The chambers were now only waiting for a suitable opportunity to assert their authority. In 1890 it was stated that President Balmaceda had determined to nominate and cause to be elected as his successor at the expiration of his term of office in 1891 one of his own personal friends. This question of the election of another president brought matters to a head, and congress refused to vote supplies to carry on the government. To avoid trouble Balmaceda entered into a compromise with congress, and agreed to nominate a ministry to their liking on condition that the supplies for 1890 were voted. This cabinet, however, was of short duration, and resigned when the ministers understood the full amount of friction between the president and congress. Balmaceda then nominated a ministry not in accord with the views of congress under Claudio Vicuña, whom it was no secret that Balmaceda intended to be his successor in the presidential chair, and, to prevent any expression of opinion upon his conduct in the matter, he refrained from summoning an extraordinary session of the legislature for the discussion of the estimates of revenue and expenditure for 1891.
For the present, and without prejudice to the future, command of the sea was held by Montt's squadron (January). The rank and file of the army remained faithful to the executive, and thus in the early part of the war the Gobiernistas, speaking broadly, possessed an army without a fleet, the congress a fleet without an army. Balmaceda hoped to create a navy; the congress took steps to recruit an army by taking its sympathizers on board the fleet.
Immediately on the outbreak of the revolution President Balmaceda published a decree declaring Montt and his companions to be traitors, and without delay organized an army of some 40,000 men for the suppression of the insurrectionary movement. While both sides were preparing for extremities, Balmaceda administered the government under dictatorial powers with a congress of his own nomination. In June 1891 he ordered the presidential election to be held, and Claudio Vicuña was duly declared chosen as president of the republic for the term commencing in September 1891.
Preparations had long been made for the naval pronunciamento, and in the end but few vessels of the Chilean navy adhered to the cause of Balmaceda. But amongst these were two new and fast torpedo gunboats, Almirante Condell and Almirante Lynch, and in European dockyards (incomplete) lay the most powerful vessel of the navy, the Arturo Prat, and two fast cruisers. If these were secured by the Balmacedists the naval supremacy of the congress would be seriously challenged. The resources of Balmaceda were running short on account of the heavy military expenses, and he determined to dispose of the reserve of silver bullion accumulated in the vaults of the Casa de Moneda in accordance with the terms of the law for the conversion of the note issue. The silver was conveyed abroad in a British man-of-war, and disposed of partly for the purchase of a fast steamer to be fitted as an auxiliary cruiser and partly in payment for other kinds of war material.
The Congressional forces failed at first to make good their footing (16th-23rd of January), but, though defeated in two or three actions, they brought off many recruits and a quantity of munitions of war. On the 26th they retook Pisagua, and on the 15th of February the Balmacedist commander, Eulogio Robles, who offered battle in the expectation of receiving reinforcements from Tacna, was completely defeated on the old battlefield of San Francisco. Robles fell back along the railway, called up troops from Iquique, and beat the invaders at Huara on the 17th, but Iquique in the meanwhile fell to the Congressional fleet on the 16th.
The Revolutionary Junta, created on April 13th, now firmly established in Iquique prosecuted the war vigorously, and by the end of April the whole area was in the hands of the "rebels" from the Peruvian border to the outposts of the Balmacedists at Coquimbo and La Serena. The Junta now began the formation of a properly organized army for the next campaign, which, it was believed universally on both sides, would be directed against Coquimbo. The necessary arms and ammunition were arranged for in Europe; they were shipped in a British vessel, and transferred to a Chilean steamer at Fortune Bay, in Tierra del Fuego, close to the Straits of Magellan and the Falkland Islands, and thence carried to Iquique, where they were safely disembarked early in July 1891. A force of 10,000 men was now raised by the junta, and preparations were rapidly pushed forward for a move to the south with the object of attacking Valparaiso and Santiago, because in a few months the arrival of the new ships from Europe would reopen the struggle for command of the sea so the Congressional party could no longer aim at a methodical conquest of successive provinces, but was compelled to attempt to crush the Presidentialist forces at a blow.
Where this blow was to fall was not decided up to the last moment, but the instrument which was to deliver it was prepared with all the care possible under the circumstances. Del Canto was made commander-in-chief, and an ex-Prussian officer, Emil Korner, chief of staff. The army was organized in three brigades of all arms, at Iquique, Caldera and Vallenar. Korner superintended the training of the men, gave instruction in tactics to the officers, caused maps to be prepared, and in general took every precaution that his experience could suggest to ensure success. Del Canto was himself no mere figurehead, but a thoroughly capable leader who had distinguished himself at Tacna (1880) and Miraflores (1881), as well as in the present war. The men were enthusiastic, and the officers unusually numerous. The artillery was fair, the cavalry good, and the train and auxiliary services well organized. About one-third of the infantry were armed with the Mannlicher magazine rifle, which now made its first appearance in war, the remainder had the Gras and other breech-loaders, which were also the armament of the dictator's infantry. Balmaceda could only wait upon events, but he prepared his forces as best he was able, and his torpederas constantly harried the Congressional navy. By the end of July Del Canto and Korner had done their work as well as time permitted, and early in August the troops prepared to embark, not for Coquimbo, but for Valparaiso itself.
Balmaceda was surprised, but acted promptly. The first battle was fought on the Aconcagua river at Concón on the 21st. The eager infantry of the Congressional army forced the passage of the river and stormed the heights held by the Gobiernistas. A severe fight ensued, in which the troops of President Balmaceda were defeated with heavy loss. The killed and wounded of the Balmacedists numbered 1,600, and nearly all the prisoners, about 1,500 men, enrolled themselves in the rebel army, which thus more than made good its loss of 1,000 killed and wounded.
There, on August 28th, the final struggle in the conflict took place: the decisive battle of La Placilla. Concon had been perhaps little more than the destruction of an isolated corps; the second battle was a fair trial of strength, for Balmaceda's generals Barbosa and Alcerreca were well prepared, had massed their troops in a strong position and had under their command the greater part of the existing forces of the dictator. But the splendid fighting qualities of the Congressional troops and the superior generalship of their leaders prevailed in the end over every obstacle and resulted in victory for the rebels. The government army was practically annihilated, 941 men were killed, including Barbosa and his second in command, and 2,402 wounded. The Congressional army lost over 1,800 men.
Valparaiso was occupied the same evening and three days later the victorious insurgents entered Santiago and assumed the government of the republic soon afterwards. There was no further fighting, for so great was the effect of the battles of Concon and La Placilla that even the Coquimbo troops surrendered without firing a shot.
The president remained concealed in the Argentine legation until September 18th. On the morning of that date, when the term for which he had been elected president of the republic terminated, he committed suicide by shooting himself. The excuse for this act, put forward in letters written shortly before his end, was that he did not believe the conquerors would give him an impartial trial. The death of Balmaceda finished all cause of contention in Chile, and was the closing act of the most severe and bloodiest struggle that the country had ever witnessed. In the various engagements throughout the conflict more than 10,000 lives were lost, and the joint expenditure of the two governments on military preparations and the purchase of war material exceeded £10,000,000 sterling.
The defeat of the presidential forces opened a so-called "pseudo-parliamentary" period in Chile's history, which lasted from 1891 to 1925. As opposed to a "true parliamentary" system, the executive was subject to the legislative but checks and balances of executive over legislative were weakened. The position of President remained as head of state but its powers and control of the government were reduced.