Evening star., 1932-01-24
Continued From First Page.)


Bolivia, and In Tarapaca Province,
then belonging to Peru, the Chileans
became convinced that these provinces
should belong to them. So they pro-
ceeded to march north and take them
The conquest of these territories
gave the Chileans practical monopoly
of the best natural fertilizer known to
man. They proceeded to export it in
great quantities. They not only sold
it at a handsome profit for the ex-
ploiters, but they put heavy export
tax upon 1t, paid, Of course, by the
final consumers, many OF them our
own farmers, which furnished half or
more Of the government revenue for
years.
1t was her surplus revenue that made
Chile the nation she Is today. 1t en-
abled her to do things that otherwise
could have been accomplished, If they
could have been done at all, only by
overtaxing herself. 1t enabled her to
maintain an army and navy which
gave her place among the four powers
Of the American continent. 1t gave
her voice in international politics
far more potent than was warranted
either by her population or her strategic
position. 1t enabled her to develop
her agriculture and her industries
much more rapidly than otherwise
would have been possible.
When the Great War broke over
the world Chile was In clover. The
demand for her nitrates was SO great
that it necessitated rapid expansion
of the industry. The export tax brought
in millions. A still more magnificent
future seemed to lie ahead
But the Germans, deprived of ac-
cess to the Chilean supplies Of nitrate,
turned their chemical abilities to the
creation of a synthetic substitute, and
with striking success.
They not only supplied their needs
during the war but built up an in
dustry which since has continued to
supply much of Chile's former market.
Worse than that, German methods have
been copied in other countries, such as
the United States, which formerly were
wholly dependent upon Chilean nitrate.
Chile's proportion Of world produc-
ton fell from 81 per cent in 1918 to
% per cent In 1929. That meant bad
business if world crisis should come.
And when it came 1t was quite
obvious that the days of Chilean pros
perfty based mainly upon the nitrate
subsidy. were over. Strenuous measures
must be taken If the industry were to
be saved. 1t fell to Americans to
undertake the task Of reorganization,
with all its certain grief and possible
satisfactions.
Three years ago there were between
so and go separate companies operating
nitrate plants With the advance Of
synthetic competition, it was clear that
the industry was doomed unless its
forces could be mobilized to meet the
defeat, or at least hold in check this
deadly foe.
The Guggenheim organization was
deeply involved in the nitrate industry.
1t turned its enormous powers TO the
solution of the problem. One OF its
engineers devised new process for
recovering the nitrate process de-
signed to cut the cost of production by
more than a third That was start.
But the export tax of s12 on each
ton was an obstacle that mere tech
nical improvement could not overcome.
If this tax were continued Chilean
nitrate could not meet synthetic COM
petition In the markets of the world.
II 1t were discontinued the Chilean gov
eminent treasury would be in a bad
way.
So it was proposed to form the great
Chilean nitrate corporation known as
"Cosach," from the first syllables Of
the name Compania Salitre de Chile
which should take over the bulk of the
nitrate companies. In consideration for
the use of the government nitrate lands
and the abolition of the export tax half
of the stock was to be given to the
Chilean government The management
of the new enterprise was to be in the
hands of the Guggenheims, and it was
to have the use of the so-called Gug-
genheim process.
1t was hoped by this means to en-