Pricing of public services

The cost of 1 water tanker is more than the monthly water bill that we pay.
The cost of purchasing the invertor/UPS/generator is more than 2 year of electricity bill. Add to it the running cost and the diesel fumes etc. State electricity board electricity is not only cheaper but much more convenient.
The cost of public transport (bus, local trains, metro) is substantially less than auto, taxi or even self-driven vehicles.  Railway Trains are cheaper than bus, flight or cars. LPG is cleaner, greener and more convenient that its alternatives chopping trees for firewood or burning the smoky kerosene stove.
As an educated, smart and savvy statesman interested in public welfare what would you do? Well it’s no brainer that you would invest in the cheaper & more convenient for the mass public. After-all power-plants are not only cheaper but also greener (per unit electricity produced) than a private generator. Public transport can go a long way in reducing congestion, pollution and making urban life more affordable etc. etc.
But you cannot! Why because Indians are like crabs in the basket. They are Ok with not being able to escape poverty, but they will surely drag down anybody else who wishes to.
We want electricity to be provided free of cost, water is already provided free of cost, bus fares have increased by 5-10% over the last decade (while diesel and salaries have increased 5 folds), railway prices have remained untouched since the Independence of this country (well at least for the last decade).
Public enterprise is no different than a business the profit it generates paves way for further investment and expansion of service. In absence of appropriate pricing the services are either shut-down or will suffer with years of neglect & underinvestment. (Some subsidized services like healthcare, police generate profit through the economic development and social impact).
You don’t expect your grocery store to stock your kitchen and feed you for free. The rent you pay motivates the builders and landlords to develop new & modern real-estate. Similarly the price you are willing to pay for public utilities funds for better services. If we are willing to pay for it then we might as well move to forest. (Water in the streams is free, firewood/energy is free, nobody will tax you for walking)
In the 80s, my father used to joke that although the entire west have a Communist-phobia USA, UK & Western Europe is more communist than the so called communist countries. (With reference to unemployment benefits, pension policy, disability and maternity support) Today in Shanghai I am getting some top notch capitalistic advice. What’s more the gentleman even said that India’s communistic & populist policies will undo whatever economic development it has. Isn’t the world is so different from what it appears to be.


Bastards rule the world

Adversity has a huge role to play in shaping the person. Most people bow down and back off when faced with adversity, but some of those who don’t accept the marginal existence rise to the top. History is filled with examples of illegitimate, outcastes & disowned children rising up as powerful tycoons, rulers and generals. Few of the names are:
1. Mahabharat: Karan was a bastard, Krishna was not raised by his parents, Dhritrastra & Pandu did not have even an ounce of the royal blood, Pandu was impotent yet he had 5 sons.
2. Ramayana: Sita was found abandoned in the fields, Ram was not supposed to be the legitimate ruler.
3. Ashoka was neither the eldest, nor was he born to the queen.
4. Aurangzeb was the 6th child of his father and had to resort to Fratricide to consolidate power (he arrested his father and hence did not have to indulge in Patricide)
5. Rome was founded by 2 abandoned orphans (sulking on the wolves milk)
6. Alexander was born out of wedlock and had to resort to Patricide the moment the crown prince was born (he was the head of the royal bodyguards and the king dies under his guard paving way for his rise to the throne)
7. Nobody knows who Jesus Christ’s father was
8. Hitler stepfather Johann Georg Hiedler was recognized as the birth-father only 20 years after his death (and 30 years after the death of Hitler’s mother)
The list goes on: Confucius (ca. 551–479 BCE), St. Vladimir the Great, Grand Prince of Kiev (980–1015), William the Conqueror (1028–87), King Joao I of Portugal (1358–1433), Leone Battista Alberti (1404–72), Antoine, bastard of Burgundy (1421–1504), Leonardo da Vinci (1452–1519), Erasmus of Rotterdam (1466–1536), Ferdinand Columbus (1488–1539), Queen Elizabeth I of England (1533–1603), Jean le Rond d’Alembert (1717–83), Alexander Hamilton (1755–1804), James Smithson (1764 – 1829), Alexandre Dumas, fils (1824 – 95) etc.
Some say that one needs ruthlessness to succeed and bastards are born with it. However many of them were kind and gentle. What they had was an obsession, the passion to succeed against all odds. The world was not handed to them on a silver platter, but that never scared them. The out of the box thinking and challenging the status quo. While the common man lives to collect his inheritance, these guys go out of the way to create theirs.


China: bike grip

Driving a bike in winter is always an issue
1. clumsy gloves: the thick gloves often slip and makes it difficult to maintain the grip on the handle.
2. Fat fingers: the insulation pads often make it difficult to operate buttons
3. chill & wind shear makes the ride uncomfortable. Whats worse is that with the hands pointed in front, the wind leaks from the cuffs and freezes the whole arms.
Chinese innovation to keep hands warm and yet not have fat fingers warm grips to ensure fingers are warm in snow[/caption]
However Chinese solved this problem in a simple, yet innovative way. These inexpensive grips ensures that the hands stay warm, yet agile even in the thickest of the snow.


old cartoons songs
Tap tap topi topi… Alice in wonderland theme song

duck tales hindi theme song

Talespin.. hindi song


Old Indian Children song

I thought of posting the youtube links of the songs that i used to love growing up

ek chidya, anek chidiya (1974)
Jungle book (chaddi pahan ke phool kila hai

Chun chun karte aayi chidiya:
cute girl singing “Nani tere morni ko mor le gaye”
Dadi amma dadi amma man jao (2 young boys pacifying their grand mother)
ladki ke kathi par ghoda… 3 young children enjoying & singing



Guest post by bijal shah
The utter stupidity of building a 27 floor residence worth US$ 2 billion and mostly have servants living in it;
The cunning of buying stakes at almost every big media company in the country so as to control it;
The facade of involving Sachin Tendulkar for the promotion of their laughable social outreach programs;
The ridiculousness of buying children Aston Martins to be driven only on jam packed Mumbai roads at 100kmph, while killing some people;
The arrogance of bullying people into submission while signing one dodgy business deal after the other, where society & environment don’t matter;
The outrageousness of a Z level security cover with CRPF commandos, not to forget the insecurity and guilt involved with it;
But guess what, NDTV says he is one among the “Greatest Global Living Indians”. Every other boy on the street of Mumbai wants to be a “Mukesh Ambani” one day.
A lot seems wrong with society and its power structures today…


Gay: Its a crime to love in India

This remark was made by a nature & history enthusiastic Thai friend who was disappointed by waves of Indian tourists who treat his country as caligula’s orgy.

“A Thai kid is always told what to do and what not to do. As a result the second they are away from the strict parental supervision, they go on a rampage. Adult Indian are no different. You Indians live a shackled live trying to conform to others expectation. You would marry strangers because your parents want it so, give up art, music & hobbies because your teacher demanded so, buy fancy houses that you cannot afford because your friend did so. When do you get time to live a moment for yourself? Slogging in the office and binge drinking is only because you actively hunt for distractions and forget what mess you have created for yourselves. When you are on the verge of a breakdown, you would catch a solo flight to Thailand and straight away head for a strip club. Why? Because here, nobody is watching.”

Read this account of Indian travelers to Tashkent which also highlights the similar unrestrained sexual indulgence of Indians away from Home. Even Indian women outside change their attire the moment they board the plane. I actually saw a woman changing from Burqua (head to toe black covering) to skirt in the flight to Singapore. It is not uncommon in Mauritius to spot a newly wed Indian woman sporting Chuda (15-30 red, white & silvery bangles), sindoor and a bikini (and one person actually swears she cannot even think of wearing the same outfit in India).

Gay support: To not to be able to love the one you love is to have your life wrenched away. - Vikram Sethi
Vikram Sethi supporting Gays in India and against section 377 IPC

Same sex or opposite sex, its a crime to love in India. Buckling under the conformity to the unwritten social laws many love birds part ways to end up in loveless relationships. Honestly I don’t care what the law says, in India breaking laws is a symbol of power, prestige and influence. What I care about is why are Indians so unhappy? If we spend all our lives pleasing strangers, when we will have time for ourselves?


Channalizing Fury

Cornelius Vanderbilt was so frustrated when his partners cheated him that he wrote a letter “Gentleman, I will not sue you because the law takes too long. I will ruin you!.” Sometimes great moments are started by a simple frustration.

Here is the official launch post of Samuhik Loans


Board Game: Settlers of Catan

Ever wanted to pay a 4 person chess? Well here is a German solution for you “Settlers of Catan”.  Published in 1995, this territorial expansion game combines strategy, alliances and negotiations with luck/dice. Unlike ‘Risk’, this board game does not have wars and leverages primarily on planning and the dynamics with 3 other competitors. While most games have 7 as the lucky number, all hell breaks loose due to 7. The robbers destroy future resources, cards need to be discarded and one of your cards might even get stolen. What I like the most about this game is the random nature of the board. Each game play is unique with a uniquely different island being formed.
Please visit this tutorial for a turn by turn rules explanation. There are a couple of online servers available that allow one to practice online. I prefer nand server


Medieval firepower part 1

Below is an informative essay Exploiting the Earth by Richard Cowen detailing how strategic & important gunpowder was. Unlike modern times, people use to collect urine for years, boil it process it before it could attain any level of purity. The ancient firearms were also very dangerous. Spontaneous ignition of arsenal was common, the cannons & musket used to crack & blast during firing killing everybody around.
History is often a glorious accounts of battles & conquest, but things were never rosy


Gunpowder arrived in the West from China via Byzantium and Islam, and directly from the Mongols. The Mongols pioneered the use of lengths of bamboo packed with gunpowder as “pipe bombs” to help blow open city gates, and they brought this technology with them during their ravages of Poland and Hungary in 1241. Roger Bacon already had a recipe for “black powder” before 1300, and a contemporary, Marcus Graecus, discussed it in his best-selling “Book of Fires for the Burning of Enemies.” By 1326 there is a picture of the new European invention, the cannon.
Since the Europeans had a thriving metal mining, smelting, and manufacturing industry, it was quickly converted to the improvement of the new weapon. Paradoxically, it was the skill of medieval bell makers, originally perfected to cast large bronze cathedral bells, that allowed the Europeans to jump quickly ahead of the Chinese in weapons technology. By 1430, European bombards were 4 m long (12­15 feet), and fully capable of knocking down contemporary castle walls. Sultan Mehmed “the Conqueror” was able to take Constantinople in the great siege of 1453 because he hired Christian metal-smiths from Transylvania to cast him a new cannon, 8 m long and firing stone cannon-balls that weighed 500 kg (half a ton). At the same time the French were driving the English out of the last of their castles in northern France with the new weapons, bringing an end to the Hundred Years’ War: the English leader, the old Earl of Shrewsbury, was actually killed by a roundshot at the battle of Castillon in July 1453. Another early casualty of cannon was James II of Scotland, who was killed in 1460 when his own cannon “The Lion” exploded as he was standing beside it watching it bombard Roxburgh Castle.
Early Western gunpowder was called “black powder” because it consisted of a finely ground charcoal base, mixed with sulfur and saltpeter (potassium nitrate). Saltpeter was the ingredient that was most difficult to obtain, and since it is the major ingredient in gunpowder best suited for military use, it was the supply of nitrate that became strategically important. By the end of the 1500s, the standard formula for military-grade gunpowder was saltpeter, sulfur, and charcoal dust in the ratio 6:1:1.
At this time, the only source of potassium nitrate was from rotting organic matter, especially rotting meat and urine. The saltpeter supplier would send out teams of collectors who would locate promising places to dig (abandoned privies and dungheaps) by tasting the soil before digging it out and carting it off to be boiled, strained and evaporated to produce saltpeter of the required purity. It is said that throughout Europe no privy, stable, or dovecote was safe from saltpeter collectors or “petermen”.
The English set up a Parliamentary Commision in 1606 to look into abuses of property by petermen. However by 1624 King James I issued a proclamation complaining about citizens who were placing their selfish interest above that of their country by paving barns or putting down plank walkways, interfering with the accumulation and ripening of saltpeter in the dung and urine. Every kingdom was desperate for gunpowder, which probably accounts for the continuing use of swords, pikes, and bows, long after firearms had made them technically obsolete.
Eventually a saltpeter industry grew up, based on artificial nitre beds, in which layers of decaying organic matter, old mortar, and earth were built up in a compost heap about a meter high, and sprinkled regularly with blood and/or urine. Nitrate crystals could be collected after about two years. In 1626, King Charles I ordered
“his loving subjects [to] carefully and constantly keep and preserve in some convenient vessels or receptacles fit for the purpose, all the urine of man during the whole year, and all the stale of beasts which they can save and gather together whilst their beasts are in their stables and stalls, and that they be careful to use the best means of gathering together and preserving the urine and stale, without mixture of water or other thing put therein. Which our commandment and royal pleasure, being easy to observe, and so necessary for the public service of us and our people, that if any person do be remiss thereof we shall esteem all such persons contemptuous and ill affected both to our person and estate, and are resolved to proceed to the punishment of that offender with what severity we may.”
Naturally there was no gunpowder left over for commercial purposes such as rock blasting in mining or canal building. Hard rock had to be excavated out by hand with hammers and picks and wedges, or it had to be fire-mined.
By the 18th century India had emerged as the principal source of saltpeter. During the Seven Years’ War the British defeated the French in India, cutting them off from this supply. It is said that the French had to make peace partly because they were running out of powder.


Guano is accumulated bird dung. It can accumulate only in areas with dense bird populations and little rain, but in those special environments it can eventually form deposits many feet thick. As it accumulates and dries, it becomes a dense organic material that is very rich in nitrate and phosphate. Around the world, guano deposits are usually found on dry oceanic islands lying in the middle of oceanic upwelling regions that support very rich fisheries. Living off the fish, and concentrated in great numbers by the small areas of available nesting sites, literally millions of seabirds, each excreting about 20 grams of dung a day, can generate massive amounts of guano.
Around the world, the most productive guano islands have been along the equatorial upwelling zone, especially in the Pacific, and in the great cold currents of the world: the Humboldt current off South America and the Agulhas current off South Africa. The word guano is a corruption of a Peruvian word huano, written phonetically in Spanish as guano and then mispronounced by English-speakers. As far as we know, the ancient Moche people along the Peruvian coast were the first people to exploit guano on any large scale, mining the offshore islands to support large populations on their irrigated coastal fields. The tradition was continued by the Incas, so that huano ranked with gold in some ceremonies, and nesting seabirds were placed under protection.
Guano usage dropped as the Spanish essentially destroyed Inca society, but the tradition was not lost. “Guano, though no saint, works many miracles,” said a Peruvian proverb. One of the first acts of the newly independent Peruvian government was to exempt huano from taxes in 1830.
As the old Spanish silver mines gradually were worked out, or flooded, the Peruvians began to try to export guano. Trial samples were well received in England, and the Peruvian entrepreneur Quirós put together a consortium of Peruvian, French, and English businessmen who bought from the Peruvian government an exclusive licence to mine and export guano for six years. In 1840 and 1841 they mined about 8000 tonnes of guano, and exported it, mostly to England, at an enormous profit on a wave of favorable publicity. Late in 1841 the Peruvian government realized that it had sold the monopoly too cheaply, and first negotiated a new deal and then nationalized the guano industry outright. It used much the same set of shippers as its agents, still leaving them a healthy profit, but keeping more of the proceeds.
For many years the three Chinca Islands, 120 miles south of the major port of Callao, were the main focus of guano mining. The Peruvian government organized guano mining on the three islands. The guano was sold directly to the trading companies that held the government licenses to export it. Vessels from many nations were hired to ship out the guano, each vessel being loaded from barges in bad weather, and down long canvas chutes from the clifftops in good weather. Eventually, enough guano was removed that a flat area could be carved out on one of the islands, and on a very unsavory foundation of solid guano were erected the headquarters for the Peruvian Governor, the British consul, the offices of the exporting companies, and the barracks for the laborers and the guards that acted as their overseers. Peruvian, British, and United States navy ships called regularly at the islands to make sure that operations were running smoothly.
Conditions were ghastly: the stench of ammonia pervaded the entire island. Probably the best living conditions were on board the dozens of guano ships that were there at any one time (it took about three months to load a ship from the barges that plied to and from the guano islands). Even then, as guano dust billowed out from the holds, crews often took to the rigging to avoid breathing it. The “trimmers” working to balance the load in the holds were not so lucky, and could only work 20 minutes at a time. A ghastly array of occupational diseases continually thinned the work force. The Peruvian government used convicts, indentured Chinese, and kidnapped Polynesians as laborers in these terrible conditions. The Peruvians and Chileans practically depopulated Easter Island and Tongareva in this way, before international outcry stopped the virtual slavery.
The Peruvian government derived most of its income from the guano trade from the early 1840s. Guano was Peru’s leading export in the 1850s and its largest source of revenue, with 300 shiploads of guano a year leaving Peru, most of them in American ships. For a while Peru was the only organized nation in the world without internal taxation, and the Peruvian president’s salary was twice that of the President of the United States. Peruvian Governments could issue bonds at 3% interest, lower than United States Government bonds! The first railroad in South America was built from Callao to Lima. However, it’s hardly surprising that the money that flowed from guano should have been illegally diverted on occasion, and that successive Peruvian governments fell victim to greed, corruption, and overspending.
The British firm of Antony Gibbs & Sons of London played a major role in the guano industry. Gibbs had been merchants in Lima since Spanish colonial days. They signed their first guano-trading contract with the Peruvian government in 1842, and their last in 1861, though there were periods where they lost the contract. At times Gibbs was the dominant company in the guano trade, primarily because from 1847 onward it held the monopoly of selling Peruvian guano (the best in the world) in Britain and North America. In the 1840s Gibbs was buying guano in Peru for $15 a ton, and selling it for an average of $50 a ton. In most years Britain was the major market for guano, generally importing about 100,000 tonnes a year, but 200,000 tonnes in 1850, and more than 300,000 tonnes in 1858. The peak for American imports was 176,000 tonnes in 1855.
By the early 1850s, entrepreneurs were prospecting for alternative sources of supply, and lower-quality guano was being shipped to Europe and North America from various Atlantic, Caribbean, and Pacific islands. The State of Maryland even hired a guano inspector to test quality, and levied a charge of 40c/tonne for the “grade stamps” on the sacks.
Guano fever swept American farmers, especially those who had suddenly realized that crop yields were dropping as they exhausted their soil. The US Senate debated guano in 1850, and President Fillmore referred to the urgent question of the nation’s guano supply in his State of the Union Address in December that year. The United States tried in vain to negotiate a treaty with Peru for a cheap stable guano supply. Guano made up 22% of the nation’s commercial fertilizer in 1850, and 43% in 1860, at a price around $73/ton.
Britain, the USA, France, and Germany were all major guano importers, and it was probably the interest of so many powerful countries in the trade that allowed Peru to keep control: each power would resists occasional attempts by the others to muscle in on the Peruvian end of the trade. In these early years of the guano trade, demand always outstripped supply. In 1852 there was a bizarre attempt by a Brooklyn entrepreneur, Alfred Benson, to persuade the US Navy to protect his ships from Peruvian “interference” while he mined guano from the Lobos islands, 20 to 40 km offshore from Peru in what was commonly accepted at the time as international waters. Benson owned a fleet of ships that routinely made the Cape Horn voyage out to gold-rush California, but generally returned with little cargo. If they could load guano off Peru, reasoned Benson, he could make literally millions of dollars. However, the British and the Peruvians were well aware of the rich guano deposits of the Lobos Islands. The Peruvians had declared them off-limits to mining (they were to be a reserve to be exploited once the Chinca Islands were depleted) and the British were already on record as regarding the Lobos islands as Peruvian possessions. Benson’s scheme was thwarted, but William R. Grace entered the guano market in 1854 in a much more legal way, by supplying the miners of Chinca and shipping out guano, in a trade that began the great W. R. Grace & Co.
However, Americans looked toward discovering guano deposits in less contested territory, at a time when the United States was in an expansionist mood. In 1854 and 1855, Americans began to mine guano from several islands in the southern Caribbean, trying to keep ahead of the Venezuelan government’s attempts to stop them or make them sign lucrative contracts. Meanwhile, in 1855 the ill-fated Alfred Benson formed the American Guano Company to mine some newly discovered islands in the equatorial Pacific, this time hundreds of kilometers from land, uninhabited, and rich in guano; and he persuaded Senator Seward (eventually of Alaska fame) to sponsor the Guano Islands Act of 1856, which encouraged entrepreneurs to claim such islands as American territory: the first American overseas territories. Within ten years, areas of the central Pacific were sometimes labelled “American Polynesia” in atlases, as 59 islands, most of them in the Pacific, were claimed and registered with the State Department as guano islands. Even the Hawaiian Navy got into the action, as Kamehameha IV tried to annex Johnston Island to his Kingdom in 1858, and succeeded in annexing Palmyra in 1862.
By the time the guano trade had become large and profitable, and the Peruvian government was receiving a very healthy share of the proceeds, though Gibbs was flourishing too. From 1849 to 1861, for example, the Peruvian government’s revenue was 65% of the gross proceeds from guano, with shipping costs eating up much of the rest.
The problem for the Peruvian government was that it usually spent each year’s guano income before it received it, borrowing money all the time. Thus the nation ended in 1861 practically bankrupt. For example, Gibbs paid the 1842 contract money in advance as a loan to the Peruvians, and 84% of it was spent on equipping the army for a war against Bolivia. Gibbs maximized their profit by selling 90% of their guano through their own agents in London, Liverpool, or Bristol, where Gibbs agents operated. Guano continued to be exported to Britain for a number of years at about 150,000 tonnes per year during the 1860s, but with the advent of nitrates and mined rock phosphate, the guano trade diminished considerably because the new products had a high and more reliable quality. In the 1870s the guano market crashed: tonnages dropped to about 100,000 a year, and petered out by 1885. However, I can still buy it for my organic orchard.


Chilean nitrates were the chief source of nitrogen for explosives, fertilizer, and chemical industries from the 1830s to the 1930s, and were the only significant source of iodine from the 1870s (replacing seaweed) until the mid-20th century (when iodine began to be extracted from oilfield brines).
In 1830, a shipment of 700 tonnes of nitrate left Tarapacá, southernmost Peru. The industry mushroomed, and annual exports were 16,000 tonnes by 1843. The peak was not reached until the rather unusual conditions of World War I, when production reached nearly 3 million tonnes. The all-time record was set in 1928, at 3.1 million tonnes.
The nitrates occur in what are now Chile’s two northern provinces, Tarapacá and Antofagasta, along a band 30 km wide and 700 km long. They seem to have formed in shallow playa lakes, where the saline water contained bacteria that fixed nitrogen into nitrate.
In 1868 there was a boom in nitrate mining in the Atacama Desert, and major nitrate ports were developed from Iquique in the north through Pisagua and across the Atacama desert to Taltal. The nitrate mining was dominated by British and Chilean enterprises, even though the Atacama Desert was formally part of Bolivia. Chile had recognized Bolivia’s title in an 1874 treaty, but was allocated economic rights there, including a guarantee that taxes on Chilean mining enterprises would not be raised.
For Peru, nitrate was rather unimportant as long as the guano trade was flourishing: in fact, most of the early nitrate mining on Peruvian and Bolivian territory was done by Chilean and British entrepreneurs. However, in 1875 a particularly impoverished Peruvian government declared nitrate deposits to be the property of the state, copying the declaration covering guano decades before. By this time the governments of Peru, Bolivia, and Chile, had all focussed their attention on control of the nitrate region.
In another of its economic crises, the Bolivian government announced a tax increase of 10 centavos per hundredweight on nitrates in 1879. At that time the largest nitrate mining company was the Antofagasta Nitrate and Railroad Company, a Chilean firm controlled by British capital, including the merchant house of Gibbs. It’s not clear what part was played by Gibbs in the politics of this incident, but the Chileans mobilized with the intention of seizing the desert. The Peruvians expressed the intention of mediating the dispute between Bolivia and Chile, but when it turned out that there was a secret treaty between Peru and Bolivia, the Chileans declared war on them both.
The War of the Pacific may have been started as much by national rivalry and runaway emotion as by the economic prize of the nitrate deposits themselves. However, the nitrate prize was enough to give the victor the income of an entire nation, and the combatants were acutely aware of that. Peru’s income had been largely based on guano and nitrate for decades; Bolivia’s economy was ramshackle at best, but its foreign income was based on metal mining in the Altiplano; and Chile had already had a taste of the riches to be gained from the Atacama mines it was already operating.
Early in the War, W. R. Grace allied itself with the Peruvian government, and became a clandestine arms shipper to Peru. It bought and shipped millions of dollars’ worth of armaments, including guns from Krupp and a new naval weapon, a torpedo boat. However the Chileans quickly beat both their opponents and went on to occupy Lima.
Chile’s victory in the War of the Pacific gave it full control of a large northern strip of coast. Iquique was the terminus of the Nitrate Railways and the most important outlet. At first Tarapacá province was dominant, with 48 out of Chile’s 53 nitrate works in 1892. But twenty years later the southern fields of Antofagasta, linked by a new railroad, the Longitudinal Railway, overtook the northern field in production.
Nitrate played an increasing role in Chile’s economy after the War of the Pacific, as copper production declined. By the late 1880s an export tax on nitrate was earning 43% of Chilean government income, and in 1894 it was 68%, and the wealth was used to improve the country’s infrastructure. The nitrate industry, however, was largely foreign owned. European capital had bought out Chilean entrepreneurs in Chile, Peru, and Bolivia, even before the War of the Pacific. The major reason was the large amount of capital needed to set up the nitrate works, the infrastructure in the difficult desert regions that contained the nitrate deposits, and the railroad and port facilities that were needed, and the continuing requirement for importing supplies. Capital on this scale was simply not available in South America, nor were the basic supplies to support the industry. For example, foreign coal constituted 20% of Iquique’s imports in 1909. In fact, a convenient two-way trade of coal for nitrate favored British shipping firms, who loaded 60% of the nitrates even though most of the nitrate went to European countries.
Synthetic production of nitrates surpassed Chilean mining production in the 1930s. By 1950 the Chilean production was only about 15% of world supply, and by 1980 it was only 0.14%. Today the Chilean reserves total only about a year’s worth of world consumption, not because they are close to exhaustion, but because world demand has increased so much.