Argentina had an unsigned alliance with Peru and Bolivia, and advantage was taken of Chile’s war engagement to press the question of boundary limits, and also that of the possession of Patagonia and the Straits of Magellan. To meet this emergency and to avoid if possible another war, the government commissioned Jose Manuel Balmaceda, who was then serving as Minister of Foreign Affairs, to go to the Argentine capital and save Chile from impending difficulties. Although coldly received in Buenos Aires, Señor Balmaceda entered upon the task with zeal and determination, unraveled the tangle of international questions, and tied the hands of Argentina by withdrawing Chile’s claim to that portion of Patagonia lying east of the Cordilleras. Previous to that time all of Patagonia was Chilean territory. It was included in the Spanish Vice-royalty inherited by the Republic. This concession precipitated other boundary disputes which were the cause of many years of international contention, almost resulting in war between the two nations on several occasions. It was finally settled by arbitration in May, 1903, when a boundary line, established by a commission appointed by King Edward VII, was accepted and approved by a treaty agreement between the two countries. On his return from the Argentine, Balmaceda was made Prime Minister and became a most potent political factor and powerful incentive to material progress and development. From armed conflicts and international complications Chile emerged triumphant and successful. Her territorial limits had been extended to include some of the richest mineral deposits on the continent, her national prestige greatly increased, her credit unimpaired and her wealth producing resources multiplied. From that time Chile made rapid advancement along lines of industrial development and intellectual progress. For the first time in her national existence the exports exceeded her imports; the balance of trade was favorable to her commerce, and the surplus in the national treasury reached 100,000,000 pesos. A remarkable thing about this surplus is that it was accumulated while the government was engaged in building railroads, bridges, public schools and colleges, penal and correctional institutions, constructing highways and providing better means of communication throughout the country. The Congress of that period, 1882-5, was notable in the history of the Republic for its progressive policies, unity of purpose and patriotic support of the government.