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Peru and Bolivia signed a secret alliance against Chile in Lima on 6 February 1873. The eleven main articles of the document they signed said they would work together and cooperate to defend against Chile's invasion. The aim of the treaty was to create more acceptable borders between Peru, Bolivia and Chile in order to exploit the natural resources of the Atacama, taking advantage of the fact that Chile seemed weaker than Peru and Bolivia. Since Bolivia had the support of Peru it had the possibility to be aggressive towards Chile and if it wanted to start fighting it could do so as it knew it had the support of Peru and was not alone so it would fight with it.

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The border between Bolivia and Chile was established with the agreement signed between Chile and Bolivia in 1979 in South America, after the War of the Pacific in 1883 that led Bolivia to lose the Antofagasta area and its entry into the ocean. This consensus is discussed today by Bolivia, which submitted the situation to the universal court in The Hague during the Evo Morales regime, however, this claim was ultimately rejected by the Court in October 2018 by 12 votes against. 3 against Bolivia and in favor of Chile.

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Chile, with very few guano and nitrates deposits ,had invested in the development work of Bolivia having the CSFA (Compañia de Salitres y Ferrocarril en Antofagasta). This was an anonymous society in the port of Valparaiso. It had a nominal capital of  $ 25000000 divided into 2500 shares of 1000 pesos. On November 27th of 1873 the CSFA signed a contract with the Bolivian government the right to exploit mineral resources freely for 15 years. The congress of Bolivia didn’t ratified the agreement, they were in the negotiations with Chile that resulted as the “Tratado de limites” in 1874. Even though this was the most important and the most relevant company almost every company in Antofagasta was chilean property, thats why they were bothered so much about the 10 cents tax, not only because it was a breach of contract but also because mos of salitre and nitrate investment was placed there.

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In 1873, the Compañía de Salitres y Ferrocarril de Antofagastasigned a contract with Bolivia for the exploitation of minerals. Everything happened in 1874, in the contract they forced Bolivia not to impose new taxes on the people and industries of Chile for 25 years. As Bolivia had economic problems, he decided that he would ratify the contract if they paid a tax of 10 cents per quintal of nitrate exported from Bolivia. The Chilean government considered that action as a violation of the agreement that they had, and that created a war between them

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In 1873, Peru and Bolivia were worried about the Chilean advance, so they agreed to a mutual defense treaty, but in 1874 Bolivia, without consulting Peru, made a separate treaty with Chile, in which they declared that they would give access to Chilean companies but would not raise taxes for 25 years. The Bolivians went through a severe crisis, and the president, seeing the crisis that was happening, raised taxes on the Chileans to 10 cents. The Chilean companies in Bolivian territories rejected this tax and refused to pay, because of the previous treaty; and in 1879 the president of bolivia seized the Chilean companies, which infuriated the Chileans who sent their army into Antofagasta to protect its economic interests, and as Peru recognised the 1873 treaty, Chile declared war on both Bolivia and Peru.

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It all started with a decision made by Bolivia, there was a fight between Chile and Bolivia because of the nitrate, this resource was very abundant in the borders (not well defined) between Bolivia, Chile and Peru. In 1872, Bolivia maked a deal with Chile, most known as the ‘’protocol Linsay-Corral’’ in this treaty Chile reiterated its recognition of the 24th parallel south as the boundary with Bolivia, in exchange for no further taxes on Chilean exploitation of nitrate resources for a term of 20 years. Perú was not very interested in this resources, as they had enough money in that time, but Bolivia’s governor Hilarión Daza was worried, the country was in poverty because the silver prize touch the ground, so they decided to apply a 10 cent tax for every quintal of nitrate exported, Chileans felt that the deal they made in 1874 was violated, so they started claim to Bolivia why this happened, Bolivia instead of abolishing the tax, made it retroactive and set a deadline of February 14, 1879 for its payment or it would expropriate the Chilean companies and auction the nitrate. As a defense, Chile silently took Antofagasta, and on March 1 of 1789, Bolivia declared war. Bolivia had more than 400 kilometers of coast, but they didn’t have naval forces, so they lost the war very fast, but a thing came out to the light, due to some circumstances, Peru had made a ‘’secret’’ deal with Bolivia, in which the agreement was for Perú to defend bolivia if a foreign invasion took place.

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The 10-cent tax was a rate approved by the Bolivian National Assembly on February 14, 1878, which was intended to be imposed on the company CSFA (Compañía Chilena de Salitres y Ferrocarriles de Antofagasta). The CSFA refused to pay due both to the Treaty of limits between Bolivia and Chile of 1874 and the exploitation license granted by the Bolivian government on November 27, 1873, it ensured the exemption of export taxes for the exploitation of the mineral.

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The economic growth and political stability brought in the 1870’s, created the best conditions to create their first political party. This political party was composed of guano era plutocrats, rich merchants and businesspeople, they all together believed that their country shouldn’t be governed by a caudillo. They thought that because of the new era of trading, business and finance (managerial skills) only civilian leadership could provide. Their candidate was the dynamic and cosmopolitan Pardo, he at age thirty-seven, had already made a lot of money doing business and serving (distinctively) as treasury minister and mayor of Lima. People asked about this manner to the worst person to be asked during all his corruption and incompetence, Colonel José Balta (1868-72), (could clean up the government, deal with the mounting financial problems, and further develop the liberal export-model that so benefited their particular interests?) Then in the election of Pardo (the competent) in 1872 every single program wasn’t enough to stop the incoming collapse, the country, (as Pardo’s term drew to a close in 1876) went into a foreign debt. “With social and political turmoil once again on the rise, the Civilistas found it expedient to turn to a military figure, Mariano Ignacio Prado (1865-67, 1876-79), who had rallied the country against the Spanish naval attack in 1865 and then served as president. He was reelected president in 1876 only to lead the country into a disastrous war with its southern neighbor Chile in 1879.”

Turmoil - State of great disturbance, confusion, or uncertainty.

Plutocrats - People whose power derives from their wealth.

Caudillo - Somebody who guides an army or is part of the military.

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The Secret Treaty of Alliance between Bolivia  and Peru was signed on February 6 of 1873 in Lima, Peru by the Minister of Foreign Affairs of Peru, Jose de La Riva Agüero  and the representative of Bolivia, Juan de la Cruz Benavente.  This secret treaty was the response to the preparations of Chile, since they wanted to invade the coastal territories of both countries. After the release of the treaty, they stated that its purpose was to guarantee the integrity, independence, and power of both countries by using a system of mutual defense against Chile. That is why Bolivia became more agressive and started to attack Chile, for the reason that Peru had its back and could fight with them. Nonetheless, this secret treaty was later known by Chile and its government, they considered this treaty as a cause of the War of the Pacific. The war started due to the nitrate tax conflict between Chile and Bolivia, but because Chile discovered the secret alliance between Bolivia and Peru, Peru became part of it.

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The alliance was the response to the preparations of Chile, which was preparing an invasion of the coastal territories of both countries.

On Thursday, February 6, 1873, the secret pact of alliance between Bolivia and Peru was signed in Lima, in anticipation of the increasingly imminent invasion of the coastal territories of those countries by Chile.

The document that the Bolivian representative Juan de la Cruz Benavente signed with the Minister of Foreign Affairs, Mr. José de la Riva Agüero, ordered Bolivia and Peru to unite and bind each other, guaranteeing each other their territorial integrity, forcing themselves to combat all foreign aggression together. As a product of the mistrust that has always existed in relations between the two republics, it was established that each of them retained the right to qualify whether the offense received by the other, from a third party, forced it or not to comply with the treaty. .

The Peruvian Congress approved the alliance on April 22 and the Bolivian Assembly on June 2 of that same year, 1873.

The text of that document is as follows:
DEFENSIVE ALLIANCE TREATY
The Republics of Bolivia and Peru, desirous of solemnly strengthening the ties that unite them, thus increasing their strength and reciprocally guaranteeing certain rights, stipulate the present Treaty of Defensive Alliance; for which purpose, the President of Bolivia has conferred sufficient powers for such negotiation to Juan de la Cruz Benavente, Envoy Extraordinary and Minister Plenipotentiary in Peru, and the President of Peru to José de la Riva-Agüero, Minister of Foreign Affairs; who have agreed to the following provisions:

Article I.

The high contracting parties unite and bind to mutually guarantee their independence, their sovereignty and the integrity of their respective territories, committing themselves under the terms of this Treaty to defend themselves against all external aggression, whether from another or other independent States or from force without flag that do not obey any recognized power.
Article II.
The Alliance will be effective to preserve the rights expressed in the previous article, and in cases of offense, consisting of:

1.° In acts aimed at depriving any of the High Contracting Parties of a portion of its territory, with the intention of appropriating its domain or ceding it to another power.

2.° In acts aimed at subjecting any of the High Contracting Parties to a protectorate, sale or transfer of territory, or to establish over it any superiority, right or pre-eminence that undermines or offends the broad and complete exercise of its sovereignty and independence.

3.° In acts aimed at annulling or changing the form of Government, the Political Constitution or the laws that the High Contracting Parties have enacted or enact in the exercise of their sovereignty.
Article III.
Recognizing both contracting parties that every legitimate act of Alliance is based on justice, it is established for each of them, respectively, the right to decide if the offense received by the other is included among those designated in the previous article.
Article IV.
Once the casus fœderis has been declared, the High Contracting Parties undertake to immediately sever their relations with the offending State; to give a passport to his Diplomatic Minister; to cancel the patents of consular agents; to prohibit the importation of its natural and industrial products, and to close the ports to its ships.

Article V.

The same parties shall also appoint Plenipotentiaries who adjust, by protocol, the precise arrangements to determine the subsidies, the contingents of land and maritime forces, or the aid of any kind that must be provided to the offended or attacked Republic; the way in which the forces must act and provide aid and everything else that is convenient for the best success of the defense.

The meeting of the Plenipotentiaries will take place in the place designated by the offended party.
Article VI.
The high contracting parties are obliged to supply to the one who was offended or attacked, the means of defense that each one of them deems to be able to dispose of, even if the arrangements prescribed in the previous article have not been preceded, provided that the case was In his opinion, urgent.
Article VII.
Once the casus fœderis has been declared, the offended party will not be able to celebrate peace, truce or armistice agreements, without the concurrence of the ally that has taken part in the war.
Article VIII.
The high contracting parties are also obliged:

1.° To preferably use, whenever possible, all conciliatory means to avoid a break or to end the war, even if the break has taken place, considering among them, as the most effective, the arbitration of a third power.

2.° Not to grant or accept from any Nation or Government, a protectorate or superiority that undermines their independence or sovereignty, and not to cede or alienate any part of their territories in favor of any Nation or Government, except in cases of better demarcation of limits.

3.° Not to conclude boundary treaties or other territorial arrangements, without prior knowledge of the other contracting party.
Article IX.
The stipulations of this Treaty do not extend to acts practiced by political parties or originating from internal commotions independent of the intervention of foreign Governments; Since the present Treaty of Alliance has as its main object the reciprocal guarantee of the sovereign rights of both nations, none of its clauses should be interpreted in opposition to its primary purpose.
Article X.
The High Contracting Parties shall request separately or collectively, when they so declare it opportune by a subsequent agreement, the adherence of one or more other American States to the present Treaty of Defensive Alliance.
Article XI.
This Treaty will be exchanged in Lima or La Paz, as soon as its constitutional perfection is obtained and will be in full force twenty days after the exchange. Its duration will be for an indefinite period of time, each of the parties reserving the right to terminate it when it deems it convenient. In such case, it will notify its resolution to the other party and the Agreement will be without effect forty months after the date of the notification.

In witness whereof, the respective Plenipotentiaries signed it in duplicate and sealed it with their private seals.

Done in Lima on the sixth day of the month of February, one thousand eight hundred and seventy-three.

Jose de la Riva Aguero Juan de la Cruz Benavente
Additional article.
This Defensive Alliance Treaty between Bolivia and Peru shall be kept secret as long as the two High Contracting Parties, by mutual agreement, do not deem its publication necessary.

Riva Aguero Benavente

La alianza fue la respuesta a los aprestos de Chile, que preparaba una invasión a los territorios de la costa de ambos países.

El jueves 6 de febrero de 1873 se firmaba, en Lima, el pacto secreto de alianza entre Bolivia y Perú, en previsión de la que parecía cada vez más inmiente invasión de los territorios costeros de esos países por parte de Chile.

El documento que el representante boliviano Juan de la Cruz Benavente firmó con el Ministro de Relaciones Exteriores, señor José de la Riva Agüero, dispuso que Bolivia y el Perú se unieran y ligaban garantizándose mutuamente su integridad territorial, obligándose a combatir juntos toda agresión exterior. Como producto de la desconfianza que siempre ha existido en las relaciones entre las dos repúblicas, se estableció que cada una de ellas retenía el derecho de calificar si la ofensa recibida por la otra, de un tercero, la obligaba o no a cumplir con el tratado.

El Congreso peruano aprobó la alianza el 22 de abril y la Asamblea Boliviana el 2 de junio de ese mismo año de 1873.

El texto de ese documento es el siguiente:
TRATADO DE ALIANZA DEFENSIVA
Las Repúblicas de Bolivia y del Perú, deseosas de estrechar de una manera solemne los vínculos que las unen, aumentando así su fuerza y garantizándose recíprocamente ciertos derechos, estipulan el presente Tratado de Alianza defensiva; con cuyo objeto, el Presidente de Bolivia ha conferido facultades bastantes para tal negociación a Juan de la Cruz Benavente, Enviado Extraordinario y Ministro Plenipotenciario en el Perú, y el Presidente del Perú a José de la Riva-Agüero, Ministro de Relaciones Exteriores; quienes han convenido en las estipulaciones siguientes:
Artículo I.
Las altas partes contratantes se unen y ligan para garantizar mutuamente su independencia, su soberanía y la integridad de sus territorios respectivos, obligándose en los términos del presente Tratado a defenderse contra toda agresión exterior, bien sea de otro u otros Estados independientes o de fuerza sin bandera que no obedezcan a ningún poder reconocido.
Artículo II.
La Alianza será efectiva para conservar los derechos expresados en el artículo anterior, y en los casos de ofensa, que consistan:

1.° En actos dirigidos a privar a alguna de las Altas Partes contratantes de una porción de su territorio, con ánimo de apropiarse su dominio o de cederlo a otra potencia.

2.° En actos dirigidos a someter a cualquiera de las Altas Partes contratantes a protectorado, venta o cesión de territorio, o a establecer sobre ella cualquiera superioridad, derecho o preeminencia que menoscabe u ofenda el ejercicio amplio y completo de su soberanía e independencia.

3.° En actos dirigidos a anular o variar la forma de Gobierno, la Constitución política o las leyes que las Altas Partes contratantes se han dado o se dieren en ejercicio de su soberanía.
Artículo III.
Reconociendo ambas partes contratantes que todo acto legítimo de Alianza se basa en la justicia, se establece para cada una de ellas, respectivamente, el derecho de decidir si la ofensa recibida por la otra, está comprendida entre las designadas en el artículo anterior.
Artículo IV.
Declarado el casus fœderis, las Altas Partes contratantes se comprometen a cortar inmediatamente sus relaciones con el Estado ofensor; a dar pasaporte a su Ministro Diplomático; a cancelar las patentes de los agentes consulares; a prohibir la importación de sus productos naturales e industriales, y a cerrar los puertos a sus naves.
Articulo V.
Nombrarán también las mismas partes Plenipotenciarios que ajusten, por protocolo, los arreglos precisos para determinar los subsidios, los contingentes de fuerzas terrestres y marítimas, o los auxilios de cualquiera clase que deban procurarse a la República ofendida o agredida; la manera como las fuerzas deban obrar y realizarse los auxilios y todo lo demás que convenga para el mejor éxito de la defensa.

La reunión de los Plenipotenciarios se verificará en el lugar que designe la parte ofendida.
Artículo VI.
Las altas partes contratantes se obligan a suministrar a la que fuese ofendida o agredida, los medios de defensa de que cada una de ellas juzgue poder disponer, aunque no hayan precedido los arreglos que se prescriben en el artículo anterior, con tal que el caso fuere, a su juicio, urgente.
Artículo VII.
Declarado el casus fœderis, la parte ofendida no podrá celebrar convenios de paz, de tregua o armisticio, sin la concurrencia del aliado que ha tomado parte en la guerra.
Artículo VIII.
Las altas partes contratantes se obligan también:

1.° A emplear con preferencia, siempre que sea posible, todos los medios conciliatorios para evitar un rompimiento o para terminar la guerra, aunque el rompimiento haya tenido lugar, reputando entre ellos, como el más efectivo, el arbitraje de una tercera potencia.

2.° A no conceder ni aceptar de ninguna Nación o Gobierno, protectorado o superioridad que menoscabe su independencia o soberanía, y a no ceder ni enajenar en favor de ninguna Nación o Gobierno parte alguna de sus territorios, excepto en los casos de mejor demarcación de límites.

3.° A no concluir Tratados de límites o de otros arreglos territoriales, sin conocimiento previo de la otra parte contratante.
Artículo IX.
Las estipulaciones del presente Tratado no se extienden a actos practicados por partidos políticos o provenientes de conmociones interiores independientes de la intervención de Gobiernos extraños; pues teniendo el presente Tratado de Alianza por objeto principal la garantía recíproca de los derechos soberanos de ambas naciones, no debe interpretarse ninguna de sus cláusulas en oposición con su fin primordial.
Artículo X.
Las Altas Partes contratantes solicitarán separada o colectivamente, cuando así lo declaren oportuno por un acuerdo posterior, la adhesión de otro u otros Estados americanos al presente Tratado de Alianza defensiva.
Artículo XI.
El presente Tratado se canjeará en Lima o en La Paz, tan pronto como se obtenga su perfección constitucional y quedará en plena vigencia a los veinte días después del canje. Su duración será por tiempo indefinido, reservándose cada una de las partes el derecho de darlo por terminado cuando lo estime conveniente. En tal caso, notificará su resolución a la otra parte y el Tratado quedará sin efecto a los cuarenta meses después de la fecha de la notificación.

En fe de lo cual, los Plenipotenciarios respectivos lo firmaron por duplicado y lo sellaron con sus sellos particulares.Hecho en Lima a los seis días del mes de febrero de mil ochocientos setenta y tres.

José de la Riva Agüero Juan de la Cruz Benavente
Artículo adicional.
El presente Tratado de Alianza defensiva entre Bolivia y el Perú, se conservará secreto mientras las dos Altas Partes contratantes, de común acuerdo, no estimen necesaria su publicación.

Riva Agüero Benavente
https://elpotosi.net/cultura/20220206_el-6-de-febrero-de-1873-se-firmo-la-alianza-secreta-entre-bolivia-y-peru.html

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On February 6, 1873, the secret alliance between Bolivia and Peru was signed - El 6 de febrero de 1873 se firmó la alianza secreta entre Bolivia y Perú

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Juan de la Cruz Benavente y José de la Riva Agüero. Roberto Querejazu Calvo y César Vásquez Bazán, El Potosi: The alliance was the response to the preparations of Chile, which was preparing an invasion of the coastal territories of both countries. On Thursday, February 6, 1873, the secret pact of alliance between Bolivia and...

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The secret treaty between Peru and Bolivia or also called Secret Pact, was an international agreement signed on February 6, 1873 in Lima-Peru. This agreement was signed by Jose de la Riva Agüero and Juan de la Cruz Benavente, in which a defensive alliance was formed, in which they would have to help each other against any attack from Chile, a country that was not part of the treaty. During all this time it was considered that the cause of this treatment was Chile, on which they wanted to impose the borders between Peru, Bolivia and Argentina, Chile was a militarily weak country, so it would be imposed before the arrival of the Cochrane frigates and Blanco Encalada

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After his great performance, uniting Peru against naval attacks from Spain, he was re-elected to lead the nation in the war against Chile; however, it was a disastrous departure on his part. Making him admit his mistake and decide to shamefully flee to Europe, abandoning his position and giving his country more worries. Luis La Puerta, took the position since he was the vice president of Peru at that time. Still, there wasn't much of a difference. When the Pacific War ended on April 4, 1884, while Andrés Avelino Cáceres was president of the country, Prado decided to return attitudinally as if he were a war hero.

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The 1870s in Peru are considered an economic crisis due to the drastic change that occurred in the Peruvian economy. Guano, which kept Peru's exports going, no longer dominated or commanded the same relevance in finance and markets as it did 30 years ago. It was not until two new sectors were introduced to save and diversify Peruvian trade, being in this case the production of sugar, overhauling cotton and wool between exports, and the extraction and manufacture of nitrate that sought to extend the control of the Peruvian natural resources from guano to nitrate, which raised government revenues and allowed debt service to be renewed.
Thanks to the constant exploitation of natural resources, there would eventually be a shortage of them and therefore what would lead to an obvious economic crisis. In order to have more resources to exploit and take advantage of, Peru decided pertinently to expand its territory through its participation in the Pacific war.

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In the 1870s, the state of Peru, as chief Mauel Pardo, made decisions, which were not good at all, and this caused everything that had been done with the trade in bird guano to fall into the abyss, causing this to cause an economic crisis. The country has adequate unlimited loans to establish debts for different countries, one of the reasons that contribute to the economic crisis is financial mismanagement and also the evaporation of bird droppings is one of the things that gives the country the most money. In addition, the money was used in things that are not worth it and they also made wrong decisions in projects that did not contribute to the country's economy. Having Peru already signed a defense alliance treaty with Bolivia and also seeing that Bolivia was in a war with Chile, Peru believed that it could overthrow Chile and succeed by gaining weapons, money and its territory to expand it and achieve increased production of guano and also improve all the economy they lost.

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In Chile the economic depression had repercussions in 1876, there was a drop in silver, there was a shortage, due to the drop in the price of copper and wheat, and the heavy export of gold and silver currency, which businessmen were forced to make in order to pay their commitments in Europe.

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The economic crisis in Chile was due to the scarcity of silver, copper and wheat, due to the drop in price of these and European debts that forced a strong export of silver to businessmen. The Chilean crisis was one of the causes since Chile was in economic problems, and wanted the Peruvian territory (Tarapaca) and Bolivian territory (Antofagasta) and its saltpeter for an economic advance, also Bolivia imposed a tax of 10 cents for every 100kg of saltpeter that the Chilean mining company exploited in Antofagasta, Chile did not want to pay and occupied the territory.

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Unpopularity of president Mariano Prado (Samuel O.)

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Unpopularity of president Mariano Prado (Samuel O.)

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After the presidency term of Manuel Pardo (1872-1876), Peru re-elected a new president due to the social and political turmoil of the inevitable collapse of the country.

The president that was elected was Mariano Prado Baca a military leader and former president of Peru. this president was elected because of the economic crisis that Peru was in, but lamentably Mariano Prado was unable to solve this crisis. This left him with an unpopular profile and image to the public. Prado thought of possible solutions to secure his position and profile but most importantly to prevent a coup d’etat which was the way presidents were fired. Considering that he previously won a war against the Spanish and became president, he thought that the best possible way to conserve his presidency was to win another war and that's how Peru entered the war of the pacific.

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Borders of: Chile, Argentina, Peru and Bolivia, before the conflict of Atacama. 

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The origin of the border dispute between Chile and Bolivia in the Atacama desert starts in the Spanish empire, the spanish leaders at the time defined the Atacama desert as the northern border of the General Captaincy of Chile. Historians from both countries (Chile and Bolivia) disagree on who was the original “owner” of this land, The majority says that the Charcas was originally part of the peruvian viceroyalty  later of the Viceroyalty of the Río de la Plata and ultimately of Bolivia, All of these gave Bolivia access to the Pacific Ocean. The disputes grew slowly with the time mostly in the 19th century, for the holding of this land. Tensions grew between Chile and Bolivia because even after all the disputes, conflict and unhappiness with the land received, in the Spanish Empire times. Bolivia thought that they should control the natural resources of the disputed zone and Chile thought they should control the zone. Antofagasta Nitrate & Railway Company and Bolivia agreed in 1873 to a contract that gave Bolivia the right to extract saltpeter duty-free for 25 years. In 1874 a second treaty was made, this treaty entitled Bolivia to collect full tax revenue between the 23rd and 24th parallels, but stipulating that tax rates on Chilean companies could not increase for 25 years. In 1878 The Bolivian government found the actual contract incomplete and said that they would only accept the treaty if the company paid a 10 cents tax per quintal of mineral extracted. The company called the Chilean government to intervene in the issue. After multiple shows of aggression between Chile and Bolivia, the war of the pacific started. In actuality Bolivia still wishes for an Atacama corridor, which Chile rejects. In spite of this conflict, Chile grants unrestricted access to all kinds of Bolivian merchandise through the Atacama.

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In the 1870's, conditions for the organization of the country's first political party were composed thanks to the economic growth and greater political stability. The financial crisis occurred during the presidency of Manuel Pardo. Guano no longer commanded the republic's trade and finance as it had for thirty years. Quantity, quality and markets persistently declined from peaks of the 1850's and 1860's. It was like this until two new growth sectors increased Peru's commercial pattern. Plantations in the north sugar production quadrupled between 1873 and 1876, with cotton and wool among exports. Meanwhile, in the southernmost province of Tarapacá nitrate extraction and manufacture steadily increased. By the constant recollection of natural resources, there will be a shortage of resources from these and will lead to the economic crisis.

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The economy of Peru depends on the world exports that are made, which refers to the world recession of 1873 that was in some way severely affected and due to that a decrease in the different exports was caused, accompanied by the recession in the economy. Peru, as they also made the decision to lend money, using guano production to strengthen themselves and spending the money on useless things and they chose the wrong projects to reach the development of Peru, then they could not depend on economic diversification in the long run, which is accompanied by bad financial management. The financing of guano in Peru finally came to an end in the 1870s and as a consequence of this collapse, the guano that they were selling disappeared. So, Peru thought that it would win the war with Chile, thinking that if they win, they would obtain a territory where there would be more guano, to be able to sell it as fertilizer, obtain salt to make gunpowder, among other things because the economic crisis that was happening at that time would come to disappear.

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Mariano Prado’s victory against Spain was considered successful enough to be reelected as a president during the great depression in 1876. His inability to solve the economic and social crisis positioned him as questionable and unpopular. His way to gain back trust and control was to participate in another conflict, the War of the Pacific.

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Chile suffered a long economic crisis in 1876. It was because of the fall of the  price of copper and wheat, the strong export of gold and silver currency. The Business Men were forced to  pay their commitments in Europe. Also the banks didn't know how to convert their bills to coins, because their actions also dropped. Another problem to Chile was that at the same time of the economic crisis was the 10 cent tax, which was a tariff approved by the Bolivian National Assembly in 1878, which was intended to be imposed on the Chilean company ”Compañía de Salitres y Ferrocarriles de Antofagasta” , for an amount of 10 cents for each 100 kg of saltpeter exported. This was also one of the causes that triggered the pacific war.

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Chile started the investment in Bolivia because of misunderstandings in the agreement they had with Bolivia which allowed them to get guano and salt from the zone in exchange for a tax.
Bolivia was going through bad economic times in 1878 so they raised the tax, causing the discontent of chile and beginning one of the biggest wars in Latin America.

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In 1876, Chile had an economic downturn. It was due to the drop in copper and wheat prices, as well as the strong export of gold and silver currencies. The businessmen were compelled to fulfill their obligations in Europe. Banks were also unable to change their money to coins due to a reduction in their actions. Another issue was that the 10 cent tax, which was a tariff approved by the Bolivian National Assembly and intended to be imposed on the Chilean company "Compaa de Salitres y Ferrocarriles de Antofagasta" for an amount of 10 cents for each 100 kg of saltpeter exported, was enacted at the same time as the economic crisis. This was also one of the factors that contributed to the outbreak of the Pacific War.