Summary

Through Chile’s arid Province of Tarapacá, no navigable rivers flow, and before the advent of mechanized road transport, railways were an expensive necessity for the nitrate industry. Freight rates could be a hundred times, per ton-km, those charged by the shipping companies which forwarded the nitrates to Europe. The Nitrate Railways Co. Ltd. was formed in London in 1882, before the official ending of the War of the Pacific, but it traced its origins back to pre-War conces- sions granted by the Government of Perú. The Company ́s directors considered that these concessions granted it exclusive rights over the rail transportation of nitrates in the Province, but eventually they had to reconcile themselves to compe- tition from newly formed railway companies. The Nitrate Railways’ high freight rates were due in part to the high costs of railway operation in the zone in the steam age, but they also contained a monopoly rent element. Once the Agua Santa and Junín Railways started to operate, competition forced rate reductions. Howe- ver, unlike these two new entrants in the market, the Nitrate Railways managed to survive the crash of the Tarapacá Province ́s nitrate industry, in 1930, and lasted 20 more years as an independent company. From 1928 onwards it had to compete in a much reduced market with the State-owned Iquique to Pintados Railway, built to break the monopoly hold of the Nitrate Railways over nitrate factories in the center and south of the Province, most of which had closed down by the time it had become fully operational.