Of the Latin American republics which have undergone severe inflation since the Great Depression, Chile alone has managed to maintain stable, constitutional government. Chile’s uniqueness in this respect owes much to the tradition of political stability which distinguished that country in the nineteenth century; but it also reflects the success of the Chilean approach to controlling the conflict generated by inflation. As early as the 1930s Chile established the embryo of today’s complex system of price controls and annual adjustments of wages and salaries to the cost of living. This policy has neither completely neutralized the effect of inflation on income distribution, nor prevented periodic attempts to curb inflation by sacrificing real wages, and therefore has not succeeded in eliminating inflation as a salient political issue. Nonetheless, judicious use of the price and wage machinery has attenuated the impact of inflation on the nonagricultural marginal, working, and middle classes, and thus has kept group conflict, which normally intensifies in an inflationary economy, within bounds. By adjusting income to prices, the Chilean system undeniably fosters the continuation of inflation; but in reducing the level of the accompanying conflict, it has served to insulate political institutions against a major threat to their stability.1 The efficacy of the Chilean solution is demonstrated by comparison with Argentina, Brazil, Bolivia and the Uruguay, which since the 1930s have also endured endemic inflation with occasional epidemic outbreaks.2 In the absence of a formula for distributing the costs and benefits of inflation in a way construed as equitable and legitimate, the struggle of each socioeconomic group to protect its real income brings more frequent resort to strikes, mass protests, and other potentially violent behavior. The standard remedy of stabilization through wage freezes, if not accompanied by effective price controls, can lead to the buildup of explosive tensions. The difficulty of resolving the multiple conflicts generated by inflation and enforcing unpopular decisions invites the assumption of dictatorial executive powers or the removal of established governments by military coup. The chronic instability of the inflation-ridden countries is not attributable solely or even primarily to inflation: political instability is at once older and more widespread than inflation in Latin America. Nonetheless, it is generally recognized that the intensification of political conflict during periods of inflation is an important factor in the breakdown of constitutionally prescribed forms of government.
The establishment of Chile’s price and wage control system was in large measure an outgrowth of that country’s early experience with food price inflation. Although the rise of food prices has generally not exceeded the overall pace of inflation, food has constituted the primary expense of the lower class Chilean family throughout the twentieth century, frequently comprising over half of total family expenditure.3 From the 1880s to the 1930s, inflation provoked growing demands for protection against rising food prices, which bore fruit in price control legislation of 1932. Price controls thereafter remained a basic component of Chilean policy, but their manifest failure to contain inflation caused working and middle class spokesmen by the late thirties to shift their emphasis to the achievement of income parity. The subsequent adoption of wage adjustment legislation completed the nucleus of Chile’s mechanism for regulating the social and political conflict generated by inflation.
The following study focuses on the formative stage of the popular movement against inflation, from the tentative beginnings of organized opposition until the rise of a conscious, articulate and effective anti-inflation movement after World War I. From 1888 to 1918, the urban poor directed their frustration over rising prices at a customs duty on imported livestock commonly known as the “impuesto al ganado,” or cattle tax. Although this duty was not a major factor in the overall rise of food prices, the circumstances of its proposal transformed it into the symbol and, in the popular mind, the primary cause of inflation. Thirty years of intermittent conflict over the cattle tax hardened the resistance to inflation, and contributed significantly to the formation of political consciousness among the urban masses. Together with the radicalization of the nitrate labor force, the growth of a school-bred, middle-class “intellectual proletariat,” and the insensitivity of the Parliamentary Republic to social problems, the cattle tax struggle underlay the rise of populist politics in the 1920s.4 While thus fostering political instability in the short run, the cattle tax issue also served as a barometer of the popular reaction to uncontrolled inflation, and encouraged the timely adoption of measures which underpinned the political stability of later years.
The introduction of legislation in 1888 to establish a protective duty on livestock was the first major step toward the erection of tariff walls around the Chilean rural economy, and an early symptom of the declining ability of agriculture to contribute to national economic development. In the 1880s, the Chilean livestock industry was in the process of expansion under the stimulus of a growing domestic market and rising prices. It had still not fully recovered from the impact of Chile’s wheat export cycle of 1850-1875, when large expanses of pasture had been converted to wheat and the cattle population substantially reduced. Thus cattle were regularly imported from Argentina, principally from the Cuyo, by being driven across the Andean passes in summer. Although large, this trade was not considered particularly injurious to Chilean interests, since the animals capable of the arduous journey were the same scrawny but hardy stock raised in Chile. Moreover, some Chilean landowners profited from the trade, by fattening the imported cattle for market.5
The purpose of the cattle duty bill of 1888, sponsored in Congress by the Sociedad Nacional de Agricultura (National Agricultural Society), was not primarily to choke off the existing trade with the Cuyo, but to forestall the possibility of ruinous competition from the pampa. In 1887, a guaranteed contract had been awarded for construction of the Chilean portion of a trans-Andean railroad via Uspallata Pass.6 The Agricultural Society feared that upon completion, the trans-Andean would introduce the products of Argentina’s modern cattle economy of shorthorns, alfalfa, and barbed wire into Chile, where the stunted “criollo” stock, natural pasture, and open range prevailed. It would permit nearly year-round importation of superior meat cattle, and eliminate the Chilean participation in the trade. This would be a severe blow to the rural economy of central Chile, which had become increasingly dependent on cattle raising after the collapse of its wheat exports in 1875.7
Opposition to the cattle duty bill was expected from the free trade forces in Congress; but before the economic debate could begin, a new, untested political force preempted the spotlight. The incipient Chilean left consisted of the minuscule Democratic Party in alliance with a handful of mutual aid societies. The party, founded in 1887 by dissident Radicals, called itself “the political party of the working people.”8 At its convention of 1889, it adopted a program calling for political democracy, industrial protectionism, labor legislation, equal rights for women, compulsory free education, and other measures which placed it in the vanguard of Chilean political groups.9 It was the first mass-based popular party in Chile, and for the thirty years after its founding was the cutting edge of opposition to the fluid but substantial landowning, mercantile and mining oligarchy which dominated national economic and political life. Despite its “petit bourgeois” leadership and reformist views, the Democratic Party is credited even by Marxist historians with contributing to the development of lower class political consciousness and schooling the future cadres of the socialist and communist movements.10
The urban lower classes whom the Democrats professed to represent were proliferating as Chile’s modern social structure began to emerge in the last decades of the nineteenth century. Between the censuses of 1865 and 1907, both the total urban population and that of the capital tripled, with Santiago reaching a population of 333,000.11 A majority of the new city dwellers were recent migrants from the countryside, forced from the land in numbers which greatly exceeded the urban demand for labor. Consequently, the cities were crowded with marginals who subsisted on casual employment, charity, and petty crime. A minority of the artisans, small merchants, and skilled workers were organized in mutual aid societies, some 150 of which existed in 1890.12 Until the advent of the Democrats’ leadership, the mutualist groups were conservative, disunited and politically ineffectual.
The proposal of a duty on livestock offered the Democratic Party a welcome opportunity to exploit growing popular resentment of inflation in the 1880s. Prices had been rising at least since the War of the Pacific, and food staples had risen by an average of 76 per cent at the wholesale level between 1879 and 1888.13 The food price trend was the result of three basic factors: the inflationary paper money policy adopted in 1878; the rapid growth of demand produced by urbanization, migration to the arid northern provinces annexed in the War of the Pacific, and the prosperity generated by the nitrate export economy; and the inability of Chile’s traditional agrarian structure to respond fully to market incentives.14
Before the introduction of the cattle duty bill, the Democrats’ strategy for attacking inflation had been limited to the encouragement of a few strikes by the mutualist societies earlier in 1888.15 The proposal of a tax on food which was already inflating, however, presented an issue relevant not only to organized labor but to the urban poor in general; and the Democrats’ contention that the duty would result in cultivated fields being turned to pasture, and thus cause all food prices to rise, made it important in even the modest homes where meat was uncommon. In opposing the proposed cattle tax, then, the Democrats showed their perception of the real but inarticulate popular frustration over inflation; in this way they courted the growing but disenfranchised, inert urban masses, and simultaneously attacked the economic interests of the landowning elite which was commonly viewed as the core of the Chilean oligarchy.
The Democrats’ strategy was a direct challenge to the National Agricultural Society, sponsor of the cattle tax. During much of the twentieth century, the Agricultural Society has been conspicuous as the political tool of vested rural interests, and especially notable for its defense of large landowners against agrarian reform. In the first thirty years after its founding in 1869, however, it more closely resembled the Sociedad de Amigos del País from which it was derived than the modern pressure group which it ultimately became. The Society was a progressive voluntary association dedicated primarily to the practical improvement of Chile’s backward agriculture. It was also a quasi-official agency of government which administered the agricultural schools and other official services, and in general acted as an informal ministry of agriculture. Formulation of agricultural policy was within the Society’s recognized purview, but the unexpected opposition of the Democrats to the cattle duty bill was the occasion for the Society’s first involvement in overt social conflict.16
On the basis of its members’ collective economic, social and political influence, the Agricultural Society was the most powerful associational interest group in nineteenth-century Chile. A majority of its 300-odd members were listed on the tax rolls among the owners of the largest 5 per cent by value of all rural holdings, and among these were the proprietors of some of Chile’s largest haciendas.17 A substantial number of the same individuals were also entrepreneurs or stockholders in mining or urban ventures, and thus personified the well-known overlap among Chilean economic elites.18 In the sample year of 1895, over half of the Society’s members belonged to the prestigious Club de la Unión —the single most reliable indicator of social elite status.19 In politics, besides frequently occupying party office, ambassadorships, intendancies, and high-level administrative positions, 32 per cent of the Society’s members in select years through 1901 served at least one term in Congress during their lives. In the same years, one third of the national Senate and a fourth of the Chamber of Deputies consisted of Society members.20
Despite the long odds, the Democrats launched their attack in July, 1888, with an enthusiastic public rally in the capital, making the cattle tax, in the estimation of a Santiago daily, “the big issue of the day.”21 This was followed by the publication of a pamphlet written principally by Malaquías Concha, a lawyer and mentor of the Democratic Party. Concha was familiar with the history and literature of the English Anti-Corn Law League—a circumstance which undoubtedly influenced the party’s decision to exploit a food tax issue and colored the language of the pamphlet. Paraphrasing the Reverend J. W. Fox of the League, Concha stated the “people’s” case in terms of class conflict: The duty would amount to
taking from the poor to give to the rich; oppression does not cease to be such because it is clothed in legal forms, and a people whose ration of meat is subject to taxes is an enslaved people, paying tribute to a handful of proprietors whose domains are burdened with mortgages and whimsical encumbrances. It is legal hunger decreed by the representatives of the people; it is tantamount to the deportation of our working classes to foreign shores.22
The manifesto also warned the oligarchy of the effect of the Corn Laws on its English counterpart:
It is to be hoped that monopoly over foodstuffs is not established among us, because that day the general misery will wipe out, as in England, all the privileges, perhaps even the influence, of the directing classes, who have not known how to repay the people’s confidence.23
The Democrats’ actions precipitated a spirited exchange in the daily press, the pages of the Revista económica, and in several pamphlets published on the duty.24 The debate focused on the possible effects of the proposed duty on the lower-class consumer, and the Democrats’ contention that the worker would be deprived of his meat found considerable support. In answer to that charge, the Agricultural Society emphasized the merits of “the very noble bean (poroto).” It maintained, with some validity, that the lower classes had never eaten much fresh meat, and went on to allege that their renowned capacity for work was due to their subsistence on “the king of all foods,” the Chilean bean. Abstinence from meat, it argued in blissful ignorance of sociomedical reality, kept the roto healthy and robust, sparing him from rheumatism, heart trouble, and other maladies. Thus, if the daily puchero (stew) which sustained the poor should decline in meat content or become completely vegetarian, would this not be a blessing in disguise?25
Despite the vigor of the debate, the duty issue was not resolved on its intellectual merits, but in the streets. The Democrat-labor coalition, which had neither representatives nor sympathizers in Congress, carried the day by organizing further protests against the proposal and by making defeat of the duty bill a major goal of a new wave of strikes which crippled Santiago and spread to some provincial towns.26 In view of the high level of popular agitation, the fearful spectacle of the political strike, and other problems besetting his government, President Balmaceda reportedly persuaded the Society to withdraw its bill.27 Thus, improbably, the disenfranchised poor thwarted the powerful Agricultural Society, and the Democrats had discovered an issue which they would exploit periodically for thirty years, while preparing the way for concrete social and political reform.
The cattle tax question remained in abeyance from 1889 until 1895, when a law of monetary conversion was passed to arrest the deterioration of the peso by reestablishing the gold standard. This posed severe problems for the national economy, which depended on devaluation to make its exports competitive and protect the home market.28 To cushion the blow of currency stabilization, a policy of moderate protectionism and bilateral commercial treaties was adopted.28 The selectively protectionist tariff reform law of 1897 was the keystone of the new trade policy. Article 8 of the law established the flat rate of sixteen pesos per bull or steer and twelve per cow, stipulating progressive implementation of the full amount in four annual stages between 1898 and 1901.30
In contrast to the case of 1888, passage of the cattle duty in 1897 met little resistance and required no special efforts by the Society, despite an increase in the rate levied. In part this reflected the consistency of the duty with both primary purposes of the new commercial policy: as specified by the Chamber of Deputies’ special committee on tariff reform, the cattle duty could either be retained to protect the Chilean cattle industry or be offered as a basis for negotiations in pursuit of a trade agreement with Argentina.31 Two other circumstances also facilitated the measure’s passage. First, the Democrats supported the industrial protection provided by the same bill, and thus could not oppose the cattle tax without jeopardizing the rural votes needed for passage of the entire tariff act. Second, relations with Argentina were deteriorating rapidly in 1897 due to a renewal of border conflicts, and a measure directed against Argentina’s lopsidedly favorable trade balance was popular and patriotic.32
Enactment of the livestock duty did not put the issue to rest. Indeed, its passage proved far easier than its subsequent defense against a host of foreign and domestic opponents. Initially, the greatest threat lay in the interaction of Chilean and Argentine foreign policy. In response to demands by the powerful Sociedad Rural Argentina, the Buenos Aires government in 1898 launched a vigorous diplomatic offensive against what it viewed as an unjustifiable obstruction of its foreign trade.33 The Chilean foreign ministry, for its part, had two powerful motives for favoring suppression of the duty. It was publicly committed to a commercial treaty with Argentina, and the cattle duty was the most valuable concession which Chile had to offer in exchange for tariff reciprocity. Concurrently, a major priority of Chilean foreign policy from 1891 to 1902 was to neutralize Argentine support for Peru and Bolivia on the unresolved boundary questions pending from the War of the Pacific. To achieve that objective, the foreign ministry considered the possibility of making territorial concessions along the borders disputed with Argentina; the sacrifice of the cattle duty might well have served the same purpose, with less loss of face for the administration.34
Despite the Society’s fears, the danger of an international agreement suppressing the duty was in fact quite remote. Even before negotiations could begin, the rise of vociferous opposition within Chile encouraged the belief in Buenos Aires that the unpopular measure would be repealed unilaterally without concessions from Argentina. The most powerful domestic opponents were regional economic interests injured by the duty: nitrate producers in the provinces of Antofagasta and Tarapacá, who alleged that the duty raised the cost of living and hence production costs; merchants and landowners connected with the trans-Andean cattle trade through the Aconcagua Valley; and southern cattlemen who bought and bred Argentine stock.35 The most implacable and active foe of the duty, however, was the left.
By the turn of the century, the Democratic Party and the labor movement had gained in political experience and power. The party had established itself throughout the republic, and after 1900 regularly elected at least two deputies.36 Although unable to enact their program, the Democrats used the congressional forum to good advantage for disseminating their program and propaganda. The mutual aid societies meanwhile had grown, and more militant anarchist and socialist unions had begun to emerge in the north. Under the tutelage of the Democrats, the mutualist societies had become more politically oriented, and their effectiveness was greatly enhanced in 1902 by the founding of a national organization, the Congreso Social Obrero, which claimed 20,000 members.37
The left’s opposition to the duty after 1898 essentially varied according to the price of meat. Opposition peaked annually in the winter months, when the closing of the passes and reduction of natural pasture produced seasonal scarcity and drove prices up. Agitation increased after 1899, and the winter of 1902 was marked by protest rallies, strikes, congressional resolutions and bills, and a crusade by the labor and Democratic press for repeal of the duty.38Table I indicates the wholesale prices of livestock, meat, wheat, potatoes and beans for 1897-1910.
Although the inflation of meat prices was undeniable, its cause was the subject of acrimonious dispute. The left contended that the duty—“a tax on the stomachs of the people”—was the sole cause of the inflation which deprived the poor of meat while it enriched the cattle barons.39 For its part, the Agricultural Society claimed that the duty added less than 10 per cent to the price of meat, and thus could not be held responsible for the inflation of recent years. With some justification, it blamed the inflation of meat prices on deficient railroad service, the proliferation of middlemen, the persistence of degenerate stock and traditional practices of husbandry, and other factors unrelated to the duty.40 In reality, the Society understated the importance of the duty, while the left exaggerated it. Essentially, the cattle tax exacerbated the pre-existing inflationary trend caused by monetary policy and the rapid growth of demand overlying a relative inelasticity of supply, and in the short run—from 1897 to 1902—probably contributed significantly to the rise of meat prices.41
After four years of mounting pressure against the duty, the threat of its repeal subsided following the winter of 1902, as the pace of inflation slackened. Respite for the duty’s defenders, however, was brief. Rumors of an imminent trade agreement with Argentina began to circulate during the fall and winter of 1905.42 Then on September 1, the retail meat merchants’ mutual aid society called for a general meeting of all Santiago mutualists to deal with the duty. The meat merchants claimed that they were being driven out of business by a decline in meat consumption, which they attributed to the rise of prices caused by the duty. The Democrats as well as the mutualists responded to the call, and on September 10 a new organization to mobilize opposition to the duty was established—the Comité Central de la Abolición del Impuesto al Ganado (Central Committee to Abolish the Cattle Tax).43
At this juncture, the Agricultural Society was largely correct in labeling the duty a bogus issue. Cattle prices had risen gradually since 1902 but, barring a disproportionate rise of meat over cattle prices, not enough suddenly to threaten the merchants. The meat dealers’ plight was real enough, but it was due primarily to the sharp inflation of wheat, beans, potatoes and other staples rather than the level of meat prices. After a decade of relative stability, these items rose by an average of 67 per cent between 1904 and 1905, in response to a massive issue of paper money which precipitated a generalized inflationary movement and stimulated a brief period of boom in Chile.44 As a result of the rise of food prices, working and middle class families’ food budgets were exhausted after the purchase of the essentials, leaving little or nothing for luxuries such as meat. Thus the normal winter decline in consumption was exaggerated in 1905, creating hardship for all who were dependent on the meat trade.
In view of this situation, why should the Democrats and mutualists have attacked the duty rather than pursuing more realistic means of combating inflation? In part, the strategy reflected a lack of options; they were still too weak to affect monetary policy or achieve effective consumer protection. Beyond that, the left could expect to reap political advantage from the popular, emotion-charged duty issue. Democratic propaganda over the years had made the duty synonymous with inflation to the urban consumer, and attacking it was by this time a conditioned response to rising prices. Moreover, the cattle tax had become the most hated and provocative symbol of the assumed economic and political hegemony of landowners in Chile, and in the common view epitomized their callous disregard for the welfare of the “people.” The following diatribe, published in the daily press, illustrates the invective constantly aimed at landowners by the duty’s opponents: Cattlemen are
the parties implicated in the peculative and criminal business conducted at the expense of the hunger of the poor people, who are the tributaries of the duty’s defenders. One can only consider those who each day fill their coffers fuller from trading on the people’s hunger to be iniquitous exploiters.45
The Agricultural Society was cognizant of the liability of the landowner image. Thus it issued periodic denials, acknowledging the existence of accusations of exploitation of the poor by the rich, iniquitous speculation with the hunger of the needy, spoliation of the worker,” but typically labeling such charges “illegitimate and impertinent slander.”46
A negative view of landowners was far from new. Since the days of the wheat export boom, the nouveaux riches hacendados had been known as a “clase derrochadora,” prodigal spenders who quaffed imported champagne and conveyed their French-perfumed ladies to the theater in gilt carriages, oblivious to the poverty around them.47 Agriculturists were also known by the turn of the century—long before the popular statement by Alejandro Venegas in Sinceridad and the more scholarly indictments of Roberto Espinoza, Agustín Ross, and Frank Fetter—as “papeleros,” the perpetrators of the fiduciary regime which inflated the value of their land while impoverishing the laboring classes.48 When prices rose, then, this composite image made the landowner the natural target of the consumer’s ire, and the feeling was easily channeled into a crusade against the most hated symbol of the agriculturists’ power and egotism, the livestock duty.
The escalation of pressure in September, 1905, set the stage for a showdown over the duty. The Democratic and labor leaders who comprised the anti-cattle-tax committee used their respective national organizations to establish branches of the committee in towns throughout Chile. The Agricultural Society, unwilling to compromise on a measure it considered essential to rural welfare, prepared to defend the duty. The Society was particularly concerned to prevent intimidation of the government by the direct tactics used successfully in 1888; to that end, it announced the formation of an “Agrarian League” to elect in March, 1906, a Congress which would be committed to retaining the duty.49
The Agricultural Society’s strategy, focused on the upcoming election, was upset by simultaneous protest demonstrations which anti-cattle-tax forces organized throughout the country for Sunday, October 22. Outside the capital, the numerous rallies went off without serious incident. In Santiago, however, an orderly protest of between thirty and fifty thousand participants degenerated into two days of violence, in which proletarian mobs roamed the city at will, looting stores and attacking the property and persons of the wealthy. This event, known as the “Red Week,” stands out as the bloodiest uprising in the history of Santiago; over three hundred persons were killed and at least a thousand were injured.50
As noteworthy as the casualty figures of the Red Week was the manner in which the authorities attempted to contain the violence. The Santiago army garrison was away on maneuvers, and a disturbance of such unprecedented magnitude easily overwhelmed the municipal police. As the situation deteriorated, the volunteer fire department, commanded and largely staffed by the capital’s elite, was pressed into service. Subsequently arms were distributed to the Club de la Unión, whose officers mustered the younger members into an impromptu “guard of order” to reinforce the beleaguered police and firemen. The ensuing clash of armed aristocrats and rock-throwing mobs produced a large share of the casualties of the Red Week, and the efforts of the guard of order were acknowledged in a public note of commendation from the Secretary of the Interior to the President of the Club de la Unión.51
Face-to-face class warfare, without the usual intermediaries, was a unique and haunting experience for both parties to the conflict To the aristocrats, facing the proletariat over rifle barrels translated the “social question” from an academic abstraction to sobering reality, and undoubtedly impressed on them the explosive potential of unmitigated inflation.52 On the other hand, the massacre perpetrated by the gilded youth in defense of their fathers’ cattle tax could only intensify the sense of alienation and class hatred among the poor. The labor press reflected these sentiments in reporting the events:
The role played ... by the aristocratic youth of Santiago in that famous “guard of order” is well known by all the workers. Everyone is aware that the majority of the victims who fell the 23rd were killed only because of the bestiality and excessive arrogance of a herd of youths who felt themselves superior beings because the authorities had given them firearms to assassinate in vile and cowardly fashion everyone they found convenient. The people were assassinated with great zeal and treachery by the brutal raids of the young bourgeois horde who on that occasion revealed the savage cannibalism which they artfully hide under the veneer of an infamous education without humanitarian sentiments or respect for the lives of others.53
In the days following the event, accusations of responsibility flew freely: the Democrats, the Argentine embassy, anarchists, the labor movement, the Society, the descamisados-all were blamed for the Red Week. Malaquías Concha and the left blamed the Agricultural Society for agitating popular passions by forming the Agrarian League.54 After months of restraint, the Society answered with its interpretation of the whole affair:
The cattle duty is nothing more than a pretext exploited by agitators who pursue purposes far different from reducing meat prices. Violent protests, carried to criminal excesses, against a minimal tax in a country which pays almost no taxes, have not been a spontaneous act of the people, nor even a truly popular act. The truth is that the people did not even realize the existence of the duty until certain agitators exploited it as the synthesis and expression of the class hatred which they themselves are whipping up among the lower classes. They have presented the cattle duty as an abuse perpetrated against the poor man in benefit of the rich.55
In the midst of the recriminations, occasional dispassionate analyses were tendered. One observer, José Alfonso, thought that meat prices were not the real issue, but a symbol of the “social disequilibrium” plaguing the country.56 Enrique Zañartu Prieto blamed the wave of inflation and profiteering touched off by the paper issue of 1904: “Now that everything prospers, that every businessman and speculator is happily getting rich, the miserable condition of the working and middle classes is irritating.”57 Even at the time, then, the conflict over meat was recognized as symptomatic of deeper-seated problems. Attacking the duty expressed the frustration of the urban masses over the decline in their standard of living during a period of general prosperity, and was also one of the few available ways of lashing out at the system which oppressed them. The Red Week illustrated the profundity and volatility of those sentiments.
Despite the impact of the Red Week, the Agricultural Society was able to block congressional action on the duty until the winter of 1907, when the acceleration of inflation again increased social tensions. In August, Congress finally agreed to a compromise which did not repeal, but only suspended the duty for two years.58 The effects of this measure on meat prices were inconclusive. At the end of the two-year period, the administration proposed a year’s extension of the suspension in the interest of furthering current trade negotiations with Argentina. The Society, however, sponsored a counterproposal to resume collection of the duty as scheduled. The decisive factor was popular reaction; when the left mustered only token opposition, Congress proceeded to re-enact the duty in December, 1909.59
Analysis of the vote on key bills in 1907 and 1909 indicates the party and regional alignments which had taken shape during the years of debate over the duty.60 The geographic breakdown reveals a clear north-south division based mainly on economic interest. Mining and commerce were important in the area north of the Central Valley, and the three northernmost provinces were virtually devoid of agricultural or pastoral activity. The only northern votes cast either year in favor of the duty came from representatives of Coquimbo and Aconcagua provinces, where cattle raising vied in importance with mining and the trans-Andean livestock trade. The agricultural and pastoral Central Valley voted overwhelmingly in favor of the duty, the main opposition there coming from representatives of urban constituencies—particularly Santiago and Concepción—and southern cattlemen who imported Argentine breeding stock.61 The only consistency in party vote was among the Democrats, who opposed the duty unanimously in both years. For the other parties, which were dominated by rival factions of the oligarchy, the cattle tax issue was an “open question” on which party members were free to vote according to local dictates or personal interest.62Table II illustrates the party and geographic breakdown of the vote in Congress.
The absence of vigorous opposition to the cattle tax in 1909 indicated a decline of interest in the issue after the peak of 1905. In part, this reflected disillusion after years of campaigning, over the inconclusive results of the duty’s suspension. The year 1909 also marked the founding of the Chilean Labor Federation (FOCh), and the task of organization and expansion engaged the labor movement more urgently than the cattle duty. During the following decade, moreover, attention was given to the underlying structural causes of food price inflation and the merits of agrarian reform began to be debated.63 Thus although denunciation of the cattle tax remained a stock item in the rhetoric of protest, the words were uttered with less fervor as the years passed.
The post-World-War-I crisis of the Chilean economy mobilized the working classes and, for the first time, elements of the middle sectors, who together mounted the last major campaign against the cattle tax. While the collapse of nitrate exports in 1918 produced massive unemployment in all areas of the economy, the high European demand for food stimulated agricultural exports, driving food prices up.64 The first priority of the mobilized groups was control of inflation; their agent for that purpose was the Asamblea Obrera de Alimentación Nacional (Workers' Assembly for National Alimentation), founded in 1918 on the model of the 1905 anti-cattle-tax committee. While labor and the left again formed the core of the movement, the support of large segments of the middle class broadened and strengthened the old consumer coalition.65
Faced with ominous and growing popular opposition, the Sanfuentes government readily granted the Assembly’s first demand, suspending the cattle tax in December, 1918, as “a condition indispensable to social stability.”66 This time, however, the gesture proved ineffectual either as a deterrent to inflation or as a means of appeasement. Spurred by the continuing rise of prices and guided by middle-class intellectuals, the urban consumer movement formulated a more sophisticated and radical program, which it presented at a mammoth protest rally in 1919. The major new points were: 1) agrarian reform, to increase agricultural productivity over the long run, and 2) price controls at the production, wholesale and retail levels to obtain immediate relief.67 After 1918 these demands superseded the cattle tax as the central issues in the fight of the turban lower-income groups against inflation.
The 1919 urban consumer program was implemented in its essentials within less than fifteen years. This resulted not only from the growth of working and middle class political power, but also from the increased sensitivity of governments, irrespective of ideology or social composition, to the disruptive potential of uncontrolled inflation. Following the precedent of the 1918 cattle tax suspension, the authorities responded to every substantial rise in the inflation rate by offering the minimum concession necessary to forestall dangerous mass mobilization. The cattle tax was suspended again when prices rose in 1925, and eliminated as a political issue in 1927 when it was placed on a sliding scale based on price levels.68 The Caja de Colonización Agrícola (Agricultural Colonization Agency) was established in 1928 for the explicit purpose of fostering productivity, and hence lowering food costs, by subdividing latifundia.69 Finally, with the dramatic acceleration of inflation following the trough of the Depression in 1932, the current right-center government did not hesitate to implement existing plans for a powerful national price control agency in a vain attempt to preserve social and political stability.70
Although later administrations expanded the scope and powers of the price control agency—to the point of discouraging agricultural production and causing the stagnation of that sector, according to one school of interpretation71—food and general prices continued to rise through the thirties. The inability of price controls to contain inflation led to demands for the adjustment of income to the cost of living. The passage of wage and salary adjustment legislation in 1937 and 1941 and its subsequent application to most of Chilean labor was thus merely a variation on established policy: it acknowledged the failure of the 1919 consumer program, and reaffirmed the conviction that the conflict produced by inflation must be controlled at any cost,72 Application of the lesson of the Red Week to successive inflationary crises, then, ultimately brought forth the Chilean solution to the political stresses of inflation.
The three-decade struggle over the cattle tax, in summary, had important imphcations for the course of Chilean political development. While fostering the formation of political consciousness among the urban masses, it taught the oligarchy to be pragmatic and flexible in dealing with inflation and other social problems. By pointing up the volatile potential of inflation, the cattle tax issue—and particularly the Red Week—influenced the adoption of the machinery which has served to minimize the social and, by extension, the political ramifications of inflation. The reduction of tensions generated by inflation strengthened the stability of the political system and enhanced its ability to resolve other conflicts attendant upon modernization, thus channeling the quest for change within established political processes. In these ways, the cattle tax experience contributed to the survival of Chile’s tradition of political stability within a context of permanent inflation and accelerated social change in the period after the Great Depression.
Some of the more useful discussions of inflation in Chile include: Albert O. Hirschman, Journeys Toward Progress: Studies of Economic Policy-Making in Latin America (New York, 1963), pp. 160-223; Aníbal Pinto Santa Cruz, Chile, un caso de desarrollo frustrado (2nd ed., Santiago, 1962), pp. 122-147; Joseph Grunwald, “The ‘Structuralist’ School on Price Stability and Development: The Chilean Case,” in Albert O. Hirschman (ed.), Latin American Issues: Essays and Comments (New York, 1961), pp. 95-123; and Tom E. Davis, “Eight Decades of Inflation in Chile, 1879-1959: A Political Interpretation,” The Journal of Political Economy, 71 (1963), 389-397.
Although Bolivia in the 1950s and Uruguay in the 1960s and early ’70s survived periods of rampant inflation without military coups, this was accomplished by the use of extra-constitutional powers to counter antigovernment violence. Cost of living indices for the four cited countries in the 1950s and ’60s are presented in Celso Furtado, Economic Development of Latin America: A Survey from Colonial Times to the Cuban Revolution (Cambridge, 1970), p. 104.
A survey of 81 working class families between 1911 and 1921 revealed that on the average 60 per cent of their total income was spent for food: Oficina del Trabajo, Boletín de la Oficina del Trabajo, año XII, no. 18 (1922), 97. A later ILO study of 454 working-class households in 1956-57 indicated that 55.5 per cent of total expenditures went for food: International Labour Office, Household Income and Expenditure Statistics (No. 1, 1950-64) (Geneva, 1967), 89. Evidence for the nineteenth century is unavailable.
The term “intellectual proletariat” is borrowed from Alberto Edwards Vives, La fronda aristocrática (6th ed., Santiago, 1966), pp. 186-190. Other studies which deal with the background to populism include: Hernán Ramírez Necochea, Historia del movimiento obrero en Chile. Antecedentes, siglo XIX (Santiago, 1956); James O. Morris, Elites, Intellectuals and Consensus: A Study of the Social Question and the Industrial Relations System in Chile (Ithaca, N. Y., 1966), pp. 78-171; and Frederick B. Pike, Chile and the United States’, 1880-1962 (Notre Dame, Ind., 1965), chs. 4 & 6.
Trends in nineteenth century agriculture are discussed in: Arnold J. Bauer, “Expansión económica en una sociedad tradicional: Chile central en el siglo XIX,” Historia (Universidad Católica de Chile), no. 9 (1970), pp. 137-235; and Teodoro Schneider, La agricultura en Chile en los últimos cincuenta años (Santiago, 1904). Statistics on cattle imports are provided in Silvia Hernández, “The Andean Passes between Chile and Argentina: A Study in Historical Geography” (unpublished Master’s thesis in geography, University of California, Berkeley, 1970), p. 49.
Construction of the Chilean side began in 1889, but the line was not opened until 1910.
Cámara de Diputados, Sesiones ordinarias en 1888, I, 12-13; El Ferrocarril (Santiago), July 11, 1888, p. 2.
The quotation from Malaquías Concha is cited in Ramírez Necochea, Movimiento obrero, p. 207.
Malaquías Concha, El programa de la Democracia, 2nd ed. (Santiago, 1905).
Ramírez Necochea, Movimiento obrero, pp. 207-216.
Dirección General de Estadística, Sinópsis geográfico y estadístico de Chile, año 1933 (Santiago, 1934), p. 46; ibid., Resultados del X censo de la población efectuado el 27 de noviembre de 1930 (Santiago, 1931), I, 40, 46.
Ramírez Necochea, Movimiento obrero, p. 256.
This figure is an unweighted average of flour, beans, and meat, from Bauer, “Expansión económica,” pp. 223-224.
For analyses of the abandonment of the gold standard in 1878, see: Frank Whitson Fetter, Monetary Inflation in Chile (Princeton, 1931), pp. 28-43; Pinto Santa Cruz, Chile, un caso de desarrollo frustrado, pp. 28-34. The domestic market for commercial agriculture roughly doubled between 1875 and 1895: Dirección General de Estadística, Resultados del X censo, I, 40, 46.
Ramírez Necochea, Movimiento obrero, pp. 282-312; El Ferrocarril, April 30, 1888, pp. 1-2.
For histories of the Agricultural Society, see: Gonzalo Izquierdo Fernández, Un estudio de ideologías chilenas: la Sociedad de Agricultura en el siglo XIX (Santiago, 1968); and Thomas C. Wright, “The Sociedad Nacional de Agricultura in Chilean Politics, 1869-1938” (unpublished Ph.D. dissertation in history, University of California, Berkeley, 1971).
This is based on the tax assessment of 1874—the last prior to 1888. The next available information, published in 1908, confirms the pattern of 1874: Impuesto agrícola: rol de contribuyentes (Santiago, 1874); Índice de propietarios rurales i valor de la propiedad rural según los roles de avalúos comunales (Santiago, 1908). Society membership lists are from Sociedad Nacional de Agricultura (henceforth, SNA), Boletín de la Sociedad Nacional de Agricultura (henceforth, BSNA), 4 (1873), 455-458; and SNA, Memoria de la SNA, año 1908 (Santiago, 1909).
This is indicated by a cursory check of the Society’s members in biographical dictionaries: Pedro Pablo Figueroa, Diccionario biográfico de Chile (4th ed., 3 vols., Santiago, 1897-1901); and Virgilio Figueroa, Diccionario histórico y biográfico de Chile, (4 vols., Santiago, 1925-1931).
Club de la Unión, Memoria del Club de la Unión, año 1895 (Santiago, 1896); SNA, Memoria 1895.
These figures are derived from Society membership lists published in the Memorias of 1873, 1885, 1895, and 1901; and Congressional rosters of the same years, from Luis Valencia Avaria, Anales de la República (2 vols., Santiago, 1951).
El Ferrocarril, July 8, 1888, p. 2.
Representación del pueblo de Santiago al Congreso de la República con motivo del proyecto de impuesto al ganado arjentino (Santiago, 1888), p. 10.
Ibid., pp. 9-10.
The most notable of the pamphlets was a lengthy polemic by Agustín Ross Edwards, which analyzed and methodically rejected the Society’s economic arguments: El impuesto al ganado arjentino: folleto de actualidad (Valparaíso, 1888).
Lauro Barros, “El impuesto a los ganados arjentinos,” Revista económica, 1 (1887), 364-376; El Ferrocarril, July 11, 1888, p. 2; ibid., July 25, 1888, p. 2.
El Ferrocarril, July 6, 1888, p. 4; La Libertad Electoral (Santiago), July 6, 1888, unpaginated; El Mercurio (Valparaíso), July 24, 1888, p. 3; Ramírez Necochea, Movimiento obrero, pp. 282-312.
El Ferrocarril, July 10, 1888, p. 2.
The role of devaluation in exportation is discussed in: Félix Vicuña, “Situación económica,” Revista Económica, 1 (1886), 9-20; Marcial Martínez, “La cuestión económica,” ibid., pp. 179-227, claims that devaluation, by promoting exportation, had saved Chile from “social revolution.”
Although the attempt to return to the gold standard was abandoned in 1898, the 1897 tariff was retained.
Boletín de las leyes i decretos del gobierno, año 1897 (Santiago, 1897), suplemento, pp. 690-715.
Cámara de Diputados, Sesiones extraordinarias en 1895-96, pp. 629-630.
Malaquías Concha later attributed the passage of the cattle duty to myopic jingoism—“Chilean patriotism overcame the necessities of the stomach.” Cámara de Diputados, Sesiones extraordinarias en 1905-06, pp. 77-78; on boundary conflicts, see Jaime Eyzaguirre, Chile durante el gobierno de Errázuriz Echaurren (Santiago, 1957), pp. 95-122, 197-289.
BSNA, 30 (1899), 809-813.
Memoria del Ministerio de Relaciones Estertores, culto i colonization presentada al Congreso Nacional en 1900 (Santiago, 1900), pp. 7, 25-27; Chilean foreign policy during this period is discussed in Robert N. Burr, By Reason or by Force: Chile and the Balancing of Power in South America, 1830-1905 (Berkeley and Los Angeles, 1965), pp. 192-259.
BSNA, 31 (1900), 955-959; ibid., 32 (1901), 41-45; Cámara de Diputados, Sesiones extraordinarias en 1900-01, pp. 75, 673-674.
Jordi Fuentes and Lía Cortés, Diccionario político de Chile (1810-1966) (Santiago, 1967), pp. 144-153.
Julio César Jobet, Luis Emilio Recabarren (Santiago, no date), p. 112.
El Chileno (Santiago), October 4, 1902, p. 1; ibid., October 17, 1902, p. 1; Cámara de Diputados, Sesiones extraordinarias en 1902-03, pp. 93-94, 108-109, 171, 271; Jorge Barría Serón, “Los movimientos sociales de principios del siglo XX” (Memoria de Prueba, Facultad de Filosofía y Educación, Universidad de Chile, 1953), pp. 72, 120-121.
El Chileno, October 17, 1902, p. 1; also ibid., October 4, 1902, p. 1.
BSNA, 31 (1900), 872-878; ibid., 33 (1902), 975-980; Cámara de Diputados, Sesiones extraordinarias en 1902-03, pp. 304-305.
The lack of reliable data on imports makes any calculation of the duty’s effect on prices inconclusive. While the official statistics show a sharp decline after 1897, the contraband trade which sprang up was estimated to account for up to 60 per cent of total imports. Other factors, such as the stabilization of Chilean currency and the supply of Argentine cattie, also influenced price levels in Chile. Revista del Centro Industrial y Agrícola, 3 (1902), 46-57; BSNA, 34 (1903), 157-159.
BSNA, 36 (1905), 185-189, 199-205, 217-222, 235-240.
El Chileno, September 14, 1905, p. 1.
See Table I; also, Dirección General de Estadística, Sinópsis estadístico de Chile, año 1925 (Santiago, 1926), p. 64.
El Mercurio (Santiago), November 4, 1905, pp. 7-8
BSNA, 36 (1905), 849.
For examples of the image, see Marcial González, “Nuestro enemigo el lujo,” Estudios económicos (Santiago, 1889), pp. 429-462; Schneider, La agricultura, p. 7.
The key works which contributed to the development or the image of landowners as papeleros include: Alejandro Venegas, Sinceridad: Chile íntimo en 1910 (Santiago, 1910); Roberto Espinoza, Cuestiones financieros de Chile (Santiago 1909), which blames the banks more than landowners; Agustín Ross Edward’s Chile, 1851-1910: sesenta años de cuestiones monetarias y financieras y de problemas bancarios (Valparaíso, 1910), which absolves the banks and blames the landowners; and Fetter, Monetary Inflation, which elaborates on the Ross thesis.
BSNA, 36 (1905), 695-696, 707-708, 735-738; SNA, Memoria 1905, p. 7; ibid., Memoria 1907-08, pp. 17-22.
All the daily press of Santiago carried extensive coverage of the events of October 22 in the editions of October 23, 1905, and following days. Of the available summaries of the Red Week, the best is Barría Serón, “Movimientos sociales de principios del siglo XX.” The official death count was seventy, but the cemeteries reported at least 300 burials of victims: Ramón Subercaseaux, Memorias de ochenta años, II, 198-202. Other estimates ran up to 500 killed: El Alba (Santiago), año I (October 15-31, 1905), pp. 4-5.
Santiago daily press, October 23-27, 1905; the note was published in El Mercurio (Santiago), October 7, 1905, p. 7.
Subercaseaux, Memorias, II, 198-202.
El Alba, año I (October 15-31, 1905), p. 4; ibid., año, I (November, 1905), p. 1.
Cámara de Diputados, Sesiones extraordinarias en 1905-06, pp. 97-104.
BSNA, 37 (1906), 162.
El Ferrocarril, October 26, 1905, p. 1.
Ibid., October 31, 1905, p. 1. The classic novel Casa grande, by Luis Orrego Luco, is set during the financial boom of 1905-07, and reflects the prevailing air of crass materialism and the bonanza outlook which could easily have had the irritating effect to which Zañartu Prieto referred.
The details of the debate during 1905-07 may be found in Wright, “Sociedad Nacional de Agricultura,” pp. 159-164.
Cámara de Diputados, Sesiones extraordinarias en 1909-10, I, 344-345, 753-754.
The 1907 law actually complicated the issue by introducing considerations alien to the duty itself. A bill sponsored by Malaquías Concha calling for outright repeal of the duty provides a better overall test of sentiment, and has been used for analysis. The 1909 resolution analyzed is one sponsored by Maximiliano Ibáñez, which ordered reapplication of the duty, and was passed.
Valencia Avaria, Anales de la República, II, 395-399, 406-410; Cámara de Diputados, Sesiones ordinarias en 1907, II, 1604-1611; ibid., Sesiones extraordinarias en 1909-10, I, 753-754.
Although the number of Democratic votes is too small to be statistically significant, the party’s sponsorship of the anti-cattle tax movement permits the assumption that its members voted out of principle as well as regional or local economic interest. The other parties cannot be grouped in any meaningful way for statistical analysis: No left (except the Democrats)-center-right classification is valid before 1918, and the common definition of the Conservative Party as agrarian, the Liberal as commercial-industrial, etc., breaks down under analysis. Due to these limitations, the party voting data are presented in raw form in Table II.
Moisés Poblete Troncoso directed an economics seminar at the University of Chile which studied the relationship between land tenure and agricultural productivity. The results of this lengthy investigation were published in Poblete Troncoso, El problema de la producción agrícola y la política agraria nacional (Santiago, 1919).
The postwar cost of living index is presented in Dirección General de Estadística, Sinópsis estadístico de Chile, año 1925, p. 118.
El Mercurio (Santiago), November 23, 1918, pp. 17-18; ibid., August 30, 1919, p. 35, Jorge Barría Serón, “Los movimientos sociales de Chile desde 1910 hasta 1926” (Memoria de Prueba, Facultad de Ciencias Jurídicas y Sociales, Universidad de Chile, 1960), pp. 117-118, 241-243.
Cámara de Diputados, Sesiones extraordinarias en 1918-19, p. 662.
El Mercurio (Santiago), August 28, 1918, p. 19.
ibid., September 22, 1925, p. 1; ibid., September 23, 1925, p. 1; ibid., September 25, 1925, p. 1; Boletín de las leyes i decretos del Gobierno, Libro XCVI, Vol. II (June 1927), 2238-2242.
Cámara de Diputados, Sesiones ordinarias en 1928, II, 1877-1884. In its 35 years of existence, the Colonization Agency actually had a negligible effect on rural land tenure.
Guillermo Torres Orrego, El Comisariato General de Subsistencias y Precios de la República (Santiago, 1947), pp. 18-35.
This common view, associated with political conservatives and “monetarist” economists, is succinctly expressed by Sergio Undurraga Saavedra, “Key Factors in Chilean Economic Development,” in Roberto Alemann et al., Economic Development Issues: Latin America (New York, 1967), pp. 108-110.
These laws are discussed in Hirschman, Journeys toward Progress, pp. 185-186.
Author notes
The author is Assistant Professor of History at the University of Nevada, Las Vegas.
