CHANGE IN CHILE

King Country Chronicle, Volume XXVI, Issue 3400, 30 July 1932, Page 2

CHANGE IN CHILE

“SOCIALIST” STATE. REALLY AN EXPEDIENT. BACKGROUND OF EVENTS. When the forces of protest against things as they are—the forces which gave rise to the Soviet Republic, the Third International, and many a lesser movement—surveyed the world which they would conquer, South American offered an invitation (writes Henry K. Norton in the New 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 the 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 which Chile, while still small, is a much larger proportion of the population than in Peru. The Chilean native is a more atcive 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, distant, charming, but unimportant agricultural country. But toward the end of the last century it seized the northern desert from its neighbours, Peru and Bolivia, and thereby acquired the greatest nitrate deposits in the world. The growing demand for nitrate as fertiliser made the nitrate country a source of unheard-of wealth, and under its beneficient ministrations Chile became a power in the Western Hemisphere. Three large American copper enterprises contributed to the national well-being, but nitrate remained the symbol of the wealth of Chile. Unfortunately for this happy arrangement, the war gave a new impetus to the manufacture of synthetic nitrate and since peace was made the Chilean nitrate industry has had an increasingly difficult time. With the general drop in world prices of 1929 it became a serious question how the industry might be saved. A huge merger known as Cosach was formed under Guggenheim management and one-half of the capital stock was issued to the Chilean Government in return for the abolition of' the export tax. The very reorganisation of the nitrate industry had helped to delay the full effects of the world crisis in Chile. But in the spring of last year the depression descended in all its sombreness. The Ibanez 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 here a bit of Chilean political history may help to make the present situation clearer. Chile was ruled from the 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 thirty years 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 restore the Presidency to the position of power which he thought it should enjoy. Alessandri promised the people anything under heaven in return for their support. And they stood by him—-at least until they began to take his promises seriously. Then they 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 middleclass with the benevolence of most ot 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 once along constitutional lines to elect a new President. Alessandri returned from exile ready to take back the 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 of law. as Chief Magistrate.

Dr. Montero, however, was faced 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 reductions was in the military section. Attempts to make reductions here invited the opposition of the military forces. Any serious cut almost certainly meant revolt. But there was no alternative.

Carlos G. Davila, a journalist of distinction, former Ambassador to the United States, former friend and supporter of Ibanez, and a politician of ambition, discerned in all of this uncertainty and discontent a call to public seiwice. Consultation with Colonel Marmaduke Grove assured him of the support of a section of the army, especially the very powerful air force.

The navy had already demonstrated a large measure of sympathy with radical ideas. Alessandri was perhaps the natural leader of these forces. But when the arrangements for the recent coup were completed, when the legal but unaggressive government of Dr. Montero was ousted from Moneda Palace, Davila cut the ground from under Alessandri by proclaiming the intention of the revolutionary junta to establish a “Socialist” Government in Chile.

This pronouncement assured him the enthusiasm 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 leap 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 the influx of foieign capital, tempted by the excellent record of Chile for paying her debts. Is it Deep? How deep-seated is the “Socialist” conviction of Carlos Davila may be judged from a speech he made in Santiago in July, 1930, in which he urged the importation of American capital. “No country can aspire to organise 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 assistance 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 resources, which would allow us in time to achieve a real economic independence and even the role of a country of financial expansion abroad.” This is 1930. In 1932 Senior Davila issues a platform which calls for drastic reorganisation of the economics of the country along Socialist lines, and especially condemns foreign capital. Significantly enough, this platform pronouncement was followed immediately by assurances to foreign investors that there was no present intention to interfere with their holdings. Davila and his associates are full aware that a programme of nationalisation of Chilean industry would not alleviate the distress of the Chilean workers. Their bow to the radical agitation is evidence of its growing influence, but it by no means signifies that radication has arrived. From all of the evidence yet reported from Chile, it appears that Davila’s Socialism is a screen for the far more practical aims of his military associates. A Socialism which rides into power on a military dictatorship will be neither dangerous to its opponents nor elfective for its fritnds.