Chile defeated the Peruvian fleet at Casma on January 12, 1839, and the Bolivian army at Yungay, Peru, on January 20. These Chilean victories destroyed the Peru-Bolivia Confederation, made Chile lord of the west coast, brought unity and patriotism to the Chilean elites, and gave Chile's armed forces pride and purpose as a military with an external mission. The successful war also helped convince the European powers and the United States to respect Chile's coastal sphere of influence. Subsequently, the country won additional respect from the European powers and the United States by giving them economic access and concessions, by treating their citizens well, and by generally playing them off against each other.

Since its inception, the Portalian State has been criticized for its authoritarianism. But it has also been praised for the stability, prosperity, and international victories it brought to Chile, as well as the gradual opening to increased democracy that it provided. At least in comparison with most other regimes of the era, the Portalian State was noteworthy for being dominated by constitutional civilian authorities. Although Portales deserves some credit for launching the system, his successors were the ones who truly implemented, institutionalized, legitimized, and consolidated it. From 1831 to 1861, no other country in Spanish America had such a regular and constitutional succession of chief executives.

Manuel Bulnes Prieto (president, 1841-51), hero of the victories over the Chilean Liberals at the Battle of Lircay in 1830, and over the Bolivian army at Yungay in 1839, became president in 1841. As a decorated general, he was the ideal choice to consolidate the Portalian State and establish presidential control over the armed forces. He reduced the size of the military and solidified its loyalty to the central government in the face of provincial uprisings. As a southerner, he was able to defuse regional resentment of the dominant Santiago area. Although Bulnes staffed his two administrations mainly with Conservatives, he conciliated his opponents by including a few Liberals. He strengthened the new political institutions, especially Congress and the judiciary, and gave legitimacy to the constitution by stepping down at the end of his second term in office. Placing the national interest above regional or military loyalties, he also helped snuff out a southern rebellion against his successor.

Intellectual life blossomed under Bulnes, thanks in part to the many exiles who came to Chile from less stable Spanish American republics. They clustered around the University of Chile (founded in 1842), which developed into one of the most prestigious educational institutions in Latin America. Both foreigners and nationals formed the "Generation of 1842," led mainly by liberal intellectuals and politicians such as Francisco Bilbao Barguin and José Victorino Lastarria Santander. Through the Society of Equality, members of the group called for expanded democracy and reduced church prerogatives. In particular, they defended civil liberties and freedom of the press, seeking to constrain the government's authoritarian powers.

Bulnes presided over continued prosperity, as production from the farms and mines increased, both for external and for internal consumption. In response to foreign demand, especially for wheat during the California and Australia gold rushes, agricultural exports increased. Instead of importing scarce and expensive modern capital and technology, landowners expanded production. They did this primarily by enlarging their estates and absorbing more peasants into their work forces, especially in the central provinces, where the vast majority of Chileans toiled in agriculture. This expansion fortified the hacienda system and increased the numbers of people attached to it. The growth of the great estates also increased the political power of the landed elites, who succeeded in exercising a veto over agrarian reform for a century.

In the mid-1800s, the rural labor force, mainly mestizos, was a cheap and expanding source of labor. More and more of these laborers became tenant farmers (inquilinos). For a century thereafter, many workers would remain bound to the haciendas through tradition, lack of alternatives, and landowner collusion and coercion. Itinerant rural workers and even small landowners became increasingly dependent on the great estates, whether through part-time or full-time work. The landed elites also inhibited industrialization by their preference for free trade and the low wages they paid their workers, which hindered rural consumers from accumulating disposable income. For a century, the lack of any significant challenge to this exploitive system was one of the pillars of the social and political hierarchy.

Liberals and regionalists unsuccessfully took up arms against Bulnes's conservative successor, Manuel Montt Torres (president, 1851-61). Thousands died in one of the few large civil wars in nineteenth-century Chile. The rebels of 1851 denounced Montt's election as a fraud perpetrated by the centralist forces in and around Santiago. Some entrepreneurs in the outlying provinces also backed the rebellion out of anger at the government's neglect of economic interests outside the sphere of the central landowning elites. Montt put down the uprising with help from British commercial ships.

From 1851 to 1861, Montt completed the construction of the durable constitutional order begun by Portales and Bulnes. By reducing church prerogatives, Montt eased the transition from a sequence of Conservative chief executives to a series of Liberals. As a civilian head of state, he was less harsh with his liberal adversaries. He also promoted conciliation by including many northerners as well as southerners in the government.

Benefiting from the sharp growth in exports and customs revenues in the 1850s, Montt demonstrated the efficacy of the central government by supporting the establishment of railroads, a telegraph system, and banks. He created the first government-run railroad company in South America, despite his belief in laissezfaire . He also initiated the extension of government credit to propertied groups. Under President Montt, school construction accelerated, laying the groundwork for Chile to become one of the most literate nations in the hemisphere. Expanding on the initiative started by Bulnes, Montt also pushed back the southern frontier, in part by encouraging German immigration.

As the next presidential succession approached, a second rebellion ensued in 1859. The rebels represented a diverse alliance, including Liberals who opposed the right-wing government and its encroachments on civil liberties, Conservatives who believed the president was insufficiently proclerical, politicians who feared the selection of a strongman as Montt's successor, and regionalists who chafed at the concentration of power in Santiago. Once again, Montt prevailed in a test of arms, but thereafter he conciliated his opponents by nominating a successor acceptable to all sides, José Joaquín Pérez Mascayano (president, 1861-71).

Under Bulnes and Montt, economic elites had resisted paying direct taxes, so the national government had become heavily dependent on customs duties, particularly on mineral exports. Imports were also taxed at a low level. The most important exports in the early years of independence had been silver and copper, mined mainly in the northern provinces, along with wheat, tallow, and other farm produce. The Chilean elites eagerly welcomed European and North American ships and merchants. Although these elites debated the issue of protectionism, they settled on low tariffs for revenue. Despite some dissent and deviations, the dominant policy in the nineteenth century was free trade--the exchange of raw materials for manufactured items, although a few local industries took root. Britain quickly became Chile's primary trading partner. The British also invested, both directly and indirectly, in the Chilean economy.

Data as of March 1994