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 more, the deposits are unique in their occurrence. Chile ex- changed her national debt for a national endowment when she took possession of ‘Tarapacé, and Peru lost a source of wealth that left her financially troubled. Chile sought to cripple her rival completely that there might never again arise any ques- tion of ownership over so important a source of wealth, and the most effective means at hand was the complete annexation of the nitrate fields. The year before the war, 1878, Tarapaca yielded 300,000 tons of nitrate. In that year the foreign debt of Chile reached $35,000,000, and the yearly expenditure had risen to $15,000,000-~a condition met by heavy taxes burden- some to the people. Quite as much for its political effect as for the territorial questions involved, the government sought re- lief in the acquisition of the rich nitrate deposits of the desert.

Before the war with Peru and Bolivia copper, wheat, and wool were among the principal exports in total value. By 1891, ten years after full production following the war, nitrate and iodine (a by-product) together had a value five times as great as the wheat exported and seven times that of copper; and by 1902 their combined yalue was fifty times that of wheat and eight times that of copper. The significance of the nitrate export tax in Chilean finance today is illustrated by the fact that during the period 1895-1910 the export dutics on nitrate and its principal by-product iodine constituted between 44 and 56 per cent of the total revenue received by the government.

It must also be remembered that the moment Peru's forces were overthrown, that moment the large income derived from the high export duty on nitrate was diverted to the Chilean treasury. No long period of recuperation was necessary as in the case of an agricultural region overrun and devastated by invading armics. Neither in this war nor in the revolution of 1891 in Chile was there any really scrious interference with the nitrate establishments that are the life of the region. All parties to the conflict were wise enough to see the plain folly of disturbing the goose that laid the golden egg. Nitrate ex- ports continued much as usual, and export taxes were collected