[WE print below two articles upon Chile, which is in the high light of South American affairs on account of its recent irregular changes of Government, and the settlement of its longstanding dispute with Peru and Bolivia by the Tacna-Arica arbitration. Arturo Torres Rioseco is a Chilean writer and scholar who for five years has resided in the United States as a professor at the University of Minnesota. His article appeared in the February 2 issue of Repertorio Americano, a weekly journal dealing with Spanish-American affairs published at San José, Costa Rica. The second article is an address delivered by President Alessandri at a banquet given in his honor by L'Ere Nouvelle, a Paris pro-Herriot daily, just before he left Europe to resume his post as Chief Magistrate of Chile. It was originally printed in the February 16 issue of the paper that was his host.]

I

CHILE is one of the richest countries on our continent. She possesses nitrates, coal, and other rich mineral-deposits. Her grazing-industry is an abundant source of wealth. But above all she is essentially an industrious nation. Her Government ought, therefore, to have an ample revenue, and her people should be rich and peaceful, and should make steady progress toward greater material and cultural well-being. But in spite of all her advantages, Chile's economic condition has been going from bad to worse ever since her war

with Peru in 1879, and to-day she stands on the verge of national insolvency.

Her people look forward to better things. Seeing their country steadily sinking, they staked their hopes on political reform, believing the Conservatives to be opportunists and robbers and the Radicals to be the apostles of a new era. That is still the popular belief, for until five years ago only a very few families understood or took part in politics. Those families divided the high offices among their members and felt themselves the absolute masters of the nation. That explains how President after President, and Ministry after Ministry, watched with criminal silence their country descend steadily toward bankruptcy, while intent only upon enriching themselves as rapidly as possible during their short period of power. That was the situation from the inauguration of our first President down to the administration of Don Juan Luis Sanfuentes of unhappy memory, except possibly during the stormy administration of President Balmaceda, whose democratic sympathies and hostility to the plutocracy provoked a revolution, led by the bigwigs and supported by a portion of the public, that flocked like sheep to a cause it did not understand.

In 1921 Don Arturo Alessandri was elected President of Chile. He belongs to what is called the Radical Party altogether too strong an appellation, for a Radical in Chile is a man mildly liberal and progressive. His election

naturally scandalized the nation's traditional masters, who hastened to put every possible obstacle in the path of a man who professed to be a popular savior. Alessandri, in spite of his limited political ability, seems always to have been a national idealist who sought to rescue Chile from the clutches of foreign capital and to govern her for the welfare of the masses. His administration might have been a great success if the reactionaries and capitalists had helped him, or at least had not stood in his way. Alessandri always had in his ministry men of medium ability who tried to administer their offices disinterestedly and honestly. But they encountered the opposition of vested interests and the powerful resistance of an iron tradition. The capitalists and the aristocrats could not tolerate a President who presumed to talk directly to the masses, to explain to the public the Government's difficulties - a man who threatened to deprive foreign investors of their rich pickings for the benefit of domestic industry and capital.

Yet unless the special concessions were swept away, and the old bureaucratic régime were reformed, the economic situation must continue to grow worse, on accout of the errors of former Governments and the incapacity of the Chilean Congress.

In international affairs Alessandri showed a generous spirit of conciliation toward Peru, although he exhibited moral weakness in submitting the Tacna-Arica dispute to the arbitration of the President at Washington. For he thereby fortified Yankee tutelage over Chile's relations with her neighbors.

This Government, which had inspired new hopes in the common people of Chile by its obviously good intentions and democratic sympathies, was tragically overthrown.

Don Arturo Alessandri has always been a turbulent man. He has fought several duels, and possessed when I knew him a faculty of keen sarcasm that made him feared by comfortloving capitalists and Congressional debaters. He had had the presumption to defeat at the polls one of the wealthiest men in Chile, and from that moment he became a political lion. His candidacy as President was opposed in the basest ways conceivable. Some called him a socialist - a word of vague but ominous meaning in our plutocracy. Others raked up an alleged scandal in his private life. Men even ventured to whisper that he had secret relations with the Government of Peru and planned to betray the country. But no one bethought himself to bring forward the only valid argument against Señor Alessandri - his lack of preparation for the Presidency. The Liberals were immensely proud of their young lion who had plunged into the political arena with such defiant pose and romantic prestige. But what qualification did this man have as an administrator for the high office to which he aspired? Had he rendered distinguished services to the country? Had he written works showing deep knowledge of public problems? Was he endowed with natural gifts that peculiarly fitted him for that high office? Those questions were never asked. The people were fascinated by his eloquent oratory, by his bombastic periods, by his dramatic challenges, by his youthful energy. And in truth, in spite of his lack of preparation for public life, he was infinitely better qualified than the Presidents who preceded him. Most of them had been intellectual mummies who were given the office because they were rich, docile, and innocuous alike to foreign investors and the local aristocracy.

As it is, the Government owes

The

and debts to Government contractors. It has contrived by the most absurd methods to enrich the banks. country does not produce what it should produce. Although exports Although exports exceed imports by several million pesos a year, the apparent balance vanishes when we consider that most of the exports are created by the use of foreign capital, and that the profit from them therefore goes into alien pockets. into alien pockets. Most mines, nitrate deposits, banks, insurance companies, and traction companies are owned by English, German, or North American capitalists. Therefore, while the Government is insolvent and the people are impoverished, the money that their brains and muscle produce enriches other nations.

The State is incapable of bettering this disastrous situation. If only teachers and other inoffensive employees had suffered, there would never have been even an attempt to better it, but the time came when among those who suffered, those who went without their pay, were the defenders of the traditional oligarchy, those who call themselves the defenders of the countrythe army officers and soldiers. On the tenth of December they overthrew the Government. . . . That coup d'état was a disgrace to a nation that aspires to the pompous titles of Democratic and Republican. It was also an insult to the people of Chile. I do not profess to know just what motives moved our soldiers. Hitherto the army of Chile had been the servant of the plutocracy. To-day it violently asserts its equality with that plutocracy, although to do so it has been compelled to destroy the sacred institutions it has sworn to defend.

II

It is a great honor, and a still greater satisfaction, to find myself here among

the Parliament, the world of letters, and the press, who incarnate the life and the strength of France.

The controlling forces of this country, the directors of these manifold energies, are seated around this table to do honor to the head of the Chilean nation. It is the soul of France that beats here. This courteous act will find a friendly echo across the seas and the mountains in my country, where we love and admire the great French democracy, which has consecrated the rights of men and the liberty of peoples, and now labors to construct a noble monument of peace.

Peace! Supreme blessing of nations, word of salvation, source of life toward which all eyes strain, horizon where dawns the consoling promise of a better humanity redeemed by suffering!

Nations in their triumphal march toward progress are subject, like travelers, to accidents along the route. My country, alas, has not escaped this law of history. She, too, has fallen into grave and painful difficulties.

The events of the last few months are mischances likely to befall every country that craves progress and that, in its vigorous endeavor to attain the plenitude of its development, encounters obstacles, falls into error, wanders from its route. Nevertheless, reaction has not triumphed. My people have recovered their balance, regained their feet, found the right path again, and already gird their loins for greater and nobler efforts than before.

Neither personal politics nor the spirit of faction has ever prospered in Chile. Her striving, since the very dawn of her independence, since her first struggle for liberty, has been inspired by the aspirations of an idealist democracy seeking to base its national unity on the immutable corner stones of law and justice. Chile has always

pursued high and generous ideals.. The bright torch of freedom that France held aloft to the world with her clarion call of 'Liberty, Equality, and Fraternity' illuminates even our distant shores and has ever been Chile's beacon light throughout her history. What has just happened in my country the events that make this banquet possible are but a powerful outburst of her democratic energies.

A movement was started to realize reforms that our historical development had made imperative. Those who sought to accomplish them strayed from their path and disappointed the hope of redemption that the nation rested in them.

Thereupon public opinion, that mighty moral and creative force, asserted itself, and, sweeping aside all resistance, called me back to power in the name of the principles that I have loyally served. Democracy has triumphed — that unconquered and unconquerable moral force that steadily pursues its victorious march toward the goal of its dream-progress based on liberty and law.

The democratic idea upon which our modern civilization is based is a shining sun that is never extinguished. Clouds may conceal it, may temporarily veil its brilliance, but it is always there, eternally radiating light and life to the universe. The democratic idea is seed that, cast upon the soil, germinates under the impulse of a mysterious lifeprinciple, and pushing through all obstacles makes its way irresistibly to the light.

Gentlemen, let us recall what Jaurès, to whom grateful France has just accorded her highest honors, said: "To set up a republic is to proclaim that millions of men will henceforth be able to determine by their own will their common rule of conduct, that

they will be able to differ among themselves without tearing each other to pieces, that their discords will never reach the point of civil war, and that they will never seek in a dictatorship a transitory, cowardly repose and an armistice of death.'

That is the evangel that my fatherland has just proclaimed in the name of, and to the honor of, universal democracy.

I feel myself at home in this company. I feel myself inspired and strengthened in this noble democracy that renders just honors to her heroes who fell on the field of battle, and who pays like honors to the heroes of humanity who devoted their lives to the cause of peace.

I shall return to Chile a modest laborer in a great task. I shall consecrate myself to the welfare of my fellow citizens and of my country, inspired by a new faith in human solidarity and social justice.

I shall return with a tranquil mind, without those hatreds and rancors that should be banished from the bosom of a Chief of State. I shall think only of the future. I shall forget the past except for the wholesome lessons of experience.

Before finishing I wish to address an appeal to victorious France - to France, so great in her days of happiness, and even greater in her hours of sorrow and trial. I wish to say to her: Remember that there exists far away across the sea an immense and prosperous continent peopled by men of the same race and the same temperament as yourself, who are struggling and laboring and steadily moving forward. It is there that the race of to-morrow lives.

Powerful and vigorous democracies are incorporating there the ardent desires and hopes of new nations who are marching to the conquest of the

future. The South American continent, of which Chile is a part, has been the theatre of Homeric struggles for liberty. Her people are ever ready to sacrifice themselves for a great

cause. The citizens of my country have always admired and loved France in her great struggles for liberty, for justice, and for universal peace, based on international fraternity.

GERMANY's new prosperity is founded on the ruins of her past. If a merchant, a banker, or any other private business man were to do what the German Government has done under the force of circumstances and for reasons of State, he would be regarded in the eyes of the law as a fraudulent bankrupt. In order to create a new currency on a par with gold, Germany was obliged to depreciate her former money to one trillionth of its original value. So, after astonishing the world by an unprecedented test of endurance between 1914 and 1918, followed by a period of privation and economic chaos, she now astonishes us a second time by her extraordinary faculty of recuperation. It would be puerile to deny a fact that every foreigner residing in the country recognizes. All agree that this nation is irrepressible. The present metamorphosis is a miracle. It resembles a feat of prestidigitation rather than of political economy. What actually happened? If setting up the Rentenmark sufficed to change the lean and hungry Teuton of two years ago into the plump and rosy counterpart of the typical German of 1914 that he is to-day, it naturally behooves us to study carefully this wonderful rejuvenator.

1 From L'Illustration (Paris illustrated literary weekly), February 7, 14

The Rentenmark was not an original German invention. It was based upon an idea applied with success a hundred years ago in Denmark, where the Government, in default of gold, issued currency guaranteed by ample private security. [The same idea was successfully applied in the colony of Pennsylvania even earlier. - EDITOR] To this was added a sort of levy upon capital in the shape of a forced mortgage payable in gold marks upon all the landed estates, industrial and mercantile enterprises, and banks of the country amounting to four per cent of their assessed value. That was the security behind the Rentenmark. This blanket mortgage was designed to yield six per cent interest. Rentenmark bills were redeemable at the holder's option, not in gold or foreign exchange, but solely in interest-bearing securities of fivehundred gold mark denominations, issued by the Rentenbank and bearing five per cent interest. This left the bank a profit of one per cent on the transaction. Contrary to the unanimous prediction of foreign experts, the scheme proved successful. The Rentenmark did not depreciate, because its emission was gradual, and because it remained exclusively a domestic medium of exchange. It did not measure itself against the pound