The Ten Centavos War

The War of the Pacific was popularly dubbed the “Ten Centavos (cents) War.” In 1877, after a devastating tidal wave destroyed much of the port of Antofagasta, the municipal council there passed a reconstruction tax. In 1878, President Hilarión Daza and the Bolivian Congress approved the modest 10¢ tax on every 100 pounds of nitrates exported from Bolivian territory. This law directly violated the 1874 treaty, and the Chileans and foreign investors were outraged. The British and Chilean–owned Nitrates and Railroad Company of Antofagasta refused to pay the tax, and tensions mounted.

At first, cooler heads prevailed. President Daza temporarily suspended the tax, and the company agreed to an annual voluntary contribution. But then Daza ended the moratorium and demanded that the tax be paid retroactively. Once again, the foreign company refused to comply. The Chileans responded with gunboat diplomacy, and anchored an ironclad in Antofagasta harbor and mobilized their entire fleet.

This time, President Daza refused to back down. With Bolivian sovereignty seemingly besmirched, Daza canceled the mining contract of the British-Chilean consortium. On February 14, 1879, Chile occupied Antofagasta—home to 5,000 Chileans and fewer than 600 Bolivians— and issued an ultimatum: Bolivia had 48 hours to accede to international arbitration of the dispute. President Daza ignored the deadline and insisted that the port first be liberated. He also withheld news of the Chilean landing for a week until after the conclusion of the popular carnival festivities then under way.

In no mood for more wrangling, Chile occupied Bolivia’s Antofagasta province and the entire Pacific coast south of the 23rd parallel in March. On March 14, Bolivia announced a formal declaration of war, but war still might have been averted if Peru’s last-minute conciliatory diplomacy had succeeded, or if Peru had not honored its defensive alliance with Bolivia. By this time, however, word of the Bolivian declaration of war had reached Santiago, and therefore, on April 5, Chile formally declared war against Bolivia and Peru.

Defeat and Loss of the Seacoast

Bolivia was totally unprepared for war, especially one so distant from its population centers and resource base, and suffered from grossly irresponsible leadership. Despite his patriotic bluster, President Daza was inept in the military campaign. On the battlefield, he proved cowardly, self-motivated, and (according to some accounts) often drunk. Daza withdrew his crack Bolivian regiments from the field and left the allied forces to be defeated by the Chileans in the Battle of San Francisco. Although the remaining allied forces were victorious days later in the indecisive Battle of Tarapacá, President Daza’s desertion became a great national embarrassment to Bolivia.

Historians have argued that Daza wanted to protect his prized regiments as a hedge against coup attempts, but on December 27, 1879, in a clever and meticulously timed plot, officers at the front and Colonel Eliodoro Camacho, the chief of staff, overthrew Daza, and the expresident fled into exile in Europe.

In January 1880, General Narciso Campero, a distinguished career officer and division commander, was appointed Bolivia’s provisional president and assumed command of the allied forces in the field as by then both the Bolivian and the Peruvian presidents had effectively deserted command of their armies. Campero’s Bolivian-Peruvian force was decisively defeated by the Chileans in May, and Campero and his exhausted troops retreated toward La Paz. At the head of one column of survivors, Campero was met with the news that the National Assembly had formally elected him president on May 31. As the marauding horde of desperate soldiers approached the Bolivian border, a cavalry force from La Paz intercepted and forcibly disarmed them. The government feared violence when the wounded and exhausted returnees learned that they would not receive the back pay owed them. For Bolivia, the shooting war was over, although hostilities between Peru and Chile continued for three more years while Bolivia watched from the sidelines, hoping for a favorable resolution.

On April 5, 1884, Bolivia signed the Truce of Valparaiso, which gave Chile control, but not permanent transfer, of Bolivia’s coastal territory. A peace treaty was finally signed in 1904, whereby Chile formally annexed Bolivia’s Atacama province (called Antofagasta today). Bolivia was guaranteed the right to import and export its goods through the ports of Arica and Antofagasta and to set up customs stations. Duties on imports were to be divided, providing Bolivia 75 percent and Chile 25 percent.

Thus, with the stroke of a pen, Bolivia lost a fourth of its territory and became the landlocked nation that it is today. The War of the Pacific was officially over, but not Bolivia’s relentless quest to regain a seacoast.

Bolivia - On the Eve of the Great Pacific War

No war breaks out over guano, of which little remains. It is saltpeter that throws the Chilean army into the conquest of the deserts, against the allied forces of Peru and Bolivia. Eduardo Galeano (1987, 218)

 The War of the Pacific was a war over resources, although territorial rivalry was its most immediate cause. The conflict also involved geopolitics, economic rivalry, greed, corruption, and personal ambitions. Indeed, the basic ingredient of the war—rivalry for power and economic dominance—first came into play with Bolivian independence. Because of this endemic regional rivalry, some historians have argued that the War of the Pacific was inevitable.

In the 1870s, the conflict of national interests and increasing disparities in economic and political power among the three neighboring South American countries of Bolivia, Chile, and Peru reached a critical climax. The new power distribution greatly favored Chile, and Chilean statesmen seized this opportunity to consolidate and further expand their nation’s influence and control along the Pacific coast.

Since its founding as a sovereign nation, Bolivia’s survival had been tentative. At first, Lima and Buenos Aires considered Bolivia’s very existence suspect. Bolivia, after all, had been capriciously carved out of the colonial audiencias that they had jealously controlled. Once established, Bolivia was troublesome and unstable. The new country seemed unable to rule itself, much less populate and effectively administer its vast and dispersed territory. Bolivia’s rich natural resources were the constant envy of its more powerful and aggressive neighbors in the Southern Cone. Debilitated by corruption and instability, Bolivia dismally failed to preserve its territory and resources when challenged by Chile.

In great part Bolivia’s geopolitics and unique national conditions facilitated this disastrous war and the loss of its Pacific seacoast. As late as the 1880s, the altiplano region remained the geopolitical center of the shaky new republic. The majority of the country’s territory, however, was neglected and isolated from the highland by formidable natural barriers—impassable and hostile mountain ranges, rivers, deserts, and jungles. Bolivians in these frontier regions were forced to fend for themselves. Moreover, Bolivia’s population was largely indigenous with only a thin upper crust of Spaniards and other Europeans. Neither social group had the necessary mobility or motivation to migrate to the less hospitable parts of the country.

These factors had a devastating impact on settlement of Bolivia’s Atacama province. Even after the discovery of guano and nitrate deposits in the Atacama Desert, which stretched from Peru in the north to Chile in the south, the Bolivian government was unable to incorporate and fortify this distant, sparsely populated coastal province. The unexpected bonanza in natural fertilizers brought a sudden influx of new settlers, prospectors, and entrepreneurs to the region; however, this population increase only compounded Bolivia’s problems since Bolivian citizens were now outnumbered 10 to one by Chileans and other immigrants, including thousands of Chinese coolies brought here by Peru and Chile as cheap, captive laborers.

With other nations and foreign firms competing for the profits from the bird droppings and saltpeter, Bolivia’s share of the bonanza steadily shrank. The remainder was squandered by the corrupt caudillos on profligate living and ill-advised foreign concessions and loans. Bolivian entrepreneurs’ resources were depleted or invested elsewhere, primarily in the highland silver mines. As a last resort, with the economy stagnant and the country heavily indebted, Bolivian governments permitted and encouraged British and Chilean capital to exploit the desert windfall on their behalf. In short, Bolivia’s inherent political and economic weaknesses directly contributed to the outbreak of the war.

Chile, on the other hand, stood in a position of relative strength. Unlike Peru or Bolivia, Chile’s exceptional political stability and economic growth since 1830 had helped make it the dominant power in the region. Chileans held regular elections for civilian governments and enticed foreign investors by the credibility of their sound political and financial systems. Chile’s cities were modern, and its people were mostly European immigrants, rather than Indians. Its economy was more diversified, and its territory was more integrated and cohesive. Chile had what both Peru and Bolivia lacked. Indeed, one Chilean president boasted in 1858 that the country had “the honor to have proved to the world that the Spanish American people can govern themselves by their own unaided efforts and can continue to prosper” (Bader 1967, 25).

This is not to say that all was well in Chile at the time. The country had its share of shortcomings and crises, and it was precisely a national crisis—the depression of 1878—that pushed Chile closer to war. By the mid-1870s, Chilean progress had come to a halt. Chilean exports had declined and the foreign debt had skyrocketed at the same time that droughts and diseases ravaged the country. Upward of 50,000 Chileans—mostly rotos, or landless peasant farmers of European descent—were forced to emigrate. Many would slave in the grueling guano and nitrate operations in Bolivia’s Atacama Desert.

Chile’s economic decline was an incentive to resolve the territorial dispute with Bolivia aggressively. Chile saw in the great riches of the coastal desert an immediate solution to the 1878 financial crisis and reliable long-term financing for the national debt and future commercial and territorial expansion. Decades later, Chile’s foreign minister, Abraham Köning, dissected Chilean motivations succinctly: “The area is rich and worth many millions” (Siles Guevara 1960, 68). Indeed, in the 20 years from 1880 to the end of the century, the gross value of the nitrate exports from the conquered regions reached nearly 3 billion pesos. On the eve of the war, corruption in Peru and Bolivia and the economic crisis in Chile had diminished the military preparedness of all three future belligerents. Chile, nevertheless, was relatively more prepared. For several decades Chile had been locked in a fierce military and commercial rivalry with Peru and had competed fiercely over control of the western seacoast. Now, Peru, like Bolivia, was virtually bankrupt, in political chaos on the eve of the war, and outclassed militarily by Chile. War decided this rivalry and assured Chilean hegemony on the Pacific coast.

The Uncouth General Daza

Bolivian historians have bestowed on Hilarión Daza the epithet “el soldado mandón” (the imperious soldier). According to historian Humberto Vázquez Machicado, Daza was born in the constitutional capital of Sucre around 1840 the illegitimate son of an itinerant Italian snake-oil salesman named Grossolín. As a child, Daza had difficulty pronouncing his father’s surname, and from these attempts he received the ludicrous nickname of “Chocholín.” Not pleased, he started to use the surname of his mother.

Daza received his limited education on the tough streets of Sucre as a small-time crook and con artist and in the rough barracks of the army. He showed a talent for being in the right place at the right time and rapidly rose in the military ranks with Mariano Melgarejo, whom in the end he betrayed for 10,000 pesos. Daza was overthrown in 1879, while at the battlefront in Tacna, and headed for Europe. There, he lived the good life until the enormous fortune that he had pilfered became depleted. He returned to Bolivia intent on heading another military coup but was killed in 1894.

Bolivia: The Last 19th-Century Caudillo

The presidency of Hilarión Daza was landmark in Bolivian history. During his administration, the legislature approved the historic Liberal Constitution of 1879 (the county’s ninth since independence), which remained, with slight modifications in 1880, Bolivia’s fundamental governing charter until the 1930s. It protected private property rights and the economic concerns of Bolivia’s Big Silver industrialists and their Chilean interests.

General Daza’s rule, however, figures most tragically in the nation’s collective memory because it marked the loss of Bolivia’s access to the Pacific Ocean. His government and Congress of 1878 passed the infamous 10¢ tax on the nitrates exported by the British-Chilean Nitrates and Railroad Company of Antofagasta. This tax, which the bankrupt Bolivian treasury desperately needed, provided Chile with the perfect pretext to occupy Bolivia’s seacoast and launch a war with its neighbors.

President Daza cannot be blamed entirely for the war and the loss of the seacoast. Years before his government, Chilean, British, and U.S. capital had extended financial tentacles into virtually every profit-generating enterprise available to Bolivia: guano, nitrates, borax, even silver. The economic concessions of the Bolivian Litoral province produced an estimated 28 million pesos annually, according to historian José Fellman Velarde. By his calculations, this bonanza exceeded 14 times the Bolivian budget and eight times that of Chile at the time. This appropriation and Bolivia’s semicolonization by domestic and foreign capital caused the War of the Pacific as much as the incompetence and venality of Daza and earlier Bolivian regimes did. Already, on the eve of Daza’s military coup of May 1876, Chile in effect controlled the bulk of Bolivia’s coastal assets demographically and financially. By the time General Daza was overthrown in December 1879, the Chilean forces had also militarily occupied the entire Bolivian Litoral.