duties collected between the 24th and 25th parallels. This was an admirable arrangement for Chili, as the richest deposits of nitrates are north of the 24th parallel, and she would be entitled to a considerable revenue every year without the trouble and expense of collecting it.
As a matter of fact, the customs dues were not properly paid, and Chili found in this circumstance a new cause of grievance. In 1870 rich silver mines were discovered at Caracoles, north of the 24th parallel, and the Bolivian government granted a concession to a company to work these mines and also the nitrate deposits. The company was under English management, backed by English and Chilian capital; it paid $10,000 to the government for the concession, and built a railway from the port of Antofagasta. The company began operations, and soon fell into disputes with the Bolivian government, relative to the export duties on the nitrates, which it was sending to foreign countries.
In 1873 a treaty of alliance between Peru and Bolivia was signed and approved by the National Assemblies of the two countries. It provided for a mutual guaranty of the independence of the two countries, and defence against aggression from others. It was agreed in the treaty that all conciliatory measures were to be tried to prevent war, and that arbitration through a third party was to be sought whenever possible. In 1878 the Bolivian government called upon the Antofagasta company to pay the duties which had accumulated on its exports; the company refused payment, whereupon the government ordered the seizure and sale by auction of enough of the company's property to pay the claims. Immediately the Chilian government proceeded to hostilities, but did not declare war, by seizing the Bolivian ports of Antofagasta, Cobija, and Tocapilla. Peru offered her services as mediator, but, as too often happens to the arbiter in cases of mediation, it was speedily involved in trouble with Chili. This trouble
