When war finally broke out officially in July 1932, the Bolivians were confident of a rapid victory. Their country was richer and more populous than Paraguay, and their armed forces were larger, had a superior officer corps, and were well-trained and well-equipped. These advantages quickly proved irrelevant in the face of the Paraguayans' zeal to defend their homeland. The highly motivated Paraguayans knew the geography of the Chaco better than the Bolivians and easily infiltrated Bolivian lines, surrounded outposts, and captured supplies. In contrast, Indians from the Bolivian high plateau area, known as the Altiplano, were forced into the Bolivian army, had no real interest in the war, and failed to adapt to the hot Chaco climate. In addition, long supply lines, poor roads, and weak logistics hindered the Bolivian campaign. The Paraguayans proved more united than the Bolivians--at least initially--as President Eusebio Ayala and Colonel (later Marshal) Estigarribia worked well together.

After the December 1933 Paraguayan victory at Campo Via, Bolivia seemed on the verge of surrendering. At that moment, however, President Ayala agreed to a truce. His decision was greeted with derision in Asunción. Instead of ending the war with a swift victory that might have boosted their political prospects, the Liberals signed a truce that seemed to allow the Bolivians to regroup. The war continued until July 1935. Although the Liberals had successfully led Paraguay's occupation of nearly all the disputed territory and had won the war when the last truce went into effect, they were finished politically.

In many ways, the Chaco War acted as a catalyst to unite the political opposition with workers and peasants, who furnished the raw materials for a social revolution. After the 1935 truce, thousands of soldiers were sent home, leaving the regular army to patrol the front lines. The soldiers who had shared the dangers and trials of the battlefield deeply resented the ineptitude and incompetence they believed the Liberals had shown in failing to prepare the country for war. These soldiers had witnessed the miserable state of the Paraguayan army and were forced in many cases to face the enemy armed only with machetes. After what they had been through, partisan political differences seemed irrelevant. The government offended the army rank-and-file by refusing to fund pensions for disabled war veterans in 1936 while awarding 1,500 gold pesos a year to Estigarribia. Colonel Franco, back on active duty since 1932, became the focus of the nationalist rebels inside and outside the army. The final spark to rebellion came when Franco was exiled for criticizing Ayala. On February 17, 1936, units of the army descended on the Presidential Palace and forced Ayala to resign, ending thirty-two years of Liberal rule.

Outside Paraguay, the February revolt seemed to be a paradox because it overthrew the politicians who had won the war. The soldiers, veterans, students, and others who revolted felt, however, that victory had come despite the Liberal government. Promising a national an 1538 nd social revolution, the Febrerista Revolutionary Party (Partido Revolucionario Febrerista--PRF)--more commonly known as the Febreristas--brought Colonel Franco back from exile in Argentina to be president. The Franco government showed it was serious about social justice by expropriating more than 200,000 hectares of land and distributing it to 10,000 peasant families. In addition, the new government guaranteed workers the right to strike and established an eight-hour work day. Perhaps the government's most lasting contribution affected national consciousness. In a gesture calculated to rewrite history and erase seven decades of national shame, Franco declared Solano López a national hero sin ejemplar (without precedent) because he had stood up to foreign threats and sent a team to Cerro Corá to find his unmarked grave. The government interred his remains along with those of his father in a chapel designated the National Pantheon of Heroes, and later erected a monument to him on Asunción's highest hill.

Despite the popular enthusiasm that greeted the February revolution, the new government lacked a clear program. A sign of the times, Franco practiced his Mussolini-style, spellbinding oratory from a balcony. But when he published his distinctly fascist-sounding Decree Law No. 152 promising a "totalitarian transformation" similar to those in Europe, protests erupted. The youthful, idealistic elements that had come together to produce the Febrerista movement were actually a hodgepodge of conflicting political tendencies and social opposites, and Franco was soon in deep political trouble. Franco's cabinet reflected almost every conceivable shade of dissident political opinion, and included socialists, fascist sympathizers, nationalists, Colorados, and Liberal cívicos. A new party of regime supporters, the Revolutionary National Union (Unión Nacional Revolucionaria), was founded in November 1936. Although the new party called for representative democracy, rights for peasants and workers, and socialization of key industries, it failed to broaden Franco's political base. In the end, Franco forfeited his popular support because he failed to keep his promises to the poor. He dared not expropriate the properties of foreign landowners, who were mostly Argentines. In addition, the Liberals, who still had influential support in the army, agitated constantly for Franco's overthrow. When Franco ordered Paraguayan troops to abandon the advanced positions in the Chaco that they had held since the 1935 truce, the army revolted in August 1937 and returned the Liberals to power.

The army, however, did not hold a unified opinion about the Febreristas. Several attempted coups served to remind President Félix Pavia (the former dean of law at the National University) that although the February Revolution was out of power, it was far from dead. People who suspected that the Liberals had learned nothing from their term out of office soon had proof: a peace treaty signed with Bolivia on July 21, 1938, fixed the final boundaries behind the Paraguayan battle lines. In 1939 the Liberals, recognizing that they would have to choose someone with national stature to be president if they wanted to hold onto power, picked General Estigarribia, the hero of the Chaco War who had since served as special envoy to the United States. Estigarribia quickly realized that he would have to adopt many Febrerista ideas to avoid anarchy. Circumventing the die-hard Liberals in the National Assembly who opposed him, Estigarribia assumed "temporary" dictatorial powers in February 1940, but promised the dictatorship would end as soon as a workable constitution was written.

Estigarribia vigorously pursued his goals. He began a land reform program that promised a small plot to every Paraguayan family. He reopened the university, balanced the budget, financed the public debt, increased the capital of the Central Bank, implemented monetary and municipal reforms, and drew up plans to build highways and public works. An August 1940 plebiscite endorsed Estigarribia's constitution, which remained in force until 1967. The constitution of 1940 promised a "strong, but not despotic" president and a new state empowered to deal directly with social and economic problems (see Constitutional Development , ch. 4). But by greatly expanding the power of the executive branch, the constitution served to legitimize open dictatorship.

Data as of December 1988