Rosset by the owners of the mines Patiño, Aramayo,
Hochschild as well as other politicians and generals ruled
modern life as part of the trade in tin. The interests of
English imperialism in the saltpet of Antofagasta and in the
oil in the south triggered two brother wars on the South
American continent. First the Pacific War 1879-83 with Chile
against Peru and Bolivia and then the Chaco War in 1932-35
with Paraguay against Bolivia.
From the mid-1800's, Chilean interests had established
themselves in the extraction of natural altars in the desert
areas of the Bolivian province of Atacama and the Peruvian
province of Tarapaca. The Chilean companies worked under
concessions issued by the Peruvian and Bolivian authorities,
and were financially supported - and often also controlled -
by British capital.
Bolivia is shrinking
In 1878, Bolivia decided to impose a new tax on Chilean
exports of Atacama carpets over the port city of Antofagasta.
This led to conflict between the two states, and in 1879
Chilean troops conquered Antofagasta. It was the prelude to
the Pacific War, where Bolivia was supported by Peru, yet
had to capitulate to the Chilean forces in 1880. Peru
continued the war, but had to capitulate in 1883 after the
Chilean forces conquered the capital Lima. Peru had to
relinquish the Tarapacá province, and Bolivia had to
relinquish the province of Atacama by the ceasefire
agreement in 1884. Chile - and thus the British capital
interests - thereby consolidated their full control over the
profitable salt extraction. The Chilean carpenter was part
of the foundations for streamlining North America and
Europe's agriculture under itindustrial revolution that was
in full swing at that time. Only in 1904 was a peace
agreement signed between Chile and Bolivia, where Bolivia
formally renounced the area, thus losing its access to the
sea. The demand for reconstruction of the lost coastal area
and access to the sea ("salida al mar") has later become the
pervasive theme of Bolivian politics, and has been used by
changing rulers to direct attention away from the country's
Twenty years after the Pacific War defeat, Bolivia lost
another part of its territory, this time in the Amazon.
Here, Brazilian rubber producers had started rubber mining
in the jungle, and after Bolivian authorities tried to
control their business, the Brazilians in 1899 declared the
Acre area independent and asked Brazil to take it over. In
1903, Bolivia formally recognized this Brazilian conquest.
European capital in the field
From around the turn of the century, foreign capital -
first British and German, later North American - was heavily
invested in Bolivia's mines. In the past, silver was the
most important mining product, but eventually tin became the
most important. Especially after cans were introduced as
packaging in the food industry. Three mining magnates
dominated the production of tin for the canning industry of
Europe and North America. Two were Bolivian - Simón Patino
and Carlos Aramayo - and one was Argentinian born in
Austria, Mauricio Hochschild. Tin extraction peaked in the
1920's, and Patino became one of the world's richest men.
The three "tin barons" just recovered the metal in Bolivia.
Instead, smelting and refining industries were built up in
North America and Europe, along with British and North
In 1922, Standard Oil of New Jersey (Exxon/Esso) received
the first oil concession in Southeast Bolivia. In this area,
Bolivia was to wage a small victorious war - this time
against neighboring Paraguay - over the lands of the Chacol
offshore (the Chaco War 1932-35).
Both North American and European oil companies were
interested in this area and supported "their" own
governments. The war led Paraguay to take control of most of
the disputed territory after 50,000 Bolivians and 35,000
Paraguayans lost their lives in the fighting.