ABSTRACT
Sources: El Mercurio de Valparaiso (1827); Estadística Minera [1911], p. 101 (1830-1890); The Course of Exchange, London (1847/48); The Economist, London (1849-1887, 1911-1914); WAGEMANN [1913], pp. 113, 115 (1874-1879, 1885, 1888-1891); FETTER [1931], pp. 13-76n (18781892); Le Temps, Paris (1892-1893, 1896-1897); Journal des débats politiques et littéraires, Paris (1894-1910). Concordance: WdW VII, pp. 303-312
Currency: During the first decades of the documented period the exchange rate quotations were recorded for pesos corrientes, the unit of account based on the Spanish peso duro (24.43 grammes of fine silver) of 8 reales of 1772. From 1817 the peso duro was minted with a republican strike, but only a small amount was issued. As gold coins were the main currency of Chile, the gold standard predominated in the country, the onza de oro or the doblón (23.4219 grammes of fine gold) of 16 Spanish pesos duros being fixed at 17¼ Chilean pesos corrientes (NOBACK [1858], p. 650). The term peso corriente helped to mark the Chilean pesos off from the old Spanish, Mexican and other South American (Patriot) pesos (NOBACK [1877], p. 799). While the Coin Act of 1835 had still prescribed the full-weighted minting of pesos following the Spanish example, the currency reform of January 9th 1851 introduced bimetallism following the French example on the basis of the peso corriente (22.50 grammes of fine silver or 1.3728 grammes of fine gold) of 100 centavos (or – in everyday life – of 8 reales). Therefore the previous gold standard was not much changed by the new laws, but the long-standing unit of account, the peso corriente, became the monetary unit (cf. ibid., p. 800), corresponding to the French 5-francs piece. With the minting of the 1-peso piece in gold (1.3725 grammes of fine gold), which began in 1860, the gold standard was simultaneously introduced and used for all bigger payments and all quotations in the exchange rate currents (cf. ibid.). Notes of private banks were not accepted until a military conflict between Chile and Spain broke out in 1865 and the treasury vouched for the validity of the notes. As a result of the worldwide devaluation of silver which became noticeable in Chile in the 1870s, the new gold coins disappeared quickly, so that Chile had the silver standard from 1875. Owing to their manageability, banknotes were more popular in those years, their circulation amounting to approximately 20 million pesos around 1877 and, in consequence, the rate of the pound sterling was falling. After its dramatic depreciation in 1892/93, the paper currency was abolished (a compulsory rate had been imposed on it on July 23rd 1878). When the gold standard was reintroduced in 1895 and the government paper money was cashed in gold, the peso gold was based on a parity of 18 pence sterling since the (imaginary) peso gold (peso de oro) corresponded to 0.5492 grammes of fine gold (1 pound sterling = 13 1/3 pesos). Only three years later the gold standard collapsed again because of a crisis in the saltpetre industry, in agriculture and in copper mining, as well as because of the need to produce armaments for fear of a war with Argentina. On July 31st 1898 government notes (billetes fiscales) were reintroduced as paper currency with a temporary compulsory rate of three years being prolonged repeatedly until 1915.
