Conservative rule continued through the presidency of Manuel Montt, which ended in 1861. The remarkable economic progress during this 30-year period gave rise to a new and vigorous group of wealthy mining and merchant families, who, rebelling against the existing authoritarian system, began to demand reforms. During the 1850s the Liberal Party became more determined. President Montt yielded to them by abolishing entailed estates and by encouraging religious tolerance. By 1861 the Liberals were strong enough to detach moderate Conservatives from the ruling oligarchy.
Beginning in 1861 the liberal wing of the Conservative Party, in coalition with the Liberal Party, instituted a number of constitutional reforms. The constitution was amended to prohibit consecutive presidential terms, prevent presidents from exercising an absolute veto, and permit literate males to vote without regard to their wealth. Laws limiting the special privileges of the landed aristocracy and of the Catholic church were passed. Education was broadened, transportation and public services were improved and extended, and immigration and further colonization of the land were encouraged. In 1865 Chile became embroiled in an inconsequential Spanish-Peruvian war that continued sporadically until 1869.
Of greater importance was the War of the Pacific (1879-1883), which broke out over control of nitrate. Nitrate found in the desert of northern Chile, coastal Bolivia, and southern Peru became immensely valuable in the 1860s. It was used in fertilizer and in explosives. The boundaries between the countries were poorly defined, and after a series of disputes over the extraction and taxation of nitrate, Chile sent a small army into Bolivian territory in 1879. A war with both Bolivia and Peru followed, which Chile won.
As a result of its victory in the War of the Pacific, which ended in 1883, Chile acquired considerable territory, including the province of Antofagasta from Bolivia and the province of Tarapacá from Peru. Peru also yielded Tacna and Arica to Chile, on condition that after ten years a plebiscite be held to determine their status. The plebiscite was never carried out satisfactorily from the standpoint of Peru, and Chile held the entire area until 1929. That year mediation by the United States finally ended the bitter and tedious dispute: Tacna became a possession of Peru and Arica went to Chile.
The importance to Chile of the nitrate industry can scarcely be overstated. Chile increased its territory by more than a third, and the income generated by the nitrate industry increased private wealth as well as public revenue. For years the export duty on nitrate supplied half or more of the national revenue. The War of the Pacific opened an era of prosperity that radiated to all the social classes but was concentrated in particular in the upper classes of society. "Chile" © Emmanuel BUCHOT, Encarta, Wikipedia
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