PERU (ante). The administration of Don Manuel Pardo was generally excellent, and from 1872 to 1875 the financial condition of the country was improved; and energy was displayed in the organization of a railroll system. But a failure in the product of guano, upon which Peru has chiefly relied 'for its advancement, brought about business prostration, and the destruction of Peruvian credit abroad; and the construction of pub lic works necessarily ceased. In 1876 col. Prado was for the second time elected presi dent. Early in 1870 war broke out between Chili and Bolivia. The former country had transferred to the latter certain territory on condition that the Chilians residing therein should be exempted from taxation, and that special mining and guano privileges should be guaranteed to the Chiflans in the district under consideration. In consequence of this guarantee, which was made a part of specific treaty stipulation, a number of Chilian merchants and capitalists organized to develop the resources of the territory in question, and the towns of Antofagasta, Mejillones and Caracoles began to assume considerably importance on account of the investment in their vicinity. But the Bolivian congress having- imposed an export duty on the nitrates of the district of Atacama; in direct con travention to the treaty which guaranteed that there should be no augmentation oC export duties for twenty'-live years; the result was an ultimatum froinChili. which followed this act by taking armell .possession of Antofagasta, and the entire district of Atacama. This movement was met by a declaration of war, on the part of Bolivia, in Feb., 1879. A secret treaty existing between Peru and Bolivia brought Peru into the difficulty, notwithstanding the most earnest efforts were made' by president Prado and the Peruvian diplomatic representative in Chili to avert such a conclusion. On April 6, war was declared against Peru; and the Chilian army, which had already entered Bolivia, became chiefly engaged in burning the sea-port towns of Peru, and everywhere driving its antagonists before it. Both Chili and Peru possessed navies: and sea-tights occurred.
without any conclusive result, until the'destruction of the Peruvian iron-clad thatzfear in October, which occurred near Antofagasta. after which Peru remained at a disadvantage. In November the Chilians attacked and routed the Bolivian army, and being in turn attacked by the Peruvians, were equally successful in that engagement, The Peruvian president, Prado, left Peru and went to New York and thence to Europe. when Nicholas de Pierola succeeded him as dictator. The latter put forth every energy to organize a powerful allied army, to oppose the Chilian force under gen. Baquedano. But in April, 18S0, the latter captured Moquega, and in May, Tacna, two important cities in southern Peru; the allied armies experiencing a defeat at the latter place which was almost a rout. Early in June the same victorious general carried the supposably impreg nable stronghold of Arica by storm, thus placing the Chilians in possession of the whole of southern Peru. In the meantime the Chilian fleet was blockading or pillaging the northern Peruvian sea-ports, and Baquedano organized an expedition against Luna. This expedition started in November, by water, and landed at Pisco, about 200 in. s. of Lima. The city of Lurin was first captured; and the Peruvians having made their last stand at Chorillos, a town in the suburbs of the capital, they were dislodged from there, and Lima surrendered on Jan. 17, 1881. The Chilian army numbered about 17,000 men, most of them being infantry; while the Peruvians had 30,000 troops, well-armed and equipped, besides 6,000 citizen-soldiers; 100 field-guns, 120 siege-guns, an abundance of ammunition, and the city protected by breastworks and other fortifications. The value of foreign interests in the cities of Lima and Callao, was estimated to be about $23,000,000, of which amount $16,000,000 belonged to Great Britain. American capital to the amount of $5,000,000 had been recently invested in the Peruvian guano fields. Peru has 3,000 m. of railroad, and a coast-line of 2,700 miles.