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434 was, in part, attributable to unwise legislation by Peru, relative to the nitrate deposits in her southern province of Tarapaca, which borders upon Atacama.

In consequence of her financial difficulties, Peru in 1873 made the nitrate deposits of Tarapaca a government monopoly, the state paying a fixed price to producers, and being herself the sole exporter. The nitrate deposits were being exploited by Chilian and English capital, and the labor employed in the work was mostly Chilian. Under these circumstances, Chili protested on behalf of her subjects, whose interests were seriously interfered with, and finding the law a failure, Peru abandoned it, substituting another authorizing the government to buy up all the nitrate works. There was a great deal of diplomatic correspondence, and it is impossible to harmonize all the statements contained in the voluminous papers. The end of the affair was that Chili declared war upon Peru on the 5th April, 1879. Chili was in far better condition for war than either of her adversaries. Owing to the character of the Pacific coast of South America, the strip of land between the Andes and the ocean consisting of waterless desert with occasional valleys, every thing depends upon the possession of the sea. Chili had been increasing her navy, while that of Peru had not been augmented. The Chilians had 2 powerful iron-clads of the newest pattern, the Almirante Cochrane and Blanco Encalada, which were alone capable of destroying the entire Peruvian fleet. In addition to these she had 4 corvettes, each carrying from 1 to 3 150-pounder, 7-ton Armstrong guns, 2 wooden gun-boats heavily armed, and 10 transports. The Peruvians had 1 turret-ship, the Huascar, but her armor could easily be pierced by the shot of the Chilian iron-clads, and her armament consisted of 2 10-inch Dahlgren guns and 2 40-pounder Whitworths. She had also a broadside iron-clad of the old type, the Independencia, and 2 wooden corvettes.