disputed area, social reforms, armistice, final settlement, charter member
Paraguayan history after the war was largely an effort to reconstruct the country. Immigration was encouraged, and Paraguay established subsidized agricultural colonies. The unsettling effects of the war, however, were apparent for many decades, particularly from 1870 to 1912, when no president was able to serve out a full term. Subsequently, periods of political stability alternated with periods of ferment and revolt. The administration (1912-1916) of Eduardo Schaerer was relatively enlightened. The country remained neutral and prosperous during World War I (1914-1918), and the administrations of Manuel Gondra (1920-1921), Eusebio Ayala (1921-1923), and Eligio Ayala (1923-1928) were on the whole periods of peace and progress. The border with Bolivia in the Chaco Boreal, which had never been formally drawn, was the scene of numerous incidents between 1929 and 1932. In the latter year a full-scale war broke out when the area was invaded by Bolivia. An armistice was declared in 1935. In the final settlement, made by an arbitration commission in 1938, Paraguay was given about three-fourths of the disputed area.
After the war, the government was reorganized to permit widespread economic and social reforms. By a new constitution adopted in 1940, the state was given the power to regulate economic activities and the government was highly centralized. Paraguay declared war on Germany and Japan on February 7, 1945. The country subsequently became a charter member of the United Nations.
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