After a weak successor served in the wake of Alessandri's resignation in 1925, Ibáñez made himself president in a rigged election in 1927. He based his reign on military support (especially from the army), on repression (especially of labor unions, leftists, and political parties), and on a flood of loans from private lenders (especially from New York). He also created the national police, known as the Carabineros. His expansion of the central government found favor with the middle class. While Ibáñez promoted industry and public works, the economy fared well until torpedoed by the Great Depression.

According to the League of Nations (see Glossary), no other nation's trade suffered more than Chile's from the economic collapse. Unemployment approached 300,000, almost 25 percent of the work force. As government revenues plummeted, deficits grew. Chile suspended payments on its foreign debt in 1931 and took its currency off the gold standard in 1932. Expansion of the money supply and increased government spending thereafter generated inflation and rapid recovery. Also helpful was an emphasis on import-substitution industrialization (see Glossary) and the revival of exports, especially copper.

Rather than run the risk of civil war, Ibáñez went into exile in Argentina in July 1931 to avert clashes with demonstrators protesting his orthodox economic response to the depression and generally oppressive rule. His regime was followed by a kaleidoscope of governments, made and unmade through elections and military coups. The most notable short-lived administration was the twelve-day Socialist Republic of 1932, led by an air force commander, Marmaduke Grove, who would establish the Socialist Party (Partido Socialista--PS) in 1933. Exasperated by depression and instability, Chileans finally restored civilian rule by reelecting Alessandri to the presidency in 1932. Although the depression capsized civilian governments in most of Latin America, it discredited military rule in Chile. Now the 1925 constitution took full effect; it would remain in force until the overthrow of Salvador Allende Gossens in 1973.

Data as of March 1994