ADMINISTEATION OF PAEAGUAY. 327 



Government. 



The present Constitution, dating from the close of the war, has been modelled 

 on that of the neighbouring States, and like them, Paraguay possesses the legis- 

 lative, executive, and judiciary powers. The communal group consists of the 

 partidos, administrative and judiciary units connected directly with the central 

 power by elected magistrates. Foreigners have the right to vote at the muni- 

 cipal elections, and are even themselves eligible. A jéfe politico represents the 

 executive in each commune, to which the Minister of Justice appoints a stipendiary 

 magistrate. 



Two Chambers, directly elected by universal suffrage, discuss all questions 

 except the Budget, which is reserved absolutely to the lower House. The Presi- 

 dent, elected like the deputies for four years, controls the executive, and chooses 

 five ministers responsible to the Chambers. Catholicism remains as formerly the 

 State religion, but liberty of worship is recognised. The free navigation of the 

 rivers, one of the main causes of the war, was a necessary result of the triumph of 

 the allies. Henceforth the Paraguay and the Parana are open to the vessels of 

 Brazil and the Argentine Republic. Foreigners also are allowed free access to 

 the State from all points of the frontier, without being furnished with passports, a 

 necessary condition under the old exclusive system. 



The country has not recovered its financial equilibrium upset by the war, and 

 the annual Budget continues to show a heavy deficit, nearly £105,000 in 1891. In 

 1892 the external debt, including the consolidated English debt, stood at about 

 £5,000,000, and in that year the Government failed to pay the interest on the 

 English debt, which amounted to over £830,000. But the financial position is 

 likely to improve with the development of trade, about five-sixths of the revenue 

 being derived from the Customs. 



It may be mentioned that after the war, when the State was hopelessly 

 bankrupt, without resources or credit, England was the only country that could 

 be induced to come to the aicï of Paraguay. The London capitalists twice made 

 advances amounting collectively to a sum of £1,438,500 ; but through one of 

 those financial mysteries, of which the history of the Hispano- American Republics 

 offers so many examples, not even a seventh part of the loan, £200,000 at most, 

 found its way to the State treasury. Negotiations were opened with a view to 

 diminish this enormous capital, and the bankers consented to a heavy reduction, 

 in exchange for a tract of " five hundred square leagues," or about 750,000 acres. 

 Later the Paraguay Government sold, always to English speculators, the Asuncion- 

 Villa Rica Railway. By this arrangement, followed by a development of coloni- 

 sation and a corresponding increase in the value of the soil, it was found possible 

 to negotiate the sale of vast tracts of arable land, greatly to the benefit of the 

 public finances. 



Commenting on these transactions, De Bourgade remarks that " no European 

 stock-market to the same degree as London has appreciated the vast resources 

 and future development of the States of America. There may be some initial 



