No. 42.
Mr. Markbreit to Mr. Fish.
La Paz, January 31, 1872. (Received March 2.)
Sir: According to the treaty of August 10, 1866, between Bolivia and Chili, establishing the boundary-line between the two republics, it was agreed that the twenty-fourth parallel of latitude south should constitute the dividing line; but that all guanos, minerals, &c, existing between the twenty-third and twenty-fifth parallels of latitude should belong equally to both countries. Since the conclusion of this treaty it has been found that the guano-deposits at Mejillones are of considerable value, and about two years ago the wonderfully rich silver mines of Caracoles were discovered by a Chilian, Diaz Gana. It is now feared by the Bolivian government that Chili may attempt to possess herself of these mines, as well as of the guano-deposits at Mejillones, availing herself of the first opportunity, with that purpose, which may offer. It is claimed that Chili is greedily waiting for some excuse, however trivial, to take this course. Mejillones is situated between the twenty-third and twenty-fourth parallels of latitude, while Caracoles, according to Bolivian opinion, lies north of the twenty-third parallel of latitude. I have had several unofficial conversations with the President and minister for foreign affairs upon this subject, and have found that their only hope seems to be, should such an emergency arise, to secure the intervention of the United States. Of Course I have been careful not to commit in the slightest manner our government nor myself.
The guano-deposits at Mejillones are variously estimated at between four and ten million tons, while the mines of Caracoles, situated about one hundred and twenty miles from the bay of Mejillones, are said to contain immense riches. The capital invested at the latter place, chiefly by Chilians, amounts at the present time to about $14,000,000. The population consists of about five thousand souls; while two years ago all that region did not contain a solitary inhabitant. A commission is now in session in this city, which has before it twenty-eight propositions made to the Bolivian government for the construction of a railway from the coast to the mines. Most of the propositions ask no guarantee from the government, but seek simply to obtain the right to construct the road.
This morning a battalion of infantry left this city for Caracoles, with the avowed purpose of maintaining order among the miners; but the real object evidently is to be, at least in some measure, prepared to meet any hostile movement on the part of Chili.
Whether the alarm felt by the Bolivian people relative to what they believe to be the attitude of that republic is well founded, the near future will show.
I am, &c,