CHAPTER VIIMINING

The Nitrate Industry.—Copper.—Iron.—Gold and Silver.—Coal.—Petroleum.—Borax, Sulphur, Manganese, etc.

International agriculturists did not begin to call for nitrate of soda until the scientific study of soils was seriously attempted and experiments demonstrated the value of this chemical as a crop fertiliser. Young countries may produce grain and fruits from soil that is almost untended, but some soils of special characteristics, and old lands cultivated for two or three thousand years, respond gratefully to the stimulus offered by supplies of nitrogen, phosphate and potash. From the time that this axiom was accepted, the West Coast of South America began to ship the product of her unique deposits overseas in big quantities.

But the nitrate pampas had been known for what they were for several hundred years before the industrial boom of the late nineteenth century; small amounts were used throughout the Spanish colonial period. This employment was confined to the manufacture of fireworks and gunpowder, some of the deposits remaining in the hands of the Viceregal Government and others being operated by Jesuits and other religious orders. The Government chiefly used the “saltpetre” in making gunpowder for firearms, and for blasting purposes in mines of precious metals; as, for example, in the silver mines of Huantajaya, somefifteen miles inland from Iquique. Early voyagers upon the coast noted that the gunpowder of Peru was better than that made in other parts of the colonies, and penalties were inflicted to prevent the illegal extraction of nitrate by unauthorised persons. Juan and Ulloa, writing in 1741, speak of the contraband gunpowder manufacture carried on near thesalitre(nitrate of soda) field of Guancarama, and the efforts of the Lima treasury to stop similar use being made of the beds near Zayla. The good fathers of the religious missions had another destination for the explosive; it was used to make the immense quantity of fireworks burnt at times of festival, a custom that is not yet extinct in Spanish America.

A simple method of obtaining the nitrate of sodium from the rocky beds of mixed composition (thecaliche) was employed by these early manufacturers, who used chiefly Indian workers. The whitish, hard substance was broken up into small pieces and thrown into huge copper cauldrons filled with boiling water. When the caliche was dissolved the liquor was dipped off with enormous spoons into first one and then another vat, and there it crystallised.

Exactly the same principle is the basis of the modern method. The caliche yields to dynamite charges, successor of the pickaxe; is brought to the nitrate plant (oficina), in wagons instead of being laboriously carried on the backs of Indians; the copper cauldron is replaced by a large tank, and coils containing steam at a high temperature are passed through the water; the liquor is drawn off by pipes at a carefully considered moment, and the final drying process takes place upon prepared cement floors; coal or oil fuel is used instead of wood. There is less waste of material today and the quantities produced are immense: but the ancient empirical nitrateextractors were not very far wrong as regards system.

After independence from Spain, small sales of nitrate to foreign countries commenced, for the manufacture of nitric acid; 800 tons were exported in 1830, but in the four-year period between 1840 and 1844 an average of 15,000 tons was maintained. Shipments rose steadily after the introduction of new methods in 1855, when steam was first used in the dissolving process and the construction of vats was changed from the system of 1812. By the year 1869 nitrate exports had risen to about 115,000 tons a year; in 1873 the figures reached over 285,000 tons; in 1876, to more than 320,000 tons.

After the War of the Pacific left Chile with the Bolivian fields of Antofagasta and the Peruvian beds of Tarapacá in her hands, a tremendous impetus was given to the nitrate industry. Great amounts of foreign capital were brought in, railways and ports constructed. Production rose steadily. In 1884 the export stood at some 480,000 tons; in 1888, about 750,000, while the million mark was passed two years later. The industry suffered from uncertainties at the time of the Balmaceda revolution, when the insurgent leaders held the north, obtaining revenues and preparing armies upon this vantage ground; but after the collapse of the Balmacedistas in 1891 foreign trade was revived, and at the end of the century nitrate shipments had reached about 1,500,000 tons.

The Nitrate Pampa: Opening up Trench after Blasting.

General View of Nitrate and Iodine Plant.

In 1908 the export amounted to more than 2,000,000 tons, increasing considerably after this time on account of the heavy buying of the European Central Powers, Germany and Austria taking together an average of 1,000,000 tons each year between 1909 and 1914. The position of nitrate in Chile’s economic life is illustrated by export figures for the last “normal” year, 1913. Total export values, 391,000,000 pesos: of this nitrate and iodine represented 311,000,000 pesos. Nitrate responded to war demands, after the first paralysis of shipping had passed, and in 1916 nearly 3,000,000 tons were exported for munitions manufacture to the Allies and the United States. The greatest purchasers of Chilean nitrate today are European and North American agricultural countries; Australia also finds this chemical of great value and, before the war, regularly exchanged it for coal cargoes.

South America herself probably presents the most extensive stretches of agricultural territory which make practically no use of nitrate. In Chile its use is almost non-existent, partly because the soil is too newly opened and rich to need a stimulus as yet, and partly because the moist southerly regions are considered unsuitable for the employment of the easily soluble salitre. Guano is the most popular fertiliser in Chile, especially in the north: its use follows old Inca custom, when such valleys as that of Arica were irrigated and fertilised to produce famous crops of maize,ajiand cotton.

No stranger country than that of the wide, golden-pink pampas where nitrate lies is to be found in the Americas. The circumstances that created the deposits, the rainless climate that preserved them for unknown centuries, are unparalleled; the belt upon the Chilean West Coast between 19° and 26° of south latitude contains the world’s sole source of naturally produced nitrate of soda. It is a unique region, and although the science of production of atmospheric nitrate advanced during the war, producers of the Chilean chemical do not view this competitor with alarm. Artificial processesare expensive; Chile can, if necessary, lower nitrate prices to meet any rival.

The coastal border of the great nitrate belt is about 450 miles in extent, its tawny dunes displaying no tree nor smallest green thing except in such rare spots as where a thread of water survives the burning sun and sand, or where, at a port, an artificial garden has been created with piped water. The generally waterless state of the region has long reduced it to sterility. None of the nitrate deposits lie upon the coast, or at a distance of less than fifteen miles inland. The average distance of the westerly margin of the deposits from the sea is about 45 miles, a few of the beds, however, lying as far as 100 miles inland. Between the salitre fields and the Pacific Ocean runs the diminished coastal range, dwindling here and there to nothing more than a straggling series of broken, rounded hillocks; to the east the deposits are guarded by the backbone of the Andes. The general altitude of the beds above sea level is from 2000 to 5000 feet.

The whole extent of the treeless and practically waterless country of North Chile, presenting a broad and tawny face to the unchanging blue sky, is a vast series of mineral deposits, for not only nitrate of sodium but also copper, borax, gypsum, cobalt, manganese, silver, and gold are spread through the great areas comprising the present provinces of Antofagasta, Tarapacá, Tacna and Atacama. Some of these minerals have been worked for centuries, but whatever small and more or less isolated deposits of nitrate exist in the two last-named regions remain unexploited: commercial production of the mineral is confined to the two great rich provinces of Tarapacá and Antofagasta.

The salitre beds vary in thickness and are of capricious distribution: great areas within the rainlessregion show no trace of these deposits, while in others the layers run twenty feet thick. The surveyed fields cover at least 225,000 acres, contained chiefly in five major districts. The most northerly, the Pampa of Tarapacá, ships its products from the ports of Iquique, Caleta Buena, Patillos, Junin and Pisagua, and is served by three railways—the Nitrate Railways Company, the Agua Santa Nitrate and Railway Company, and the Junin Railway Company. Next comes the Pampa of Toco, exporting through the coast town of Tocopilla, to which it is joined by the Anglo-Chilean Nitrate and Railway Company. Farther south lies the enormous Pampa of Antofagasta, with outlets at the fine port town of Antofagasta and its older rival, Mejillones; the region is served by the main line and branches of the Antofagasta and Bolivia Railway Company. The fourth field in order is the Aguas Blancas Pampa, with a shipping point at Caleta Coloso, reached by an arm of the Antofagasta and Bolivia Railway; and the most southerly deposit of considerable size is the Pampa of Taltal, shipping its product by the Taltal Railway to Taltal Port. A few isolated beds lie outside the areas of these five great deposits, as the Providencia and Boquete beds of Antofagasta, but so far as present surveys have proved their existence, the great masses of nitrate are definitely localised.

Tarapacá, with 76 oficinas equipped, normally produces about 40 per cent of the total nitrate exported from Chile; Antofagasta, with 30 oficinas, chiefly of a more modern type, produces about 35 per cent; Taltal, with 9 oficinas, ships usually some 10 per cent of the total; Tocopilla, with 7 oficinas, about 9 per cent; and Aguas Blancas, with another 7 oficinas, is responsible for 6 per cent.

Nitrate Companies

The total capital invested in nitrate lands and plants is calculated at 400,000,000 Chilean gold pesos of eighteen pence, or about £38,000,000 sterling. It is not easy to state exactly what proportion of this total should be assigned to each of the different groups of nationals owning these properties, since many firms employing foreign capital are registered as Chilean companies, and both during and since the war a considerable number of oficinas have changed hands; but the official statistics published by the Chilean Government give the percentage of production ascribed to the various groups of owners, thus offering a useful guide.

The figures ascribe to Chilean owners, out of a total 129 plants in operation in 1918, 60 oficinas, producing 50 per cent of the nitrate total; to English companies, 43 oficinas and 34 per cent of the production; to the Jugo-Slavs, with 7 oficinas, about 6 per cent of the production; Peruvians, 7 oficinas, 3 per cent of production; Spaniards, with 3 oficinas, less than 2 per cent of the total output; Americans, 2 oficinas, nearly 3 per cent; Germans, with 2 oficinas, less than 1 per cent of production—this reduction from a larger pre-war production being due to closure of several properties from 1914 onwards.

The Chilean companies include the largest and most heavily capitalised in the country, one of these, the Compañia de Salitres de Antofagasta, producing 10 per cent of Chile’s total output. The firm owns seven oficinas, employs 15,000 men, does a large general import and export business, owns its own fleet of barges and tugs, and possesses a belt of nitrate lands on the Antofagasta Pampa twenty miles long. In 1918 the company, capitalised at 16,000,000 pesos (Chileanpaper), earned profits of over 22,000,000 pesos or over £1,000,000 sterling at the prevailing exchange, and was thus able to set aside a substantial sum for rainy days. It is on account of earnings such as these, supplemented by the fantastically huge sums earned in the summer of 1920 when the price of nitrate rose to seventeen shillings per quintal, that the nitrate companies were able to observe with a semblance of equanimity the subsequent and sustained fall in prices. The international merchants were badly hit when the slump of 1921 came, but companies in Chile had made so much money that it was preferable in many cases to shut down operations rather than to continue the production of unwanted goods.

Other big Chilean firms are the Cia. Salitrera “El Loa,” operating seven works, all in Antofagasta Province; the Cia. Salitrera Lastenia, with three fine properties upon the same pampa; and the Cia. de Salitres y Ferrocarril de Agua Santa, operating six oficinas on the Tarapacá Pampa.

Of the English companies, the largest was the Alianza, operating three oficinas in Tarapacá, and exporting normally about 150,000 tons annually, but this company has changed its domicile to Valparaiso and now counts with the Chilean group. The Anglo-Chilean Company has three oficinas in the Tocopilla district; the Lautaro, three, on the Taltal Pampa; the Liverpool Nitrate Company, three, in Tarapacá; the Amelia, three, in Tarapacá and Antofagasta; the Fortuna, three, in Antofagasta; the Rosario, three in Tarapacá; the New Tamarugal, two, in Tarapacá, where the two nitrate works of the London Nitrate Company and the properties of the Lagunas companies are also situated.

The German oficinas are twelve in number, operated by four companies. Of these the most important is theCia. Salitrera de Tocopilla, formerly the Compañia H. B. Sloman, with four properties on the Pampa of Toco. The Cia. Salitrera Alemana owns five oficinas, all situated on the Taltal Pampa; Salpeterwerke Gildemeister A. G., has three works in Tarapacá, and the Salpeterwerke Augusta Victoria A. G., one oficina, in Antofagasta. The well-known Italian firm of Pedro Perfetti owns five oficinas in Taltal.

The nationals who most notably increased their interest in nitrate properties during and immediately after the war were the enterprising Jugo-Slavs who have of late years taken a considerable part in Chilean development work. The largest of the Jugo-Slav firms is that of Baburizza Lukinovic, with five well-equipped oficinas in the Antofagasta district. Several other European-owned oficinas passed into Slavic hands before the stagnation of the market set in.

Two North American firms own nitrate oficinas. The Dupont Nitrate Company operates two properties in Taltal from which about 30,000 tons are annually shipped, but since all this product goes directly to the Dupont explosives works in the United States, the market is not interested in the output. W. R. Grace and Company, doing a general export and import trade and employing their own steamers, operate nitrate works in Tarapacá, with a production of about 45,000 tons.

A few years ago pessimists prophesied that the Chilean nitrate fields would be exhausted by the year 1923. Careful examinations carried out by the national authorities as well as by individual companies have definitely allayed any fear of this kind. Surveys made under the auspices of the Chilean Government by the distinguished engineer Francisco Castillo showed that nitrate fields properly tested, owned and in operation,cover some 2244 square miles, while outside that area there are at least 75,000 square miles of undeveloped nitrate-bearing lands—chiefly in the hands of the Government of Chile. With, thus, over 95 per cent of the deposits untouched it is reasonable to expect a long life for this industry.

From the fields of Tarapacá and Antofagasta 60,000,000 tons of the chemical have been taken since the beginning of overseas exports, and it is estimated that in the comparatively small surveyed and operating area there are about 240,000,000 tons in sight, a quantity sufficient to fill the world’s needs for at least another century at the present rate of supply. This is without taking into consideration the huge body of less readily accessible nitrate lands referred to in Dr. Castillo’s conservative report, which included no deposits containing less than 17 per cent of nitrate, nor layers of less than twelve inches in thickness unless exceptionally rich.

Into the highly controversial question of the origin of the nitrate-bearing deposits it is unprofitable to go deeply, since, as in the case of petroleum, scientists have not agreed upon a theory. Several have been put forward, and a good deal of study and research has been devoted to the problem, but with no final result, a definite objection tripping up even the most likely suggestions. The most generally supported theory is that which was expounded in its original form by Darwin, postulating the long submergence of this part of the West Coast under the sea, its gradual rise through volcanic action, and the slow drainage and drying of masses upheaved from the Pacific floor. Remains of shell-fish are occasionally found imbedded in the caliche,and the presence of iodine is also adduced as contributory evidence; but bromine is curiously absent, and the question is complicated by other geological displays, some of which certainly seem to prove that before the subsidence of this belt in the Pacific the land was high and dry, clothed with thick forests.

I listened once upon a burning afternoon in the nitrate pampas to the seriously held theory that the caliche drained down, under the soil, from the mountains, and that the particular beds upon which my good friend was operating owed their origin to Lake Poopó, a turquoise gem near the railway line leading to Bolivia; the beds, it was insisted, seeped slowly from the lake and were being pushed up from underneath by subterranean pressure. Another theory credits the volcanos of the Andes with the production of sufficient ammoniated steam to create chemical changes upon the pampas; others suggest the union of oxygen and nitrogen in the air during electric storms, forming nitric acid which, in contact with lime, might produce nitrate of lime; this, if coming into touch with sulphate of soda, might form nitrate of soda, releasing the sulphate of lime.

He who prefers a less technical theory may agree that nitrogen deposits are derived from the guano of sea-birds, found along the Pacific coast.

The terminology of the nitrate pampas is a proof of its old recognition. Thechucais the loose, often friable, decomposed top layer, from two to twelve inches thick. Below it comes thecostra, a hard, rocky agglomeration of cemented clay, porphyry and feldspar amalgamated with sulphates of calcium, potash and soda, often also containing traces of nitrate of soda and common salt. Third comes thetapa, the immediate shield of the nitrate of soda beds, composed of fragments of nitrate, of salt, sand and clay. These three layers form mattressesfrom a few inches to three or even six feet in depth, and owing to the hardness of the costra must be blasted away from the precious fourth layer, thecalicheproper.

The caliche bed varies remarkably in thickness and in position, sometimes offering a thin, sand-mixed, layer of little value, and at other times revealing itself as a beautiful shining snow-white bed several feet in thickness; its hue varies from pure white to grey, sandy, and even violet, and its consistency may be sometimes loose and porous, while in other regions it is as hard as marble. The best caliche contains as much as 70 per cent of nitrate, and by the present methods of extraction it is not considered worth while to operate deposits containing less than 14 to 15 per cent. The average in Tarapacá and Antofagasta runs to about 20 per cent. Below the caliche is theconjelo, another fairly loose layer of sand and clay, salts, selenite crystals and traces of nitrate; still farther down is another plainly differentiated stratum, called thecoba, with a comparatively high percentage of water, a heavy proportion of clay, calcium sulphate, and other minor components. The nitrate is often carried through several of the protecting layers, and foreign matter is frequently found mixed with the caliche, yet the different strata almost invariably exist in readily distinguishable and undisturbed beds.

The process of preparation for the market is simple. The caliche, thoroughly crushed by heavy machinery, is tipped into immense tanks and covered with water: coils of pipes fixed in these vats heat the mass to a high temperature and the nitrate of sodium, readily soluble in boiling water, dissolves. The other ingredients of the caliche fortunately are not so easily dissolved, and settle to the bottom of the tanks, so that when thewater is drawn off and cooled the nitrate crystallises in a high grade of purity. There is a moment to be watched for in drawing off the liquor, however; common salt (sodium chloride) is frequently present in the caliche in unwanted quantities, dissolving with the same readiness as the nitrate. But it begins to precipitate before the nitrate, and the right time for withdrawing the liquor is when the salt has settled and the nitrate is immediately following it. The nitrate-charged water crystallises on the floor and sides of the shallowbateas(vats, generally of wood) into which it is passed, the process of cooling and crystallisation taking from 20 to 40 hours. The liquor is then pumped away, part being used for the manufacture of iodine according to the amount permitted to the oficina by the central Association, while the nitrate crystals are gathered in large pans for a few days for draining, and afterwards spread upon the cemented open planes, thecanchas, for two weeks until thoroughly dry; it is then ready for bagging. It is during the drying stage on the cancha that nitrate in large quantities, all over the pampas, would be spoiled by dissolution if heavy rain should fall—a phenomenon of such rare and unlikely occurrence that it is not taken into consideration. The belt is not absolutely rainless, Iquique claiming a rainfall of half an inch per annum, while the Antofagasta Pampa has received showers four times in the last fifteen years; heavy fogs, too, not infrequently invade the pampas. But it would take a series of terrific deluges for moisture to filter through the protecting crusts above the caliche, and this sometimes suggested danger is not in sight.

The “commercial standard” of purity which exported nitrate must attain for sales to agricultural regions is 95 per cent, but 96 per cent and over is reached in shipments destined to explosives factories. The cost ofproduction of necessity fluctuates with the prices paid for wages, fuel and equipment, but was reckoned by Dr. Enrique Cuevas, in 1916, to work out at a minimum of two shillings, or fifty American cents, for each Spanish quintal of 101 pounds weight. During 1921 the cost was reckoned at double this amount. Expenses tend to increase year by year, with higher wages and costs of food and fuel, as well as new charges such as that recently added by the Employers’ Liability Laws of Chile. Antofagasta reckons that the cost of living increased 300 per cent between the middle of 1914 and the middle of 1921: it is certainly no less upon the inland nitrate fields, where all merchandise has an extra rail journey, every gallon of water is piped long distances from the mountains, and it is common to bring cattle for slaughter overland from northwest Argentina, the animals being shod for the three or four weeks’ march over rough trails. The only method of reducing costs is by improved scientific production, and to this aim the work of the best companies is constantly and successfully directed.

Iodine is extracted from the “mother liquor” that has already deposited its burden of nitrate of soda and of common salt, and which is, after the extraction of iodine, returned to the first lixiviation tanks to serve again in dissolution of new loads of the raw caliche. The purple-black iodine crystals, of so pungent a quality that a whiff from the store-room is almost blinding, are packed into strong little wooden casks for export. A couple of big oficinas could, between them, manufacture enough iodine in a year to supply the world’s needs, but to prevent glutting of the market there is an agreement with the Producers’ Association by which the amount of this chemical made by each nitrate plant is strictly regulated.

A Desert Industry

Before the realization of the properties of nitrate and its commercial exploitation upon a great scale, the burning pampas of Tarapacá and Antofagasta were solitudes, shunned by all animal life. This region, whose products were destined to give new life to a million cultivated fields, to bring orchards and groves all over the world into magnificent flower and fruit, lacked the ability to produce so much as a blade of grass. Forming a continuous stretch of arid country with the long deserts north of Copiapó, the major part of this strip shelters no life that has not been artificially introduced.

Yet today this region presents the liveliest scenes of the West Coast. Where a solitary waste lay under the sun, railways cross the desert with loads of heavy bags of chemicals; tall chimneys rise into the quivering air, the grey tin roofs of the nitrate works dot the pampas thickly. Each nitrate plant is the centre of an artificial town, to which every drop of water must be piped, every article of clothing, food, every scrap of wood and metal needed for dwellings and oficina must be carried. The ground is pitted with the marks of thetiros, the test blastings made in all directions to discover the quality and position of the nitrate stratum; and one may stand upon any small rise in the richest nitrate pampas and count a dozen or more of the long flat “dumps” of waste material that denote the active working of an oficina.

The scene appears to have no elements of beauty, for there is no hue but that of the sandy desert, the grey and black of the oficinas and the gleam of railway tracks; the outlines of the scored and pitted ground, the railway cars, the smoking chimneys, are harsh. Yet there is a sense of energy and prosperity, of intelligent activity, and in the pure dry air of the pampa almosteveryone experiences a feeling of splendid health and well-being.

Above the flat desert is an enormous bowl of clear, transparent sky and one looks far away to distances that seem endless. At sunrise and sunset the effects of light upon the sky and pampa are of a beauty never seen but in expanses such as these. I have watched the sky in an Antofagasta nitrate pampa when, as the sun fell swiftly, all the arch flushed with rose, and quickly flooded with sheets of purest violet while the orange and umber pampa took on deep amethyst shadows; before pastel or paint could record the sight, all the sky was transformed in a clear luminous lemon-yellow, upon whose bright surface streams of translucent green presently ran. The high peaks of far-distant Andes appeared as if floating, the snow-crowned heads of San Pedro and San Pablo alone visible against the changing sky, fading at last into the mantle of sapphire that gradually shrouded pampa and heights, with nothing moving but a host of brilliant stars, sparkling like diamonds on a live hand.

In a few moments after sundown the scorching heat has given place to sharp cold, and he who rides by night across these deserts must carry a heavy woollen poncho; one sleeps indoors under blankets. Dawn is a miracle of pink and pearl, and in at the window comes the scent of the cherished flowers in the little garden, glistening with dew. The new day is of an indescribable freshness and serenity. Long before noon the sun is pouring vertical floods of sunshine upon the desert, the very sand seems to quiver with heat, and a relentless scorching breath seems to fill the world. But to this all-the-year-round heat the foreigner soon becomes accustomed—everyone, as a matter of fact, workers and officials alike, is a “foreigner” to this pampa; human life is importedlike every other commodity here. But the children born of white parents in the nitrate fields are strong and sturdy, and it is not surprising that they who have lived for a year or two on the pampas find themselves restless in other places, suffer a feeling of constraint, a longing for these wide skies and far horizons.

The great development of the nitrate industry has created during the last forty years a series of ports along the Pacific, and brought to this once desolate coast, where there existed only a few fishing villages or outlets for desultorily-worked mines, a population which today exceeds 350,000. The workers directly engaged in the extraction, preparation and shipment of nitrate number about 70,000, about 50,000 of these being employed upon 173 oficinas, when all are in operation.

When the writer last visited the Antofagasta Pampas, the nitrate business was just recovering after a period of post-war depression and the series of big works were getting back into the full swing of activity. The industry had been enormously prosperous just before the outbreak of war in 1914, but experienced very sudden reverses when the dislocation of shipping checked shipments. At the beginning of 1915 only 35 oficinas were in operation. A certain confusion was also occasioned by the fact that several big producers were German, but the accumulated stocks of these firms were eventually taken over and sold by the Chilean Government. At the time when the future looked gloomy, with oficinas idle and large stocks piled up in the warehouses of the nitrate ports, the great war call for nitrate in the manufacture of high explosives began, resulting in a new wave of prosperity. Shipping had to be found bythe Allies for the transport of the chemical, and the ports of the pampa regions showed tremendous activity. But with the cessation of hostilities the urgent demands of manufacturers of explosives in the United States and Europe came to an end and the pre-war market offered by farmers did not immediately resume its calls. Shipping gradually returned to ordinary commercial channels, the scarcity of freight for normal commerce was at once apparent, and the rates that consequently prevailed were too high for profitable shipment of nitrate at the prices to which it fell. Many oficinas closed down. But in early 1920 a healthy reaction set in. Agriculturists began buying again, and added to this cheerful effect the industry was reassured by the non-materialisation of many threatening prophesies of the serious nature of the competition to be offered by artificially-produced nitrate.

The work of the active Asociación de Productores de Salitre de Chile first made itself felt in 1920. As its name implies, the group comprises firms engaged in Chilean nitrate production, practically every company subscribing with the exception of the two North American operators and a few small oficinas. Formed by the same energetic firms who previously organised, in 1889, the widely-spread Committee of Nitrate propaganda, the Asociación goes farther in that it controls the output of nitrate of soda and of iodine, agrees upon a price, f.o.b. in Chile, for these products, and deals with international distribution. Maintaining committees in London and Berlin, the Association has also opened branches in France, Belgium, Holland, Italy, Spain, Scandinavia, Egypt, Yugo-Slavia, India, South Africa, Japan, China, and all over North and South America, these delegations being added to wherever prospects for the consumption of nitrate are presented. The Association’smain object is to obviate the violent fluctuations of price that have threatened the industry from time to time; to watch markets closely and to avoid overloading them by retaining a check upon output. The Association’s headquarters are in Valparaiso, in constant cable communication with international centres. The effect of the work of this voluntary combine, upon which such other powerful groups as the Eastern rubber planters look with something like envy, has been undeniably beneficial although no efforts can counteract the adverse results of slackened demand.

In 1913 the price per Spanish quintal was eight shillings f.o.b. in Chile, or about $2 United States currency, while freight to British ports cost twenty-three shillings per ton, New York charges running about $6. Nitrate is packed into bags of two quintals each, ten bags thus weighing a little more than an English ton. During the war the price rose to thirteen shillings per quintal, but fell to between nine and ten shillings in 1919. Owing to a strong reawakened demand, plus the work of the Association, the price rose in 1920 until about the middle of the year it stood at seventeen shillings per quintal for deliveries in the spring of 1921, and even with freights ranging from £5 to £12 a ton to London, and $30 to $50 to New York, a handsome profit remained to producer and distributor. This prosperous period lasted until the general world paralyzation of markets was felt, and the big Government nitrate stocks of the United States and Europe were released. In 1921 the international dealers, with stocks of high-priced nitrate on their hands, faced the delayed post-war slump, and formed a pool to maintain prices at fourteen shillings per quintal. Sales were reduced to vanishing point, and the way was opened for more extensive rivalry from the sulphate of ammonia trade;eventually the pool agreed to lower prices upon an arrangement with the Nitrate Producers’ Association, by which £1,500,000 was accepted as part compensation. This sum is collected by a small levy upon all nitrate exported. Prices were then reduced to eleven shillings per quintal up to December, 1921, and to 10s. 3d. for deliveries in the spring of 1922. At these prices trade revived appreciably, and the world’s need for nitrogenous fertilisers set freights moving again.

Continuing for more than a year, the nitrate crisis affected no one more acutely than the Government of Chile, for in addition to finding themselves suddenly deprived of the most substantial part of their national revenues, they were faced with a staggering amount of unemployment. The oficinas, of which all but 45 were forced to close as a result of the moribund market, discharged some 40,000 men. There is no work in the Desert of Atacama apart from nitrate and copper industries; the land produces no food and there is nowhere to live. A stream of unemployed workers was almost immediately directed southwards, and while a proportion was absorbed by the farming and milling industries of the agricultural zones, numbers remained in the vicinity of the capital, a source of considerable anxiety. At one time it was reported that 10,000 men were camped out near Santiago, a charge upon the Government, and although the authorities were active in seeking to find employment on a series of public works, these plans were rendered difficult by the financial straits of the nation. The administration of Sr. Arturo Alessandri went into office with many schemes for the betterment of living conditions in the working classes, but has been seriously hampered by the economic trials that beset Chile within a few months of the change of government.

It is scarcely to be expected that the Government should see eye to eye with the nitrate producers in the question of sustained export at a time of market depression. The nitrate companies argue that it is useless to produce and attempt to export a commodity for which there is no demand, with immense stocks already choking international warehouses: that any such action would lower the price of nitrate to a level ruinous to the holders of the existing stocks and be bound to react disastrously upon nitrate producers. The Government rejoins that they desire a general lowering of nitrate prices, so that the fertiliser should be bought in larger quantities; they want to see a continuation of large quantities produced and exported, in order that workmen should not be, as during the 1921 crisis, thrown upon the country’s hands, and also in order that export dues should continue to fill national coffers. To this the producers reply that there is one ready means of lowering nitrate prices, and that is to take off or to substantially reduce the Government export taxes, amounting to £2.11. 4. per ton. As a matter of fact, there has been serious consideration of a governmental project to purchase the nitrate output direct from producers, reselling it to world markets free of tax, or with a very light duty. Here again plans are stultified first by lack of funds and secondly by lack of public enthusiasm for nationalisation of industries in the face of the world’s experience during the last ten years. There is a wide recognition of the fact that the nitrate industry has been built up by private enterprise of a kind invaluable to young countries.

He who tries to understand the nitrate situation is much hampered by different calculations of weights and costs, and will sympathise with the complaint of Don Alejandro Bertrand, who remarks that in statisticsof the industry one finds “production and export of nitrate expressed in Spanish quintals of forty-six kilograms; prices quoted in pounds sterling per English ton of 1015 kilograms; while the British financial reviews vary, some giving the prices in shillings and pence per English hundredweight, while others quote pounds, shillings and pence per English ton. The Latin countries quote in francs, liras or pesetas, whose sterling exchange value varies, while Hamburg quotes in marks per zentner of 50 kilos.” Quotations also vary, continues the Inspector for the Chilean Government of Nitrate Propaganda services, according to whether the chemical is sold in Chile, where prices are always “free on board,” or free alongside vessel, or whether they are sold including ship freight to Europe or when placed in wagons at the port.

There are today 173 oficinas upon thepampas salitrerasof Chile. At the commencement of the commercial development of the fields, British capital and technique was foremost in the work, the efforts of the well-known Colonel North contributing largely towards the active interest of British investors. Chileans themselves have long been keen developers of nitrate properties and considerable investors; today their share is higher than that of any other nationality—a situation unusual in Spanish American countries, where industries are frequently left to foreign companies to a degree unhealthy for everyone concerned. The Chilean’s enterprise and business sense have indeed carried him far afield, his interests in Bolivia covering 60 per cent of the silver and tin mines.

The social system upon all oficinas is necessarily the same: dwellings and food supplies for the workers must be the consideration of the company, and in consequence large camp stores (despachos) are always maintainedin which goods are sold to employés. Certain objections to this system are always heard, but it is here unavoidable; in all good and well-managed oficinas these stores are stocked amply, prices being kept down to a limit at or just above cost price. There is always a keen demand for workers, and no nitrate camp would retain its employés if conditions were not those uniformly regarded as just. The chief social difficulty of the oficinas is in keeping off company lands the enterprising piratical provision and liquor sellers who are likely to demoralise and rob. The only remedy is enclosure of the properties and fencing is becoming more usual. At one time the boundary of a nitrate grant was fixed by a string and a heap of stones, but since the Chilean Government has taken steps to regularise estates there has been less of the happy-go-lucky system of limits.

The acute interest of the authorities of Chile in the nitrate industry is due to the fact that it constitutes the chief source of national income. Over 60 per cent of Chilean revenues are derived from the export tax of two shillings and four pence per quintal, paid partly in paper and partly in gold, the total sum amounting in prosperous years to £7,000,000 or £8,000,000 sterling, or between $35,000,000 and $40,000,000 United States currency.

The tax is a heavy one, and equally weighty imposts are placed upon iodine, also a product of the nitrate oficinas. The product of the wonderful borax lake, in upper Antofagasta, on the edge of the Bolivian boundary, pays a similar tax, yet the considerable export of copper from Chile goes free. This unequal treatment of the different natural riches of the soil is frequently explained by the fact that copper is mined in many parts of the world and therefore the Chilean productmust meet competition, an impossible feat if its cost were raised by the imposition of export dues. If, however, the cost of production of Chilean bar copper by the Guggenheim group is correctly estimated at eleven cents per pound, it is fairly plain that at the time during the war when Europe was paying twenty-six or twenty-seven cents per pound for this commodity it might have yielded a return to the country of origin.

Of the nitrate ports, Antofagasta is today the most lively and agreeable, although Iquique is still a rival in quantities of the chemical exported. Just north of Antofagasta lies Mejillones, the old port established in colonial days, but its equipment was found to be inadequate after the acquisition of this territory by Chile, and the creation of modern facilities and a modern city was decided upon. People who live in Antofagasta are proud of the place with excellent reason. The approach by train from the south is through ramshackle, happy-go-lucky fringes that have tacked themselves on, but the city itself is well equipped. Streets are wide, clean and well paved; shops are filled with merchandise from London, Paris and New York, and are not extravagant in price. Office buildings, many of which house the representatives of nitrate railways, nitrate and iodine companies, agencies of copper and borax companies, of shipping lines, brokers and several foreign and native banks, are spacious and well equipped; the telephone service compares well with that of many cities of ten times the size of Antofagasta, with its 70,000 inhabitants. Hotels are comfortable, service courteous, and tariffs less than one might expect in a city with not a single meadow or orchard within hundreds of miles, deriving all that it consumes from the Chilean farming lands farther south,from the packing-houses of Magellanes territory and wheat fields of the centre and south, or from the sugar and fruit regions of Peru or markets overseas.

The public park is an object of admiration of every visitor coming from the barren coast farther north or from the Atacama copper country to the south; it has been sedulously nursed into greenness that is the more remarkable since Antofagasta’s water supply is piped from the foothills 200 miles away—through lands so arid that more than once a fox of the deserts, driven with thirst, has followed the pipe-line across the pampas right into the city. The great pride of hospitable and cheery Antofagasta is in the country club to which the visitor is always motored along the sweep of the bay; here is a cool building with a fine dancing floor and a good cook. But its chief claim to admiration is the little garden, no more than a few feet square, tended so devotedly that all the year round it glows with gay flowers.

All the chief towns of the nitrate pampas, besides possessing rail transport to the Pacific, are connected by the main line of the “Red Central Norte” to Santiago, and thence to the farming regions of the Chilean south; there is through railway connection, thus, between such towns as Iquique and Antofagasta and the newly-operating packing-house of Puerto Montt. Agricultural Chile has no better markets than those offered by the thronged and busy nitrate pampas and ports of her own north, and from Llanquihue to Coquimbo, the last outpost of farming country in northern Chile, foodstuffs are sent by rail or sea to supply the great region of desert camps.

Antofagasta. The Nitrate Wharves.

Copper

The future of copper mining in Chile is wrapped in uncertainty. The industry has already undergone a not unfamiliar transformation, with a deeply marked effect upon the Chilean population engaged in this work, for, commencing as a series of individual enterprises on the part of the native-born, it has become a large scientifically organised business operated chiefly by foreigners,[5]with the Chileans reduced to the position of wage-earners.

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