The region, which abounds in valuable rubber forests, was settled by Bolivians between 1870 and 1878, but was invaded by Brazilian rubber collectors during the next decade and became tributary to the rubber markets of Manaos and Para.
This decision at first gave offence to the Bolivians, but friendly overtures from Peru led to its acceptance by both parties with the understanding that modifications would be made in locating the line wherever actual settlements had been made by either party on territory awarded to the other.
Several important changes were made by congress in the period between his resignation and the election of Xavier Espinosa, January 1868: the power of the president to imprison persons regarded as dangerous to public order was annulled; and the immediate naturalization of Bolivians, Chilians, Peruvians and Colombians was authorized.
Vitor, a landing-place a little to the south of Arica, was offered by the Chilean government to Bolivia, but refused as not complying with the conditions stated in the protocol of 1895; the Bolivians furthermore preferred to wait and see if Arica was finally ceded by Peru to Chile, and if so to claim the fulfilment of the terms of the protocol.
The Bolivians followed the example of their allies.
Bolivia was in no position to venture upon hostilities or to compel the Chileans to make concessions, and the final settlement of the boundary dispute between Argentina and Chile deprived the Bolivians of the hope of obtaining the support of the Argentines.
The government of Chile undertook to construct a railway at its own cost from Arica to the Bolivian capital, La Paz, and to give the Bolivians free transit through Chilean territory to certain towns on the coast.