The Revolution in Chile.

Press, Volume LXVIII, Issue 20566, 7 June 1932, Page 8

The Revolution in Chile.

The formation of the first Socialistic Republic of Chile, announced in this morning's cable news, is an interesting and also alarming variant on the usual South American revolution. It is at least three years since any South American Government, excepting that of Argentina, has been reasonably sure of remaining in office for more than a few months, but foreign investors have at least been able to comfort themselves with the reflection that the revolutions, although frequent, have merely been victories of the " outs" over the " ins." And as the " ins : ' have not hitherto been rash enough to attempt confiscation of foreign interests, revolutions have become accepted as one of the neeessary inconveniences of business enterprise in South America. There have, it is true, been rumours of Communist plots, but these have not been taken very seriously. Even when Senor Davila, who is now, we are told, organising the Chilean Government on Soviet lines, was imprisoned . last March for Communist activities, a usually well-informed writer in Current History had no hesitation in describing the charge as, ''ridiculous." The announcement of Senor Davila's Government that it proposes to " get " Chile out from under the yoke of "capitalism," and particularly of foreign capitalism, by the simple method of confiscation, is therefore an unpleasant awakening, particularly to American ami British investors. American capital invested in Chile is estimated, according to a cabled report, at between 650,000,000 and 1,000,000,000 dollars, and the British Legation in Santiago recently estimated the British investment at £100,000,000, of which £30,000,000 is in Government bonds. In August, 1931, the Chilean Government defaulted in its interest payments on these bonds, admitting frankly that its action was due to "excessive expenditure during recent "years" as well as to the heavy fall in commodity prices. In April of this year a National Cabinet under President Montero made a half-hearted attempt to grapple with the financial situation, but has been unable to stem the run on the gold reserves of the Central Bank of Chile and it is apparently the threat of a complete financial collapse which has precipitated the present revolution. There is comfort in the thought that Senor Davila modestly refers to his experiment as the first Socialist Republic of Chile.