In the meantime, nitrate, a powerful rival of guano, had been discovered in the desert of Tarapacá, then the southernmost province of Peru. The companies engaged in extracting nitrate, of which about five million quintals were exported annually, were competing with one another so closely that the low prices established by them threatened to ruin both the guano and the nitrate business; and President Manuel Pardo, in order to raise the selling price of both products, with a view to increasing the revenues of the nation, put into force a government monopoly of nitrate. As a result of the war with Chile which followed, the nitrate fields of Tarapacá passed into the possession of that country. The evils of competition again threatened to ruin the trade, until, under the auspices of the Chilean government, a system of limiting the production was adopted, which remains in force. What Peru lost in the nitrate fields of Tarapacá may be estimated from the statistics of Chile, which show the revenue from the export of nitrate and iodine (the latter obtained in the preparation of nitrate) to be five million pounds sterling yearly, nearly three-fourths of all Chile’s exports being from the nitrate fields. [Illustration: DIGGING GUANO ON THE CHINCHA ISLANDS.] Peru lost the revenues from both guano and nitrate under the same stroke, and during the years that immediately followed, the country passed through the darkest period of its history. But, as this experience served to direct the attention of the nation to the more permanent riches of this great territory, the loss of its most attractive possessions cannot be regarded as an unmixed evil. From an abundance of wealth, Peru was suddenly plunged into great poverty. But, as with individuals, so with nations,—the test of the spirit lies in its strength to meet adversity and overcome the discouragement that follows in its path; and this test the Peruvian people met by resolutely facing the task of building up their shattered fortunes through the development of the national industries. Their territory is rich in agricultural products and minerals; the rubber and hardwoods of the forest are treasures of immense value; and the people have grown to realize the full importance of developing these unlimited resources. As a result, the sun of prosperity has again risen over the land; and in the warmth of his beams, the harvests shed ever-increasing blessings and the hearts of the people expand with content. [Illustration: A GUANO PORT, CHINCHA ISLANDS] [Illustration: CALLE DE LIMA, CALLAO.] CHAPTER XX CALLAO, THE CHIEF SEAPORT OF PERU—STEAMSHIP LINES [Illustration: MONUMENT TO ADMIRAL GRAU, CALLAO.]