Source: Daily Worker, August 15, 1931
Transcription/Markup: Paul Saba
Copyleft: Internet
Archive (marxists.org) 2018. Permission is granted to copy and/or distribute this document under the terms of the Creative Commons License.
President Carlos Ibanez of Chile, one of the most hated dictators of Latin-America, was forced out of the Presidential palace on July 26. His forced resignation and subsequent escape to Argentine was primarily the result of the mass pressure of the Chilean people who have bled since 1927 through the most barbarous methods of repression against them. Thanks to Ibanez, Yankee imperialism has almost doubled its investments since 1927. Ever since his coup d’etat that ascended him to power, this representative of the Chilean bourgeoisie has served the interests of Yankee exploiters.
The staple product of Chile, nitrates, has suffered a serious setback since the Guggenheims assumed control of the mines. In contrast to the gigantic development of the nitrogen production, agriculture conserves its most primitive methods. In spite of the country being the foremost in South America in the production of metals such as iron, ore, nitrates, etc., Chile is basically an agrarian country. Semi-feudal relations still remain in the village. The agrarian crisis that has hit so severely the Latin American countries for many years, has been considerably aggravated by the economic crisis of capitalism, particularly by the economic crisis in the United States.
The control of the nitrates by Guggenheim was conditioned and preceded by a steady financial control of the government loans and a series of network of municipal loans extended throughout the country. The penetration of American imperialism at the expanse of the British, necessitated a complete guarantee to Wall Street bankers in the form of subduing the revolutionary struggle of the workers and launching of a heavy repression against the revolutionary trade unions and the Communist Party. Ibanez was the “chosen strong man” to do the job for the United States imperialists, The Chilean bourgeoisie under Ibanez built a strong army of mercenaries, a police force with high salaried officers. After a temporary successful crushing of the militant working class organizations, the cold blooded street assassinations of the most valiant leaders and the hundreds of deportations and exile to the dreadful Islands Mas Afuera Ibanez proceeded to install a fascist Labor Code whereby all workers were compelled to receive their working card from the government “labor” agencies.
But all these repressive measures could only dissipate the class struggle for a while. Monopoly imperialism cannot give solution to the capitalistic contradictions. In the attempt to solve the crisis of nitrates in Chile, the Guggenheims have performed the greatest merger ever known in Latin America. This merger is known as the Cosach. More than $375,000,000 of the nitrates were recently merged under the leadership of the Guggenheims. The company has a total asset of $750,000,000. A few weeks after the conclusion of the Cosach, this merger meant a deep slash into the national revenue of the government. Until then, the Chilean government received more than $30,000,000 a year from the export tax on the nitrates. The Cosach makes the Chilean government a “partner,” with the result that the return from this “partnership” reduced the government revenue to $21,000,000 for the first year.
The government is unable now to pay the interest on the loans owed to American and British bankers. The darkest picture of the situation in Chile is given to us by the robber Ramirez, president of the Cosach. He saw the present collapse of Chile in April when he said:
Few persons seems to have fully realized the fact that, unless the Chilean nitrate industry is radically reorganized, it will necessarily cease to exist at not far distant date, and that, as a consequence, 50,000 men will be thrown out of work, our fiscal revenues will drop 180,000,000 pesos, our exports will fall off 800,000,000 pesos, our fiscal assets will suffer to the amount of 3,000,000,000 pesos represented by the nitrate reserves, and two important provinces of the country will be transformed into a desert.
What did the fascist government of Chile do in order to avert the catastrophe? It has introduced a wage cut up to 25% for the minor government employees and for all workers in the shops, factories and mines. Increased speed up, longer working hours for the workers. Increased taxation upon the poor peasants and tenant farmers. A new wave of terror was installed against the workers in February of this year.
In order to save itself from this financial collapse, the Ibanez government rushed for loans to Wall Street and London. Ramirez was unable to obtain a $33,000,000 loan for which he made a special trip to New York last April. Ibanez’s power began to totter. Four Ministers of Finance succeeded one another.
In this frenzied search for loans. Ibanez began his flirtations with London. This highly displeased American bankers and their government. The worst crime committed by Ibanez against Yankee imperialism was the proposal of his Minister of Finance Planet, to call an economic conference of the Latin American governments in order to discuss a customs union, unemployment, military armaments and the economic and financial problem. This conference was to exclude the participation of the American government. The New York Times of July 11 says of Planet’s plan: “Planet’s Plan Troubles Washington.” The plan, however, did not materialize. The Argentine government was lukewarm to it. The Argentine bourgeois papers answered the call to the conference with the following question: “Why antagonize the United State government, when it is not necessary. We must remember that we are to make payment of $50,000,000 by December.” Olaya Herrera, who is the Wall Street puppet president of Colombia, refused to participate, suggesting to leave the points for discussion to the next Pan-American Commercial Congress to be held next October.
American imperialism, alienated by the independent maneuvers of Ibanez and above all, the deep political unrest within Chile, caused by a series of workers’ demonstrations and the movement of the students who came openly out demanding the resignation of Ibanez, let Ibanez fall and are now trying to find another servile.
For the first time since the installation of fascism in 1927, the workers demonstrated in the streets on May Day. The police forces thrown in to crush the demonstration did not succeed. The activities of the revolutionary workers within the government and reformist trade unions began to seriously undermine the government. The working class of Chile began its counteroffensive. The lower strata of the petty bourgeoisie that also feels the burden of taxation and the oppression of the imperialists, the students and anti-imperialists made a further wedge in Ibanez’s power.
But Ibanez’s substitution does not change the situation. The bourgeoisie and the landlords in maneuvers with Yankee imperialism still maintain themselves in power. The new government was immediately recognized by the White House. This new government has already taken the first steps to deport 100 Communists. There is no doubt that a still stronger wave of persecutions against the militant workers and peasants is forthcoming.
The struggle of the workers, peasants and the lower strata of the petty-bourgeoisie against the landlord-bourgeois-imperialist regime will continue. The only solution to the economic collapse of Chile is the anti-imperialist agrarian revolution that will overthrow the power of the bourgeoisie and imperialism and will establish a workers’ and peasants’ government. Only then will the toiling masses of Chile be able to put an end to the system of exploitation and colonial robbery.