A meagre description of the stirring events of this contest will be found in that part of this volume devoted to Peru. Chile's overwhelming victory not only profoundly affected her international position, but also her internal condition. The preparations of the spring of 1879 plunged the government into expenditures which ordinary revenues were totally insufficient to meet. A new issue of paper money was resorted to, but the interest on the foreign debt was kept up. The first nine months of 1879 were an anxious time for Chileans. Pitted against two nations whose combined population was nearly double her own, her treasury empty, while that of Peru was supplied by the marvellous nitrate deposits of Tarapaca, the result appeared doubtful and the consequences of failure almost too horrible to face. When the Peruvians lost their iron-clad, _Independencia_, hope rose, but the ease with which the _Huascar_ eluded the Chilean ships made the people again lose confidence in their navy, and the coast towns were terror-stricken. But the destruction of the dreaded iron-clad in the naval battle of the 9th of October changed in the twinkling of an eye fear into confidence, apprehension of national ruin into the joyful assurance that a Chilean army would soon be in possession of the Golconda of the Pacific. Within a month the Chilean forces were landed in the nitrate country, the Peruvians and Bolivians had been chased across the desert, and the Chilean collectors were receiving a million and a half a month from the royalties of the nitrate mines. A net sum nearly equal to the total revenue which Chile previously had been collecting from all sources was added to her income, and she was no longer driven to painful expedients in order to raise money to meet her military expenses. Although the issues of paper money were continued and prices consequently rose, business flourished and a period of abundance replaced the hard times which had reached a crisis in 1878. The government was able to abolish the odious tobacco monopoly, and the war rather lightened than increased the burdens of commerce. The centralised government of Chile proved an admirable instrument for times of war. The president and his ministry, backed by a compact congress, wielded the whole force and resources of the country like a weapon fitted to the hand, striking heavy and relentless blows until Peru lay prostrate.