Montes, Ismael

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Ismael Montes

Bolivian statesman, lawyer, and military officer Ismael Montes (1861–1933) served two terms as President of Bolivia (1904–09 and 1913–17). A member of the country's Liberal Party, Montes ran an administration of political and social reform. He was instrumental in developing Bolivia's railway system and he fostered development. He also expanded his country's economy by adopting the gold standard and helping to make tin Bolivia's biggest export.

Early Life and Military Career

Ismael Montes Gamboa was born in Corocoro (later known as La Paz), Bolivia, on October 5, 1861. When he was 16, he graduated from the National College of Ayacucho in La Paz. As a young man, he attended the Greater University of Andres to study law.

In 1879, during the administration of Hilarión Daza, he interrupted his legal education to enlist in his country's army to fight against Chile in the War of the Pacific (1879–83), which involved a dispute between Chile and Bolivia over control of a part of the Atacama Desert on the Pacific coast of South America. Though the fighting ended in 1883, territorial issues would continue right up until Montes's first term as president, when the war would "officially" end.

At the heart of the conflict were valuable mineral resources contained on the disputed territory as well as control of the Pacific coast. Previously, the two countries had formed a treaty that recognized the 24th parallel as their boundary and gave Chile the right to share the export taxes on the mineral resources of Bolivia's territories. Later, however, the Bolivian government expressed dissatisfaction with the terms of the agreement because it did not like having to share the taxes. In addition, Bolivia, in danger of becoming a landlocked country, was afraid that Chile would seize control of the important coastal regions. Peru entered the conflict, siding with Bolivia, because it, too, was concerned about control of the Pacific coast. In 1874, the Chilean-Bolivian treaty was revised so that Chile gave up its share of export taxes on minerals shipped from Bolivia. In return, Bolivia agreed not to raise taxes on Chilean business in Bolivia for 25 years. But, in 1878, Bolivia tried to raise taxes on the Chilean Antofagasta Nitrate Company in the port city of Antofagasta. When the Chilean government protested, Bolivia threatened to confiscate the property. On February 14, 1879, Chile responded by sending troops in to occupy the city, causing Bolivia to declare war. Chile responded with its own declaration of war, against both Bolivia and Peru.

While in the army, Montes rose to the rank of captain. In 1884, he left the army to continue his law studies. He finally received his law degree on June 12, 1886. Afterward, he practiced law and worked as a journalist. Also during this period, he began his political career as a national representative from La Paz.

In 1898, Montes resumed his military career during the "Federal Revolution" of the Liberal Party, which sought to oust the Conservative Party that had been ruling the country for two decades. The following year, the Liberals overthrew the Conservatives. The coup, which would eventually lead to Montes's ascendancy to the presidency, was caused by resentments that developed during the long rule of the Conservatives, as well as regionalism and federalism issues. The Liberty Party gained important support from the rich tin-mining entrepreneurs in and around La Paz. The Conservatives had the support of the silver-mining entrepreneurs. The actual revolution was set in motion when the Liberals demanded that the capital be moved from Sucre to the more developed city of La Paz.

After the Liberals took control of the government, Montes became the army's Minister of War, serving under first party President Jose Manuel Pando. In 1900, he took part in the unsuccessful Acre campaign in Brazil, which involved a dispute over 191,000 square kilometers of territory on the Acre River that contained valuable rubber resources. The dispute escalated into armed conflict with the Brazilian rubber gatherers who had encroached into the territory. After three years of fighting, Pando turned the area over to Brazil when he signed the Treaty of Petropolis. Bolivia gave up its claims to the land in return for two areas on the Madeira and the Paraguay rivers totaling 5,200 square kilometers and the use of a railroad to be built near the Madeira river in Brazilian territory.

Afterward, Montes became Chief of the General Staff and began a process of reforming the army.

Elected President of Bolivia

While congressional elections were fairly open, the Liberal Party, like the Conservatives before them, controlled the presidential elections and, in 1904, Montes became President of Bolivia. He governed from the Palacio Quemado ("Burnt Palace"), which was the unofficial name given to the rebuilt Palace of Government after it was burned down by a mob in 1875, during one of the country's many civil and political upheavals that marked that historical period. This would be the first of his two terms. His first term lasted until 1909; by the end of his second term, he would become the dominant figure in the era of Liberal Party rule.

After the Liberal Party gained power, its administration's top priority was settling existing border quarrels. When Montes became president, he inherited some substantial territorial issues. Still in dispute were some of the land claims that had initiated the War in the Pacific. In the first year of Montes's first term, Bolivia signed a peace treaty with Chile that officially ended the war. The treaty recognized Chile's possession of the Pacific coast. Bolivia ceded much in the agreement. It gave up its former coastal provinces and would be without a seaport city. Still, the treaty provided Bolivia with some substantial benefits. For giving up its territory, Bolivia received a cash indemnity of US $8.5 million. More importantly, Chile agreed to build a railroad, at its own cost, that would connect the Bolivian capital of La Paz with Chile's port of Arica. Bolivia was guaranteed free transit for its commerce through Chilean ports and territory. The treaty was ratified in 1905.

The treaty generated some opposition in Montes's country. However, Montes felt that a normalization of relations with Chile was essential to Bolivia's continued economic development. Indeed, the treaty brought a period of political and economic stability.

Improved Bolivia's Economy

While in office, Montes adapted Bolivia to the gold standard. His greatest achievement in office is considered to be the expansion of Bolivia's economy, which he fostered through increasing tin imports and obtaining large loans from foreign countries. These loans were later criticized as irresponsible, but they helped him improve Bolivia's railway systems, which had already benefited from the treaty he helped engineer with Chile. During his first term, he strongly supported railroad construction and greatly advanced railway travel in Bolivia. In 1906, he obtained a sizable loan from the National City Bank of New York, which helped him complete Bolivia's internal rail links. That year, he negotiated with the Speyer Contract, which established the Bolivia Railway Company with the funds obtained from the National City Bank. The company laid down 416 miles of track in a system that linked Bolivian cities and mining centers with the Peruvian network. By 1920, most major Bolivian cities were connected by rail. However, the construction had cost Bolivia $22 million, and the government could not pay off the debt. The British Antofagasta and Bolivia Railway Company then gained control of the rail system.

During his administration, Montes also began an ambitious public works program that included new urban construction, creation of new roads, and the installation of telegraph lines.

Also in his first term, embracing his party's Liberal policies, Montes helped bring about a period of political and social reforms. The army was reorganized under a French military mission, while the educational system was reformed by a Belgian Pedagogical Mission. Many Bolivian teachers were sent overseas for training. The nature of the church and state relationship was changed, too. Liberal Party policies were anti-clerical, and the special privileges that had been officially granted to the Roman Catholic Church were canceled. This created conflicts with the Church. In 1905, Montes legalized public worship by other faiths.

The Liberal Party itself practiced laissez-faire economic policies, which meant that it interfered as little as possible in the marketplace. Tin entrepreneurs and wealthy landowners paid only minimal taxes. When the government seized remaining lands belonging to native communities, it turned them over to private landholders. Montes himself took ownership of some of the most valuable properties. In another major development, the Liberal administration moved the seat of national government to La Paz, which became Bolivia's capital.

In 1909, Montes was succeeded by Dr. Heliodoro Villazón. Montes engineered the election.

Became President for a Second Term

In the years between his two terms, Montes served as a Bolivian diplomat in France and England. In 1913, he secured his own reelection and became president once again. During his second term, Montes continued to increase railroad construction, and he fostered the development of mining. The Liberal era was highlighted by the rise in tin production. During Villazón's administration, tin exports increased dramatically. By Montes's second term, tin became Bolivia's main export, surpassing silver and other products.

Also during his second term Montes continued his first-term policies of development. But a severe economic recession in 1913–14 curtailed his spending. The recession resulted from a drop in international trade that preceded World War I as well as severe droughts that negatively affected national agricultural production. The weakened Bolivian economy led to some civil strife, which gave rise to Liberal opposition in the form of the new Republican Party in 1914.

During most of its period in power, the Liberal Party had been able to rule without significant opposition. The overthrown Conservative Party had been greatly weakened. But the downturn in the economy and a continued loss of national territory increased support for the Republican Party, who charged the Liberals with abuses of power. In particular, the dissidents charged that Montes's second election was fraudulent.

However, a small economic recovery quelled some of the dissatisfaction, and Montes was able to finish out his second term. In 1917, he handed the reins of the government over to his successor, Jose Gutierrez Guerra.

End of an Era

Guerra's presidency would be the last of the Liberal administration. The Republicans seized power in a bloodless coup in 1920, which brought to an end one of the most stable periods in Bolivia's turbulent history.

After he had finished his second term, Montes was appointed minister to Great Britain and France, acting as Bolivia's delegate to the League of Nations. After the Republican revolution, he decided to live in exile in Paris, France.

He returned to Bolivia in 1928, during the presidency of Republican Hernando Siles Reyes (1926–30). When Daniel Salamanca became President in 1931, Montes was appointed Minister of the Military. Salamanca was a former Liberal who had left the party to become a Republican. When Siles was overthrown, in large part because of conditions resulting from the Great Depression of 1929, Salamanca led a Republican-Liberal coalition and was elected President.

Salamanca was an unpopular president who governed during a period of economic hardship, and he repressed political opposition. During his administration, he renewed past hostilities with Paraguay over disputed territory in the Chaco region. This led to the Chaco War, which turned out to be a disaster for Bolivia, as it resulted in thousands of casualties and only worsened the economic conditions. On November 27, 1934, Salamanca was deposed by a group of Bolivian generals.

During the Chaco War, Montes served as the Major General of the Army of Bolivia, and he supported the war until his death on November 18, 1933, in La Paz.

Montes's Legacy

Today, Montes is regarded by many to have been one of Bolivia's best presidents. He reigned during a period of civil and economic stability, and he was a progressive leader whose development programs and reformation policies helped lead his country out of a turbulent past.

In 1983, the La Paz newspaper Ú ltima Hor polled 39 prominent Bolivians on which seven presidents they considered "most significant." Montes placed fifth on the list.