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266 A HISTORY OF CHILE signed between the republics, by the terms of which the watershed of the Cordillera was fixed as the bound- ary on the east of Chile, and that on the south at a line nearly coincident with the 52nd parallel. More, par- ticularly, the southern boundary was fixed at a line extending from Point Dungenness along the land to Mt. Dinero, thence west to the point of intersection of the seventieth meridian and the fifty-second parallel of south latitude ; thence westward along that parallel to the dividing line of the watershed of the Andes. The regions lying north of said line were to belong to the Argentine Republic, those south to Chile. The island of Tierra del Fuego was divided, as well as the outlying islands. The Straits of Magellan were made neutral forever, navigation of the same being declared free to all nations with no forts ever to be erected there. The revenue questions, which had given President Errazuriz so much trouble during the last year of his administration, were still of paramount interest. In 1876, the receipts had more than met expenditures; in 1877, there was a deficit of over two millions of dollars. For a few years trade had been against Chile, owing to failures of wheat crops and heavy depreciations in copper. At this juncture the government authorized the banks to suspend specie payments until August 31st, 1879, and guaranteed their emission of paper money to the amount of $15,600,000, which was de- clared to be redeemable in coin on August 31, 1879. It was estimated that there were not to exceed $5,000,- 000 of bullion and coin in the countr}', and knowledge of this fact caused a depression and a feeling of inse- curity in commercial and financial circles, notwith- standing the fact that the government was cutting down expenses in every direction. The cutting down of custom duties was a serious