¹ For example, Warren, Harris G., Paraguay and the Triple Alliance: The Post-War Decade 1869–1878 (Austin, Texas, 1978)Google Scholar and The Rebirth of the Paraguayan Republic. The First Colorado Era, 1878–1904 (Pittsburgh, 1985)Google Scholar; Miranda, Aníbal, Apuntes Sobre el Desarrollo en el Paraguay (2 vols, Asunción, 1979 and 1980)Google Scholar; Aquino, Ricardo Caballero, La Segunda República Paraguaya (Asunción, 1984)Google Scholar; Herken, Juan C., Ferrocarriles, Negocios, y Política en el Paraguay (Asunción, 1984)Google Scholar and El Paraguay Rural Entre 1869 y 1913 (Asunción, 1984)Google Scholar and El Paraguay Rural Entre 1869 y 1913 (Asunción, 1984)Google Scholar; Lewis, Paul H., ‘Paraguay From the War of the Triple Alliance to the Chaco War 1870–1932,’ in Bethell, Leslie, (ed.), Cambridge History of Latin America, vol. V (London, 1986), pp. 475–96.CrossRefGoogle Scholar

² This became clear as early as in the Congress of 17 June 1811. In the note of 20 July to the Buenos Aires Junta the Paraguayans already stated their decision to retain their autonomy until the establishment of new political institutions by a General Congress, provided that the arrangements were approved by the inhabitants of the Province. They also took advantage of the opportunity to restate old trade claims concerning the taxation of Paraguayan products. Chaves, Julio César, La Revolución Paraguaya de la Independencia (Asunción, 1961), p. 58.Google Scholar It is also worth noting, nevertheless, that die-hard royalists and other pro-Spanish elements manipulated this anti-porteño sentiment to subtly undermine the pro-independence and pro-American content of the political discourse of the Buenos Aires Junta. For a liberal (in the Latin American sense, i.e. a North American conservative) discussion of this issue see Peña, Benjamín Vargas, Espías del Dictador Francia (Asunción, 1982)Google Scholar and especially Secreta Política del Dictador Francia (Asunción, 1985).Google Scholar

³ The expression geopolitical is used here in a very restrictive sense and only to denote the political implications of Paraguay's geographic situation. Brazil and Argentina have traditionally considered Paraguay their sphere of influence and have vied to preserve or enhance whatever influence they have acquired. Moreover, they have generally done so in the broader framework of an expansionist geopolitical rationale. Thus, a geographic fact had far-reaching political consequences.

⁴ This will give a grand total of approximately 59 million gold pesos in contrast to a total of 34 million, circa 1917, estimated in Table 4. Note, however, that the value of the investment of the foreign companies not included in Table 4 was about 12.4 million gold pesos (excluding Puerto Guarani and Companhia Minas e Viação de Mato Grosso) and that Table 4 does not take into account some important post-1917 investments, chiefly the meat packing plant Liebig's. The difference that remains, approximately 6 million gold pesos, can be explained partly by investment in paper pesos, partly by differences in the estimations of the value of the livestock sector.

⁵ Pastore, Carlos, La Lucha Por La Tierra en el Paraguay (Montevideo, 1972), pp. 148–52.Google Scholar

⁶ For example, Warren, , Paraguay and the Triple Alliance, pp. 285–7.Google Scholar

⁷ In this regard, an aspect generally ignored is the effect of the Demonetisation Law of 31 July 1871. This law dealt with the fact that the pre-1869 issues of paper money had lost all value. By an unusual provision, however, the law ‘placed in effect the main burden of the devaluation on the debtor rather than on the creditor and forced large-scale liquidation of property’. Triffin, Robert, Monetary and Banking Reform in Paraguay (Washington, 1946), p. 3.Google Scholar

⁸ Zárate, Teresa, ‘Parcelación y Distribución de las Tierras Fiscales en el Paraguay (1870–1904),’ Revista Paraguaya de Sociología, vol. 10, no. 6 (1973), p. 137Google Scholar; also Pastore, , La Lucha Por la Tierra, pp. 233–44.Google Scholar

⁹ Reber, Vera Blinn, ‘Commerce and Industry in Nineteenth Century Paraguay: The Example of the Yerba Mate’, The Americas, XLII, no. 1-2 (07 1985), pp. 48 and 38.Google Scholar

¹⁰ For an eloquent example, see Barret, Rafael, Lo que son los Yerbales (Montevideo, 1911).Google Scholar

¹¹ Reber, , ‘Commerce and Industry’, p. 33.Google Scholar

¹² Decoud, López, Album Gráfico, p. xxGoogle Scholar, and Schurz, , Paraguay pp. 81–2.Google Scholar

¹³ Laino, Domingo, Paraguay: De La Independencia a la Dependencia (Asunción, 1976), p. 171.Google Scholar

¹⁴ Schurz, , Paraguay, p. 91.Google Scholar

¹⁵ Ibid., p. 91.

¹⁶ Liebig's Extract of Meat Co., Liebig's en el Paraguay (Bologna, 1965), pp. 81–2, 86Google Scholar; Schurz, , Paraguay, pp. 73–6Google Scholar, and Paraguay, Secretaría General de Gobierno, Colección Legislativa 1870–1923 (Asunción, 1925).Google Scholar

¹⁷ Gauld, Charles A., The Last Titan: Percival Farquhar, American Entrepreneur in Latin America (Stanford, 1964), p. 221.Google Scholar

¹⁸ Liebig's, , Liebig's en el Paraguay, p. 87.Google Scholar

¹⁹ The discussion of the meat sector draws heavily from Diego Abente, ‘The Political Economy of Meat in Paraguay’.

²⁰ Schurz, , Paraguay, pp. 124–5Google Scholar, and Herken, , El Paraguay Rural, pp. 136–41.Google Scholar

²¹ For example, in a letter to the Paraguayan Foreign Minister, the US Minister to Uruguay and Paraguay asked: ‘Under the circumstances, would it not be a wise move on the part of the Government of Paraguay to give the monied men of the United States an object lesson in fair dealing which they would not overlook?’ William R. Finch to Antolín Irala, Montevideo, 13 June 1904, in United States National Archives (RG 59), General Records of the Department of State, Despatches from United States Ministers to Paraguay and Uruguay (hereafter referred to an USNA DUSMPU), Microfilm 128, roll 17.

²² White, Richard A., Paraguay's Autonomous Revolution (Albuquerque, 1978).Google Scholar Dr White's work is a fine piece of research full of archival data. Some of the conclusions he draws, however, are derived more from a preconceived theoretical framework rather than from the facts themselves. Furthermore, although Dr White's arguments are limited to the dictatorship of Francia, the tendency of the revisionist literature is to extrapolate them to the López period as well.

²³ While it is obvious that Francia's policies did not destroy the rural oligarchy, to provide a clear profile of the pre-1870 elite and its internecine conflicts is a difficult task still to be performed. For a very interesting and fresh approach see Cooney, Jerry W. ‘The Yerba Mate and Cattle Frontier of Paraguay, 1776–1811: Social, Economic, and Political Impact’, Paper presented at the XIV International Convention of the Latin American Studies Association, New Orleans, La., 17–19 03 1988.Google Scholar I suspect that another important cleavage was that pitting farmers against cattle-raisers.

²⁴ Williams, John Hoyt, ‘Paraguay's Nineteenth-Century Estancias de la República, Agricultural History, XLVII, no. 3 (07 1973), pp. 206–7, 212.Google Scholar

²⁵ Ensayo sobre el Dr Francia y la Dictadura en Sudamérica, Segunda Edición corregida y aumentada (Asunción, 1985), pp. 146–7.Google Scholar

²⁶ While relying on Chaves in attempting to substantiate his claims about the alleged ‘popular’ origin of Francia's dictatorship, White chooses to ignore what Chaves says a few lines before, namely that ‘Comerciantes, ganaderos, pequeños industriales, productores, veían que aquel gobierno les aseguraba el desenvolvimiento tranquilo de sus actividades, la obtención de seguras ganancias. […] Se había impuesto una férrea disciplina social…los malhechores eran perseguidos sin descanso; desaparecieron los ladrones, los asesinos, los mendigos’. The references are to Chaves, Julio CésarEl Supremo Dictador (Madrid, 1964), p. 193Google Scholar [emphasis added].

²⁷ Paraguay's Autonomous Revolution, p. 78. For Ibañez's background see Pfannl, Roberto Quevedo, ‘Villa Real de la Concepción en los Días de la Independencia’, Historia Paraguaya, Anuario del Instituto Paraguayo de Investigaciones Históricas, vol. 6–7 (1961–1962), pp. 60–8Google Scholar; and de Arrellaga, Renée Ferrer, Un Siglo de Expansión Colonizadora (Asunción, 1985), pp. 37, 42–3, 59, 102.Google Scholar

²⁸ Vázquez, José Antonio, El Doctor Francia Visto y Oido por sus Contemporáneos (Asunción, 1961), p. 717.Google Scholar For the prominent role of the de Roxas Aranda in the tiny elite of colonial Paraguay see Kruger, HildegardDer Cabildo von Asuncion: Stadtverwaltung u. Stadt. Obersicht in d. I. Halfte d. 18. Jh. (1690–1730) (Frankfurt am Main, 1979), pp. 177, 182–5, 190, and 195–6Google Scholar; Quevedo, Roberto, Paraguay Años 1671 a 1681 (Asunción, 1984), especially pp. 98, 191, 195, 198–9Google Scholar; and Mérida, José Luis Mora, Historia Social del Paraguay, 1600–1650 (Sevilla, 1973), p. 217.Google Scholar Francia himself had also been a member of the exclusive Cabildo of Asunción since 1808 and in 1809 was appointed by it to the Junta Suprema of Spain in his capacity as a Patricio cabalmente idóneo (Chaves, Julio César, La Revolución Paraguaya, p. 71).Google Scholar

²⁹ As a result, Carlos A. López inherited part of the vast possessions of Roxas, including the famous estancia of Rosario where he retired during the long dictatorship of Francia. Chaves, Julio César, El Presidente López: vida y gobierno de Don Carlos (Buenos Aires, 1955), p. 26.Google Scholar

³⁰ Abente, Diego, ‘The Liberal Republic and the Failure of Democracy’, ‘The Americas’ (forthcoming, 04 1989).Google Scholar

³¹ Space limitations preclude further elaboration on the distinctions between the period of Francia and that of the Lópezes. In a nutshell, my argument is that under Francia the state was basically mercantilist while under the Lópezes it developed a patrimonialist character.

³² The emergence of an active native elite had not been a purely economic development. Also the political forces that initially had little if any latitude in setting policies gradually acquired a degree of independence from the dominant economic elites and foreign powers.

³³ Agricultural production, on the other hand, was undertaken by small peasants who sometimes owned, sometimes rented, but more often just occupied small parcels. The only cash crop of any significance was tobacco.

³⁴ Arad, , ‘La Ganadería en el Paraguay,’ p. 214.Google Scholar

³⁵ Together with the Banco de España y del Río de la Plata and the Banco Mercantil, A. Perasso & Cia. went bankrupt during the great crisis of 1920. See Schurz, , Paraguay, pp. 81–2.Google Scholar

³⁶ Anuario Estadístico de 1888 and Memoria 1901 1902, as cited by Miranda, Aníbal, Apuntes sobre el Desarrollo en el Paraguay, vol. 1, pp. 141 and 145.Google Scholar

³⁷ For this reason I believe that discarding the thesis identifying liberalism with the merchant elites and conservatism with the rural oligarchy based on the argument of cross-ownership is, at the very least, premature. More research is needed to clarify this issue.

³⁸ As Miguel Angel González Erico, for instance, argues in his ‘Estructura y Desarrollo del Comercio Exterior del Paraguay, 1870–1918’, Revista Paraguaya de Sociología vol. 12, no. 3 (1975). PP. 125–55.Google Scholar

³⁹ Ibid., p. 143.

⁴⁰ Some efforts to provide a quantitative picture of the structure of the economy include attempts to weigh the importance of the three sectors of the economy based on census data. For example, in his Apuntes Sobre el Desarrollo Miranda disaggregates the national product assigning more than 80% to agriculture and livestock activities (vol. 1, p. 146). The problem with this finding is that it does not clearly discriminate between the processes of production and commercialisation in the primary sector, thus obscuring the important difference we are examining here.

⁴¹ An examination of the foreign trade of Paraguay shows that excluding yerba, tannin, lumber, and meat products, all controlled by foreign companies, the main items left to the domestic elites were tobacco and hides. Together they accounted for 30% of Paraguay's export earnings in 1916, 34% in 1912–14 and in 1920, and 16% in 1926. In general that percentage oscillated between 15 and 35%, the rest largely made up by tannin, yerba, and meat products. Data from Paraguay, Anuario Estadístico, several years; Esteves, Freire, ‘Historia Contemporánea’, p. 203Google Scholar, and US Department of Commerce, Commerce Yearbooks, several years.

⁴² Schurz, , Paraguay, p. 190.Google Scholar

⁴³ Ibid., p. 144.

⁴⁴ Ibid., pp. 48 and 144, and González, J. Natalicio and Ynsfran, Pablo M., El Paraguay Constitucional (Paris, 1929), p. 151.Google Scholar That was also the opinion of the British Consul, as quoted in Herken, , Ferrocarriles y Negocios, pp. 113–14.Google Scholar

⁴⁵ Schurz, , Paraguay, pp. 182–3Google Scholar; Triffin, , Monetary and Banking Reform, p. 9Google Scholar; Erico, González, ‘Estructura y Desarrollo del Comercio Exterior’, p. 137Google Scholar; and Paoli, Juan Bautista Rivarola, Historia Monetaria del Paraguay (Asunción, 1982), pp. 254–5.Google Scholar

⁴⁶ Esteves, Freire, ‘Historia Contemporánea’, pp. 189–90.Google Scholar

⁴⁷ Warren, Paraguay and the Triple Alliance; Schurz, , Paraguay, pp. 174 6Google Scholar; Gonzalez Erico, ‘Estructura y Desarrollo del Comercio Exterior’.

⁴⁸ Esteves, Freire, ‘Historia Contemporánea’, p. 189Google Scholar, Liebig's, , Liebig's en el Paraguay, p. 64.Google Scholar

⁴⁹ Warren, , ‘The Paraguayan Revolution’, p. 374Google Scholar; Aquino, Caballero, ‘La Segunda República’, El Siglo, Montevideo, 12 08, 1904Google Scholar, article enclosed in W. R. Finch to John Hay, Despatch no. 768, Montevideo, 15 Auguat 1904, in USNA DUSMPU, Microfilm 128, roll 17.

⁵⁰ Diario Nuevo, Montevideo, 13 08, 1904Google Scholar, article enclosed in W. R. Finch to John Hay, Despatch No. 768, Montevideo, 15 August, 1904, in USNA DUSMPU, Microfilm 128, roll 17.

⁵¹ These policies were characterised by the Revolutionary Manifesto thus: ‘Inicuas leyes administrativas y financieras han dado al traste con lo poco que se ha salvado de naufragios anteriores. Agredido el comercio honrado, ha recibido fuertes quebrantos en sus intereses.’ Cited in Jaeggli, Alfredo L., Albino Jara: Un Varón Meteórico (Buenos Aires, 1963), p. 58.Google Scholar

⁵² Triffin, , Monetary and Banking Reform, p. 9Google Scholar; Paoli, Rivarola, Historia Monetaria, pp. 236–45.Google Scholar

⁵³ Esteves, Freire, ‘Historia Contemporánea’, pp. 88–9Google Scholar; also Herken, Juan C., ‘La Revolución Liberal de 1904 en el Paraguay: El Trasfondo Socio-Económico y la Perspectiva Británica’, Revista Paraguay a de Sociología, vol. 22, no. 62 (Enero-04 1985), pp. 143–7.Google Scholar The recent re-edition of Fulgencio R. Moreno's 1902 pamphlet La Cuestión Monetaria en el Paraguay, Reedición Clásicos Colorados (Asunción, 1985)Google Scholar, lends even further support to the interpretation advanced in this article.

⁵⁴ ‘Paraguay. The last revolution and the present polities’, in O'Brien to E. Root, Despatch No. 64, Montevideo, 12 December 1905, in USNA DUSMPU, M-128, roll 18.

⁵⁵ Warren, Harris G., ‘The Paraguayan revolution of 1904’, The Americas, XXXVI, no. 3 (01 1980), p. 384Google Scholar; and Aquino, Caballero, La Segunda República, p. 214.Google Scholar

⁵⁶ Jaeggli, ,. Albino Jara, p. 51.Google Scholar

⁵⁷ Warren, , ‘The revolution of 1904’, p. 374Google Scholar; El Siglo, Montevideo, 12 08 1904.Google Scholar Rafael Barret insists that the ‘youth and the merchants of the country sympathized with the Revolution’, and that the success of the movement was assured after Mr Gaona ‘congregated the merchants’ and secured their financial support. ‘The last Revolution’, pp. 3, 6.

⁵⁸ The Banco Mercantil group was headed by Juan Bautista Gaona and had close connections to La Industrial Paraguaya, the Azucarera Paraguaya and some of the most important mercantile houses. The Rius and Jorba group had close links also with powerful merchants and with the Molino Nacional. Later, this group was strengthened by the creation of the Banco de la República that in 1911–12 supported the brief cívico-colorado coalition. In the 1922–3 civil war, however, the group backed the radical gondristas against the schaeristas. The Banco Mercantil group quite never recovered from the 1920 crisis. The Banco de la República lasted a decade longer, but eventually fell as a result of the Great Depression and the new economic policies adopted to finance the Chaco War.

⁵⁹ Herken, , Ferrocarriles y negocios, pp. 23–4.Google Scholar As in all concessions there is always the possibility of side payments. None has been suggested in this case, but even if it did take place the objective fact is that the decision did prevent extreme concentration of power in one company.

⁶⁰ Eligio Ayala's 1926 Message to Congress exemplifies this policy well. Referring to the recovery brought about by the meat packing plants, he credited the recovery of livestock to a timely concession ‘to a powerful foreign company’. Cited in Liebig's, , Liebig's en el Paraguay, p. 103.Google Scholar

⁶¹ Herken, Ferrocarriles y Negocios.

⁶² Paraguay, , Anuario Estadístico 1928, p. 33.Google Scholar For an example of the prevailing climate of social dissatisfaction see Gaona, Francisco, Historia Social y Gremial de Paraguay (Buenos Aires, 1967).Google Scholar

⁶³ Erico, González, ‘Estructura y Desarrollo del Comercio Exterior’, pp. 138–9Google Scholar; and Rivarola, , Historia Monetaria, pp. 282–9.Google Scholar

⁶⁴ As Otto Kircheimer notes in his insightful observations of the European scene, which can be applied, mutatis mutandi, to the Paraguayan case. ‘Changes in the Structure of Political Compromise’, in Burin, Frederic S. and Schell, Kurt L. (eds.), Politics, Law, and Social Change. Selected Essays of Otto Kircheimer (New York and London, 1969), p. 133.Google Scholar

⁶⁵ Guggiari, Lorenzo Livieres, La Financiación de la Defensa del Chaco (Asunción, 1983), p. 67.Google Scholar The creation of the Ministry of Economy in 1933 was also part of the strategy to increase state intervention for the purpose of ensuring the success of the war effort. See Seiferheld, Alfredo M., Economía y Petróleo durante la Guerra del Chaco (Asunción, 1983), pp. 392–408.Google Scholar

⁶⁶ Triffin, , Monetary and Banking Reform, pp. 12–13.Google Scholar

⁶⁷ Henderson, I. L., Paraguay. Economic and Commercial Conditions in Paraguay, 1952, Board of Trade, Overseas Economic Surveys, (London, 1952), p.. 2.Google Scholar