Negotiations for a settlement were entered into and continued until May 14 when the President of the United States, not as arbitrator but in the exercise of good offices at the request of the parties, submitted to the American ambassadors at Lima and Santiago a proposal as the final bases of a solution. This provided that the territory should be divided, Tacna to Peru, and Arica to Chile ; the dividing line to start at a point on the sea coast to be called "Concordia," ten kilometres to the north of the bridge over the River Lluta and to continue parallel to the Arica-La Paz Railroad following the topographic features. The sulphur deposits of Tacora remain in Chilean territory and the Uchusuma and Mauri canals remain the property of Peru. In case of disagreement, a third person designated by the President of the United States shall render the final decision. Chile will construct for Peru at Chile's expense within the Bay of Arica a wharf, customhouse and station for the railway from Tacna to Arica, Peru to enjoy all the privileges of a free port. Chile is to deliver to Peru the sum of six million dollars and also to deliver, without cost to Peru, all public works already constructed and all Government owned real property in the Department of Tacna. Chile is to maintain in the Department of Arica the franchise granted by Peru in 1852 to the Arica-Tacna Railroad Company and to deliver the Department of Tacna thirty days after the exchange of ratifications. Private property legally ac
quired in the territory under their respective sovereignties is to be respected by both Governments. A monument commemorating the consolidation of their friendly relations will be erected by the two Governments on the Morro de Arica. The children of Peru vian nationals born in Arica will be considered Peruvians until the age of twenty-one years, at which time they may elect their definitive nationality; Chileans born in Tacna will enjoy the same right. Both Governments agree to release the other from any obligation or indebtedness between them whether derived from the Treaty of Ancon or not.
In presenting this proposal to the two Governments, the Amer ican ambassadors at Lima and Santiago stated that the proposal was not to be interpreted as indicating that either the President or Government of the United States expressed any opinion or made any suggestion whatever regarding any future disposition by either party of that portion of the territory in dispute which would be in its possession should the proposal be accepted by the two Governments. Chile accepted on May 15, 1929, and Peru on May 16, 1929. It came into effect on Aug. 28, 1929. (F. WE.)