Spanish legislation gave a monopoly of South American commerce to a favoured ring of merchants at Cadiz, forbidding any communication with Chile except by the circuitous Isthmian route. Freights were enormous, profits and taxes exorbitant, and in spite of the repressive measures of the Spanish authorities, smuggling was carried on by way of the route over the Andes to Buenos Aires and Colonia. The war of the Spanish Succession, following the death of the last of the descendants of Charles V., disorganised Spanish administration, and during the confusion of the first few years of the eighteenth century illicit trading increased apace. The triumph of Louis XIV., and the seating of a French prince on the throne of Madrid, resulted in a temporary permission to French ships to trade with South America. For a time French manufactures were brought directly to Chile by way of Cape Horn. The customs receipts—hitherto merely nominal—rapidly increased, and although the license was soon revoked at the demand of the Cadiz monopolists, a permanent impetus had been given to commerce. Improving conditions gave a fresh start to immigration, and the comparatively rational policy of the Bourbon dynasty removed many of the more crying abuses of colonial administration. A little before the middle of the eighteenth century Governor Manso, with the approval of Madrid, founded a dozen cities scattered through all the provinces as far south as the Biobio, and settlements spread to the frontier of Araucania. Manso's successor, Rosas, was even more diligent in establishing new towns and received the title of "Conde de Poblaciones." He founded the University of San Felipe at Santiago, and stimulated commerce by opening a mint. In his administration occurred the great earthquake of 1751, which engulfed and destroyed Concepcion by a tremendous wave from the sea, and inflicted great damage upon Santiago and many other towns. These convulsions are very frequent in Chile and in early times people supposed that it was not safe to build houses of more than one story. It has since been ascertained that two-story edifices are as secure as lower ones and Chilean cities contain many handsome buildings.
Rosas' successor was Don Manuel Amat. Under his administration the erection of new cities continued, and he is remembered as the captain-general who helped suppress the robbers and bandits who had infested the country. Vigilance committees were organised, volunteer patrols guarded the city streets and country roads, and a coast militia fought the pirates who infested the seashore. Chile in the middle of the eighteenth century presents the characteristics of a frontier country—rapid founding of towns, disorders and lawlessness effectively suppressed by lynch law, and a childish display of newly acquired wealth.
The encroachments upon the Araucanians finally grew irksome to those indomitable and intractable savages. What the Spanish armies and priests had failed in, the settlers who poured into the fertile plains and valleys of southern Chile seemed about to achieve. The next captain-general even tried to incorporate the independent tribes into the Spanish system, but when he attempted to gather them into towns the spirit which had animated their forefathers proved too strong. A war broke out which lasted several years and ended only when the Spanish government renewed the treaties guaranteeing them practical independence, and allowing them to keep an ambassador at Santiago. Just about this time the trans-Andean province of Cuyo was separated from Chile and transferred to the newly created Buenos Aires viceroyalty. Taken purely for reasons of administrative convenience, this measure resulted in shutting off Chile from expansion over the vast plains of the Plate Valley, confining her between the Andes and the sea, and ultimately securing to the Argentine a territorial and numerical preponderance among Spanish-American republics.
CHAPTER III
THE WAR OF INDEPENDENCE
The last years of Spanish rule were the most prosperous Chile had known. A brisk coasting trade sprang into being; a small merchant marine grew up; the removal of the prohibition against free commerce with the rest of Spanish South America raised prices. The opening of Buenos Aires reacted upon her western neighbour, and Chile ceased to depend on the Isthmus route. A spirit of enterprise was awakened by a freer intercourse with the outside world and by the immigration of hardy adventurers who came through Buenos Aires, the great South American rendezvous of that day.