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Before the Nitrate Era: British Commission Houses and the Chilean Economy, 1851–80

Published online by Cambridge University Press:  05 February 2009

John Mayo
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Extract

The years between the election of Manuel Montt as President of Chile in 1851 and the outbreak of the War of the Pacific in 1879 were years of considerable expansion in the Chilean economy despite occasional setbacks which were generally followed by renewed prosperity. Government activity assisted this growth: Montt's administration, in particular, passed laws and followed policies designed to help commerce and industry and to establish the infrastructure of a modern economy.1 However, the country's increased wealth came from greater production for export in the traditional economy, using largely traditional methods, rather than through technical innovations or the introduction of new industries. The export sector fuelled the republic's growth; not only did export receipts pay for imports, but they provided the guarantee for foreign loans, while the Government secured the bulk of its revenues from duties levied on exports and imports.

Type
Articles
Information
Journal of Latin American Studies , Volume 11 , Issue 2 , November 1979 , pp. 283 - 302
Copyright
Copyright © Cambridge University Press 1979

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References

1 For Montt's Government, see Encina, Francisco A., Historia de Chile desde la prehistoria hasta 1891 (20 vols., Santiago, 1942–52) XIII, Chaps. 55–60;Google ScholarEdwards, Alberto, El Gobierno de don Manuel Montt (Santiago, 1932), Chaps. 2 and 6;Google ScholarJobet, Julio César, Ensayo crítico del desarrollo económico-social de Chile (Santiago, 1955), Chap. 1.Google Scholar

2 See Pederson, L. R., The Mining Industry of the Norte Chico, Chile (Evanston, 1966)Google Scholar and Bauer, Arnold, Chilean Rural Society from the Spanish Conquest to 1930 (Cambridge, 1975) for studies of the two sectors.Google Scholar

3 Necochea, H. Ramírez, Historia del Imperialismo en Chile (Santiago, 1960), p. 62Google Scholar, estimates British production at 20-30% of the country's capacity, which seems unlikely. He includes the Mexican & South American Co., which failed, and both Gibbs and the Cerro Blanco Co. which Gibbs controlled. Between 1868 and 1886, British-owned copper companies provided Gibbs with only about 5% of their consignments. London, Guildhall Library, Gibbs Papers, MS 11033A/4, Value of shipments, 31 Dec. 1886.

4 Bauer, , and McBride, G. M., Chile, Land and Society (New York, 1936Google Scholar) make clear the social importance of land-ownership; the former describes in detail sources of credit for agriculture.

5 Graham, Maria, Journal of a Residence in Chile during the year 1822 and a voyage from Chile to Brazil in 1823 (London, 1824), p. 179.Google Scholar

6 Bauer, op. cit., p. 87.Google Scholar

7 Ibid., p. 38. These figures refer to 1849.

8 Gilliss, J. M., The U.S. Naval Astronomical Expedition to the Southern Hemisphere during the Years 1849-50-51-52 (3 vols., Washington, 1855), I, 234.Google Scholar

9 Parliamentary Papers, 1866, LXXIV, 408;Google ScholarAnuario estadística de Chile 1875 (Santiago, 1875), p. 197;Google ScholarIbid 1884, p. 437.

10 Parliamentary Papers, 1866, LXXIV, 408;Google ScholarAnuario estadistica de Chile 1875, p. 197;Google ScholarIbid 1884, p. 437.

11 London, Public Recard Office, Foreign Office Archives, Chile (F.O. 16). F.O. 16/101, Fras. Brown, C. (Valparaiso) to Charles Swinburne (Santiago), 2 June 1857. (Charges amounted to 8% on sales in bond: 5% commission, 2½% guarantee, and ½% port agency, and 9% duty paid – 1% store rent being added.)Google Scholar

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13 Ibid, Articles of Partnership, II Jan. 1851. After 1863 the firm was named Balfour, Williamson & Co. in Liverpool, and Williamson, Balfour & Co. in Chile.

14 The only exceptions known to me were two houses financed by Edwards, Agustín, Edward Logan & Co. (1858),Google Scholar and Sawers, Woodgate & Co. (1872).Google Scholar

15 e.g. Williamson, Balfour Papers, Santiago, Liverpool Letterbook 1857–9, Santiago, Duncan For Papers, Old Letters 1841–53 for examples of this.Google Scholar

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18 London, Guildhall Library, Huth Papers, MS 10700/5, Fred. Huth to Browne, B. G., 16 June 1853.Google Scholar

19 Balfour, Williamson Papers, Articles of Partnership, 19 Mar. 1874.Google Scholar

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23 Balfour, Williamson Papers, Articles of Partnership, 19 Mar. 1874.Google Scholar

24 Huth Papers, MS. 10700/5, Extension of Partnership, 16 Dec. 1862.Google Scholar

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26 Huth Papers, MS. 10700/5, annexed to extension of Articles of Partnership from to April 1862.Google Scholar

27 Ibid

28 Ibid, annexed to Articles of Partnership, 25 May 1848.

29 Ibid, Bart. G. Browne to Frederick Huth & Co., 16 Aug. 1853.

30 Ibid

31 Ibid

32 Ibid

33 Duncan Fox Papers, Old Letters 1854–59, Lynill, J. P. (Valparaiso) to Meyer (Manchester), 15 July 1857.Google Scholar

34 Ibid, Lynill to Meyer, 33 Jan. 1857.

35 Ibid, Lynill to Meyer, 15 May 1857.

36 Ibid, Lynill to Meyer, 31 Jan 1857. Before it was Ravenscroft Bros. & Co.

37 Ibid, Lynill to Meyer, 15 Sept. 1857.

38 Balfour, Williamson Papers, Articles of Partnership, II Jan. 1851;Google ScholarWilliamson Letterbooks, III, Williamson, S. to Balfour, R., 22 Oct. 1884.Google Scholar

39 In Parliamentary Papers, e.g. 1862, LVII, 315.Google Scholar

40 Ibid, pp. 313, 315, 319–21.

41 Ibid, 1867–1868, LXX, 987, 988, 990.

42 Anuario estadlstica de Chile 1881, pp. XVI, 200.Google Scholar

43 Santiago, Williamson, Balfour Papers, Liverpool Letterbook 1857–59 far monthly orders.Google Scholar

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45 Anuario estadistica de Chile 1876, p. 200.Google Scholar

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48 Ibid, S. Williamson to C. McCulloch, 16 April 1877.

49 Gibbs Papers, MS. 11471/I, A. G. & S. to W. G. & C., 8 April 1859.Google Scholar

50 Nitrate was an exception even before 1879, but the deposits were outside Chile.Google Scholar

51 Parliamentary Papers, 1862, LVII, 316.Google Scholar

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56 Gibbs Papers, MS. 11471/I, A. G. & S. to W. G. & C., 27 Apr. 1873.Google Scholar

57 Ibid, A. G. & S. to W. G. & C., 8 Apr. 1858.

58 Santiago, , Archivo Nacional de Chile, Notarial de Valparaiso, 108, No. 453, Agreement between T. Waitt (for Waters & Waitt) and G. Müller (for A. Hemenway & Co.), 6 Feb. 1856.Google Scholar

59 Ibid, 112, No. 448, Agreement between Eduardo Edmondson (for Myers, Bland & Co.) and Ramon Lecaros, 15 Dec. 1856.

60 Gibbs Papers, MS. 11471/2, A. G. & S. to W. G. & C., 35 Mar.–I April 1876.Google Scholar

61 Duncan For Papers, Santiago Copy Book, Ravenscroft Bros. & Co. (Valparaiso) to W. & J. Ravenscroft (Liverpool), 14 April 1853.Google Scholar

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63 Williamson Letterbooks, Vol. iv, Williamson, S. to McCulloch, C., 3 Oct. 1878.Google Scholar

64 Ibid, Vol. III, S. Williamson to A. Balfour, I Nov. 1864.

65 On Lambert, see Véliz, C., ‘Egaña, Lambert and the Chilean Mining Associations of 1825’, Hispanic American Historical Review, Vol. 55 (1975). (Lambert became a nataralized Briton.)CrossRefGoogle Scholar

66 Archivo Nacional de Chile, , Notarial de Valparaiso, 3, No. 219, Agreement between Onofre BunsterGoogle Scholar and Watson, John Thomson & Co., 20 May 1856.Google Scholar

67 Ibid, 171, No. 661, Agreement between Robert Walker and Agustín Edwards, 10 Apr. 1872. Compound interest at 10 or 12% per annum of course accounted for much of these sums.

68 Chilian Times, 14 Oct. 1876.Google Scholar

69 F.O. 16/68, No. 15, Sulivan to Palmerston, 26 Apr. 1850.Google Scholar

70 Gibbs Papers, MS. 11475/I, A. G. & S. to W. G. & C., 2 Mar. 1860.Google Scholar

71 Memoria de Hacienda 1860 (Santiago, 1860), table, not paginated.Google Scholar

72 Though Chileans sometimes believed this was so. See e.g. Gibbs Papers, MS. 11036/3,Google ScholarGibbs, H. H. to Gibbs, W., I Dec. 1863;Google ScholarEl Mercurio (Santiago), 1863;Google ScholarGibbs Papers, MS. 11036/3,Google ScholarGibbs, H. H. to Gibbs, W., 22 Sept. 1862.Google Scholar

73 This excludes the foundries and small factories owned by Britons outside the commission houses.Google Scholar

74 See Will, Robert M., ‘The Introduction of Classical Economics into Chile’, HAHR, Vol. 44 (1964) for the coming of laissez faire.Google Scholar

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76 Banco de Chile 1894–1944. Reseña histórica (Santiago, 1944), p. 18.Google Scholar

77 Constitución del Banco Nacional de Chile, MS. 21 July 1865.Google Scholar

78 Williamson Letterbooks, Vol. III, Williamson, S. to Balfour, A., 21 Apr. 1865; his firm put up $60.000 (nominal)Google ScholarIbid, 17 April 16 July 1865.

79 Archivo Nacional de Chile, , Notarial de Valparaiso, 141, No. 67, Agreement between Banco Nacional and Wicks.Google Scholar

80 Gibbs Papers, MS. 11021/23, p. 1006.Google Scholar

81 Bauer, Op. Cit., p. 246.Google Scholar

82 See Platt, D. C. M., ‘The Imperialism of Free Trade: Some Reservations’, Economic History Review, 2nd ser. Vol. XXI (1964).Google Scholar