CHANGE IN CHILE

Evening Post, Volume CXIV, Issue 16, 19 July 1932, Page 9

CHANGE IN CHILE

"SOCIALIST STATE

REALL* AN EXPEDIENT

BACKGROUND OF EVENTS

When tha forces of protest against things 83 they are—tho forces which gave rise to tho Soviet Republic, tho Third International, and many a lesser movement—surveyed the world which they would conquer, South America offered an invitation (writes Henry K. 'Norton in the "Now York Times," when giving the background of the recent announcement of intention to create a Socialist State in Chile).

One of the cherished ambitions of , tho ■ South American Radical leaders has been to organise Chilean radicalism. Chile offers a better field than Peru for their purposes, for several reasons. The industrial proletariat ■in Chile, while still small, is a much .larger proportion of the population than •in Peru. Tho Chilean native is a more active and responsive member of society than the Peruvian Indian. And the lower classes in Chile have been ■prepared for radical teachings 'by recent political events. '

- Chile was • originally a small, dis'taat, charming, but unimportant agricultural country. But toward the end of tho last century it seized the northern desert from its neighbours -Peru and Bolivia, and thereby acquired the greatest nitrate deposits in tho world. The growing demand for nitrate as f ertilisor made the nitrate country a source of unheard-of wealth and under its boneficent ministrations Chile be- . came, a powor in tho Western Hemisphere. ' Three large American, copper enterprises contributed to the national ■well-being, but nitrate remained the' symbol ,of the wealth of Chile. CHANGING CONDITIONS.- , Unfortunately for this happy arrangement, the war gave a new im- i petus to the manufacture of synthetic' jiitrate and since peace was made the nitrate industry has" had an increasingly difficult time. With 'the general drop in world prices of J. 929 t lit became a serious question how the industry might be saved. A huge merger known-as Cosach was formed under Guggenheim' management and ono-half of the capital stock was issued to the Chilean. Government in return for the abolition of tho export tax. The very reorganisation of the nitrate industry 'had helped to delay the full effects of the 'world crisis in Chile. But in tho spring of, last; year tho depression descended in all its sombreness. The .Jbanez Government, a quasi-military dictatorship which had been in power since 1927, found it increasingly difficult to meet the demands of the national budget. In July the popular discontent reached its height and Ibanez , left for Argentina. And hero a bit of Chilean political listory may help to make the present' situation clearer. Chile was ruled from tho day of its birth to 1890 by a series 'of dictators representing the landholding aristocracy. In a civil war at that ■time Congress won the right to control the ..Government. In the next year's the interplay -of politics in its worst sense brought the Chilean Administration to a low point in honesty and effectiveness. ( •■ ' Then Don Arturo Alessandri came upon_/ the scene as President. He- determined to restdro the Presidency to the position'of power which he thought it should enjoy. Alessandri promised the people anything tinder heaven in return for their support. And they stood by him—at least until they began" .to take his' promises seriously. Thenthey so disorganised the economic life of the country that the more conservative elements forced Alessandri out of office. After some uncertainty Ibanez established his dictatorship of the incipient middle class with the benevolence of most of the army. When the crisis came in July, 1931, and the dictator departed, the Chilean people exhibited a high degree-of political discipline. 'They proceeded at onco along constitutional lines to elect a new President. Alessandri returned from exile ready to take back tho Government that others had.failed to manage. But the Chileans were not disposed to place themselves again in his hands. •They rejected his offer and installed Dr. Montero, a professor o ,law, as :Chief Magistrate.' , - ' THE SAME PROBLEM. _ ■ - Dr. Montero, however, -was faccd'with - the same problem which had'proved too much for the dictator Ibanez. • The. national budget had to be cut and the only place to-;make adequate roductiona was in, the military section." Attempts 'to make reductions here invited the opposition of ttie military forces. Any, serious cut almost certainly meant ,»ovblt. But there was no- alternative. , ■ Carlos ,G. Davila,'a journalist of distinction, former Ambassador to the United States,' former friend and sup-porter-of-Ibanez, and-a-politician of ambition, discerned in all of this un. .certainty •and-'diacontent a call to public service. Consultation with Colonel Maraaduke Grove assured him of the support of a- section of the army, especially tke very powerful air force. The navy had already demonstrated a large measure -of sympathy with radical , .ideas. > Alessandri was perhaps tho na.tural leader of these fo'rees. -• But when £he' arrangements for the recont coup "-were completed^ when the legal but unnggressive' government of Dr. Montevo •was ousted from Moneda Palace, Davila cut ,the ground from undor Alessandri 'by proclaiming tho intention of ' the . revolutionary junta to establish a "Socialist" Government in Chile. This, pronouncement assured him the enthusias.ni of the discontented elements, -while it estranged most of the ability,and brains of the country. For . it appears impossible to establish a practical -Socialism in Chile without a ledp of decades. Chile has little in, the .way of industry outside the nitrate fields and the American-owned copper enterprises.,' Such industrial development as there is has been due to tho influx of foreign capital,' tempted by the excellent record of Chile for payinc her debts. ■ IS IT DEEP? How deep-seated is the "Socialist" conviction of Carlos Davila may be 'judged from a speech he made, ml Santiago July, 1930, ,in which he urged the importation of American cap.ital. "No country can aspire to organiso its production, and accumulate capital at one and the same.time. These are processes which follow one another and cannot be altered. To refuse the assist anco of foreign.capital and technique in that first stage of our economic development would be just the- same as giving up all hope of creating our own capital resources, which would allow us in ti&e to achieve a real economic independence and even the role of a country of financial expansion abroad " " This in 1930.' In 1932 Senior Davila issues a platform which calls for drastic reorganisation of the economics of tha country along Socialist lines) and es pecially condemns foreign capital. Significantly enough, this platform pro* nouncenient was followed immediately by assurances, to foreign investors that there was no present intention to interfere "with their holdings. , .Davila and his associates are fully aware- that a programme of nationalisation of Chilean industry would not ■ a]leviate tho distress of the Chilean workers. Tlicii- bow to tho radical* agitation is evidence of its growing Jnfluencej but it by no means signifies