Señor Domingo Santa Maria, who now acceded to the presidency of Chile, was a Liberal in politics, and had previously held various important posts under the government. Under the rule of President Montt he had been an President Santa Maria. active member of the opposition and involved in various revolutionary conspiracies; for his participation in these plots he was at one time exiled from the country, but returned and received official employment under President Perez. The principal task confronting President Santa Maria on assuming the presidency was to negotiate a treaty of peace with Peru and provide for the evacuation of the Chilean army of occupation. The presence of the Peruvian general Cáceres and his forces in the interior of Peru prevented for some two years the formation of any Peruvian national administration in Lima with which the Chilean authorities could deal. In August of 1883 the Peruvians were defeated by the forces commanded by Admiral Lynch, and a government was then organized under the leadership of General Iglesias. A provisional treaty of peace was then drawn up and signed by General Iglesias and the Chilean representative, and this was finally ratified by the Chilean and Peruvian congresses respectively in April 1884. By the terms of this treaty Peru ceded to Chile unconditionally the province of Tarapacá, and the provinces of Tacna and Arica were placed under Chilean authority for the term of ten years, the inhabitants having then to decide by a general vote whether they remained a part of Chile or elected to belong once more to Peru. In the event of the decision being favourable to Peru a sum of 10,000,000 dollars was to be paid by Peru to Chile. On the ratification of this treaty the Chilean forces were immediately withdrawn from Lima and other points of occupation in Peruvian territory. The government of Bolivia also attempted to negotiate a treaty of peace with Chile in 1884, and for this purpose sent representatives to Santiago. No satisfactory terms, however, could be arranged, and the negotiations ended in only an armistice being agreed to, by which Chile remained in occupation of the Bolivian seaboard pending a definite settlement at some future period.
The administration of President Santa Maria met with violent opposition from the Conservatives, who included the Clerical party in their ranks, and also from a certain section of the Liberals. The dislike of the Conservatives to President Santa Maria was occasioned by his introduction of the law of civil marriage, the civil registration of births and deaths, and the freeing of the cemeteries. Hitherto no marriage was legal unless celebrated according to the rites of the Roman Catholic religion, and all registers of births and deaths were kept by the parish priests. Civil employees were now appointed under the new laws to attend to this work. Formerly the cemeteries were entirely under the control of the Church, and, with the exception of a few places specially created for the purpose, were reserved solely for the burial of Roman Catholics. Under the new regime these cemeteries were made common to the dead of all religions. Under President Perez, in 1865, a clause in the law of constitution had been introduced permitting the exercise of all creeds of religion, and this was now put into practice, all restrictions being removed. On several occasions, notably in 1882 and 1885, President Santa Maria used his influence in the elections of senators and deputies to congress for the purpose of creating a substantial majority in his favour. He was induced to take this course in consequence of the violent opposition raised in the chambers by the liberal policy he pursued in connexion with Church matters. This intervention caused great irritation amongst the Conservatives and dissentient Liberals, and the political situation on more than one occasion became so strained as to bring the country to the verge of armed revolution. No outbreak, however, took place, and in 1886 the five years of office for which President Santa Maria had been elected came to an end, and another Liberal, Señor José Manuel Balmaceda, then succeeded to power.
The election of Balmaceda was bitterly opposed by the Conservatives and dissentient Liberals, but was finally successfully carried by the official influence exercised by President Santa Maria. On assuming office President Balmaceda elected president. Balmaceda endeavoured to bring about a reconciliation of all sections of the Liberal party in congress and so form a solid majority to support the administration, and to this end he nominated as ministers representatives of the different political groups. Six months later the cabinet was reorganized, and two most bitter opponents to the recent election of President Balmaceda were accorded portfolios. Believing that he had now secured the support of the majority in congress on behalf of any measures he decided to put forward, the new president initiated a policy of heavy expenditure on public works, the building of schools, and the strengthening of the naval and military forces of the republic. Contracts were given out to the value of £6,000,000 for the construction of railways in the southern districts; some 10,000,000 dollars were expended in the erection of schools and colleges; three cruisers and two sea-going torpedo boats were added to the squadron; the construction of the naval port at Talcahuano was actively pushed forward; new armament was purchased for the infantry and artillery branches of the army, and heavy guns were acquired for the purpose of permanently and strongly fortifying the neighbourhoods of Valparaiso, Talcahuano and Iquique. In itself this policy was not unreasonable, and in many ways extremely beneficial for the country. Unfortunately corruption crept into the expenditure of the large sums necessary to carry out this programme. Contracts were given by favour and not by merit, and the progress made in the construction of the new public works was far from satisfactory. The opposition in congress to President Balmaceda began to increase rapidly towards the close of 1887, and further gained ground in 1888. In order to ensure a majority favourable to his views, the president threw the whole weight of his official influence into the elections for senators and deputies in 1888; but many of the members returned to the chambers through this official influence joined the opposition shortly after taking their seats. In 1889 congress became distinctly hostile to the administration of President Balmaceda, and the political situation became grave, and at times threatened to involve the country in civil war. According to usage and custom in Chile, a ministry does not remain in office unless supported by a majority in the chambers. Balmaceda now found himself in the impossible position of being unable to appoint any ministry that could control a majority in the senate and chamber of deputies and at the same time be in accordance with his own views of the administration of public affairs. At this juncture the president assumed that the constitution gave him the power of nominating and maintaining in office any ministers he might consider fitting persons for the purpose, and that congress had no right of interference in the matter. The chambers were now only waiting for a suitable opportunity to assert their authority. In 1890 it was stated that President Balmaceda had determined to nominate and cause to be elected as his successor at the expiration of his term of office in 1891 one of his own personal friends. This question of the election of another president brought matters to a head, and congress refused to vote supplies to carry on the government. To avoid trouble Balmaceda entered into a compromise with congress, and agreed to nominate a ministry to their liking on condition that the supplies for 1890 were voted. This cabinet, however, was of short duration, and resigned when the ministers understood the full amount of friction between the president and congress. Balmaceda then nominated a ministry not in accord with the views of congress under Señor Claudio Vicuña, whom it was no secret that Balmaceda intended to be his successor in the presidential chair, and, to prevent any expression of opinion upon his conduct in the matter, he refrained from summoning an extraordinary session of the legislature for the discussion of the estimates of revenue and expenditure for 1891. When the 1st of January 1891 arrived, the president published a decree in the Diario Oficial to the effect that the budget of 1890 would be considered the official budget for 1891. This act was illegal and beyond the attributes of the executive power. As a protest against the action of President Revolution of 1891. Balmaceda, the vice-president of the senate, Señor Waldo Silva, and the president of the chamber of deputies, Señor Ramon Barros Luco, issued a proclamation appointing Captain Jorje Montt in command of the squadron, and stating that the navy could not recognize the authority of Balmaceda so long as he did not administer public affairs in accordance with the constitutional law of Chile. The majority of the members of the chambers sided with this movement, and on the 7th of January Señores Waldo Silva, Barros Luco and a number of senators and deputies embarked on board the Chilean warship “Blanco Encalada,” accompanied by the “Esmeralda” and “O’Higgins” and other vessels, sailing out of Valparaiso harbour and proceeding northwards to Tarapaca to organize armed resistance against the president (see [Chilean Civil War]). It was not alone this action of Balmaceda in connexion with congress that brought about the revolution. He had alienated the sympathy of the aristocratic classes of Chile by his personal vanity and ambition. The oligarchy composed of the great landowners have always been an important factor in the political life of the republic; when President Balmaceda found that he was not a persona grata to this circle he determined to endeavour to govern without their support, and to bring into the administration a set of men who had no traditions and with whom his personality would be all-powerful. The Clerical influence was also thrown against him in consequence of his radical ideas in respect of Church matters.
Immediately on the outbreak of the revolution President Balmaceda published a decree declaring Montt and his companions to be traitors, and without delay organized an army of some 40,000 men for the suppression of the insurrectionary movement. While both sides were preparing for extremities, Balmaceda administered the government under dictatorial powers with a congress of his own nomination. In June 1891 he ordered the presidential election to be held, and Señor Claudio Vicuña was duly declared chosen as president of the republic for the term commencing in September 1891. The resources of Balmaceda were running short on account of the heavy military expenses, and he determined to dispose of the reserve of silver bullion accumulated in the vaults of the Casa de Moneda in accordance with the terms of the law for the conversion of the note issue. The silver was conveyed abroad in a British man-of-war, and disposed of partly for the purchase of a fast steamer to be fitted as an auxiliary cruiser and partly in payment for other kinds of war material.
The organization of the revolutionary forces went on slowly. Much difficulty was experienced in obtaining the necessary arms and ammunition. A supply of rifles was bought in the United States, and embarked on board the “Itata,” a Chilean vessel in the service of the rebels. The United States authorities refused to allow this steamer to leave San Diego, and a guard was stationed on the ship. The “Itata,” however, slipped away and made for the Chilean coast, carrying with her the representatives of the United States. A fast cruiser was immediately sent in pursuit, but only succeeded in overhauling the rebel ship after she was at her destination. The “Itata” was then forced to return to San Diego without landing her cargo for the insurgents. The necessary arms and ammunition were arranged for in Europe; they were shipped in a British vessel, and transferred to a Chilean steamer at Fortune Bay, in Tierra del Fuego, close to the Straits of Magellan and the Falkland Islands, and thence carried to Iquique, where they were safely disembarked early in July 1891. A force of 10,000 men was now raised by the junta of the revolution, and preparations were rapidly pushed forward for a move to the south with the object of attacking Valparaiso and Santiago. Early in April a portion of the revolutionary squadron, comprising the “Blanco Encalada” and other ships, was sent to the southward for reconnoitring purposes and put into the port of Caldera. During the night of the 23rd of April, and whilst the “Blanco Encalada” was lying quietly at anchor, a torpedo boat called the “Almirante Lynch,” belonging to the Balmaceda faction, steamed into the bay of Caldera and discharged a torpedo at the rebel ship. The “Blanco Encalada” sank in a few minutes and 300 of her crew perished.
In the middle of August 1891 the rebel forces were embarked at Iquique (where a provisional government under Captain Jorje Montt had been set up), numbering in all about 9000 men, and sailed for the south. On the 20th of August the congressist army was disembarked at Quinteros, about 20 m. north of Valparaiso, and marched to Concon, where the Balmacedists were entrenched. A severe fight ensued, in which the troops of President Balmaceda were defeated with heavy loss. This reverse roused the worst passions of the president, and he ordered the arrest and imprisonment of all persons suspected of sympathy with the revolutionary cause. The population generally were, however, distinctly antagonistic to Balmaceda; and this feeling had become accentuated since the 17th of August 1891, on which date he had ordered the execution of a number of youths belonging to the military college at San Lorenzo on a charge of seditious practices. The shooting of these boys created a feeling of horror throughout the country, and a sensation of uncertainty as to what measures of severity might not be practised in the future if Balmaceda won the day. After the victory at Concon the insurgent army, under command of General Campos, marched in a southerly direction towards Viña del Mar, and thence to Placilla, where the final struggle in the conflict took place. Balmaceda’s generals Barbosa and Alcérrica had here massed their troops in a strong position. The battle, on the 28th of August, resulted in victory for the rebels. Both the Balmacedist generals were killed and Valparaiso was at once occupied. Defeat and suicide of Balmaceda. Three days later the victorious insurgents entered Santiago and assumed the government of the republic. After the batile of Placilla it was clear to President Balmaceda that he could no longer hope to find a sufficient strength amongst his adherents to maintain himself in power, and in view of the rapid approach of the rebel army he abandoned his official duties to seek an asylum in the Argentine legation. The president remained concealed in this retreat until the 18th of September. On the evening of that date, when the term for which he had been elected president of the republic terminated, he committed suicide by shooting himself. The excuse for this act, put forward in letters written shortly before his end, was that he did not believe the conquerors would give him an impartial trial. The death of Balmaceda finished all cause of contention in Chile, and was the closing act of the most severe and bloodiest struggle that country had ever witnessed. In the various engagements throughout the conflict more than 10,000 lives were lost, and the joint expenditure of the two governments on military preparations and the purchase of war material exceeded £10,000,000 sterling.
An unfortunate occurrence soon after the close of the revolution brought strained relations for a short period between the governments of the United States and Chile. A number of men of the U.S.S. “Baltimore” having been given liberty on shore, an argument arose between some of them and a group of Chilean sailors in a drinking den in Valparaiso. Words led to blows. The Americans were badly handled, one of their number being killed and others severely hurt. The United States government characterized the affair as an outrage, demanding an indemnity as satisfaction. The Chilean authorities demurred at this attitude, and attempted to argue the matter. James G. Elaine, then secretary of state, refused peremptorily to listen to any explanations. In the end Chile paid an indemnity of $75,000 as asked, but the affair left bad feeling in its train.
The close of the revolution against Balmaceda left the government of Chile in the hands of the junta under whose guidance the military and naval operations had been organized. Admiral Jorje Montt had been the head of this President Jorje Montt. revolutionary committee, and he acted as president of the provisional government when the administration of the country changed hands after the victory of the Congressional party. An election was now immediately ordered for the choice of a president of the republic and for representatives in the senate and chamber of deputies. Admiral Montt, as head of the executive power, stanchly refused to allow official influence to be brought to bear in any way in the presidential campaign. The great majority of the voters, however, required no pressure to decide who was in their opinion the man most fitted to administer the affairs of the republic. For the first time in the history of Chile a perfectly free election was held, and Admiral Montt was duly chosen by a nearly unanimous vote to be chief magistrate for the constitutional term of five years. The senate and chamber of deputies were formally constituted in due course, and the government of the republic resumed normal conditions of existence. The new president showed admirable tact in dealing with the difficult problem he was called upon to face. Party feeling still ran high between the partisans of the two sides of the recent conflict. Admiral Montt took the view that it was politic and just to let bygones be bygones, and he acted conscientiously by this principle in all administrative measures in connexion with the supporters of the late President Balmaceda. Early in 1892 an amnesty was granted to the officers of the Balmaceda régime, and they were freely permitted to return to Chile without any attempt being made to molest them. The first political act of national importance of the new government was the grant of control to the municipalities, which hitherto had possessed little power to direct local affairs, and were not even permitted to dispose of the municipal revenues to any important amount without first obtaining the consent of the central government. Almost absolute power was now given these corporations to manage their own concerns, and the organization of the police was placed in their hands; at a later period, however, it was found necessary to modify this latter condition.
President Montt next turned his attention towards the question of how best to repair the damage occasioned to the country by eight months of civil warfare. The plan of public works authorized in 1887 was reconsidered, and the construction of portions of the various undertakings recommenced. The army and navy were reorganized. Additional instructors were brought from Germany, and all arms of the military service were placed on a thoroughly efficient footing in matters of drill and discipline. Several new and powerful cruisers were added to the navy, and the internal economy of this branch of the national defence was thoroughly inspected and many defects were remedied. President Montt then took in hand the question of a reform of the currency, the abolition of inconvertible paper money, and the re-establishment of a gold basis as the monetary standard of the republic. This reform of the currency became the keynote of the president’s policy during the remainder of his term of office. Great opposition was raised by the representatives of the debtor class in congress to the suppression of the inconvertible paper money, but in the end President Montt carried the day, and on the 11th of February 1895 a measure finally became law establishing a gold currency as the only legal tender in Chile. In July 1896 the Conversion Act was put in force, a dollar of 18d. being the monetary unit adopted. In 1895 relations with the neighbouring republic of Argentina began to become somewhat strained in regard to the interpretation of the treaty concerning the boundary between the two countries. The treaties of 1881, 1893 and 1895 left doubts in the minds of both Chileans and Argentines as to the position of the frontier line. On the 17th of April 1896 another protocol was drawn up, by which the contending parties agreed to submit any differences to the arbitration of Great Britain, at the instance of one or both governments. President Montt had now fulfilled his term of office, and on the 18th of September 1896 he handed over the presidential power to his successor, Señor Federico Errázuriz, who had been duly elected in the month of June previously.