In July, 1897, General Roca was nominated for the Presidency by the Convention of the National party, with Dr. Pellegrini in the chair. There was no real opposition to his election. Again and again during a quarter of a century he had proved himself able to cope with the most difficult situations which had arisen in Argentine affairs. In 1890, his firmness and adroitness had saved the country from the agony of a useless political upheaval after the failure of the Celman administration. During the anxious months that followed the panic, his generosity had secured a co-operation of the moderates of Buenos Aires with his own immediate followers in holding back the Radicals and revolutionists in check. During the critical year of 1892, the outbreaks against the Saenz Peña administration increased in violence until it seemed as if the country would be convulsed with a serious civil war, but when Roca stepped in the tide of disorganisation turned, and his firm hand re-established the authority of the Federal government. His prestige and his personality enabled him to count upon an obedience from the chiefs of the provincial factions which was of inestimable value. He possessed those rare and indispensable qualities which make a man a centre around which other men can rally. He had built up the one really national party in the country and was faithful to his friends and his adherents, but sufficiently broad-minded to combine with other parties when the interests of the whole country demanded it.
General Roca entered upon his second presidential term in the beginning of 1898. One of his first acts was to intervene in Buenos Aires province and put an end to a deadlock between the governor and the Provincial Assembly. The boundary dispute with Chile, a question which, in spite of the earnest desire of both governments for peace, might at any time precipitate a ruinous war, was submitted for settlement by arbitration. W. J. Buchanan, the United States Minister at Buenos Aires, named as arbitrator for the northern frontier, quickly announced a decision which was promptly accepted by both parties. The more complicated southern frontier could not so easily be prepared for submission; a serious misunderstanding arose, and both countries felt compelled to spend large sums for armaments which they knew they could ill afford. Happily, a decision was at last rendered in 1902. No question now remains open which is likely to involve the external peace of Argentina.
Internal peace has not been menaced during General Roca's term. The commercial situation of the country has vastly improved. Immigration, which had largely ceased after 1890, has again risen to over a hundred thousand a year. Wheat exports rose from 4,000,000 bushels in 1897 to 61,000,000 in 1900. The total exports in 1899 were $185,000,000, twice as great per capita as the record export of the United States. There have been no issues of paper money, and the value of the currency has risen to forty cents. The government has established a new artificial par at a little more than this sum, and has begun accumulating a gold reserve. A resumption of specie payments is soon expected.
Nevertheless the chief difficulties and preoccupations of the Roca administration have been with financial questions. A deficit of $70,000,000 had accumulated in the few years before 1898, and the interest on the immense public debt makes an equilibrium in the budget almost impossible. Many of the provincial governments have defaulted, and the national government has had to carry their burdens in addition to its own, to satisfy clamorous foreign creditors. In 1901 it was proposed to unify the debt, refunding the whole at a lower rate of interest, and specifically pledging certain sources of public income. This plan had the approval of the government, but the national pride was touched by the latter feature. The populace could not bear the idea of giving a sort of mortgage on the country. The passage of the bill by Congress was met with so many demonstrations of popular disapproval that it was abandoned. This change of front was accompanied by the formation of an alliance between the followers of General Mitre and those of General Roca.
The industrial impetus already acquired by the Argentine Republic is sufficient to carry it over all obstacles, and it seems assured that there will be a rapid settlement of the whole of this immense and fertile plain. Here nature has done everything to make communication easy, and a temperate climate insures crops suited to modern European civilisation. Two grave perils have so far been encountered—namely, a tendency toward political disintegration and an abuse of the taxing power. The former is now remote, for since the railways began to concentrate wealth and influence at Buenos Aires, and to destroy the prestige and political power of the provincial capitals, the national structure built by the patriots of 1853 has stood firmer each year.
The Argentine has had a bitter lesson of the evils of governmental extravagance, and still groans under the burden of a debt which seems disproportionately heavy, but the growth of population and wealth will soon overtake it, and the very difficulties of meeting interest are the cause of an economy in administration, of which the good effects will be felt long after the debt itself has been reduced to a reasonable per capita. A nation is in the process of formation in the Plate valley whose material greatness is certain, and whose moral and intellectual characteristics will have the widest influence on the rest of South America.
PARAGUAY
CHAPTER I
PARAGUAY UNTIL 1632
The beginnings of the settlements in Paraguay have been sketched in the introductory chapter on the discoveries and conquest. In 1526, Cabot, searching to find a route to the gold and silver mines of the centre of the continent, penetrated as far as the site of the present city of Asuncion. He had already, in the exploration of the Upper Paraná, skirted the southern and eastern boundary of what has since become the country of Paraguay. Ten years later the exhausted and discouraged remnants of Mendoza's great expedition sought rest and refuge among the peaceful agricultural tribes of this region. Under Domingos Irala, these six hundred surviving Spanish adventurers founded Asuncion in 1536, the first settlement of the valley of the Plate. They reduced the Indians to a mild slavery, compelling them to build houses, perform menial services, and cultivate the soil. The country was divided into great tracts called "encomiendas," which, with the Indians that inhabited them, were distributed among the settlers. Few women had been able to follow Mendoza's expedition, so the Spaniards of Asuncion took wives from among the Indians. Subsequent immigration was small, and the proportion of Spanish blood has always been inconsiderable, compared with the number of aborigines. The children of the marriages between the Spanish conquerors and Indian women were proud of their white descent. The superior strain of blood easily dominated, and the mixed Paraguayan Creoles became Spaniards to all intents and purposes. Spaniards and Creoles, however, learned the Indian language; Guarany rather than Spanish became, and has remained, the most usual method of communication.
The Spaniards of Asuncion were turbulent and disinclined to submit to authority. They paid scant respect to the adelantados, whom the Castilian king sent out one after another as feudal proprietors. Until his death Irala was the most influential man in the colony, but his power rested on his own energy and capacity, and on the fear and respect in which he was held by his companions, more than on the royal commission that finally could not be withheld from him.
Across the river from Asuncion stretched away to the west the vast and swampy plains of the great Chaco. It was inhabited by wandering tribes of Indians whom the Spaniards could not subdue. They fled before the expeditions like scared wild beasts, only to turn and mercilessly massacre every man when a chance was offered for ambush or surprise. To the east