By this time the dispute with the Argentine over the possession of the southern extremity of the continent had become acute, and public feeling in both countries had risen to a height perilous to the maintenance of peace. The only boundary treaty between Chile and Argentina--that of 1856--provided that the limits should be as they had been during colonial times, but these were not certain because throughout the Spanish occupation the territory now disputed had been uninhabited, and neither the viceroy of Buenos Aires nor the captains-general of Chile had concerned themselves about it. Since independence Chile had always claimed to the Andes on the east and to Cape Horn on the south, including the region about the Straits of Magellan over to the Atlantic side. As early as 1843 she had established a post at the eastern end of the straits, and Argentina at first did not seriously dispute her possession. In 1870 guano was discovered in the region, and when Chile promptly proceeded to treat it as her own the Argentine government protested. For ten years the two countries bickered, but with the Peruvian war impending Chile thought it wiser to make some concessions, and the dispute was finally settled by a treaty in 1881 by which the territory was divided, Chile getting the more valuable part with the control of both ends of the straits, although this great interoceanic waterway was declared neutral and no fortifications may be erected there. CHAPTER V CHILE'S GREATNESS AND THE CIVIL WAR Since 1873 the low prices of Chile's chief exports, wheat and copper, had turned the balance of trade against her. The government could not make both ends meet, and in 1878 the banks were compelled to suspend specie payments. They resorted to the issue of more notes, backed by the government's guaranty. Just at this juncture the Bolivian government levied a heavy royalty on the nitrate extracted by the Chilean companies operating in Bolivian territory. This threatened ruin to the most promising enterprise in which Chilean citizens were engaged, and was believed to be a manifest violation of the terms of the treaty of 1866. The government determined not to stop short of war itself if necessary to defend Chilean interests, though war on Bolivia also meant war on her ally, Peru.