No sooner had the Chilean army left than Caceres began a civil war to oust Iglesias. For eighteen months the fighting continued with varying fortunes, but in December, 1885, Caceres surprised Lima when undefended; Iglesias resigned; a general amnesty was proclaimed, and peace was restored to the distracted country. A junta assumed power and in the election which followed Caceres was chosen president, and in the middle of 1886 he entered upon the dreary task of re-organising Peru. The treasury was empty, the population had been decimated by a horribly destructive war during four years, the flourishing coast valleys with their cotton and sugar plantations had been laid under contribution, the mines had ceased to be worked, the guano and nitrate revenue was gone, the country was weighed down with a debt which could never be paid, and foreign creditors pressed for a settlement utterly beyond the abilities of the impoverished country. Rigid economies were enforced in all departments of the administration, but the most that could be hoped was to meet ordinary expenditure. Peru had nothing to offer towards the immense foreign debt except her railways, and the British creditors finally agreed to the Grace contract, by which she was released from all responsibility for a sum amounting to over fifty millions sterling, in return for the cession of the state railways, the payment of eighty thousand pounds annually, and certain rights to the guano deposits, mines, and public lands. British pressure induced Chile to give up a large proportion of the guano proceeds, and in 1890 the contract was ratified and the "Peruvian Corporation" took over the vast properties conceded. Though disputes have arisen from time to time, the corporation has made some progress in extending lines to open up the mineral wealth on the plateau, and a successful beginning has been made toward the exploitation of the rubber forests of the Amazon plain. It cannot be doubted that the industrial development of Peru must be greatly aided by the existence of this gigantic private enterprise which will apply the energy and economy characteristic of individual enterprise to undertakings governmental in magnitude. [Illustration: GENERAL DON ANDRES A. CACERES]