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 ERA OF CONSTITUTION MAKING 267 matter for the government, as the revenues were de- rived almost wholly from that source and from the tobacco monopoly; income and real estate taxation had long been vehemently opposed by the landed pro- prietors. The country scarcely had had time to recover from the effects of the issue of paper money of 1878, before the government found it necessary to resort to a further emission of ^6,000,000. This was in the spring of 1879, and was made necessary on account of the ex- traordinary expenses incurred in the beginning of the war with Bolivia and Peru. Negotiations were again opened with the banks, but they were afraid of this second issue and refused to undertake it, whereupon the government determined upon issuing the full amount itself. This was well received by the patriotic Chile- ans, wlio were prepared to make great sacrifices to carry on the war. The government arranged with -the foreign creditors to suspend payments to the sinking fund, and paid maturing interest upon the loans prompt- ly. This preserved the national credit, and satisfied the bondholders. The failure of crops and decline in the price of cop- per in 1877, had caused a decrease of about $15,000,000 in the value of exports. In this grave emergency, the capitalists in Santiago and Valparaiso petitioned con- gress to levy an income tax. The revenues, despite the war, soon began to improve. In 1880, the receipts (ordinary) were $27,693,087, the expenditures (ordi- nary) $24,777,360, so that there was a surplus of nearly three millions where before there had been a deficit of a million. These items do not include war expenses, which at this time amounted to about two millions a month. In his message in June, 1881, Pres- ident Pinto estimated the total receipts for the year at