Balmaceda found himself in the difficult position of being unable to appoint any ministers that could control a majority in the senate and chamber of deputies, and at the same time act in accordance with his own views of the administration of public affairs.

As protest against the action of President Balmaceda, the vice-president of the senate, Waldo Silva, and the president of the chamber of deputies, Ramón Barros Luco, issued a proclamation appointing Captain Jorge Montt commander of the navy, and stating that the navy could not recognize the authority of Balmaceda so long as he did not administer public affairs in accordance with the constitutional law of Chile.

On 7 January the Blanco Encalada, accompanied by the Esmeralda and O'Higgins and other vessels, sailed out of Valparaiso harbour and proceeded northwards to Tarapacá to organize armed resistance against the president.

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.

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.

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 troops at Iquique and Coquimbo were necessarily isolated from the rest and from each other, and military operations began, as in the campaign of 1879 in this quarter, with a naval descent upon Pisagua followed by an advance inland to Dolores.

The Congressional forces failed at first to make good their footing (16–23 January), but, though defeated in two or three actions, they brought off many recruits and a quantity of munitions of war.

On 26 January they retook Pisagua, and on the 15 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.

The Pisagua line of operations was at once abandoned, and the military forces of the congress were moved by sea to Iquique, whence, under the command of Colonel Estanislao del Canto, they started inland.

The battle of Pozo Almonte, fought on 7 March, was desperately contested, but Del Canto was superior in numbers, and Robles was himself wounded and then executed inside a field hospital and his army dispersed.

The garrison of Tacna (at that time part of Chile) was driven into Peru, others joined the Congressional Army and the rest made a laborious retreat from Calama to Santiago, in the course of which it twice crossed the main chain of the Andes.

Early in April a portion of the revolutionary squadron, comprising the armoured frigate Blanco Encalada and other ships, was sent southward for reconnoitring purposes and put into the port of Caldera.

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 20,000 men was now raised by the junta, but with weapons and ammunition for only 9,000, 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.

Körner 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.

By the end of July Del Canto and Körner 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.

The Presidential Army had four divisions; Santiago, Valparaiso, Concepcion and Coquimbo, and President Balmaceda had ordered his generals to not engage the enemy unless they had a combined force of al least 14,000 men.

This massacre had an important effect on the Chilean people, gaining more support for the Junta and making so that those loyal to the President started to waver on their convictions.

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 president.

After the battle of Placilla it was clear to President Balmaceda that he could no longer hope to find sufficient strength amongst his adherents to maintain himself in power, and in view of the rapid approach of the rebel army he abandoned his official duties to seek asylum in the Argentine legation.