History of Bolivia


War of the Pacific

The War of the Pacific resulted from a dispute between Bolivia and Chile over sovereignty of the mineral-rich coastal area of the Atacama Desert. In the mid-1860s, the two nations had come to the brink of war because of disagreement over their boundaries. In 1874 Chile agreed to fix the border at 24° south latitude in return for Bolivia's promise not to increase taxes on Chilean nitrate enterprises for twenty-five years. But in 1878, Daza imposed a slight increase on export taxes. Chile immediately objected, and when Daza refused to revoke the tax hike, Chile landed troops on February 14, 1879. Bolivia, in alliance with Peru, declared war on Chile on March 1, but Bolivia's troops in the coastal territory were easily defeated, in part because of Daza's military incompetence. Driven from office by a popular revolt, Daza fled to Europe with a sizable portion of Bolivia's treasury. The attempt of General Narciso Campero Leyes (1880-84) to come to the aid of Peru, Bolivia's ally in the war, was unsuccessful, and the combined armies were defeated by Chile in 1880. Having lost its entire coastal territory, Bolivia withdrew from the war. It ceded the territory officially to Chile twentyfour years later, in 1904, under the Treaty of Peace and Friendship.

The War of the Pacific was a turning point in Bolivian history. Bolivian politicians were able to rally Bolivians by blaming the war on Chilean aggression. Bolivian writers were convinced that Chile's victory would help Bolivia to overcome its backwardness because the defeat strengthened the "national soul." Even today, Bolivia has not relinquished the hope of regaining an outlet to the Pacific Ocean.

After the war, a vigorous debate among civilian elites spawned the development of new political parties. Mining entrepreneurs, who had become the most important economic group in the country because of increasing production, created the Conservative Party (Partido Conservador). Conservatives favored reaching a quick peace settlement with Chile that would include indemnification for lost territories and enable Bolivia to construct a railroad for mining exports. The Liberal Party (Partido Liberal) denounced the pacifism of the Conservatives. It also resented the economic dependence of the mining sector on Chilean and British capital and hoped to attract United States investment. Despite these differences, both parties were primarily interested in political and economic modernization, and their ideological outlooks were similar. Civilian politicians reorganized, reequipped, and professionalized the discredited armed forces and tried to subject them to civilian control. Still, both Conservatives and Liberals initially supported military candidates for the presidency. The governments in power from 1880 to 1920--elected by a small, literate, and Spanish-speaking electorate--brought Bolivia its first relative political stability and prosperity.

Reconstruction and the Rule of the Conservatives

The Conservatives ruled Bolivia from 1880 until 1899. General Campero completed his legal term in office and presided over free elections in 1884 that brought to power Gregorio Pacheco Leyes (1884-88), one of Bolivia's most important mine owners. After Pachecho's term, however, fraudulent elections resulted repeatedly in Liberal revolts. Although the Liberal Party was allowed to participate in the National Congress (hereafter, Congress), it had no chance to win a presidential election.

Under the Conservatives, the high world price of silver and increased production of copper, lead, zinc, and tin combined to create a period of relative prosperity. The Conservative governments encouraged the mining industry through the development of a rail network to the Chilean coast. The growth of commercial agriculture, such as the development of Bolivia's natural rubber resources, also contributed to an apparently stronger economy. Agricultural production in the highlands increased as the haciendas expanded in some regions.

Aniceto Arce Ruíz (1888-92), although elected legally, was an autocrat who managed to stay in power only through repression. His main economic accomplishment was to extend the AntofagastaCalama Railroad to Oruro. The extension of the railroad drastically reduced the cost of transporting minerals to the Pacific Coast. Economic growth was skewed, however, as railroads that were built to export minerals started to bring imported wheat from Chile; in 1890 Chilean wheat was cheaper in La Paz than wheat from Cochabamba. The open economy also hurt local industry. The expansion of the haciendas at the expense of the free Indian communities resulted in numerous uprisings and forced many Indians to work for their landlords or to migrate to the cities. As a result of this migration, the census of 1900 noted an increase of the mestizo population, but Bolivia remained a predominantly Indian and rural nation, in which the Spanishspeaking minority continued to exclude the Indians.

The Liberal Party and the Rise of Tin

In 1899 the Liberal Party overthrew the Conservatives in the "Federal Revolution." Although the Liberals resented the long rule of the Conservatives, the main reasons for the revolt were regionalism and federalism. The Liberal Party drew most of its support from the tin-mining entrepreneurs in and around La Paz, whereas Conservative governments had ruled with an eye on the interests of the silver mine owners and great landowners in Potosí and Sucre. The immediate cause of the conflict was the Liberal demand to move the capital from Sucre to the more developed La Paz.

The Federal Revolution differed from previous revolts in Bolivia in that Indian peasants actively participated in the fighting. Indian discontent had increased because of the massive assault on their communal landholdings. The campesinos supported the Liberal leader, José Manuel Pando, when he promised to improve their situation.

Pando, however, reneged on his promises and allowed the assault on Indian land to continue. The government suppressed a series of campesino uprisings and executed the leaders. One of these revolts, led by Pablo Zárate Willka, was one of the largest Indian rebellions in the history of the republic. It frightened whites and mestizos, who once again successfully isolated the Indians from national life.

Like their Conservative predecessors, the Liberals controlled the presidential elections but left the elections for the Congress relatively free. They also continued to professionalize the Bolivian military, with the aid of a German military mission. President Ismael Montes Gamboa (1904-09 and 1913-17) dominated the Liberal era.

Liberal administrations gave priority to the settlement of border disputes. Bolivia's inability to protect and integrate the frontier with Brazil had led to the encroachment of Brazilian rubber gatherers. In 1900 they began an active secessionist movement in the eastern province of Acre and after three years of small-scale fighting won annexation by Brazil. In the Treaty of Petropolis in 1903, Bolivia relinquished its claims to 191,000 square kilometers of Acre territory in return for two areas on the Madeira and the Paraguay rivers totaling 5,200 square kilometers, the equivalent of US$10 million, and the use of a railroad to be constructed around the rapids of the Madeira in Brazilian territory. In 1904 Bolivia finally concluded a peace treaty with Chile under which it officially ceded Bolivia's former territory on the coast in return for indemnification of US$8.5 million, less the value of the Bolivian section of a new railroad that Chile would construct from La Paz to the Pacific Coast at Arica. The payment was used to expand the transportation system in Bolivia. By 1920 most major Bolivian cities were connected by rail.

Liberal governments also changed the seat of government and the nature of church-state relations. The presidency and the Congress were moved to La Paz, which became the de facto capital, but the Supreme Court of Justice remained in Sucre. Liberal presidents canceled the special privileges officially granted to the Roman Catholic Church. In 1905 they legalized public worship by other faiths, and in 1911 they made civil marriage a requirement.

Perhaps the most significant development of the Liberal era was the dramatic rise of Bolivian tin production. Since the colonial period, tin had been mined in the Potosí region; nonetheless, Bolivia historically lacked the transportation system necessary to ship large quantities of tin to European markets. The extension of the rail link to Oruro in the 1890s, however, made tin mining a highly profitable business. The decline in European tin production also contributed to the Bolivian tin boom at the beginning of the twentieth century. With the development of huge mines in southern Oruro and northern Potosí, La Paz eclipsed Potosí as the mining industry's financial and service center.

Tin production in Bolivia came to be concentrated in the hands of Bolivian nationals, although the regimes encouraged foreign investment. At first, foreign interests and Bolivians with foreign associations took the major share. This changed, however, when Bolivian tin-mining entrepreneurs realized that smelters in competing countries depended on Bolivian tin. Simón Patiño was the most successful of these tin magnates. Of poor mestizo background, he started as a mining apprentice. By 1924 he owned 50 percent of the national production and controlled the European refining of Bolivian tin. Although Patiño lived permanently abroad by the early 1920s, the two other leading tin-mining entrepreneurs, Carlos Aramayo and Mauricio Hochschild, resided primarily in Bolivia.

Because taxes and fees from tin production were critically important to national revenues, Patiño, Aramayo, and Hochschild exercised considerable influence over government policy. Unlike the silver-mining entrepreneurs of the Conservative period, the tin-mining magnates did not directly intervene in politics but employed politicians and lawyers--known as the rosca --to represent their interests.

The tin boom also contributed to increased social tensions. Indian peasants, who provided most of the labor for the mines, moved from their rural communities to the rapidly growing mining towns, where they lived and worked in precarious situations. Bolivia's First National Congress of Workers met in La Paz in 1912, and in the following years the mining centers witnessed an increasing number of strikes.

Liberal governments at first did not face any serious opposition because the Conservative Party remained weak after its overthrow in 1899. By 1914, however, opposition to political abuses and the loss of national territory led to the formation of the Republican Party (Partido Republicano). Republican support increased when mineral exports declined because of the crisis in international trade before World War I, and agricultural production decreased because of severe droughts. In 1917 the Republicans were defeated at the polls when José Gutiérrez Guerra (1917-20), the last Liberal president, was elected. But the long rule of the Liberals, one of the most stable periods in Bolivian history, ended when the Republicans seized the presidency in a bloodless coup in 1920.

The Republican Party and the Great Depression

The advent of the Republican Party did not at first indicate any profound change in Bolivian politics. Fernando Díez de Medina, a Bolivian writer, commented on the change: "Twenty years of privilege for one group ends, and ten years of privilege for another begins." The 1920s, however, was also a period of political change. New parties emerged as the Republican Party split into several factions. One major opposing branch was led by Bautista Saavedra Mallea, who had the support of the urban middle class, and the other was led by the more conservative Daniel Salamanca Urey (1931-34). A number of minor political parties influenced by socialist or Marxist thought also emerged.

During Republican rule, the Bolivian economy underwent a profound change. Tin prices started to decline in the 1920s. After peaking in 1929, tin production declined dramatically as the Great Depression nearly destroyed the international tin market. This decline was also caused by the decrease in the tin content of ore and the end of new investment in the mines in Bolivia. As economic growth slowed, Republican presidents relied on foreign loans. Saavedra (1920-25) and Hernando Siles Reyes (1926-30) borrowed heavily in the United States to finance major development projects, despite opposition by Bolivian nationalists to the favorable terms for the lender. The so-called Nicolaus loan aroused national indignation because it gave the United States control over Bolivia's tax collections in return for a private banking loan of US$33 million.

During the 1920s, Bolivia faced growing social turmoil. Labor unrest, such as the miners' strike in Uncia in 1923, was brutally suppressed. But the unrest reached new heights of violence after the drastic reduction of the work force during the Great Depression. Indian peasants continued to rebel in the countryside, although they had been disarmed and their leaders had been executed after participating in the overthrow of the Conservative Party in 1899. Now, for the first time, the Indians found support for their cause among the elite. Gustavo Navarro, who took the name Tristan Marof, was Bolivia's most important Indianist. He saw in the Inca past the first successful socialism and the model to solve rural problems. As Indian uprisings continued during Liberal rule, Siles Reyes promised to improve their situation and organized the National Crusade in Favor of Indians.

The social legislation of the Republican governments was weak, however, because neither Saavedra nor Siles Reyes wanted to challenge the rosca. Siles Reyes's four years of inconsistent rule and unfulfilled promises of radical changes frustrated workers and students. In 1930 he was overthrown when he tried to bypass the constitutional provision forbidding reelection by resigning in order to run again. A military junta ruled until March 1931, when Salamanca (1931-34) was elected as a coalition candidate.

Although he was an esteemed economist before taking office, Salamanca was unable to suppress social unrest and to solve the severe economic problems caused by the Great Depression. Criticism of his administration mounted in all sectors of Bolivian society. Initially reluctant to enter into an armed conflict with Paraguay, he nevertheless led Bolivia into war, a move supported by the military and traditional groups.

The Chaco War

The origin of the war was a border dispute between Bolivia and Paraguay over the Chaco. This vast area was largely undeveloped except for some minor oil discoveries by Standard Oil in Bolivia and Royal Dutch Shell in Paraguay. The Chaco, which Bolivia traditionally regarded as a province (Gran Chaco), became more significant to Bolivia after the latter lost its Pacific Ocean outlet to Chile. Bolivia hoped to gain access to the Atlantic Ocean with an oil pipeline across the Chaco to the Paraguay River. Despite mediation attempts by various countries, the increased number of border incidents led the military high commands of Bolivia and Paraguay to believe in the inevitability of war.

Salamanca used one of the border incidents to break diplomatic relations with Paraguay and increase Bolivia's military budget, even though the country had severe economic problems. Convinced that Bolivia's better-equipped, German-trained troops, which outnumbered the Paraguayan army, could win the war, Salamanca went to war in 1932.

The war raged for the next three years. The Bolivians were defeated in all major battles, and by the end of 1934 they had been driven back 482 kilometers from their original positions deep in the Chaco to the foothills of the Andes. Serious strategic errors, poor intelligence, and logistical problems in reaching the distant battle lines contributed to the losses. In addition, the morale of the Bolivian troops was low, and the highland Indians could not adapt to the extreme climate in the low-lying Chaco. Despite the high command's decision to end the war, Salamanca was determined to continue at all costs. In 1934, when he traveled to the Chaco to take command of the war, Salamanca was arrested by the high command and forced to resign. His vice-president, José Luis Tejada Sorzano, who was known to favor peace, was accepted as president (1934-36).

Salamanca's overthrow was a turning point in the Chaco War. The Paraguayan troops were stopped by new, more capable Bolivian officers, who fought closer to Bolivian supply lines. On June 14, 1935, a commission of neutral nations (Argentina, Brazil, Chile, Colombia, Peru, and the United States) declared an armistice; a definite settlement was finally reached in 1938. Bolivia lost the Chaco but retained the petroleum fields, which Paraguay had failed to reach. Both countries suffered heavy losses in the war. In Bolivia alone, an estimated 65,000 people were killed and 35,000 wounded or captured out of a population of just under 3 million.

The humiliating disaster of the Chaco War had a profound impact in Bolivia, where it was seen as dividing the history of the twentieth century "like a knife." The traditional oligarchy was discredited because of its inept civilian and military leadership in the war. Unable to deal with growing criticism, its members blamed the loss of the war on the low potential of the Bolivians and saw the earlier pessimistic assessment in Arguedas's famous novel Pueblo Enfermo (A Sick People) confirmed.

After the war, a group of middle-class professionals, writers, and young officers questioned the traditional leadership. This group, which came to be known as the "Chaco Generation," searched for new ways to deal with the nation's problems. It resented the service of the rosca on behalf of the tin-mining entrepreneurs and criticized Standard Oil, which had delivered oil to Paraguay clandestinely through Argentine intermediaries during the war. The Chaco Generation was convinced of the need for social change. Gustavo Navarro, now more radical than during the 1920s, raised the famous slogan "land to the Indians, mines to the state." The military, which came to power in 1936, tried to bring about change with popular support.

Bolivia History Contents

SOURCE: Area Handbook of the US Library of Congress