The Saltpeter War: The War Of The Pacific

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The Saltpeter War (1879-1883), more commonly known as the War of the Pacific, is the conflict involving three South American countries (Chile, Bolivia and Peru) that grew out of the dispute between Chile and Bolivia over control of a part of the Atacama Desert, an area rich with deposits of nitrates and guano. Chilean business enterprises, which were mainly responsible for developing the area, thought their interests were at risk when Peru nationalized all nitrate mines in Tarapaca, and the Bolivian government imposed a 10-cent tax on the Antofagasta Nitrate & Railway Company in order to make profit and take advantage of the increasing income of the region. Chile’s involvement in the war was economically focused due to the recent deterioration in its wheat, copper, and silver exportation demand in 1873. With this ruling made by the Bolivian government to increase taxes on Chilean companies, and threats to confiscate land further alluding to continued economic depletion, Chile saw it a necessity to engage in conflict in order to gain ownership of the new wealth in nitrate. It was because of this decision to go to war with a united Bolivia and Peru that Chile was able to enter the 20th Century with a sustained economy.

National borders had not been finalized until 1866, when Bolivia and Chile had negotiated a treaty establishing the 24th parallel as the permanent boundary. The treaty also entitled both countries to share in tax revenue on the mineral resources of the territory between the 23rd and the 25th parallels.1 The Atacama Desert lied between the 23rd and 26th Parallels on the Pacific Coast of South America within the Peruvian province of Tarapacá and the Bolivian province of Litoral. In 1874, Bolivia became exasperated ...

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...crative mineral income. With the seizure of the natural products the Chilean national treasury was able to grow by 900% from 1879-1902 mainly due from the taxes of the acquired land.12 From 1902-1921 Chilean ownership of the nitrate grew from 15% to 51%, and established Chile and a global contributor in the nitrate industry.13

Chile was able to increase production rates and its national treasury in an 18 year time period after the Saltpeter War. The war’s benefits allowed Chile to expand itself as a nation, allowing for more control of the South American continent. With the control of the nitrate industry and neighboring countries, Chile was able to establish itself as an economic threat. With national treasury up by 900%, and the and major land control with valued natural resource income, Chile entered the 20th Century with dependent but sustaining economy.

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