Louisiana State University LSU Digital Commons LSU Historical Dissertations and Theses Graduate School 1954 The hiC lean Nitrate Industry in the Nineteenth Century. Joseph Robert Brown Louisiana State University and Agricultural & Mechanical College Follow this and additional works at: https://digitalcommons.lsu.edu/gradschool_disstheses Part of the History Commons Recommended Citation Brown, Joseph Robert, "The hiC lean Nitrate Industry in the Nineteenth Century." (1954). LSU Historical Dissertations and Theses. 8100. https://digitalcommons.lsu.edu/gradschool_disstheses/8100 This Dissertation is brought to you for free and open access by the Graduate School at LSU Digital Commons. It has been accepted for inclusion in LSU Historical Dissertations and Theses by an authorized administrator of LSU Digital Commons. For more information, please contact [email protected]. THE CHILEAN NITRATE INDUSTRY IN 3y THE NINETEENTH CENTURY A Dissertation Submitted to the Graduate Faculty ©f the Louisiana State University and Agricultural and Mechanical College in partial fulfillment of the requirements for the degree of Doctor of Philosophy in The Department of History by Joseph Robert Brown B* , Texas College of Mines and Metallurgy* 19^8 M« A#* University of Chicago* I9I4J) May, 195t UMI Number: DP69478 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. UMI Dissociation Publishing UMI DP69478 Published by ProQuest LLC (2015). Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code ProQuest:a * ProQuest LLC. 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106- 1346 MANUSCRIPT THESES Unpublished theses submitted for the masterTs and doctor*s degrees and deposited in the Louisiana State University Library are available for inspection. Use of any thesis is limited by the rights of the author. Bibliographical references may be noted, but passages may not be copied unless the author has given permission. Credit must be given in subsequent written or published work. A library which borrows this thesis for use by its clientele is expected to make sure that the borrower is aware of the above restrictions. LOUISIANA STATE UNIVERSITY LIBRARY 1 1 9 -a TABUS OF CONTENTS Fag® LIST OF TABLES .................... ill PREFACE .......... iv ABSTRACT ......... ....................... x MAP OF THE NITRATE REGION 1878 ......... 17 Chapter I. THE HISTORY OF THE NITRATE INDUSTRY THROUGH THE WAR OF THE PACIFIC ............ 1 II. THE DEVELOPMENT OF A CHILEAN NITRATE POLICY. • i+O III. THE GROWTH OF ENGLISH INVESTMENTS AND THE DISTRIBUTION OF OWNERSHIP. «... r . ... 78 IV. THE NITRATE RAILROADS........ 126 V. THE EXPANSION OF PRODUCTION AND CONSU^TION. 1$2 VI. THE ATTEMPTS TO CONTROL PRODUCTION ...... l6£ VII. THE LABOR FORCE .......... 189 VIII. THE NITRATE INDUSTRY AND THE REVOLUTION OF 1891 208 IX. THE IMPACT OF NITRATES ON NINETEENTH CENTURY CHILE ................ 230 SELECTED BIBLIOGRAPHY . ....... 237 APPENDIX .............. ......... ... 250 I*! ST OF TABLES Table Page I* The nitrate Revenues of Chile ««*#»••* 56 II# Sales of State**Owned nitrate hands, 1882-1903 6 ? Ill# Distribution of Productive Power In the Hltrate Industry* 18?&*18?8 #«***#•«• 81 IV* Distribution of Nitrate Certificates by Nationality, 1S?9 «*«««***#«••«• 82 V# British Investments in nitrate Enterprises* I8 9 O • #•*•••***'***••«*** 96 VI# Selected Stock Market Quotations# I8 8 8 -X8 9 O # 102 VII# Dividends Declared by British Bit rate Enterprises • #*##•#«•***«#•#• 115-116 VIII# British Investments in Nitrate Enterprises# 1 9 0 0 * * * 119 IX# Railroads in the Nitrate Region llf8 X* Capitalisation and Dividend Statistics for Nitrate Railroads •«*••#*•#••#•# 150 XI# The Production# Consumption# and Price of Nitrate, 1880-1900# «***«*#•***## 155 XII# Expenditures for Sales Promotion, 1805*1908 • 162 XIII# The Growth of the Nitrate Labor Force, 1880-1903 • ................. *••#«« 19lj- 111 PREFACE After th© American colonies or Spain achieved inde* pendenee in the nineteenth century* their nature! resources were made accessible to foreign capitalists# Tim newly created countries of Latin America recognised the economic opportunities at hand? but without foreign assistance* they were unable to develop© their resources on a full scale# Their need for outside aid can be attributed to one or several of the following conditions* lack of capital re­ sources* inadequate technical knowledge* indifference to industrial activities* and pre-occupation with other aspects of the life of their countries# Of the Latin American peoples* however* Chileans were the ones most Interested in economic activities* Because of this trait* they have been termed the ^English of South America#n The early Peruvian nitrate capitalists could be included in this category as well* for in reality it was the citizens of these two countries who founded the nitrate industry# Although until 1870, Peruvians and Chileans owned most of the nitrate deposits * European engineers provided the technical assistance necessary in operating the nitrate plants successfully# For Peru in the 1870*s and thereafter for Chile* the nitrate industry rose to a position of great Importance# The iv course ©f Its development not only affected th© economic life of these countries hut their politics and foreign affairs as m i l # Adjacent Bolivia# too* felt the impact of nitrate developments# The conflicting economic interests of the three countries ©iBaeshed them in a struggle that led to one of the few major wars fought in Batin America after Independence# Known today as the War of the Pacific (1079*1303)* hut to many contemporaries as the "Hitrat© War,H the conflict re­ sulted in th© acquisition by Chile of the entire nitrate region# This gay# Chilean nitrate capitalists the oppor­ tunity to participate more freely in the development of the industry# But opportunity for Chilean capitalists m s oppor­ tunity for British capitalist© too# and the latter found occasion to establish their dominance during Chilean re­ organisation of th© industry* In th© years that followed a tremendous growth in nitrate production occurred, and the policy of Chile toward the industry was established# That policy closely tied the Interests of the Chilean government with th© prosperity of th© industry# However# the interests of nitrate capitalists and of th© government did not always coincide# Intermittent conflicts between the two occurred until a basis for cooperation finally was achieved at the beginning of the twentieth century* This dissertation will consider th© developments outlined In th© above paragraphs# Although the present study v has been limited to a discussion ©f the nitrate industry In the nineteenth century, it has been necessary to carry the treatment slightly beyond 1900 in presenting statistics and in bringing certain developments to an appropriate conclusion. For several reasons the turn of the century consti** tutes the end or one period of nitrate development and the beginning of another. In the first place# by that time the formulation of Chile*® nitrate policy had been stabilised on the principles of protecting nitrate revenues and pro** moting their gradual increase by augmenting productive ea«* pacity. Secondly# after 1 9OQ the government reversed It® antagonistic attitude toward activities of private nitrate interests and within the limits of its established policy sought to cooperate with private interest® for the common welfare. Thirdly, the attempts made by producers prior to 1 9 0 0 to control production In their own interests had proven to be temporary expedients, incapable of solving the basic problems of th© industry* A renewed effort by producers after the turn of th© century, in which the major faults of earlier efforts to control production were corrected and the support of the government won# achieved a seemingly permanent status. Fourthly, British dominance which was the chief characteristic of nitrate history prior to 1 90 0 was defi** nltely on th© wane by that date, lastly, it was not until after 1900 that organised labor became a powerful factor In the nitrate Industry. vl Because of the scarcity of data* this study gives only brief consideration to th© technical* managerial* and legal aspects of the history of th© nitrate industry# More* over* definitive treatment of the subjects emphasised in the following pages has been impossible* since th© data necessary for such a study is widely dispersed or cannot be located# The chief deficiencies lie in th© lack of files of Chilean newspapers (such as El Ferrocarrll* El Mercuric# and the Chilean Times)* and in th© absence of materials relating to activities of Chileans in th© nitrate industry# Records of th© Pelegacion do Salitreras (Bureau of Hltrate Affairs) and court records in Chile are other sources that have not been available for consult at lorn « An effort has been made* without success* to find the private papers of leading British par­ ticipants in the early history of th© nitrate industry# However* the sources for a history of the nitrate industry found in United States libraries are numerous* The Library of Congress* Harvard College Library* Boston Public