Presidential Republic (1925–1973) - Carlos Ibáñez and Arturo Alessandri Palma - Carlos Ibáñez (1927-1931)

Carlos Ibáñez (1927-1931)

Carlos Ibáñez's cabinet remained popular until the outbreaks of the Great Depression in 1931. He exercised dictatorial powers, and did not dislike being compared to Benito Mussolini. He suspended parliamentary elections, instead naming politicians to the Senate and Chamber of Deputies himself. Freedom of press was restricted, 200 politicians were arrested or exiled (among whom Alessandri and his former ally Marmaduque Grove), the Communist Party was proscribed, and the workers' movement strongly repressed. Before these actions, the Congress and the parties remained close-mouthed, and delegated to Ibáñez large executive powers through the decretos con fuerza de ley (decrees having force of law, DFL) — basically, the executive power could pass legislation without needing the Congress to vote. Ibáñez found in his Minister of Finances, Pablo Ramírez, the support he needed.

In 1929, General Ibáñez requested to the parties list of the candidates to the general elections, in order to select himself who would be allow to present himself. He then went to the Termas de Chillán resort, and there select members of both Houses. Thereafter, the following legislature became known as the Congreso Termal.

His popularity, however, was helped by massive loans by American banks, which helped to promote a high rate of growth in the country. He launched important public works, ordering the construction of canals, bridges, prisons, ports, the facade of the presidential palace La Moneda, the secondary presidential residence at Castillo Hill in Viña del Mar, etc., and increased public spending.

He also reformed the police forces, by merging in 1927 the Fiscal Police, the Rural Police, and the Cuerpo de Carabineros into the Carabiniers of Chile, and became their first Director General. Ibáñez also created the Chilean Air Force, LAN Airlines and the COSACH (Compañía de Salitres de Chile, saltpeter company).

On an international level, Ibáñez signed in June 1929 the Treaty of Lima with Peru, in which Chile agreed to return the Tacna Province to Peru — which has been seized during the War of the Pacific — in exchange of a financial compensation.

His popularity lasted until after the Wall Street Crash of 1929, which effects began to be felt in Chile at the end of 1930, leading to the abrupt fall of the prices of saltpeter and copper, upon which the Chilean economy was strongly dependent. At that point all loans were halted and called. Without the influx of foreign currency, Chile was heavily affected by the Great Depression. Furthermore, the United States and European states began to implement high tariffs in a return to protectionism. In a few weeks, unemployment in the Northern mines affected tens of thousands of persons. In 1931, the flux of international credit was stopped, pushing the state to a quasi-bankruptcy.

Although Ibáñez's government increased export taxes to 71% and established restrictions on exit of devises, he did not manage to equilibrate the balance of trade, leading to a depleting of the gold reserves. On July 13, 1931, he named a "Cabinet of National Salvation" (Gabinete de Salvación Nacional) including Pedro Blanquier and Estaban Montero. The combination would be lethal, as when Blanquier, on one hand, revealed the catastrophic state of the finances, Montero was lifting the censor, leading to immediate reactions from the people.

Ibáñez's large public spending did nothing to alleviate the situation, and his opponents, primarily the exiled Grove and Alessandri, began to plan a comeback. Several conspiracies attempted to remove him from power, one by Alessandri, Marmaduque Grove and two other persons (which led to their exile to the Easter Island), and another in September 1930 in Concepción.

A great wave of public unrest followed, during which students of the University of Chile and of the Pontificia Universidad Católica de Chile initiated demonstrations, soon joined by physicians and lawyers. The police forces killed more than ten people, leading to Ibáñez' resignation on July 26, 1931, and his subsequent exile on the following day. Before leaving, Ibáñez delegated his office to the President of the senate, Pedro Opazo, who in turn resigned in favor of the Interior Minister, Juan Esteban Montero, a member of the Radical Party, who was proclaimed by the Congress new President.

Read more about this topic:  Presidential Republic (1925–1973), Carlos Ibáñez and Arturo Alessandri Palma

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