No. 73.
Mr. Osborn to Mr. Evarts.

No. 44.]

Sir: Congress was formally opened in regular session on the 1st instant. As is the custom, the President of the republic read his message in person to both houses of the National Assembly. Having been honored with an invitation from the minister of foreign relations to be present on the occasion, I attended the opening and witnessed the ceremony.

Inclosed you will find a copy of the message in Spanish, as also a faithful synopsis in English. This synopsis is all that has been published here in the English language, but it is so complete, that I have deemed it unnecessary to cause the message to be translated entire.

The message is a plain statement of the condition of the country as it appears on the surface, but it fails, in my judgment, to meet the necessities of the hour. It shows a prostration of business and a vast decrease of commerce; a diminution of the public revenues and an increase of the public debt; and yet, to my mind, it points out no adequate remedy for these evils. True, it proposes, with a view of creating additional revenues, an increase of the duties on imports and the creation of a light income tax; but these, even if they should be accepted by Congress, would prove inadequate, I fear, to the necessities of the country, and could not but fail, I judge, to accomplish the purposes desired.

It is due to truth, however, that I should not allow this to go upon record without saying that there is in this country a universal sentiment in favor of meeting promptly, in good faith, the public obligations, and that, in my opinion, the interest and principal of the public debt will continue to be paid when due.

“Imports”, says the President, “which in 1876 amounted to $35,291,041, fell off in 1877 to $29,279,113; and exports fell from $37,771,039 to $29,715,372, due to the low price of copper in Europe and the deficient harvest.” Continuing, he says “the revenue has experienced the effects of the reduction of trade; the ordinary receipts last year being $13,701,794.65, [Page 92] inferior to those of 1876 by $1,658,922.35, and the extraordinary to $4,977,172.02. The expenditure amounted to $20,463,685.73, or an excess over the revenue of $1,784,729, to which must be added $634,393.61 deficit standing over from 1876.”

It will be observed that the President announces that the dispute with the Argentine Government concerning their boundaries has not been definitely settled, from which you will understand that the treaty lately negotiated at Buenos Ayres, to which I referred in my dispatch No. 34, does not meet the approval of the Chilian Government. Of this I will write fully hereafter.

As soon as they shall assume tangible shape, I will inform you as to the proposed changes in the duties on imports.

I have, &c.,

[Inclosure in No. 44.—Translation.]

synopsis of president’s message.

June 1.—The ordinary session of Congress was opened to-day with the customary ceremonies. The President’s message commenced with the announcement that the foreign relations of the republic are satisfactory; that no arrangement had been come to on the frontier question with the Argentine Republic, but that he hoped time would remove the obstacles which now prevent a settlement. The railway between Curicó, Los Angeles, and Angol was provisionally delivered to the state at the beginning of the current year, and its conclusion in a solid and permanent manner is desirable as early as possible, with which design the necessary plans and estimates are being prepared. The bill on the organization of the administration of the state railways is recommended to the consideration of Congress. The codes on civil and criminal judicial procedure are in an advanced state. Notwithstanding the lack of resources, public instruction is receiving the carefulest attention of government. Commerce last year suffered a notable diminution. Imports, which in 1876 amounted to $35,291,041, descended in 1877 to $29,279,113; and exports fell from $37,771,039 to $29,715,372—due to the low price of copper in Europe and the deficient harvest. These causes still continuing, much improvement cannot be looked for this year. The revenue has experienced the effects of the reduction in trade, the ordinary receipts last year being $13,701,794.65—inferior to those of 1876 by $1,658,922.35; and the extraordinary to $4,977,172.08. The expenditure amounted to $20,463,685.73, or an excess over the revenue of $1,784,729, to which must be added $634,393.61, deficit standing over from 1876. Reductions have been introduced into the expenditure as far as possible, but it must not be forgotten that economy has its limit, and the disorganization of the public service may be an evil of greater magnitude than additional taxation, even in the present hard times. For this reason the bills on the reform of the tariff, and the income tax, are recommended to the attention of Congress. The government has raised the loan of $3,000,000, which it was authorized to do to cover the deficit of last year, on advantageous conditions, and has satisfactorily settled the question respecting the admittance of bank-notes in the government offices. With the object of deciding the question of the mineral wealth of the desert of Atacama, an engineer was sent to make a detailed survey; his report, confirming many of the hopes entertained from previous explorations, will shortly be published. The advance of the Araucanian frontier is next alluded to, and the progress realized by the settlement of that region. The army is complimented on its efficiency and discipline, and the navy is maintained in as perfect a manner as the resources at disposal will admit. Some of the vessels have been laid up, and others, inadequate for the service, sold; the iron-clad Almirante Cochrane is shortly expected from England, whither she had been sent for repairs. The coast surveys are being continued successfully, and the fourth volume of the Anuario has recently been published, containing a report of the operations of that department. To improve the instruction of the officers of the navy, the government has obtained the admittance of some of them to vessels of the English, French, and German marine. The message concludes by an allusion to the difficulties existing with reference to the financial situation, and the hope that they will be overcome by the prudence and patriotism of the nation; and, in calling attention to the defects in the existing electoral law, recommends the careful study of the amendments that will be submitted to it during the present session of Congress.