In mid 1928, the Sixth Inter-American Conference took place in Havana. Chile seized this opportunity to propose to Peru a re-establishment of relations to look for a direct settlement in the Tacna-Arica affair. Secretary Frank Kellogg gave his support to the Chilean proposal, and instructed his representative in Lima to obtain Leguía's approval to renew the talks. Leguía agreed to re-establish diplomatic relations, but stated that Peru could not request this. At the same time, he demanded a guarantee that once these relations were renewed, Chile would return the territories in dispute. Leguía told Ambassador Moore that Peru would prefer an internationalization of the area or its division in two parts, with the port and the city of Arica under international administration, and remarked that he was opposed to giving the territories to Bolivia. (1)

Secretary Kellogg succeeded in making Chile and Peru reinitiate diplomatic relations in July, so that by October 1928 both governments would be ready to start the talks for a solution that, at Leguía's request, would be presented to the president of the United States, so that in his role as arbitrator, he would present it to both governments. Leguía needed to have this solution come from Washington in order to override public opinion that might find opposition to giving up Arica as a Chilean possession. (2)

The Bolivian minister in Washington, Eduardo Diez de Medina, visited Secretary Kellogg and made clear Bolivia's concern that its landlocked status would not be taken into consideration in the negotiations. As this dispute was under the arbitration of the United States, he asked that Bolivia be considered in the good offices. Kellogg answered that his country had not forgotten the Bolivian claim, but that only the two countries involved could participate in the peaceful solution of the problem. Diez de Medina stated that this would crush Bolivia’s last hopes, because without the support and the friendly help of the United States she would accomplish nothing. The Secretary assured Diez de Medina that Bolivia had lost neither the American friendship, nor its support, and in considering the opposition of Peru and Chile to give up the whole territory to Bolivia, the best solution would be to wait until both countries reached an agreement, and then, on their own accord, agree to give Bolivia a zone that would include at least the railroad, the port and the city of Arica. Diez de Medina concurred with Kellogg’s new suggestion and made clear that Bolivia did not look upon the American arbitration as an obstacle in an understanding between Peru and Chile, but just that the Bolivian cause could only be supported by the friendship of the United States, without which Bolivia would have no alternative.

At the end of October, the American envoy in Lima reported on his conversation with President Leguía establishing that Leguía had accomplished the following with the Chilean Ambassador, Figueroa: Leguía proposed to Chile the return of the whole territory. The Chilean ambassador did not accept this. Peru reopened the question of the plebiscite that had failed because of Chilean actions. Figueroa refused to talk about the plebiscite and suggested the division of Tacna and Arica between the two countries. Leguía objected that Tacna would lose its only access to the sea via the port of Arica, and that together they constituted, an indivisible geographical unity. Ambassador Figueroa asked President Leguía if he had another solution. Leguía replied that the administration of the territories could be left in the hands of the United States. The Chilean ambassador said he would consult Santiago on the matter.

The American representative reminded Leguía that the acceptance of the United States to administer the territory was not guaranteed, but that it could be considered, in which case they would need Leguía's consent for a joint administration between the United States and another country in the area, i.e. Bolivia. Moreover, the American representative pointed out that the most logical administrator for both territories should be Bolivia. Leguía reiterated that he could not agree to hand over the territories to Bolivia. Later, the American envoy met with Figueroa, who announced that the counterproposal from Chile was to give up Tacna and a portion of northern Arica to Peru, while Chile would retain the railroad area on the south and the port of Arica. (4)

On the same day, Kellogg instructed his staff in Lima to stress to Leguía the need for an amicable settlement as soon as possible. Such a settlement would establish the division of the territory with the railroad line as a future border line, the Arica-La Paz Railway Company as a Chilean possession, and the city of Arica, along with the port, to be declared free and open zone. The arrangements would take place at Morro so that the latter would be completely demilitarized, and Peru would be granted rights for a free transit and additional guarantees for the Arica-Tacna railroad.

By early December, Chile had agreed with Peru concerning the cession of the whole territory located within ten kilometers north of the Arica-La Paz railroad, the concession of port facilities and free transit - similar to the ones that Chile granted Bolivia - and the investment of public services in Tacna for a value of six million pesos. Peru had accepted this solution at first, seeking only to establish a connection that would preserve a special relationship between Tacna and Arica, and that at the same time would offer Tacna its own port facilities in Arica’s territory. (5)

At the beginning of 1929, Leguía obtained the collaboration of the United States to explore possibilities for building a port in Tacna as close as possible to Arica. Furthermore, as an element of the negotiation, Leguía insisted that the Morro and Arica’s port should be Peruvian.

As Secretary Kellogg was about to be replaced due to the change of government in the United States, he gave instructions to Ambassador Moore in Lima to encourage Leguía for a definite settlement, admitting, for once and for all, that it was impossible to exclude the Chilean sovereignty. He added that he wished to conclude his term as secretary of state with the settlement of the Tacna-Arica controversy. (7)

The Bolivian minister, Eduardo Diez de Medina, visited the State Department once more urging the American authorities to keep in mind Bolivia’s interests in the outcome of the negotiations between Chile and Peru. (8) By the end of February, president Leguía had already confidentially agreed to give up the city of Arica. In this regard, he gave instructions to his new representative in La Paz and also entrusted this decision to Ambassador Moore, however he still kept it from the Chilean representative. The solution that Leguía was ready to accept was based on the construction of a new port one and a half kilometers north of the port of Arica. Part of the province of Arica would be handed over to Peru, where the Tacna-Arica railroad terminal would be included, hereby eliminating the stretch of the track that entered the city of Arica.

The Arica-La Paz railroad line would not be affected by this solution and the Morro would have to be demilitarized and put under the Pan-American Union. On the Morro they would also construct an international monument to peace. Moore said that if Chile would accept Leguía’s position, the settlement could be made immediately. To complement the former news, Moore made clear that, as far as possible, the border line would run parallel to the Arica-La Paz railroad, at a distance of no more than ten kilometers nor less than thirty meters.

Kellogg transmitted this news to the ambassador in Santiago, who responded that the Chilean government emphatically refused the construction of a new port north of Arica, as they feared that Leguía would later reach an agreement with Bolivia and construct another railroad for the new port in Tacna. This would mean financial disaster for Chile, which had incurred a great expense to build the Arica-La Paz railroad. (9)

The Chilean ambassador, Carlos Dávila, visited Kellogg and told him he had instructions from Santiago to emphasize Chile’s total opposition to a new port in Arica. At the same time, the Government in Chile was extremely preoccupied about the Arica-Tacna railroad and the possibility that it might be extended to Bolivian territory to connect it with the Arica-La Paz railroad, thus leaving the stretch on Chilean territory useless and seriously affecting the normal functioning of the port of Arica, for which the Bolivian commerce was vital.

Kellogg answered that there should be no fear of the constructions of a new railroad, as it would prove too long and costly. At the same time, he suggested that the construction of the new Peruvian port would take a minimum of two years, by which time Kellogg expected Chile, and not Peru, would be in a better position to negotiate directly with Bolivia. Kellogg insisted that as Leguía’s acceptance to lose the port of Arica had already been secured, the settlement should be finalized immediately.

Ambassador Figueroa visited Leguía in Lima to inform him of Chile’s refusal of the construction of a new port and instead offered him a dike to the north of the Bay of Arica, with a building for customs and the construction of a modern station for the Arica-Tacna railroad. All expenses would be met by Chile and would also allot Peru two million dollars. Chile, in turn, believed that the border line should start at a point called Escritos, 16 kilometers north of Arica, and thence connect it with the line that would run ten kilometers from the railroad. Chile told Leguía that the most she would accept would be the construction of a port in the river Lluta, in which case, Chile asked that a clause be incorporated in the treaty stating that the new port would be granted to a third party and that Peru would promise not to construct a railway to Bolivia through the territories that were being returned. Chile said this was the last offer Chilean opinion might accept, as an extreme sacrifice. When commenting on this offer to Kellogg, Ambassador Culbertson mentioned that he had information that Leguía would not accept to extend the railroad from Tacna to Bolivia. On the other hand, Culbertson did not believe that Bolivia should be mentioned in the treaty or that there should be pressure on the matter of granting the port to a third party, as a unique obligation from Peru. Therefore, Culbertson suggested that the clause be redrafted in general terms, as follows:

When Hoover took office as president of the United States, he decided to maintain Kellogg as his secretary of state for a few more weeks, until the Tacna-Arica controversy was settled. During this time the talks were mainly over technical aspects relating to the possible construction of a port in the rivers San Jose and Lluta and in other locations extending to the river Sama. In this respect, Leguía obtained the help of the American government in providing military engineers to make the studies and discuss them with Chilean engineers. Leguía said that he could not accept the port in Lluta but affirmed that he had information that the beaches of the north of Arica were not adequate for the construction of a port. That would mean that the cost of a port would reach 10 to 15 million dollars. on the other hand, the Peruvian president insisted that the final solution should be proposed by President Hoover so that he could accept it without being considered a traitor to his own country. (12)

Ambassador Culbertson insisted to Kellogg that the construction of a port north of Arica could be technically feasible but that economically and commercially it would be absurd and it would threaten the peace between Peru and Chile, turning it into a focus of competition for Bolivian commerce. Therefore, he suggested that Leguía be convinced that there would only be a small port for light traffic, and that Chile be reimbursed for any expenses it might have spent in building the port. In this regard, Ambassador Moore in Lima also tried to persuade Leguía, so that by March l7th, Chile and Peru had agreed unofficially on eight point as a basis for the treaty. During that period, Kellog, who had been so close to a solution, was replaced by a new secretary of state, Henry Stimson.

After consultation between Leguía and Figueroa, an agreement already approved by Chile was handed to Stimson, although it still lacked Leguía’s endorsement and it was to be presented by President Hoover. It included the division of the territories in two parts: Tacna to Peru and Arica to Chile. The border line would start on the coast of Escritos and would continue ten kilometers north of the Arica-La Paz railroad. At the same time, the Chilean government would give Peru a pier in the Bay of Arica, a building for customs and a station for the railroad from Arica to Tacna. It would also give up the territory of Tacna to Peru 30 days after the ratification of the treaty. Finally, the governments of Chile and Peru would not grant, without previous agreement between themselves, any portion of the territory to a third party, nor would they alter the present international railway system.

Secretary Stimson had a meeting with the high ranking staff of the State Department, revised the draft of the treaty and prepared a memorandum to inform President Hoover. (14) On April 24th, President Leguía met Chilean Ambassador Figueroa and approved eight points in the agreement, and agreed that the draft of the treaty should be presented by the ambassadors of Chile and Peru in the United States to Secretary Stimson, who in turn would present it to President Hoover.

After few hours of reaching Leguía and Figueroa this confidential agreement, a copy of the same was handed to the Bolivian ambassador in Lima, Ostria Gutiérrez, who immediately transcribed it to the ministry of foreign affairs in La Paz. In turn, Minister Diez de Medina visited Secretary Stimson early on April 26th, and stated that the Bolivian government had knowledge that Chile and Peru had practically agreed on a document containing a clause which was hostile to Bolivia. Diez de Medina reminded him that the Bolivian government had never interfered in the direct negotiations, yet she considered intolerable that the parties would decide to not grant any territory to a third party nor construct an international railroad.

Stimson registered this conversation and informed his ambassadors in Lima and Santiago as follows:

Later, Secretary Henry Stimson sent instructions to Lima mentioning that the president of the United States could not recommend any solution to the dispute between Chile and Peru that Bolivia considered unfriendly and requested that he be informed if President Leguía or Ambassador Figueroa insisted in keeping said clause in the treaty, in which case the president of the United States would not be able to recommend such settlement. (15)

Ambassador Moore met with Leguía on April 27th, and after presenting the problem, informed Stimson that Leguía had stated that under no circumstances would Peru do anything to embarrass President Hoover, whom Leguía admired greatly. He committed himself to eliminate the clause from the treaty and said he would demand the same from Chile.

The ambassadors from Chile and Peru in Washington submitted the draft to the secretary of state on May l4th. The anti-Bolivian clause was not part of this draft. The secretary of state therefore invited the Bolivian charge d'affairs in Washington, Jorge de la Barra, and showed him the text of the Chilean-Peruvian treaty. He remarked that because of the intervention of the United States the anti-Bolivian clause had been eliminated; therefore, Stimson asked that Bolivia in turn, as a sign of gratitude and reciprocity should not insist in sustaining her dispute with Paraguay in the League of Nations behind the United States’ back. De la Barra reminded Stimson that the question with Paraguay would be resolved with the help of the United States.(18) On May l7th, President Hoover announced that the Tacna-Arica controversy had been resolved, due to the good offices of the United States, and not according to the arbitration originally asked by the interested parties.

In March of 1929, the American minister in La Paz informed that the Bolivian press was constantly publishing a series of articles against Chile that Bolivians had decided to boycott the purchase of Chilean products and there was a campaign aiming that Bolivian enterprises should discharge employees of Chilean nationality. He noted that most of the anti-Chilean campaign was directed towards the Chilean minister of foreign affairs, Conrado Rios Gallardo, who was described as one of the worst enemies of Bolivia. The American envoy reported a series of protests taking place in Bolivia commemorating the 5Oth anniversary of the occupation of Antofagasta. Consequently, Rios Gallardo had asked that the Bolivian envoy to Santiago be dismissed as persona non grata because he had flown the Bolivian flag at half mast in the legation in Santiago on February l4th as remembrance to the captive Antofagasta.

From Santiago, Culbertson reported on the subject:

Ambassador Bianchi periodically visited the Bolivian Ministry of Foreign Affairs to protest anti-Chilean editorials and maintained that the whole campaign originated in the Bolivian Ministry of Foreign Affairs itself. Envoy Martin did not rule out an imminent rupture of the relations between Chile and Bolivia.

In another communication, Culbertson insisted that the relations between the two countries were very bitter and could turn into an armed clash at any moment. He described Minister Rios Gallardo as a very young man, inexperienced in international affairs, and with a deep hatred for Bolivia. On evaluating the situation, the American envoy suggested to keep Bolivia out of the dispute until it was finally settled. Once this was accomplished, and provided Bolivia showed a sensible and constructive position, he was sure Chile and Bolivia would be able to reach an agreement on the maritime problem.

On May l7th, Secretary Stimson told the press that the agreement between Chile and Peru could facilitate a solution to Bolivian landlocked status. Consequently, Minister Dávila verbally protested to the secretary of state, who explained that he had not signed anything and that he had merely answered a question from a journalist. Dávila insisted to Stimson that there were no pending problems between Chile and Bolivia, as the past controversy had been settled with the Treaty of 1904. He added that the anti-Bolivian feelings in Chile were too deep to allow any favorable agreement towards Bolivia. (22)

From Lima, Ambassador Moore reported that Leguía and Figueroa had signed the draft of a treaty on June 3rd; it contained changes in the text proposed by Hoover. Meanwhile, in Washington the Bolivian minister, Eduardo Diez de Medina. along with Mr. De la Barra, visited the secretary of state and informed him that in accordance with Stimson’s suggestion, Bolivia would once again stop insisting on the port’s problem until the final agreement of the Tacna-Arica question was made public. Referring to the relations between Bolivia and Paraguay, Minister Diez de Medina reiterated that Bolivia had instructed its delegates to the conciliation commission to try to obtain a peaceful agreement to the dispute. On departing, Diez de Medina repeated that the port question was a vital matter to Bolivia, and that at the right time, the matter would be reiterated.

On July 3rd, Minister Diez de Medina met with the secretary of state to present a protest to the United States for the inclusion of the anti-Bolivian clause in a secret protocol which was part of the treaty proposed by Hoover. The secretary of state denied any knowledge of such secret protocol, and said that the fact was that the United States was committed that such a clause would not be part of the treaty and that this commitment had been made public with the Hoover proposal, which did not include any secret protocol.

Later on, Under-Secretary White mentioned to Diez de Medina that the American government had no knowledge of any secret pact and that the clause that was part of the original treaty had been eliminated at the request of the United States. White considered that such a clause did not isolate Bolivia from the sea, but that it established instead that no part of the controversial territory now in possession of either Peru or Chile would be conceded to a third party without previous agreement between them, and at the same time, there would he no change in the present system of international railways. Diez de Medina said that that was correct, however, it meant closing all doors to Bolivia, inasmuch as Peru would veto any effort by Chile and vice versa, as both countries had extremely opposite interests in their relations with Bolivia. In other words, the agreement intended to "lockup Bolivia."

The secretary of state requested information from his envoys in Lima and Santiago on the evidence of the alleged protocol.(25) From Santiago, Culbertson transmitted the information obtained from the minister of foreign affairs that the protocol had been incorporated as an integral part of the Treaty of Lima and it established in its first article that neither Chile nor Peru could, without previous agreement, concede to a third party the totality or part of the territories which, as of that date, were under their respective sovereignties; neither could they, without that condition, construct new international railroads through the territories. Culbertson insisted that the governments of Chile and Peru wished to maintain confidential the terms of the treaty and the protocol until both had signed it, and advised not to insist on the matter. Thus, the ceremony finally took place on July 29.

In his memoirs, Culbertson wrote that the protocol clause was probably drafted by Felix Nieto del Rio, who took the idea from the sixth article of the Chilean-Bolivian Treaty of 1866 which provided the dependence of both signatories for the transfer of the territory to a third power. He added that the excuse Chile gave for using this clause was in response to the threat of a railway line from Tacna to La Paz, assuming that Peru would construct it, in detriment to Chilean domain and interest in Bolivia. Culbertson justified the clause in the protocol in its final form as positive because it forced Chile and Peru to agree in resolving jointly the Bolivian question, thus avoiding the traditional power game these countries had had in the past, to utilize Bolivia as an instrument against each other. Culbertson finally observed that Bolivia could not resolve the maritime question until she let the results of the War of the Pacific rest, and could face the problem with a modern criteria: i.e., on the economic rather than sentimental or historical ground. He added that the settlement should be based on ample and generous mutual concessions between Bolivia and Chile. (27)

On August 2nd, President Hoover, acting as arbitrator, in the Tacna and Arica dispute, issued the verdict where he referred to the activities of the plebiscite commission and the exercise of good offices which was carried out parallel to the arbitration. President Hoover said that these actions were carried out at the request of the interested parties, and not as a duty of arbitrator. He then presented to Chile and Peru a summary of the points of agreement which should serve as basis for the solution of the Tacna-Arica problem.

Hoover’s proposal was accepted by both governments on June 3rd and they signed a treaty. Its first article stated that the controversy originated in Article III of the Treaty of Ancón had definitely been resolved. Actually, the US participation in solving the Tacna-Arica dispute made possible the enactment of a solution already proposed by Chile to Peru four decades earlier. However, such a solution was never accepted by the latter until President Leguía could legitimate it as a purported American proposal submitted by President Hoover.

Bolivia was appalled at the role played by the United States in allowing Chile and Peru to maintain the anti-Bolivian clause in a secret protocol, in spite of the fact that the US had been committed to eliminate it from the original text. The secretary of state expressed his disapproval with the contents of the clause; he said he had no knowledge of the secret protocol and affirmed that it had been concealed from the American administration.

Regarding the clause in the complementary protocol the Bolivian government declared:

The continental press strongly supported Bolivia, and the Bolivian press editorialized against the protocol for its negative aspect on the controversy over the port.

In Washington, the Peruvian chargé d’Affairs, Bedoya, visited Secretary of State Stimson and gave him a message from the Peruvian minister of foreign affairs asking that the United States not support Bolivia in its claim for a port in the Pacific. The secretary of state assured him that the United States would not interfere or encourage any action in that regard, as it had already been established that the port’s problem concerned only Peru, Chile and Bolivia, and Stimson would avoid irritating any of those countries and would not interfere. (30)

With this agreement, which became known in Bolivia as "double lock," Chile managed to overrule Peru in any attempt to solve the Bolivian confinement, and Bolivia's landlocked status was sealed with the support of American diplomacy. Although the clause was not incorporated in President Hoover's proposal, its inclusion and wording were polished with the help of envoy Culbertson in Santiago; therefore establishing certain responsibility, which undoubtedly implicated American diplomacy in the final result.

The Tacna-Arica settlement consolidated the prestige and the hegemonic role of the United States in the hemisphere. This settlement intended to balance the interest of Peru and Chile at the expense of Bolivia’s expectancy to have an outlet to the sea. The United States diplomacy accepted pragmatically that Chile and Peru deserved better attention than Bolivia, a country that was not only peripheral, but also was the weakest in the region.

Settlement of disputes in the periphery are important if those settlements benefit directly and are of direct interest to the world powers. To this effect, the terms of the settlement reflect mostly the interests of a hegemonic power rather than those of the peripheral states, although among peripheral states such terms also reflect differentials in power positions.