Chile had but two neighbors and she had boundary disputes with both. The dispute with the Argentine led to the erection of a fort and the founding of a settlement in the Strait of Magellan by Chile in 1843. From that time until the boundary award by King Edward in 1903, the two republics were in a continual controversy over territorial limits, which on more than one occasion led them to the brink of war. With her other neighbor, Bolivia, Chile had a boundary dispute which has had far-reaching consequences. A _modus vivendi_ which seemed to promise lasting peace was agreed upon. Contrary to expectation, however, the agreement produced war, procuring for Chile another neighbor and still another territorial dispute. Previous to the war of the Pacific, the province of Antofagasta, which was Bolivian territory, separated Chile and Peru, but as a result of that war Chile came into possession of the province of Antofagasta and consequently became a neighbor to Peru. Surrounded as she was then with three Republics individually and collectively maintaining a hostile attitude to her independent and aggressive policy, Chile was placed in a peculiarly delicate and dangerous political position. If one of her three neighbors made a move in its boundary question the other two pressed for a settlement of similar claims. During the civil conflict in Chile her three neighbors took advantage of the internal disturbance to urge settlement of their boundary questions. And when the relations between Argentina and Chile became so strained as to make war imminent, Bolivia and Peru assumed a most aggressive attitude in demanding a settlement of the questions growing out of the war of ’79. Chile has not forgotten these acts of her neighbors, but her attitude is not one of resentment. Her desire is for peace, as has been demonstrated by her generous and amicable adjustment of differences with Bolivia and Argentina; peace at home and abroad, but peace with honor. She governs her sword in accordance with the motto of the Castilian Hidalgo: “No me desenvainas sin causa; no me envainas sin honor.” (I do not unsheath my sword without cause; I do not sheath it without honor.) The territorial questions of Chile with Argentina and Bolivia have been definitely settled, and the three countries have been greatly benefited thereby. Chile and the Argentine have been relieved of the enormous drain upon their resources in the purchase of ships and preparations for war, and under treaty arrangements capital is seeking investment in Bolivia in the development of its natural resources. The only outstanding territorial question that Chile now has to deal with is that relating to Tacna and Arica.