In the stormy period of the ’seventies, when expenditure on public services was heavy, and, also, railroad building was developed, deficits were common; but by 1880 receipts had risen to over 40,000,000 pesos, and a balance of nearly 13,000,000 over expenditures was left in the treasury.
In 1891 the public revenues of Chile for the first time reached—and exceeded by 5,000,000 pesos—the hundred million mark. In 1895 receipts reached 127,000,000 pesos, with 93,000,000 expenditure, in round numbers; next year, with an income of nearly 163,000,000 pesos, there was a surplus of 47,000,000, an agreeable record exceeded in 1901 when, with revenues of nearly 186,000,000, the balance left in public coffers amounted to more than 50,000,000 pesos. Both receipts and surplus rose in the next year, and in 1903 official statistics showed the remarkable figures of 210,000,000 income, with 91,000,000 on the right side of the ledger after expenses were paid. A slight drop was experienced in 1904, but in 1905 receipts went up to nearly 257,000,000 pesos, rising to 373,000,000 in 1907 and 458,000,000 in 1908. In 1911 a tremendous jump in public income was made, to 796,000,000 pesos: in this year the surplus rose to nearly 457,000,000 pesos. In the three following years there was a falling off from this satisfactory record, but the balance remaining in the treasury was always substantial, and until Chile was adversely affected by the international upheavals following the European War her treasury was in a condition that many wealthier nations might envy. But in 1919 the Government was obliged to record a deficit of over 60,000,000 paper, and in 1920 estimated a deficit of 89,000,000 paper pesos. The result of these unprecedented difficulties is to bring about a somewhat hasty series of plans for changing the tax system, with a view to obtaining larger revenues, and while heavy dues were placed upon the importation of luxuries, remodelling of the inheritance and land laws, and of the imposts upon industry and commerce was outlined. The fall of nitrate prices, and paralysation of the market, emphasised the fact that this industry is taxed to a disproportionate degree, while many other forms of activity are exempt. In 1915, for example, out of 134,000,000 paper pesos received in the customs houses, 85,000,000 were paid for nitrate exports and 1,000,000 for its by-product iodine, while of the gold receipts, amounting to 30,000,000 pesos, 29,000,000 were paid for the same output from the salitre fields.
CHAPTER XIII
CHILE’S NAVAL POSITION
Chile and the World War.—Strength of the Chilean Navy.—The Army.
The geographical situation of Chile, giving her a strip of coast twenty-eight hundred miles long, renders her acutely interested in the future of the Pacific. Command of the Strait of Magellan and the possession of an excellent fleet are guarantees of her ability to protect this interest.
In the wide affairs of this ocean, destined apparently to be the scene for the next trials of political if not of physical strength, the nations of the South American west coast have as yet had no voice, for while it is accepted as a matter of course that certain European countries, the United States and Canada, as well as Japan, Australia and New Zealand, should insist upon having their views heard, neither Mexico nor the countries of Central and South America are generally regarded as parties to the questions involved. With the development of national consciousness and the creation of well-equipped navies, a number of these countries will figure as coadjutors of increasing importance, and in the forefront of them Chile will, I am convinced, be found, ready and able to assume her share in the working out of a common problem.
Chile was physically affected by the great war. Not only was Easter Island used as a naval base by the German fleet, but her ports were used as refuges or supply stations by the ships of several belligerents. German shipping lay in Chilean ports, many German sailors were interned during the war period in Chile, and although her position was a passive one it cannot be doubted that the deep interest with which she watched events in the Pacific and the Magellanic archipelagos was much more than passive. So far as the Allies were concerned, their cause would have been little, if at all, served by the entry of Chile into the conflict against the Central Powers; it was Chile herself, with a possible post-war claim upon some of the steamers of the Kosmos line lying interned during the war in her ports, who stood to gain by a belated entry, and it is to the credit of her scrupulously correct neutrality that she refrained. A distinguished Chilean writer, Dr. Enrique Rocuant, published in 1919 a comprehensive study upon “The Neutrality of Chile: the grounds that prompted and justified it.” I think that no one who understood the situation, or the feeling that Chile sincerely exhibited, needed this explanation, however lucid and kindly, detailing as it does the absence of any such motive as brought Brazil, with her list of torpedoed vessels, to the Allies’ side, and setting forth the equity of Chile’s actions when faced by the acts of the belligerents in her territorial waters. There were, for example, violations of Chilean neutrality by various units of the German fleet at Easter Island and the Port of Papudo as well as in Cumberland Bay (Juan Fernandez); against these violations Chile vigorously protested; when the British Glasgow followed the Dresden, escaped from the battle of the Falklands into Cumberland Bay, found that vessel with flags flying and guns pointed and promptly sank her, Chile made similar forcible protests. But she accepted the British regrets and offer of satisfaction with very ready graciousness.
Two years after the close of the great war Chile became, as a direct result of her old and cordial relations with the British navy, in an unprecedentedly strong naval condition.
Strength of the Chilean Navy
In August, 1914, two dreadnoughts were building at Elswick for the Chilean Government, the Almirante Latorre and the Almirante Cochrane, the price of each vessel being £2,800,000. A number of fast destroyers, also constructed by the Armstrong Whitworth Company, formed part of the Chilean naval developments, two of these, the Lynch and the Condell, being already in Pacific waters when hostilities broke out. The dreadnought Almirante Latorre was completed speedily, taken over for British Government service, and did good work under the name of H. M. S. Canada during the four and a half years of the conflict; in April, 1920, she was repurchased by the Chilean Government, which obtained for the comparatively modest sum of £1,400,000 not only this fine vessel but three more destroyers, sister ships of the Lynch (the Williams Rebolledo, Simpson and Uribe) and a naval tug. About the same time the British Government also presented to Chile six submarines and fifty aircraft, a gift associated with British appreciation of the sympathetic attitude of Chile at the time when the exigencies of war brought about detention of the vessels under construction.