to act and to act energetically.30
Hayne went even further, to state that the Bolivian authorities would
act:
knowing that it is the intention of the Chile government to take action in the matter
not only in defence of their treaty but in defence of the interest of the Chilean
shareholders in the Co., and may not attempt to enforce the payment of the duty.31
Hayne's final remarks reflected the confidence of the Board's members,
who as early as March 1878 knew that they could count on official support,
if necessary, in their dealings with the Bolivian authorities; and that
knowledge had been accrued through the access of some of its members
to positions of power, either through personal relations or political
27
Archives of Antony Gibbs & Sons (AGA), Guildhall Library, London; William Gibbs
(WG) Valparaiso to Antony Gibbs & Sons (AGS) London, 6 March 1878, MS 11470/2.
28
Ibid. *8 Ibid. 30
Ibid. 31
Ibid.

35o Luis Ortega
connections. In fact, Gibbs & Sons felt confident enough to go ahead with
the acquisition of shares worth £24,092 in April 1878, raising its total
investment in the ANRC to £117,162.32 No doubt the promising prospects
for nitrate in the European market and a 10% dividend in 1877 were
powerful incentives. Furthermore, in May 1878 the ANRC embarked on
the construction of an iodine plant, which was completed four months later
at a cost of £3 3,000.33 In other words, its business confidence had not been
affected by the changes in Bolivian policy.
Between April and October 1878 the ANRC and the Bolivian government
held direct negotiations while the Chilean government limited its involve-
ment in the affair to a secondary role. Yet, in April the Chilean Minister
to Bolivia, Pedro Nolasco Videla, had an interview with the Bolivian
Minister of Finance during which the latter informed him that his
government had decided to suspend the enforcement of the 14 February
law 'until a satisfactory solution to this difficulty is found'. Even when
Eulogio Doria Medina replaced Manuel Salvatierra at Bolivia's Ministry
of Finance, the government upheld the suspension. In Chile, nevertheless,
'distrustful capitalists demanded a statement which was more than just
words', and they gradually began to increase their pressure on the
government.34 By mid-October the Chilean government changed its policy
and began to intervene directly. A note from the Foreign Ministry drafted
at that time gave a new dimension to the dispute. In fact, although the
Bolivian authorities had maintained the temporary suspension of the
February law, on 8 November Videla delivered a note in which his
government stated that recent Bolivian policy could push Chile to abrogate
unilaterally the treaty of 1874. The note also mentioned the fact that, as
the Chilean population and Chilean investment in Antofagasta had grown
considerably, the situation there had become tense and could induce the
Chilean government to intervene directly. It ended with a stern warning:
The refusal by the Bolivian government to accept such an obvious and just demand
(the annulment of the 10 cents law) would put my government in the position
of having to declare the Treaty which binds us with that country void, and the
consequences of such a painful but justified and necessary decision would be the
exclusive responsibility of the side which has failed to fulfil the terms of the pact.35
According to Francisco Valdes Vergara, then one of the secretaries at
the Chilean Legation in La Paz, the presentation of this note alone made
32
AGA, WG to AGS, Annual Account, 15 October 1878, MS 11470/2.
33
Ibid., WG to AGS, 26 June 1878, MS 11470/2.
34
B u l n e s , op. cit., 11, 107.
35
Memoria del Ministro de Kelaciones Exteriores (MINREX) (1879), Anexos, pp. 45—6.

Chilean Entrepreneurs and War 3 51
the Chilean authorities responsible for having placed Bolivia 'in the
position whereby she had to carry her resistance to the extreme', adding
that such a move made his government liable ' to criticism, not for having
prepared for war, but for having put itself in a difficult position without
realizing that its actions were leading to an armed confrontation'. Valdes
Vergara added that his government had probably acted in such a manner
as 'it surely believed that Bolivia, acknowledging her weakness, would
yield to its demands'; thus the harsh wording of the note.36 In a letter
to President Pinto, Lorenzo Claro, who was also attached to the Legation
in La Paz, while recognizing that Bolivia was 'defenceless against Chile',
asked, 'will she remain passive?'. His answer contained some clues as to
the future course of the dispute: ' Not at all; she will throw her lot into
Peru's arms and will buy an alliance with her at any price.' A conflict would
then ensue 'all because of a Chilean action which is difficult to justify'.37
What moved Claro to make such gloomy and serious reflections? First
there was the reply by the Bolivian authorities which led, on 17 December,
to the enforcement of the law. But there were other reasons, which had
more serious implications. Prominent amongst them was the Chilean note
of 8 November, sufficient alone to ' lead to a conflict of serious and vast
consequences', and that despite the fact that the Bolivian government had
given ' a proof of utmost deference to our government when it suspended
the enforcement of the law'. As a result of the step taken by the Chilean
Ministry of Foreign Affairs, the negotiations had probably been damaged
irreparably since, before the first protest had been answered, Fierro's note
arrived, outlining the seriousness which Chile attributed to the enforcement
of the tax which was actually suspended.38 In his letter, Claro was making
reference to Alejandro Fierro, the Chilean Minister of Foreign Affairs and
one of the ANRC's shareholders.39
According to Claro it was no easy task to explain, let alone justify, the
sending of the note of 8 November, since the Bolivian government' could
not accept in cold blood such an undiplomatic note which was not at all
necessary since the law was suspended'. He went even further, to describe
the procedure of the Chilean Foreign Ministry as an act of 'intimidation,
which would only have been opportune after the order had been given
36
El Hera/do, 16 October 1896.
37
AN. Fondo Varios (FV), vol. 838, picza 871, pp. 139-40. Claro was President Pinto's
c o u s i n ; h e had c o n s i d e r a b l e financial interests in Bolivia.
38
Ibid., p . 140.
39
Fierro was listed as a shareholder in the ANRC's ' Memoria' for the second half of 1878,
but not in that for the first half of 1879.

352 Luis Ortega
for the enforcement of the law, or in case a discussion of the protest had
been refused'. Therefore, the note reflected Fierro's impatience and lack
of'cold blood', and could be considered as the cause of the stiff response
from La Paz. In other words, 'to an inopportune note, an answer
equivalent to a challenge had been given'.40
Why did the Chilean government adopt the stance reflected in the note
of 8 November? In Claro's view, the temporary suspension by the Bolivian
government of the 10 cents law indicated that there was no 'sound reason
to fear its enforcement if in the course of the negotiations it was concluded
that it constituted an infringement of the treaty'. But at the same time he
underlined a number of points which made i t ' clear that the February law
in no way contravenes the 1874 Treaty and that Bolivia was entitled to
pass it'. According to Claro, the law amounted to nothing more than a
condition for the approval of the contract which reinstated that of the
ANRC cancelled by the law which had repealed all the legislation passed
under the Melgarejo government. In fact, in 1872 the Bolivian National
Assembly had passed a law for the revalidation of land and mining
concessions according to which its approval was necessary for any contract
or agreement reached between the government and private parties. As the
Bolivian government and the ANRC had signed their contract under the
terms of the 1872 law, a legislative ratification was required. That was why
in Claro's opinion the 10 cents law did not infringe article IV of the 1874
Treaty since, he insisted, the former was just a 'condition under which
a generous concession was accepted'. Claro concluded his long letter by
saying that the negotiations demanded tact and courtesy, qualities absent
in Fierro's procedures, and that the essence of the dispute was a legal
matter, and 'far from being a question of honour, nor one of respect'.41
His remarks, important as they are, must be weighed against the fact that
he had vast interests in Bolivia which, in the event of a conflict between
the two countries, would be jeopardized. But they certainly introduced an
element of doubt, and weakened the Chilean case.
If the legal background and the state of negotiations did not support
Fierro's sending of the note of 8 November, its presentation must have
been the outcome of other kinds of consideration. Certainly, the delay in
receiving a definitive answer from La Paz was significant, but the pressure
exerted by the ANRC's Board of Directors may have been more important.
Evidence of this is contained in Gibbs' correspondence. Of particular
interest in that context is a note written by Francisco Puelma reproduced
40 41
Claro to Pinto, loc. cit.y p. 141. Ibid., pp. 141-2.

by Hayne. Puelma, a deputy, personal friend of President Pinto, confidant

of Fierro and holder of 6 % of ANRC shares, had written to Miguel
Saldias, also a deputy and President of the ANRC Board, informing him
that:
Fierro has read me the letter he has written to Videla (the Chilean Minister to
Bolivia) instructing him clearly and categorically to negotiate the suspension of
law in the name of the Chilean government and not on our behalf.
Puelma indicated that the minister attached great importance to the new
line adopted by the government in the negotiations and also gave his
approval to the ANRC's firm stand on the problem. 42 It would seem that
Puelma was making reference to the note of 8 November, and, if that was
the case, this is further proof of the Board's access to high office and of
its ability to influence events. Conscious of their political assets, the
Directors' actions became more decisive.
At the beginning of 1879 negotiations between the two governments
were, to all intents and purposes, at a standstill, and there was no reason
to expect either a fresh initiative or a positive settlement. The Bolivian
government had set 11 January as the date for the enforcement of the 10
cents law, which implied the confiscation of the ANRC's assets in
compensation for payments in arrears. As the date drew closer and the
general crisis in Chile deepened, attitudes towards the diplomatic crisis
began to harden. Evidence of this is to be found in a letter written by
Antonio Varas, a most prestigious and influential political figure, member
of the Council of State, Chairman of the Caja de Cre'dito Hipotecario
(Mortgage Credit Bank), deputy and holder of ANRC shares, whose views
could be considered as representative of a broad section of the elite:
We are being faced with the danger of a very serious rupture and the worst thing
is that one must recognize that to some extent the problems with our neighbours
are caused by the fact that Chile does not enjoy the consideration and respect she
used to. Otherwise one could not explain why Bolivia insists on measures which
Chile considers a violation of the Boundaries Treaty, without even giving an
opportunity for negotiations to take place.
One arrives at the point of wishing that malaise would get even worse, so that
the inconveniences of a rupture may be confronted, because we are in any case
in a very poor position now that even Bolivia is overruning us. Nor is our internal
situation encouraging. The economic crisis persists, despite a generally good
harvest. Politically no party is strong enough to give a clear direction to the
nation... I must confess to you that notwithstanding my faith in the country's
42
AGA, WG to AGS, 5 November 1878, MS 114/0/2.

3j4 Luis Ortega
future, sometimes I become depressed by events and I have to make an effort to

overcome these feelings.43
There were good reasons why such a gloomy letter was written by the
erstwhile strong and authoritarian Varas. The economic and social crises
were as serious as ever, and political recrimination had reached a new
height. By mid-January the gloom had intensified with the news from
Antofagasta of the seizure of the ANRC's property and the announcement
by the Bolivian authorities of their impending sale by auction.44 According
to the British Minister to Chile, the actions of the Bolivian authorities had
'aroused great indignation in the country'.45
In fact, when the news reached Valparaiso on 14 January the country's
international situation was considered to have become intolerable. The
further deterioration in relations with Bolivia, if not their total breakdown,
came precisely at the time when the boundary dispute with Argentina was
reaching a settlement. By the end of the previous year, Argentina and Chile
had been at the brink of war and the dispute was solved only after delicate
and laborious negotiations. The approval of a boundaries' treaty binding
the two countries by Chile's Chamber of Deputies on 10 January prompted
Hayne to write to London saying that such a decision was 'good news
for Antofagasta shareholders'.46
As it was, for the owners of the ANRC and their supporters the solution
given to the ' Argentine problem' came at a crucial time. In fact, as soon
as an agreement was reached by the end of 1878 and tension eased in the
south the Chilean authorities could concentrate all their efforts and
energies in the search for a solution to their northern problem. Thus, early
in January the ironclad Blanco Encalada, the most powerful unit in the
Chilean Navy, was sent to Caldera, the northernmost point of the
telegraphic network, with instructions to remain there and wait for further
orders. It was no mere accident, therefore, that the Blanco should drop
anchor at Antofagasta bay on the 9th and that on the n t h the ANRC
manager, George Hicks, should seek refuge on board.47
The news from Antofagasta caused a great deal of anxiety and confusion
amongst the Valparaiso business community, and especially, of course, for
43
Antonio Vatas to Rafael Vial, 21 January 1879, in RCbHG, xxv, 29(1913), p. 435. Varas'
earnings as an A N R C shareholder amounted to £25 5 for the first half of 1879; cf. Jose
Besa to Antonio Varas, AN. FV., vol. 838, pieza 78, 22 October 1879.
44
Bulnes, op. cit., 1, 109.
46
Pakenham t o Salisbury, Confidential N o . 4, Santiago 1; January 1879, F O 16/202.
49
AGA, WG to AGS, 14 January 1879, M S ' "470/3.
47
Oscar B e r m u d e z , Historia del salitre desde su descubrimiento hasta la Guirra del Pacifico
(Santiago, 1963), p . 335; Bulnes, op. cit., 1, 118.

the ANRC shareholders. However, once the initial astonishment was over,
the Board launched a vigorous and, eventually, momentous campaign,
T h u s , ' Don Agustfn (Edwards) took the telegram (sent from Caldera with
the news of the confiscation) to the Intendente to telegraph up to the
Minister of Foreign affairs', in an effort to put additional pressure on the
government, which only the previous day had made clear its reluctance
to use force in order to pre-empt Bolivian actions. 48 A few hours later the
Board held a meeting to 'discuss matters, which had only just broken u p ' .
During that gathering:
Mr Puelma did not seem altogether as sanguineous as we should have expected
about the ultimate result of this affair; he says that there are some very influential
people in Santiago strongly interested in persuading the government to abstain
from supporting us energetically, such as Melchor Concha y Toro, the President
of the Chamber of Deputies, who is a considerable holder of Huanchaca shares,
which company's interests might be very much prejudiced by a rupture between
Chile and Bolivia; he (Puelma), advocated spending some money in encouraging
writers in some of the newspapers for articles of a patriotic nature, viz, on our
side of the questions, and thus was agreed, so we may expect the immediate
appearance of a series of such articles in a Santiago paper, likely El Ferrocarril,
and in a Valparaiso newspaper, probably La Patria.*9
That the Board meant business and that they were capable of acting
decisively and speedily was confirmed in the newspapers during the next
few days. They secured, for instance, the services of Isidoro Errazuriz, a
deputy, influential political personality and owner of ha Patria, a Valparaiso
newspaper which immediately engaged in the publication of articles and
editorials of a 'patriotic nature'. On the other hand, leading shareholders,
such as Edwards and Puelma, called at the presidential palace, 'La
Moneda', seeking full official support. 50
By the second half of January the Board had set up a powerful and
ubiquitous pressure group, active in lobbying Congress and 'La Moneda'.
Meanwhile, through the press, not yet unanimous in its treatment of the
diplomatic crisis, great pressure began to be placed on hesitant authorities
48
As note 46. The reference is to Agustin Edwards, businessman, deputy and the ANRC
major shareholder.
49
Ibid. There is no record on the amounts spent. Concha y Toro was a major shareholder
in the ' Huanchaca' and ' Exportacion y Mineria' companies, both operating in Bolivia
although registered in Valparaiso. John Mayo in his 'La Compani'a de Salitres de
Antofagasta y la Guerra del Paci'fico', in Historia, no. 14 (1979), pp. 72—102, and 'A
Company War? The Antofagasta Nitrate Company and the outbreak of the War of the
Pacific', in Boletitt de Estudios LMtinoamericanosy del Caribe, no. 18 (1980), pp. 3-12, based
on similar evidence, discusses the involvement of Chilean businessmen in the dispute.
His conclusions are different from this article's.
60
As note 46, and AGA, Lima to WG, 14 January 1879, MS 11121.

356 Luis Ortega
and politicians. According to Edwards, in political circles there were still

unfavourable attitudes towards the ANRC as well as towards an eventual
' chilenization' of the territory in question.51 Therefore, the press campaign
organized by the Board was aggressive from its very beginning and the
demands it put forward increased as the days went by. ElFerrocarril shifted
its discussion of the crisis from the broader context of Chile's global
foreign policy and argued that adherence to diplomatic means would lead
to even worse problems. The paper demanded the adoption by the
government of an 'energetic and decisive attitude' in response to the
supposed offence inflicted on the country by Bolivia. In that context, the
annexation of Antofagasta was seen as the only viable alternative.52 La
Patria almost completely abandoned its informative role in preference to
that of leader of a virulent propaganda campaign which did much to create
a warlike atmosphere in Valparaiso and Santiago. From the very start the
paper demanded from the government a policy of no concessions in its
dealings with its Bolivian counterpart, and the permanent annexation of
the territory between parallels 23 and 24. These demands were made in
the name of the nation's rights, rather than in relation to ' the material
interests which are the original cause of the dispute'.53
At the beginning of February Los Tiempos posed the following question
to its readers with regard to the Antofagasta problem: ' Who discovered
copper there? Who discovered silver? Who discovered guano? Who
discovered nitrate' ? Its reply was positive and conclusive:' We did' - and
added - ' We are sure that Bolivia will react sensibly. In the meantime let
us keep our gunpowder dry'. 54 During January only ElMercurio observed
a moderate attitude vis-a-vis the crisis. However, during early February
it too dropped its initial opposition to the use of force in preference for
a solution which included the 'recuperation' of Antofagasta by Chile.
Meanwhile, the group led by Melchor Concha y Toro did not reciprocate,
and so Gibbs' agent in Valparaiso could claim a complete victory for the
ANRC on that front.55
Diplomatic relations between the two countries deteriorated further
during the second half of January. The Chilean government did not change
its demands - abrogation of the 10 cents law and the return to the ANRC
61
As note 46.
52
loc. cit., 12, and 10-20 February 1879.
53
loc. cit., 24 January 1879; this paper's campaign lasted until the beginning of April.
64
loc. cit., ; February 1879.
65
El Mercurio, January to March 1879. Of special interest are the issues of 18 January
and those from 14 February onwards. Hayne's claim is in AGA, WG to AGS, 27
January 1879, MS 11470/3.

of its assets - whilst the Bolivian government now insisted on the

withdrawal of the Chilean naval force from its coast. The tension increased
at the beginning of February as the Bolivian authorities at Antofagasta
notified the ANRC that the auction of its assets would take place on the
14th. In a note to Alejandro Fierro, Nicanor Zenteno, the Chilean
Consul-General at Antofagasta stated that the notification had produced
a dramatic change in mood from the existing ' apparent calm' to a ' state
of silent agitation'. He added that it was highly unlikely that the 2,000
ANRC workers would impassably witness such an 'act of plunder', and
said that the state of affairs was so serious ' and such the alarm, that the
Company's manager has become extremely worried, and against his will
he has agreed with the Commander of the Blanco Encalada to adopt
some preventive measures in case his valuable interests come under
attack'.56
As the news of the forthcoming auction reached Valparaiso, some of
the ANRC Directors held a meeting with President Pinto, who had moved
his government to Valparaiso for the summer season. The president,
although fully aware of the serious implications of the latest Bolivian move,
told the Directors that, while there was no conclusive evidence that
negotiations in La Paz had definitely collapsed, he was not prepared to
use force and, therefore, would not intervene to stop the auction. Despite
that temporary setback, however, it become obvious to the Board that the
government had taken a decision as to how it was going to solve the
dispute, whereby the ANRC's case would constitute a good excuse upon
which it could support its case or pursue ' the big game they are playing
to annexe the debatable territory'. Nevertheless, the Board held yet
another meeting in order to discuss the pressure it would exert upon the
government to persuade it to recall Videla and stop the auction.57
It became apparent to outside observers that the course of events made
the chances of a peaceful settlement extremely weak.58 To what extent this
was the result of the campaign organized and financed by the ANRC is
only a matter for speculation, but it is interesting to note that during the
first days of February Francisco Puelma spent most of his time visiting
the government's offices at the Intendencia, and those of Edwards' and
the ANRC's. As far as the government's position was concerned, Gibbs'
66
MINREX (1879), 'Nota del Consul Jeneral de Chile en Antofagasta al Ministro de
Relaciones Esteriores, 6 Febrero 1879', Anexos, p. 49. Ibid., 'Nota del Ministro Chileno
en La Paz al Ministro de Relaciones Esteriores de Chile, No. 86, 12 Febrero 1879',
Anexos, pp. ; 5-6.
57
AGA, WG to AGS, 10 February 1879, M S "470/3.
68
Pakenham to Salisbury, Confidential No. 6, Santiago 10 February 1879, FO 16/202.

35 8 Luis Ortega
representative in Valparaiso had by then come to the conclusion that there

were two options being considered: some officials thought that if the
auction took place one of the Board members should place the highest bid;
others, led by the Minister of the Interior, Belisario Prats, argued that the
auction should be allowed to go ahead, since the government would have
its hands free to intervene militarily only after it had taken place.
Meanwhile, military preparations got under way. On 9 February the
corvette Chacabuco was despatched to Caldera with a contingent of naval
artillerymen and marines on board.59 This event caused great excitement
in Valparaiso, as reported by La Patria the following day under the
heading ' War Movements':
Yesterday's great event and the theme of all conversations has been the departure
of Chilean troops for the Bolivian littoral and the expectations created by the
forthcoming war. An immense crowd gathered yesterday at the Bolsa and Alvarez
piers to witness the embarkation of the artillerymen on their way to Antofagasta;
the enthusiasm was something difficult to describe and more than a thousand of
the spectators would have happily accepted the invitation to be taken to the war
theatre to defend the honour and the interests of the fatherland.60
Yet neither the national dimension already being given to the dispute
by the press nor the goverment's attitude served to calm the ANRC Board.
A number of doubts still permeated the group formed by the main
shareholders who, in turn, reflected the impact that the diplomatic crisis
was having amongst the elite. One of the major doubts of the British
shareholders, which still made them feel uncertain about the likely
outcome of the dispute, concerned Puelma, who, apart from being strongly
interested as a shareholder, was also involved in the campaign for the
forthcoming congressional elections as a government supporter. Although
heavily involved in the ANRC, it was thought that Puelma's loyalty
towards the government could lead him to side with the latter's position,
at least until the elections were over.61
However, all doubts and hesitations were superseded by the fruits of
the Board's own actions, which not only created a favourable atmosphere
for its claims, but outmanoeuvred the efforts of Concha y Toro and his
associates. With regard to the latter, it would seem that they limited their
efforts to warning the government about taking' any precipitate measures'.
In fact, there is no evidence that they were involved in a propaganda effort
59
AGA, WG to AGS, 12 February 1879, M S '«47°/3-
60
La Patria, 10 February 1879.
61
A s note 59.

anywhere near that of the ANRC, and their lobbying was rather limited
when compared to that of Edwards, Puelma and their associates.62
If anything, the Board increased its propaganda efforts between io and
14 February. Thus, in the early hours of 12 February a leaflet, the text of
which suggests that it had been written by Isidoro Errazuriz, was widely
distributed in Valparaiso inviting the 'portefios' to attend a 'patriotic
meeting' to be held at midday at the Pla^a de la lntendencia. The invitation
read:
In honour of our government and in vindication of an offended public opinion,
we can announce to the people that the glove thrown from La Puz has been picked
up, that our Legation in Bolivia has been withdrawn and that the commanders
of our troops in the north have received the order to be on the alert to occupy
the territory over which the tri-coloured flag of Chile waved in the wind before
1866.
Citizens: let us pay tribute to the government with our sincere applause and
let us give it our calm support, since we are assured that it does at present represent
the highest of natural feelings and is fulfilling the important duties the situation
calls for. Let the expression of a virile people, of the thousand echoes of the
meeting reach them, so that the people may feel pleased and well represented in
power, while the prestige, honour and interests of Chile are defended with
courage. Let us be seen and heard by those in authority to be displaying the
attitude that corresponds to the good children of Chile. Today, on the day of the
glorious anniversary of Chacabuco let us assemble in the Pla^a de la lntendencia
in a sufficiently large number to convince the government and America that Chile
is on 12 February 1879 inhabited by men who do not dishonour those who
sacrificed themselves for the fatherland on 12 February 1817. Citizens, attend the
meeting of patriotism, the meeting of courage, the meeting of reconciliation of
people and government.63
The meeting had, no doubt, been organized some days in advance,
which makes the leaflet's text interesting on more than one count. For the
first time the interests of the ANRC and those of the country were seen
to correspond in public and related to values such as the national honour
and prestige which in Chile had a long-standing social importance.
Secondly, it shows that it was written after the government had decided
to break off negotiations with Bolivia and to proceed to the occupation
of Antofagasta. In fact Puelma was at the lntendencia on 11 February when
a telegram from Caldera announced that the Bolivian government had
repealed the 10 cents law, but that it had also cancelled the grant of 1873
to the ANRC and was returning the lands concerned to state ownership.
The Chilean response was swift and sharp: Videla was given orders to leave
62
See note 55 and AGA, WG to AGS, 14 February 1879, MS 11470/3.
63
R e p r o d u c e d in La Patria, 12 F e b r u a r y 1879.

360 Luis Ortega
Bolivia immediately and instructions were sent to the Blanco's commander

to proceed to occupy Antofagasta. The news was conveyed by Puelma to
the Board only minutes after those momentous decisions were taken by
the Cabinet.64 He had, in fact, been as close as possible to power when
it most mattered.
At the public meeting, which was attended by a crowd of at least 6,000
people, the tone of the speeches was even sharper than the leaflet's
wording. Isidoro Errazuriz said that the situation facing the country was
' the genuine fruit of the weak and conciliatory policy' hitherto pursued
in foreign affairs, but now the gap between the nation and the government
had disappeared. He ended his speech saying that the government could
now count on unlimited support and co-operation from the country as well
as with 'the treasure of the nation's patriotism'. Yet he added that,
nevertheless, the government should ' keep in mind that it is being closely
observed by a nation determined to exert vigilance, to become one man
in order to crush selfish manoeuvres and influences . . .', without specifying
what they were. Another speaker, Maximo Lira, said that 'the Bolivian
conflict has occurred as a result of our withdrawal from Santa Cruz in
Patagonia; Bolivian insolence in the Pacific is the result of our weakness
in the Atlantic; on this side they have attempted to steal from us because
on the other we allowed ourselves to be dispossessed'. In short, from that
moment the dispute had acquired the characteristics of a national problem,
with the Chileans being the ones who were 'provoked, deceived, and
dispossessed'. Lira closed his speech by inviting the crowd to 'applaud
the authorities who are prepared to staunchly defend Chile's honour and
rights', but he added, ominously: 'We will curse those who would once
more listen to the advice of the weak'.65
The resolutions passed at the meeting suited the ANRC's aims perfectly.
First, it was agreed to ask the government to proceed actively and
energetically in support of the Chilean entrepreneurs ' exposed to unfair
taxation and hideous exploitation in the Bolivian littoral'; secondly 'to
make clear that such a purpose would not be entirely achieved until Chile
exercised the rights derived from repealing the treaty of 1874, according
to which she ceded that territory to Bolivia'. Finally, it was decided to
congratulate the government for its patriotic behaviour in abrogating the
treaty with Bolivia 'in response to the many violations inflicted upon it
by that country'.66
64
AGA, WG to Lima, 12 February 1879, MS 11470/3, provides an account of Puelma's
activities.
65
T h e speeches and resolutions were reported by El Deber, El Mercurio and La Patria,
66
13 February 1879. Ibid.

Once the meeting ended, the crowd, which included people from 'all
the social classes, from the aristocratic property owner to the humble son
of the people... many public figures... and even a representative of the
fair sex who with her presence wanted to show that in the bloodstream
of the Chilean mother there is more than a drop of the blood of the Spartan
mother', marched through the streets of Valparaiso chanting 'patriotic
hymns' and shouting: 'Let us go to war'; 'No mercy'; 'We have got
strong hands to defend the fatherland' and 'Long live Chile'.87
Amongst the many interesting aspects of that meeting there are a few
which deserve special mention. The first is the linking of the ANRC
problem to the long-standing territorial ambition over the territories north
of parallel 24; this would have important consequences in the shaping of
attitudes and policies during the following weeks. Secondly, there was the
assumption that the country was already in a state of war; hence the efforts
made by the speakers to incite a suitable collective response. It is true that
the attendance was relatively small (at the time Valparaiso's population was
some 100,000 inhabitants), yet it was held at the country's business centre
and, also temporarily, its political centre; such an unusual mass mobilization
may have had a strong impact due, precisely, to its exceptional nature.
Third, the gathering constituted clear evidence of the Board's efforts to
give a national and mobilizing dimension to their problem. There is
another aspect, of broader implications, which also merits attention; both
speakers insisted that the opportunity had come to restore Chile's
international reputation, badly tarnished by the way in which the border
dispute with Argentina had been resolved the previous year. Similar words
are to be found in the newspapers both of Santiago and Valparaiso during
those days, and this suggests that, to some extent, the elite was still
suffering from the 'Argentine trauma', resulting from its first major
international setback. An example of this is JLa Patria's leading article of
10 February. Under the heading 'Bolivian provocations and Chilean
readiness to compromise', the paper asserted in flowery language:
We are harvesting in the north what we have sown in the Atlantic, in the Straits,
in every point where there has been a conflict between Chile and her neighbouring
states. From the day we feared to chase the fugitive criminals from Punta Arenas
through territory under our jurisdiction; from the day we ignominiously moored
at Lota the ships entrusted with the enforcement of our laws and with the defence
of our rights; ever since we humbly tolerated the invasion and violations of our
soil by Argentine forces and discussed and approved a treaty of friendship with
the nation who had provoked and offended us, we should have been prepared
67
La Patria, 13 February 1879, article under the heading ' jA la guerra!'

362 Luis Ortega
to see our neighbours' insults, contempt and abuses piling upon us to the point
of making our international discredit unbearable.88
It is no easy task to determine if such statements were the genuine
expression of a collective feeling of frustration or rather the outcome of
skilful journalistic manipulation. Nevertheless, their publication added
weight to the mounting pressures for a military solution to the problem.
As to their effectiveness, it can only be a matter for speculation; the
newspaper readership in Chile at the time was very limited, but the press
played an important role in times of agitation.69 Such was the case in
pre-electoral times and, at least between January and April 1879, during
the crisis under study.
While agitation and patriotic fervour begun to dominate the streets, it
was reported to London that the Chilean government had finally decided
to look for a justification to intervene 'energetically' without having to
wait for the long-expected answer from La Paz. It was while the Cabinet
was discussing this delicate matter that the telegram from Caldera
arrived.70 As has been seen, the decisions then taken led to the military
occupation of Antofagasta, which took place on 14 February, the day
originally set for the auctioning of the ANRC assets. The Chilean troops
did not meet resistance on landing, rather they were greeted by an
overjoyed crowd of Chileans.71
The inevitability of the war

The news of the occupation of Antofagasta did not calm anxieties in Chile,
rather it gave a new dimension to the crisis in the north. On 16 February
Domingo Santa Maria, an influential deputy, ANRC shareholder, Minister
of Foreign Affairs from April 1879, anc^ President of the Republic between
1881 and 1886, wrote to President Pinto, his personal friend, insisting that
the occupation of Antofagasta should be permanent, since' moral triumphs
would not satisfy the people'.72 The same demand began to gain space
68
Ibid., 10 February 1879. "* C o l l i e r » op. (it., passim.
70 71
As note 64. Bulnes, op. (it., r, 120-1.
72
AN. FN., 'Varios', vol. 416, pieza 1, Santa Maria to Pinto, 16 February 1879. Santa
Maria had already made his views on the problem known to the Council of State; at
a meeting on 16 January, amongst other things, he said: 'We must not hesitate now.
For a long time now we have shown undue consideration towards Bolivia.. .Our
deference towards that country has given grounds for others to think of us as weak
or timid; and to tell the truth, as a result we have lost a good deal of our influence
in the Pacific, influence which we must exert, since it tends to regularize and bestows
some seriousness on the public affairs of other Republics'. Santa Maria's entire speech
is in, Santa Maria, op. tit., pp. 98—100.

and support in the newspapers. Thus, in an editorial in El Independiente,

Zorobabel Rodriguez argued that, in the event of a war, Chile ought to
proceed 'sensibly', obtaining all possible advantages from the situation
which she had been forced into. There was no need — in his view — for
a major military campaign, and he could not foresee any bloodshed if the
right number of troops was mobilized. According to Rodriguez, it was
of paramount importance to consolidate Chilean authority in Antofagasta
through permanent occupation, as an answer to Bolivian provocation and
to the expressed desires of Chileans living there. If that was the
Government's decision, it 'would have interpreted faithfully the public
feeling'. Los Tiempos, in another article of a 'patriotic nature' called for
a ' fast, decided and decisive war', as Chile's international life had become
intolerable and it was time that the authorities acted 'vigorously'.73
Demands such as these strengthen the hypothesis that, even before the
Chilean troops landed in Antofagasta, the annexation of the ' debatable'
region had become a goal for a majority within the elite. Thus, the land-
ing of troops was more than a move to protect threatened Chilean
entrepreneurs; it amounted to an expansionist drive which, eventually, was
to pull the country out of the doldrums. Yet the government's justification
for its actions remained that of protecting threatened 'national' interests.
In that conext, it could be argued that the Board had scored a major
victory: it had imposed its views on the rest of the elite and had secured,
by mid-February, almost unanimous support for its cause throughout the
country, not least that of the government. Evidence of the Board's success
in turning its problem into a national one was fully reflected in a
proclamation issued by the first Chilean governor of Antofagasta, which
ended:
Compatriots: What is the importance of the displeasures of the past if the present
and future of this soil is ours? Long live the Chilean government for it has
correctly interpreted the feelings of the Chilean industrialists who have suffered
so much under Bolivian rule.74
But, what were those so correctly interpreted feelings? Certainly they
were not those of the group led by Melchor Concha y Toro, whose vast
interests in Bolivia were now seriously threatened.75 Were they the relief
derived from the annexation of Antofagasta which meant the acquisition
of a new exportable commodity by the country? President Pinto seems
73
El Independiente, 19 February 1879; Los Tiempos, same date.
74
Reproduced in Pascual A h u m a d a M o r e n o , Guerra del Pacifico (8 vols., Valparaiso,
1884-92), 1, 57. 75 See above, pp. 18-19, an( ^ n o t e s 37 ant * 49-

364 Luis Ortega
to have made an accurate assessment of the aspirations of an important

part of the Chilean business community, which was now shared by many
politicians and the general public alike. In a letter to Joaquin Godoy,
Chile's diplomatic envoy to Peru, the president said:
Once established on the coastline it will be impossibleforus to abandon it.. .the
fact that in 1866 we ceded that territory to Bolivia has never been approved by
public opinion in Chile. To return to Bolivia the territory between parallels 23
and 24 would be considered here as the surrender of one of our provinces to a
foreign power.76
However, at the time it was known that the president had steadfastly
opposed any direct intervention by the government in the dispute prior
to the Bolivian authorites' confiscation of the ANRC's assets, to the point
of having rejected the idea of stopping the auction by force. His own
political views and values as well as his awareness of the precarious state
of the country's economy which, amongst other things, had forced a
reduction in the armed forces between 1876 and 1878, made him reluctant
to resort to armed intervention.77 His decision early in February to invade
Antofagasta leads one to question the reasons behind it. Although there
is no abundant evidence as to what moved the president to intervene, it
is likely that pressure from the ANRC Directors had an important bearing.
This could be considered successful on two counts: first, it mobilized press,
politicians and masses in their support, and secondly, it placed the
government in a difficult predicament whereby it was faced not with a
private grievance but with a 'national' and 'patriotic' demand, thereby
narrowing the options open to the president.
The outcome of the affair could not have been more favourable, at least
in the short term, for the ANRC. The day after the Chilean troops landed,
production at its plant in Antofagasta was resumed and a few days later
its confidence was further boosted when the government announced that
another 2,000 troops would soon leave for the north. Commenting on these
events, James Hayne wrote to his parent house in London, saying that
'as shareholders in the Antofagasta Co., we may congratulate ourselves
on the support and protection we have received from the Chilean
government', although he feared that some time would have to elapse
before matters settled down and the ANRC could consider itself 'quite
secure'.78
76
Ani'bal Pinto to Joaquin G o d o y , Santiago 21 February 1879, quoted in Bulnes, op. cit.,
1, 124.
77
Bulnes, op. cit., 1, 130-4.
78
AGA, WG to AGS, 27 February 1879, M S 11470/3-

In fact, despite recent governmental decisions, doubts still lingered

amongst the Valparaiso business community. A major source of concern
was the offer made by the Peruvian government during the third week of
February to mediate between the two countries. However, by then it would
seem that events had gone too far, to the point where the Peruvian offer
was received with scepticism, as it was thought' extremely improbable that
the Chilean government will now listen to any proposal of arbitration'.79
The hardening of the Chilean attitude became evident later in the month
when troops occupied the ports of Cobija and Tocopilla, to the north of
parallel 23, i.e. the territory originally under dispute. Popular reaction to
the news from the north reflected a great deal of expectation and tension.
The atmosphere at Valparaiso was described as 'war-like', with the
Cabinet being pressed by the newspapers to push north and seize Calama.80
Private reports noted that the press reacted strongly against the Peruvian
mediation and the possibility of a negotiated solution or a compromise,
some papers asserting 'very positively that the government must fall if it
admits any arrangement such as the last rumours have suggested'.81
By the beginning of March it seemed most unlikely that a negotiated
solution would be reached. The mediation of the Peruvian government,
tied to that of Bolivia by the 1873 Defensive and Offensive Treaty, was
seen as doomed.82 Not even the evidence that Peru was to side with Bolivia
in case of a formal declaration of war served to placate the bellicose
atmosphere in Chile's cities and towns. Furthermore, throughout March
the press began to point at the Peruvian government as the instigator of
the TO cents law, in an attempt designed to eliminate the competition from
the ANRC to the production of the state-controlled Tarapaca nitrate
fields.83
'• Ibid.
80
Ibid., 3 M a r c h 1879, M S " 4 7 ° / 3 -
81
Ibid., 10 M a r c h 1879, M S 1 1 4 7 0 / 5 .
8S
Ibid., contains interesting r e m a r k s a b o u t t h e possibilities of t h e P e r u v i a n mediation.
According to Bulnes, op. tit., 1, from the very beginning the Peruvian initiative was
faced by an 'insurmountable obstacle'. Whether the Chilean leadership knew about the
Treaty's existence or not has been a matter of controversy among historians. If they
knew, it means that the government was following a policy which would lead to war
with Peru. La F'atria made reference to the 1873 Treaty in its 7 March issue. Santa Maria
was given assurances about its existence by Rafael Vial, who wrote to him, saying:' The
Treaty exists'. Commenting on the Peruvian motives, he added:'... but they don't give
a damn about its existence. If they are against us it is because of the competition they
face from our nitrate; the Treaty is the pretext, nitrate is the motive'. Vial to Santa
Maria, Lima, 5 March 1879; quoted in Santa Maria, op. tit., chapter iv, in KChHG, xxxn,
36 (1920), p. 63.
83
See Vial's remarks in previous note.

366 Luis Ortega
On 5 April, fifty days after its troops had landed in Antofagasta, the
Chilean government declared that the country was in a state of war with
Peru and Bolivia. Bolivia had already done so in late February, and Peru
followed suit a few days later. All the Chilean ministers resigned the day
after war was declared, and on 14 April a new ministry was sworn in. Apart
from the Minister of War, Basilio Urrutia and the Minister of Finance,
Augusto Matte, the remaining three, Antonio Varas, Minister of the
Interior, Domingo Santa Maria, Minister of Foreign Affairs and Jorge
Huneeus, Minister of Justice, Worship and Public Education, were ANRC
shareholders. Varas was known to be very influential with President Pinto
having been his private adviser since his inauguration in 1876.84 This
influence increased as Chile's crisis worsened. Rumours which tipped
Varas as the next Minister of the Interior in a new cabinet in mid-1878
moved El Mercurio to comment. In an editorial headed 'Crisis of
Confidence', the paper affirmed that such a possibility ought to have
impressed public opinion, which, tired of so many problems, expected a
change which would bring some consolation and hope to the country.85
In Santa Maria's case, his power and importance were confirmed in 1881
when he succeeded Anibal Pinto to the Presidency of the Republic, at a
time when future presidents owed their nomination to the incumbent. His
appointment to the cabinet, given his views on the crisis, indicated that
the government had adopted an uncompromising course of action.
Although it would be erroneous to attribute the new policy exclusively
to the success of the ANRC shareholders in the furtherance of their private
interests, their opinions and proposals on the problem during February
and March must, no doubt, have had an important bearing on official
decisions. Their appointment to the cabinet could be seen as an ANRC
victory, and, once there, their views dictated official policy. By mid-April
the Chilean government had outlined its war objectives: permanent
sovereignty over the territory between parallels 23 and 24, and the
annulment of the treaty signed by Bolivia and Peru in 1873. However,
other aims were not defined so clearly. Although the government declared
that it was seeking a new regional order in which new conflicts such as
the one in question would not occur, it declared that although Chile was
not seeking to expand her territory at the expense of others, and that' her
intention is not - and has never been - that of adopting the role of
conqueror', the President and his ministers were of the opinion that this
84
El Mercurio, 15 April 1879. The reference to the Pinto-Varas 'special relation', is in
Armando Donoso, Kecuerdos de cincuenta arios (Santiago, 1947), p- 212.
86
El Mercurio, 3 July 1878.

policy could be modified considerably, depending on the course of events.

Accordingly, the Chilean government could find itself in a position of
having to 'modify the borders of Peru', thereby ensuring the country's
(Chile's) future external peace, by making it' impossible for Peru to become
a threat to the balance of power in South America'.86
In fact, the Peruvian province of Tarapaca, also rich in nitrates, soon
became an important element in the overall strategy of the Chilean
leadership. Therefore, from a military point of view the destruction of
Peru's navy and the subsequent occupation of Tarapaca became top
priorities.87 By the beginning of May, that is to say only a month after
the declaration of war and before any engagement had taken place, for the
Valparaiso business community it had become ' pretty evident that Chile
is looking at the Peruvian nitrate to indemnify herself for the expenses of
the war'.88
The new official Chilean line soon acquired the dimensions of a national
crusade and began to revitalize the nation's hitherto ailing spirit. In that
context, new hypotheses with regard to the origins of the War of the Pacific
can be formulated. They inevitably contradict traditional interpretations.
Thus, Gonzalo Bulnes' view that' two currents of opinion were in conflict
in Chile at the time, clashing against each other violently: on the one hand,
the populace, the masses, that entity which cannot be measured, vast as
the sea, liable as the sea to sudden tempests; on the other, the leading
personalities of the ruling class... who contemplated the possibility of a
war against Peru with the profoundest aversion, as public finances were
on the verge of bankruptcy', no doubt should be modified, as it still carries
some analytical weight.89
The evidence shows that the 'masses' were, in fact, encouraged and
asked to support the demands for intervention in Antofagasta, for
territorial expansion and, eventually, for a declaration of war precisely by
'leading personalities of the ruling class'. It is true that the latter did not
maintain a unanimous position throughout the crisis. Yet the group which
united in support of the ANRC proved to be more determined and
successful, finally achieving most of their goals. But it is interesting to note
that their opponents, Concha y Toro and his associates, adopted a different
position, not because of the precarious state of public finances; they were,
in fact, more concerned about the damage that a total rupture between the
86
'Acta de la Sesion de Gabinete del 19 de abril de 1879', in RChHG, xvin, 27 (1906),
8
7-8. ' Ibid.
88
AGA, WG to AGS, 5 May 1879, MS 11470/3.
89
B u l n e s , op. cit., 1, 134.

368 Luis Ortega
two countries would inflict on their private interests in Bolivia. As

mentioned above, they limited their efforts to warning the government
against taking 'precipitate measures'. Their lobbying was weak and their
objections ceased almost completely after Antofagasta was occupied.
Perhaps, once the broader objectives of official policy were outlined, it was
seen to be proper to cast aside their private interests and grievances and
join the 'national' war effort.
As far as the ANRC shareholders were concerned, despite some
temporary hesitations such as Puelma's, their lobbying never ceased until
the government announced its intention to occupy Antofagasta. Two
months later, however, their demands had been surpassed by the official
goal: the annexation of the entire nitrate region. Nevertheless the Board
had played a crucial role, first through their pressures and demands on the
government and then through the press. The latter's role in the crisis is
another point which merits some attention. As previously mentioned, the
papers had a reduced readership, but they were quite important in
influencing whatever public opinion there was in Chile at the time,
especially during critical times. In this particular case the press was skilfully
used in turning a private problem into a national one and in putting
forward radical proposals for a solution. Later on the papers were to play
a significant role in legitimizing the war and the government's policies,
as well as in giving a universal significance to the latter. It came as no
surprise, therefore, that in early May El Ferrocarril, an erstwhile staunch
critic of the government, declared that the entire nation was pledging its
' support to the Pinto government. The hour of sacrifice has arrived' - the
paper asserted - ' a n d Chile demands that each one should fulfil his/her
duties'.90
However, no analysis of the origins of the War of the Pacific should
rely on a unilateral interpretation, least of all on a conspiratorial one. The
causes of the war were many and involved, as its results were clear and
definite.91 Bolivia's policies, no matter how they are interpreted, played
a decisive part in the making of the conflict. The postures of different
Bolivian governments towards international issues were inconsistent, to
say the least; this made the occurrence of disputes with Chile a regular
90
El Ferrocarril, 10 April 1879. Provincial papers, reflecting 'popular' opinions, carried
a similar message. I am indebted to Sofia Correa for this information. See also William
F. Sater, 'Chile During the First Months of the War of the Pacific', in JLAS,v, 1 (1973),
133-58, on early disenchantment.
91
Harold Blakemore, British Nitrates and Chilean Politics, 1886-1S96. Balmaceda and North
(London, 1974), p. 14.

event. Ultimately, the uncertainty about the best way to deal with Bolivia
played into the hands of those Chileans who had always entertained the
idea of annexing the territory between parallels 23 and 24.
Another factor which contributed to bring about the 1878-9 crisis was
the political situation of the Antofagasta territory which, although
allegedly Bolivian, had an overwhelmingly Chilean population. The
entrepreneurs who controlled the most important economic activities in
the area were also Chilean. Bolivian governments had never been capable
of asserting their sovereignty over Antofagasta, yet in 1878 one of them
chose to alter the terms of the activities of Chilean citizens established there
without considering what the implications of such a move would imply in
terms of relations with Chile.92 In Chilean eyes, therefore the occupation
of Antofagasta in February 1879 amounted to an overdue settlement of
a long and protracted problem. With regard to Peru, many Chileans firmly
believed that her government had induced that of Bolivia to pass the 10
cents law in order to eliminate the ANRC as a competitor in the nitrate
market. Furthermore, Bolivia and Peru had offended Chile's dignity and
honour by signing the 1873 treaty, as this was regarded as a direct threat
to the country. All those factors called for determined defence of the
'national interest', according to the Chilean government. Its conduct
throughout the dispute, it claimed, had been adequate, and it could also
count on the moral support derived from its scrupulous observance of its
international obligation.93
The role of foreign interest in the War of the Pacific was also, for a time,
the subject of much debate, especially an alleged British involvement with
Chile. This view was carried to extremes by the United States Secretary
of State, the notorious J. G. Blaine, who maintained that the conflict was
an English war against Peru with Chile as the instrument. Many writers,
especially those sympathetic to Peru and Bolivia, enthusiastically adhered
to that line of interpretation. But some thirty years ago such a view was
conclusively refuted by V. G. Kiernan.94 As far as private British interests
were concerned, even Gibbs' role during the weeks prior to the occupation
92
See ' Esposicion de los motivos que justifican la r e v i n d i c a t i o n por parte d e Chile del
territorio c o m p r e n d i d o entre los paralelos 23 y 24 de latitud sur. Circular a los
Honorables Ministros diplomaticos en Chile. Ministerio de Relaciones Esteriores de
Chile' in Ahumada, op. cit., 1, 64-74. O n t h e political situation in Antofagasta prior
to the Chilean landing, see Oscar Bermiidez, 'Historia de la Municipalidad de
Antofagasta, 1872—1885', in RChHG, no. 126 (1958), pp. 235—86.
93
' E s p o s i c i o n . . . ' , op. cit.
94
V . G . Kiernan, ' F o r e i g n Interests in t h e W a r o f the Pacific', in Hispanic American
Historical Review, x x x v , 1 (1955), p p . 14-36.
13 LAS 16

370 Luis Ortega
of Antofagasta seems to have been rather limited, if not totally marginal,

to that of the Chilean shareholders in the ANRC. The latter's success in
securing domestic support made it unnecessary for Gibbs to seek protection
from the British government, which in any case would probably not have
been granted as the ANRC had Chilean majority control and was registered
in Valparaiso. Certainly Gibbs reacted strongly when faced with the 10
cents tax and participated in the discussions held by the ANRC's Board
of Directors, but its final siding with Chile, when Peru became directly
involved in the conflict, was only decided after considering all the factors
involved, a process which led them to the conclusion that their interest
rested 'more with the Chilean than with the Peruvian side of the
question'.95 That decision reflected above all Gibbs' preference for the
Chilean trade policy, which was more stable and liberal; in fact, their long
commercial and financial dealings with Peru, official and private, had not
been very happy.96
The line of analysis which attributes a leading role to foreign interests
in the origins of the War of the Pacific is not only misdirected but
misleading. It ignores the Chilean elite's power and resilience, which
allowed some of its members to articulate a far-reaching response to their
own crisis and to the breakdown in diplomatic relations with Bolivia. From
this point of view, it is also important to consider the predicament of those
entrepreneurs directly involved in the dispute and their responses to it.
Many of them, if not all, were involved both as politicians and entre-
preneurs. The evidence of their deep concern about the overall crisis and
its multiple effects on the country is varied and abundant.9' In the case
of the ANRC's major shareholder, Agusti'n Edwards, as well as that of
some of his partners, the effects of the economic crisis had been a source
of uneasiness and distress from as early as 1877, especially in one key area:
copper exports. The sharp decline in the metal's price inflicted a severe
financial blow on 'Don Agusti'n', which meant the abandonment of his
ambitious scheme to set up a business concern in Great Britain with a
paid-up capital estimated at £2 5o,ooo.98 In fact, for Edwards and others
nitrate had become a way of keeping their external connections alive.
86
AGA, WG to AGS, 28 March 1879, MS 11470/3.
96
Ibid. The Times, 10 and 20 May 1879, discusses the conflict from the point o f view o f
British commercial interests in the region, opting for the Chilean trade regime. Gibbs'
involvement in Peru is analysed by William Mathew, The House of Gibbs and the Peruvian
Guano Monopoly ( L o n d o n , 198 i ) , passim.
97
See Cifuentes, op. cit., n, 150-60. Anibal Pinto's correspondence and ' Apuntes' are also
very revealing on the subject, as are the editorials in the press of Santiago and Valparaiso
from 1877 onwards.
98
AGA, WG to AGS, 3 January 1878, MS 11470/3.

Chilean Nitrates and War 371
For other influential Chileans, Bolivian policy towards the ANRC was
in a way reminiscent of their own experiences in Peru between 1873 an<^
1875, when its government took control of the Tarapaca nitrate oficinas.
In 1873 t n e nominal investment in that area by companies registered in
Chile was of the order of £1,200,000." Therefore, when in 1875 the
Peruvian government finally nationalized the industry, the Valparaiso
business community reacted angrily against the prejudice they felt had been
inflicted upon them.100 In fact, some of them began to air their grievances
again in January 1879 an<^ joined the ANRC's campaign. In the light of
this, the entrepreneurial and economic considerations which had a bearing
on the origins and actual course of the war acquire a new dimension. In
fact, the argument which claims that those who had been expropriated in
Tarapaca and those about to be so in Antofagasta joined forces with the
aim of giving a global answer to the nitrate question and thereby to the
country's acute problems, once more deserves consideration.101 Amongst
those who had experienced expropiation in 1875 were Benicio Alamos
Gonzalez, Jose Manuel Balmaceda, Enrique Cood, Miguel Cruchaga,
Alberto and Enrique Edwards (close relatives of'Don Agusti'n'), Ramon
Garcia-Huidobro, Ramon Larrafn, Marcial Martinez, Manuel Montt
Torres and others. All of them had a considerable political influence, and
Balmaceda, as will be seen below, had very clear views as to the future
of the nitrate region. The group on the verge of being expropriated by
the Bolivian government included, along with those already mentioned,
Senator Luis Pereira, Colonel Cornelio Saavedra, Rafael Sotomayor
(former Minister of Finance and Minister of War from October 1879 u n t il
his death in 1880), Eugenio Vergara, Jose Francisco Vergara
(Sotomayor's successor in the War portfolio), Julio Zegers, Minister of
Finance until mid-1878, Enrique Cood, and some other leading public
figures.102
It is highly probable that while in office or in Congress some of these
men did not make any distinction between their interests and those of the
country as a whole. Eventually this came into the open when the fortunes
of the group directly involved in the Antofagasta dispute were publicly
99
Ortega, 'Change...', op. cit., appendix 1, lists the companies and their shareholders
at the time of their incorporation. O'Brien, op. cit., chapter i, analyses their evolution.
100
ACA, WG to ACS, 6 August 1876, MS 11470/1. See below note 108.
101
Ortega, 'Change...', op. cit., pp. 486—7.
102
Ibid., a p p e n d i x 1, p p . 5 0 3 - 1 5 , s h o w s t h a t a c o n s i d e r a b l e n u m b e r of c o n g r e s s m e n h a d
acquired 'nitrate' shares; Edwards controlled 42% of the ANRC shares. In 1872
Puelma held 34%; between 1872 and 1879 the share stock was raised from 2,500 to
5,000, cf. ANRC, 'Memorias', 1872 and 1879.
13-2

372 Luis Ortega
linked with those of Chile. Yet it would be more to the point to consider
whether these men believed that an international military campaign could
open a way out from the difficult situation the country was living through.
Did they think that the acquisition of the nitrate region would revitalize
the country's flagging external connections and, therefore, ensure the
preservation of the existing socio-economic order? For a majority, if not
for the entire elite, it had become evident by the end of 1878 that the export
cycle based on copper, silver and foodstuffs had come to an end, as those
commodities were being driven out of their most important foreign
markets. In the eyes of the foreign business community it was unlikely
that an improvement would take place before mid-1880, and they were
at pains to ascertain from whence it would come.103 Therefore, the
question remained as to how the country was going to maintain its crucial
links with the international economy. A complete severance of these would
have had the most serious consequences for the country's economic and
social structures. Such a situation would probably have led to reforms
which would have altered the existing power structures, threatening the
elite's hegemony, and that was clearly unacceptable.104
Politicians of every persuasion seem to have been fully aware of the
benefits which could accrue for the country from the exploitation of
nitrates by its nationals. Support for the government, as long as it kept
an unyielding stance in its determination to take permanent possession of
Antofagasta, cut across party lines. Only isolated voices expressed their
opposition to the use of force. From a different point of view, the fluidity
achieved in the relationship between government and part of the private
sector during the three months prior to the outbreak of the war was most
remarkable; it reached a climax on 14 April with the appointment of a new
cabinet in which ANRC shareholders were a majority. Their virtual
control of the government was doubly important: they had, as shareholders,
been collectively responsible for the intense pressure put upon the
president and the previous cabinet by the ANRC's Board of Directors in
its search for a kind of support which would inevitably lead to an
international confrontation; secondly, they introduced an approach with
regard to the role of nitrate in the Chilean economy which seems to have
103
AGA,WGloAGS, 1 August 1877, MS 11470/'2; ibid., jo October 1887, MS 11470/2;
ibid., 15 July 1878. Archives of Balfour, Williamson & Co. Ltd, University College
London Library; Stephen Williamson Letter Book No. 3, Williamson to Williamson
Balfour, Valparaiso, Liverpool, 20 October 1878.
104
See Ortega, 'Chilean Economic Policy...', forthcoming.

been crucial in the definition of the war objectives. So thin was the line
dividing public and private interests that once the war got under way the
man who had been the link between the ANRC and the government,
Francisco Puelma, was sent with Rafael Sotomayor to Antofagasta. Both
travelled as governmental 'private agents' to observe the situation and
discuss plans for the forthcoming campaign with the military chiefs already
stationed there. It is true that Puelma had a unique knowledge of the
region, yet his advice was inevitably influenced by the posture he had
adopted during the months prior to the outbreak of hostilities as well as
by his views on the role of nitrate in Chile's economic future. Puelma and
Sotomayor kept the government informed about the steps being taken to
organize the expeditionary army, and both were of the opinion that more
troops were needed urgently. In mid-May, Puelma wrote to Minister Varas
warning him that, although the thought was alarming, it was necessary
to become accustomed to the idea that the war would reach vast
dimensions and that it 'might well be the case that we will need to raise
the Army to 20,000 soldiers'.105 Thus the idea of a prolonged and large-scale
war took shape and was cemented at a very early stage.
However, popular wit in Antofagasta had already elaborated its own
interpretation of the Chilean objectives behind the war. In early April a
letter reported: ' Ya hay gente que pregunta por aqui: ^se hace la guerra
por la "patri" o por el "salitri"?' 106
In a more sophisticated and articulate way, leading politicians, all
partisans of the annexation of the nitrate region, had their own answers
to the many questions about the origins of the war. In a speech in the
Chamber of Deputies, Jose Manuel Balmaceda warned:
We cannot and should not forget at this crucial time the supreme national,
industrial and historical interests at stake in this conflict. Chile and Peru are bathed
by the waters of the Pacific, they occupy vast territories on its shores and are the
only states on that seaboard whose capital cities and ports are close to the coast.
Therefore, from the Isthmus to Cape Horn, Santiago and Valparaiso in Chile and
Lima and Callao in Peru are the centres of population, activity and progress on
that coast. Our historical and industrial traditions, our natural and inevitable
rivalries give to this war characteristics which demand the deepest attention from
the patriot and the statesman.
105
Q u o t e d in Bermiidez, Historia, op. cit., p . 391.
106
Colonel Jose Velasquez to Jovino Novoa, Antofagasta, 12 April 1879, in KCbHG,
xxv, 29 (1913), p. 367; a play on words based on the northern accent. It could be
translated as:' There are people who are already asking whether the war is being fought
for the fatherland or for the nitrates.'

374 Luis Ortega
Balmaceda's words were a reminder that the Chilean elite's long-standing

hegemonic aspirations in the western south Pacific were still vigorous. But
he also reflected upon the origins of the war in a way which characterized
the event and gave it a definitive sense of purpose, at least for one sector
of the ruling class. According to Balmaceda, there was:
an industrial interest also linked to the (nitrate) territory. Chilean capital and
labour developed the Peruvian nitrate deposits, and for this reason we were
expelled from that country in 1874. Chilean capital and labour developed the
Bolivian nitrate deposits, and that was also the reason behind the attempt made
by the Bolivian authorities to expel our compatriots from there in 1879. Yet there
was something else behind that move; since new nitrate deposits had been
discovered in Chilean territory, the 1879 manoeuvre was designed to set up a
Peruvian nitrate monopoly through the acquisition of the entire nitrate region.
However:
Justice and fate have worked in such a way that all the areas in the world known
to date to contain nitrate deposits are now under Chilean rule. That rule must
be, and will be, permanent. And all the territories which contain nitrate deposits
must be Chilean because of a fundamental reason which admits no question...
without them we would not have the means with which to heal the wounds that
the war has inflicted on the public coffers. We would have a nitrate industry, but
(if Tarapaca was handed back to Peru) it would be faced by competition which
would bring about instability and results impossible to determine with any degree
of certainty. Therefore, Tarapaca must be Chilean. Where would be our
northernmost border? This is a crucial question of immense future importance.
From the point of view of the nitrate industry, at the river Camarones. But the
same criterion does not apply to the geographical considerations of the
problem.107
The economic and geopolitical reflections contained in Balmaceda's

speech make any further comments superfluous. Yet to what extent did
his words represent a commanding opinion within the elite? This is a
question for which there is no easy answer. However, it would seem that
they had a positive reception in political circles: exactly a year later
Balmaceda was appointed Minister of Foreign Affairs in President Santa
Maria's first cabinet. In that capacity he wrote an extraordinary document
in which he expounded the basic tenets of his 1880 speech. In a circular
to all Chilean diplomatic agents Balmaceda declared that:
For self-evident and legitimate reasons, Chile's security required territorial

expansion. The nitrate territories of Antofagasta and Tarapaca were the real and
direct causes of the war.
107
Camara de Diputados, Sesion Ordinaria, 21 September 1880.

Following on from this important statement, and in direct reference to

the failure of the mediation of the United States government in 1880, which
proposed the return by Chile of all the territories she had occupied
(Antofagasta and Tarapaca) to her enemies, the minister added:
Returning the very cause of the conflict to enemy control, after our triumphs and
the occupation, would be unjustified and would show a total ignorance of the
sort of knowledge statesmanship presupposes.
Balmaceda went on to refer to the historic causes which had unleashed
the war; in this view the latter was the 'logical result of a series of
transgressions committed by Peru and Bolivia against Chile since 1873'.
The minister held Peru responsible for being behind many manoeuvres
which were not only damaging to Chile's material interest, but which also
constituted a blatant violation 'of the most elementary principles of justice
and public morality'. While referring to the treaty of 1873 and to the 10
cents law, he made it plain that the aggression against Chilean interests
had started when:
Peru passed and enforced the pernicious 1873 laws which took away from us the
capital and the fruits of the labour with which we had contributed to the formation
of the nitrate industry... a flagrant violation of the principles upon which
international law concerning private matters is based and an open affront to public
trust, under the protection of which our nationals poured over the arid soil of
Tarapaca their wealth and the sweat of their brows.108
Balmaceda's words do, in fact, pose many questions, not only with re-
gard to Chilean foreign policy itself but, and this is perhaps more impor-
tant, on the broader question of the oligarchy's overall view of territorial
matters and the balance of power on the Pacific coast of South America.
With regard to Antofagasta, as previously mentioned, the terms of the
boundaries treaties of 1866 and 1874 were seen in Chile as implying the
cession of that territory to Bolivia. Those feelings were intensified after
the discovery of silver at Caracoles in 1870, as it was mostly Chilean capital
and labour which undertook the exploitation of those deposits. The
negligible Bolivian presence throughout the area only served to confirm
the view held by many in Chile that for practical reasons Antofagasta was
closer to Chile than to its legal owner. Such a conclusion persuaded many
to think again about the future of the territory. As early as 1872, the British
Minister to Chile reported that the Chilean presence in Caracoles, together
108
' El Ministro de Relaciones Esteriores de Chile a las Legaciones de la Repiiblica en
el estranjero. Circular. Santiago 24 December 1881.'In MINREX (1882), anexos,
pp. 47-59.

376 Luis Ortega
with their exploitation of nitrate near Antofagasta, made more likely the
occurrence of further disputes between the two countries and that these
would probably not be resolved by diplomatic means.109 In fact, such a
possibility was publicly discussed in Chile. On 2 October the Mercurio del
Vapor reported on what the British Consul in Valparaiso described as the
'most remarkable incident in Congress... the somewhat imprudent
"interpellation" addressed by deputy (Miguel) Cruchaga to the Minister
of Foreign Affairs, Sefior (Adolfo) Ibanez'. The deputy, concerned about
hostilities towards Chilean nationals and interests in Antofagasta, asked
if, in response, the government would be prepared to make 'a show of
strength on the Bolivian coast or if it (had) decided upon any other
measures'. Cruchaga was anxious to know whether the Minister could give
assurances that Chilean entrepreneurs would continue to enjoy their
current 'immunities, without fear of any detrimental privilege or com-
petition '. In his view, in order to secure the current state of affairs, the
Chilean government should assert some form of authority in Antofagasta
or, 'under the terms of the Treaty of 1866, it may recover those lands'.
Ibanez did not answer the more pressing questions and limited himself to
stating that, as far as the current status of Chilean business in Antofagasta
was concerned, it was up to the Bolivian government to answer whether
this would be maintained.110 From time to time the subject of a probable
annexation of Antofagasta found its way back to the newspapers. In
February 1877, El Mercurio devoted an editorial to refuting rumours
reported in the Bolivian and Peruvian press to the effect that Chile wanted
to annex the province of Antofagasta.111 That the topic was discussed
throughout the 1870s suggests that some individuals in Chile entertained
the idea of redrawing the political map of the Atacama desert. Therefore,
when at the beginning of 1879 t n e diplomatic crisis between Chile and
Boliva erupted the problem appeared as a key demand amongst those put
forward by the people campaigning for and on behalf of the ANRC.
Returning to Balmaceda's circular, this also indicates that public and
private interests were closely linked in Chile at the time. A threat against
a private concern operating beyond the national borders prompted a swift
reaction from the government; and that was seen as a legitimate action
in defence of the ' national' interest.
It was Isidoro Errazuriz who put the whole episode in a perspective
which indicates that there was more than a mere legal dispute involved
109
Thomson to Granville, Diplomatic No. 39, Santiago 17 May 1872, FO 16/172.
110
Same to same, Diplomatic No. 42, Santiago 30 May 1872, FO 16/172.
111
El Mercurio, 2 February 1877.

in its origins. According to Errazuriz, the war should be seen from a
broader point of view:
By a happy coincidence, without precedent in the history of nations, this war,
apparently fraught with danger, has been Chile's salvation; a business. The war
knocked on our door at the time when the most prolonged and disheartening crisis
had our industry and trade in a state of prostration; when the lack of work had
brought hunger and despair to many homes; when for the same reason crime had
multiplied; in other words, at a time when even on the calm horizon of our
imperturbable internal peace clouds were beginning to gather. The war has changed
everything: it has opened an immense area to the entrepreneurial verve of our
citizens and has revived our vitality.112
Chile had, indeed, recovered many things — not least her hope in the
future.
Conclusion
The question of the origins of the War of the Pacific remains an open one
and the underlying Chilean motives are still a matter of controversy.
Certainly, the causes of the war were many and involved: economic,
political and juridical questions all played their part in bringing about the
conflict. However, if one factor, or set of factors played a key role in that
process, then these were the economic and social variables, and it is on
their analysis that the historian should focus his attention. The long-term
causes of the war are to be found in the complicated history of relations
between Chile and Bolivia, which had for a long time been marred by
disputes over the sovereignty of the Antofagasta region. Yet all the
disputes which arose from 1842 onwards involved a specific issue: the
presence of Chilean entrepreneurs in the area. In other words, whatever
quarrel there was between the two countries, this could be traced back
to economic and entrepreneurial problems. The passing of the 10 cents
law by Bolivia's National Assembly in February 1878 started a diplomatic
crisis which made possible the re-emergence of old rivalries which finally
led to a full-scale war.
As seen above, the background to the dispute in Chile was a critical one.
The country's economy was undergoing a decline which seemed
irreversible and even its social fabric was apparently in jeopardy. In this
context it does not seem altogether improbable that the ruling class, once
its divisions were healed, decided to pin its hopes for a way out of the
situation on an option which involved the use of military force.113
112
Camara de Diputados, Sesidn Ordinaria, 9 August 1880.
113
O'Brien, op. cit., p. ; o; see also Robert N. Burr, By Reason or Force. Chile and the Balancing
of Power in South America, iSjo-ipo; (2nd edition, Berkeley, 1974), pp. 135-66.

378 Luis Ortega
Moreover, the likelihood of this was at the time discussed in the

international press. Thus, for one paper it seemed that despite Chile's
well-earned reputation as a 'model for her neighbours', a bellicose mood
had possessed the country during the first months of 1879 leading to the
'quarrel with Bolivia'. Furthermore, the crisis had disturbed 'Chilean
equanimity' so a ' little diversion (the war) has been made for the purpose
of ignoring more serious problems'. 114
Whether this was true or not, and it was certainly not entirely true, once
the war got under way Alberto Blest Gana claimed that the time had come
when Chileans should not spare any effort to achieve what the fatherland
demanded: not just a victory, but 'the country's salvation' .1U The diplomat
may have correctly interpreted what was at stake for his country in that
conflict. The Chilean elite's own opinions suggest then that the War of
the Pacific had more than a purely politico-military content. The enthusiasm
with which the official declaration of war was greeted throughout the
country is but one indication of this. Yet this very response had been
nurtured by the media and leading politicians for some time.
El Mercurio, one of the few newspapers, if the only one, which at the
beginning of the diplomatic crisis refrained from fanning the flames of
public opinion in favour of the occupation of Antofagasta and the war,
reflected on what were, perhaps , the real dimensions of the conflict; under
the heading ' All that is needed', the paper asserted:
If the celebrations and merriment born of patriotic enthusiasm did not also contain
the bitter taste of uncertainty and doubt, we would be entitled to say that
happiness, for such a long time absent from our beloved land of Chile, is back
embellishing and presiding over our destiny. For who does not dream of victories
to lift the national spirit from the torpor in which the country has been submerged
to the point of almost losing the memory of its glorious past - a torpor caused
by invidious weak-mindedness on the one hand, degrading misery on the other,
and above all corruption, which for so many years has filtered down from the
highest echelons of power throughout the whole society? Nobody is in a better
position than the government itself to say whether or not this is true. Abandoned
yesterday by public opinion, weakened by the sheer weight of its own mistakes,
without a single bond to link it with the people's heart, all that it needed was
to exchange timidity for energy and passivity for action so that everybody,
without exception, would hasten to show that there are no sacrifices, whatever
they may imply, that the people are not prepared to make in order to defend Chile's
rights and dignity.116
114
The South American journal, 22 March 1879.
115
AN. FN., 'Varios', vol. 413, pieza 14a, Blest Gana to Pinto, Paris 16 June 1879 (my
italics).
116
El Mercurio, 24 February 1879.

The change in collective mentality, which was to launch the country

into her most successful international campaign, was already evident by
mid-February 1879. What was the ANRC's contribution in bringing it
about? There is no certain way of assessing the real impact of its
propaganda campaign; certainly it was not the only factor which paved
the way for a revival of the 'national spirit'. Yet its significance cannot,
in fact must not, be minimized or ignored.117
The final question, as to whether the events leading up to the war and
its actual outbreak provided the elite with the solution to the crisis it had
long sought for, remains an open one. Even if the war was not a
consciously chosen way to extract the country from its dire predicament,
it did in practice serve that purpose. Some authors have even asserted that
the war averted a potentially explosive domestic situation.118 Whether this
was the case or not, it also remains an open question. But what is beyond
doubt is that from 1879 onwards, once again fortune began to smile on
Chile. The war produced a dramatic change in the country's evolution:
it removed worries about the delicate economic situation from the debate,
and introduced demand factors and fiscal measures which helped to
reactivate the economy. From a social point of view it constituted a catalyst
which united the population behind a common goal. Thus, faith in the
future was swiftly recovered and the nation, hitherto suffering from the
traumas caused by political and social tensions and uncertainty, became
a united entity, striving to restore its former stability and to conquer new
heights of international recognition. These achievements were of great
benefit to the elite as they provided an ideal end to the crisis. The conquest
of Tarapaca and Antofagasta provided the country with a commodity
which had excellent prospects in the international market, thus ensuring
the maintenance of the external connection. New markets for the depressed
agricultural sector were opened and, most important, a new source of
public revenue was found which made the unpleasantness of a tax reform
unnecessary.
117
Ravest, op. cit., p. 18, argues that 'what was really defended by our government in
February 1879 were values which cannot be expressed numerically or in economic
terms: Chile's dignity and honour'. A more balanced view is Harold Blakemore, 'The
Politics of Nitrate in Chile: Pressure Groups and Policies, 1870-1896. Some
Unanswered Questions', in Revue franfaise d'histoire d'outre-mer, LXVI, 244-5, ('979)>
pp. 286-99. Another view on Chilean motives is in Thomas M. Bader, ' A Willingness
to War: a Portrait of the Republic of Chile during the years preceding the War of the
Pacific' (unpublished Ph.D. dissertation, University of California, Los Angeles, 1967),
passim.
118
Discurso de S.E. el Presidente de la Reptiblica en la apertura del Congreso Constituyente de 1891,
(Santiago, 1891), p. 7, was the first to expound this view. See Bader, op. cit., pp. 114,
el. seg.

380 Luis Ortega
The evidence indicates that despite the severe effects of the crisis of the
1870s on Chilean society, the oligarchy's resilience allowed that social
sector to surmount the most serious challenge to its rule and emerge
victorious and re-invigorated from a most demanding war. It seemed
appropriate, therefore, that some decades later President Anibal Pinto was
described as:
the president who created more wealth than ever before, who had taken over an
impoverished country facing serious economic problems, but left office leaving
her loaded with wealth and glory.119
In fact, the War of the Pacific put an end to the crisis, at least for the
time being.
119
In Donoso, op. cit., p. 214.

Nitrates Chilean Entrepreneurs and The Origins of The War of The Pacific

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Nitrates Chilean Entrepreneurs and The Origins of The War of The Pacific

Uploaded by

Copyright:

Available Formats

J. Lat. Amer. Stud.

i6, 337-380 Printed in Great Britain 337

Nitrates, Chilean Entrepreneurs and the

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

Chile during the second half of the 1870s

Until the mid-1870s the Chilean economy experienced a period of

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

The repercussions of these events on the fiscal structure were serious.

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

Table 2. Some items of Chilean public finances 186J—18J9

1875 2,908,213 3,121,881 57O.375

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

Crisis in the North

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

by Hayne. Puelma, a deputy, personal friend of President Pinto, confidant

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

future, sometimes I become depressed by events and I have to make an effort to

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

and politicians. According to Edwards, in political circles there were still

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

of its assets - whilst the Bolivian government now insisted on the

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

representative in Valparaiso had by then come to the conclusion that there

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

Bolivia immediately and instructions were sent to the Blanco's commander

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

The inevitability of the war

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

and support in the newspapers. Thus, in an editorial in El Independiente,

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

to have made an accurate assessment of the aspirations of an important

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

In fact, despite recent governmental decisions, doubts still lingered

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

policy could be modified considerably, depending on the course of events.

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

two countries would inflict on their private interests in Bolivia. As

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

of Antofagasta seems to have been rather limited, if not totally marginal,

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press

Balmaceda's words were a reminder that the Chilean elite's long-standing

The economic and geopolitical reflections contained in Balmaceda's

For self-evident and legitimate reasons, Chile's security required territorial

https://doi.org/10.1017/S0022216X00007100 Published online by Cambridge University Press