ulgated, and the ecclesiastical system was
organized under an archbishop appointed by the pope. To Montt, as
minister under Bulnes and afterwards as president, must be given the
main credit for the far-seeing policy which laid the foundations of the
prosperity of Chile; and though the administration was in many ways
harsh and narrow, firm government, rather than liberty that would have
tended to anarchy, was essential for the success of the young republic.

After 1861, however, a Liberal reaction set in, aided by divisions in
the Conservative party arising mainly over church questions. Montt's
successors, Jose Joaquin Perez (1861-1871), Federico Errazuriz
(1871-1876) and Anibal Pinto (1876-1881), abandoned the repressive
policy of their predecessors, invited the co-operation of the Liberals,
and allowed discontent to vent itself freely in popular agitation. Some
democratic changes were made in the constitution, notably a law
forbidding the re-election of a president, and the gradual and peaceful
transition to a Liberal policy was a proof of the progress which the
nation had made in political training. Outside the movement for
constitutional reform, the most important internal question was the
successful Liberal attack on the privileged position and narrow views of
the Church, which led to the birth of a strong ultra-montane party among
the clergy. The government continued to be animated by a progressive
spirit: schools, railways, telegraphs were rapidly extended; a steamship
mail service to Europe was subsidized, and the stability of the
government enabled it to raise new foreign loans in order to extinguish
the old high interest-bearing loans and to meet the expenses of public
works. In 1877 a financial crisis occurred, met by the emission of paper
money, but the depression was only temporary, and the country soon
rallied from the effects.

During this period there was desultory fighting with the Indians; there
was a long boundary dispute with the Argentine, settled in 1880; and in
1865 Chilean sympathy with Peru in a quarrel with Spain led to a foolish
war with Spain. The blockade of their ports and the bombardment of
Valparaiso by a Spanish squadron impressed the Chileans with the
necessity of possessing an adequate fleet to defend their long
coast-line; and it was under President Errazuriz that the ships were
obtained and the officers trained that did such good service in the
great war with Peru. With a population