CHILE: Four-Ply Crisis

Eight years ago President Arturo Alessandri had to flee from Chile to Argentina, managed to do so in a special train flying the U. S. flag. Fortnight ago Chileans again elected him President (TIME, Nov. 7). Last week Santiago police had to fire machine gun bullets over the heads of a mob which wished to reject President-Elect Alessandri and raised deafening cheers for the defeated candidate, part-Irish Col. Marmaduke Grove (pronounced Gro-vay). With all Chile tense, wondering whether Col. Grove would try a coup d’état (as he has several times before) the world’s largest nitrate plant Pedro de Valdivia closed down last week. This plant, owned by the U. S. Guggenheims, has a capacity of 700,000 tons of nitrate yearly and is controlled by Cosach, the Chilean nitrate monopoly in which the Government and the Guggenheims are major stockholders. Tersely Cosach’s President Medley Gordon Brittain Whelpley called the closing down of Pedro de Valdivia “a constructive move to divide production evenly among the other plants.” In Santiago stocky, blue-eyed, part-Italian President-Elect Allesandri said: “I propose to obtain a law that will name a special liquidating commission which will liquidate the assets and liabilities of Cosach without overrunning or ignoring legitimate rights and so that these assets and liabilities may be acquired by a new company which should substitute for Cosach. “I cannot understand why any one should be alarmed. We are trying to establish a company which can work without the enormous dead weight of debts which the Cosach has, debts whose service charges have increased the production cost of nitrate to fantastic proportions and made it impossible for our product to meet competition on the foreign markets. . . . ” This might mean much or little, depending on whether the President-Elect or Col. Grove or some other Chileanbecomes the next President. One thing was certain however: Chile is facing famine conditions. During the week Chile Copper Co. (subsidiary of Anaconda) asked Government permission to import directly flour and other foods for its miners at Chuquicamata. Braden Copper Co. was feeding not only workers but the unemployed of Rancagua at the rate of 3,000 loaves of bread per day. Inability to import enough food results partly from the Chilean Government’s long-standing policy of restricting foreign exchange movements to support the peso—a policy denounced last week by Senor Julio Perez Canto who happens to be Chile’s Minister of Finance. In secret, illegal exchange dealings pesos changed hands in Santiago last week at 50 and more to the dollar. The official rate is 16. Chileans were facing simultaneously a four-ply crisis: political, industrial, social, monetary.