2. Balmaceda came to office when government revenue
at an all-time high
Main income: export of nitrate
Created a new ministry of industry/public (1887)
Expended large $ to improve/expend
telegraphic/railway systems, construction of bridges,
roads and docks
Balmaceda generously evolved public education, which
was needed to provide skilled workers for Chilean
industry
During his presidency, total enrollment in Chilean school
rose in four years from 79,0000 in 1886 to 150,000 in
1890
Favored raising wages of workers
Inconsistent in his labor policy
Sent troops to crush a number of strikes due to yielding to
strong pressure from foreign/domestic employers
3. Determined to “Chileanize” nitrate industry
Wanted to nationalize industries that only
benefitted foreigners
Direct reference to nitrate industry
Later, Balmacaan's strategy shifted
Encouraged entrance of Chilean private capital
into nitrate production and exportation to
prevent formation of a foreign dominated nitrate
cartel whose interest in restricting output
clashed with government’s interest in
maintaining high level of production to collect
more export taxes
4. Disliked Chilean elite for their lack of
entrepreneurial spirit
Balmaceda waged a determined struggle to
end monopoly of British owned Nitrate
Railways Company, whose prohibitive freight
charges reduced production/export of
nitrates
His nationalistic policies provoked hostility of
English nitrate “kings”
English “kings” like North had close links with
Chilean elite
Employed prominent liberal politicians as their legal
advisers
5. Had many domestic foes, too
Clericals opposed his plans to further curb
powers of the Church
Aristocracy resented his public works program
because it drew labor from agriculture and raised
rural wages
Banks, which profited from an uncontrolled
emission of notes that fed inflation and
benefited mortgaged landlords and exporters,
were angered by his proposal to establish
national bank with monopoly of note issue
6. Government’s economic problems multiplied,
adding to Balmacedas political difficulties by
narrowing his popular base
Prices in an overstocked world market fell,
and English nitrate interests responded to
the crisis by forming a cartel to reduce
production
Reduced production and export of nitrates
and copper sharply diminished the flow of
export duties into the treasury
Result was a series of great strikes in Valparaiso
and the nitrate zone in 1890
7. January 7, 1891, Congressional leaders
proclaimed a revolt against the president in the
name of legality and the Constitution
Navy opposed rebels
English-owned enterprises also actively aided the
rebels
Many nitrate workers, alienated by Balmacaan's
repression of their strike, remained neutral or
even joined rebel army, organized by a German
army officer
September 14, 1891
Day on which his legal term of office came to an end,
Balmaceda put a bullet through his head
8. Oligarchy preferred to rule through congress divided into
various factions rather than through a strong executive
1892- A new law in 1892 vested local governments with the
right to supervise elections for local and national offices
This force of power of the land owners, priests, and
political bosses, were thought Balmaceda progressive
policies
Era of Parliamentary Republic was accompanied by a
growing subordination of the Chilean economy to foreign
capital
In the same period, North American and German capital
began to challenge the British Homogony in Chile
U.S. and German trade with Chile grew at a faster rate
German instructors gained strong influence in Chilean army
Flow of German immigrants continued