nd died in July. At the ensuing election Riesco was elected
president. The attitude of Chile towards the Pan-American Congress at
Mexico became a matter of interest in the autumn, particularly in
connexion with the proposal for compulsory arbitration between all
American governments. The Chilean government made it quite clear that
they would withdraw from the congress if this proposal was meant to be
retroactive; and their unyielding attitude testified to the
apprehensions felt by Chile concerning United States interference. In
October the Chilean government announced that the contemplated
conversion scheme, for which gold had been accumulated, would be
postponed for two years (till October 1903), the gold being held as a
reserve fund pending the result of the arbitration over the Argentine
frontier. This was generally considered to be a reasonable and
statesmanlike course. Unfortunately, a recrudescence of the excitement
over the boundary dispute was occasioned by the irritation created in
Argentina by the fact that, pending a decision, Chile was constructing
roads in the disputed territory. During December 1901 relations were
exceedingly strained, and troops were called out on both sides. But at
the end of the month it was agreed to leave the question to the British
arbitrators, and the latter decided to send one of their number, Sir
T.H. Holdich, to examine the territory.

Argentine boundary award.

The survey occupied some eight months, and it was not until the autumn
that Sir T.H. Holdich returned to England to make his report. The
difficulty of ascertaining the true line watershed had been very great,
but the result was eminently successful. The award of King Edward was
signed on the 20th of November 1902, and both parties to the litigation
were satisfied. In order that future disputes might be amicably settled,
a treaty was signed by which it was agreed that any question that might
arise should be submitted to the arbitration of Great Britain or in
default of that power to the Swiss Confederation. The removal of this
source of irritation and the restoration of friendly relations between
the two republics was a great relief to the finance of Chile. Had it not
been for the political instability of the country, the effects of the
diminution of expenditure on military and naval preparations would have
effected a rapid improvement in its financial position. The constant
change of ministry (there being no stable m