with the Chileans To a large extent, Daza Groselle entered the Palacio Quemado with a desire to create Bolivian control over the remote, sparsely-populated maritime province of Litoral. By the late 1870s, the latter was already settled mostly by Chileans, who found access to the region much easier than did the highland Bolivians. Predictably, a corollary of this growing physical and economic Chilean presence in the region was its irredentist claim by Santiago, especially when rich deposits of guano were discovered near the Bolivian port of Mejillones. In 1878, there was a very strong earthquake in Bolivia followed by a severe drought that caused a famine. The conflict with Chile had its genesis in the Chilean influence in the territory of the Bolivian coast, whose attraction was in guano and saltpeter. The Compañía de Salitres y Ferrocarril de Antofagasta, a company with Chilean capital, had many prominent political shareholders of that country. Daza, once in power, initiated a completely anti-Chilean policy. Chileans residing in Antofagasta complained of mistreatment by the Bolivian authorities. The treaty with he Compañía de Salitres y Ferrocarril de Antofagasta In 1873, the Bolivian government signed an agreement with the representative of the Compañía de Salitres y Ferrocarril de Antofagasta, an agreement that at the beginning of 1878 was not yet in force, because, according to the Bolivian constitution, contracts on natural resources had to be approved by congress. This was done by the Bolivian National Constituent Assembly through a law, on February 14, 1878, on the condition that a tax of 10 cents per quintal of saltpeter exported by the company be paid. For Chile, the collection of the tax of 10 cents per quintal exported explicitly violated article IV of the 1874 Treaty between Bolivia and Chile, which prohibited raising taxes for twenty-five years on "Chilean people, industries and capital working between parallels 23 º and 24º" and residents in that area. Bolivia counterargued that the company was not a "Chilean citizen" nor a resident but a commercial entity, which constituted, according to the laws of Bolivia, as subject, therefore, to its ius imperium. The Chilean owners of the affected company flatly refused to pay said tax, considering it to be abusive, and requested help from the government of Chile. Santiago pledged their support for the company's cause, despite the fact that it was a dispute between a private company and the Bolivian State. The