Between 1910 and 1912, Paraguay experienced an era of extreme political violence. Historians have assumed that instability was merely part of the process of the Liberal party’s consolidation of power after their victorious 1904 revolution which displaced the Colorados. Any outside involvement in that turmoil was just a result of the traditional Brazilian-Argentine rivalry for influence in Asunción. Juan Carlos Herken offers a persuasive alternate interpretation. He posits economic-political machinations of a powerful North American financier whose dream of a South American transcontinental railroad network had great political and economic impact on Paraguay.
Percival Farquhar had already constructed an extensive railroad and utility empire in Brazil. Starting around 1908 through his Brazilian companies, French banking support, and the assistance of his associate, Manuel Rodríguez, an important Argentine politician and promoter, Farquhar moved to gain political influence in Asunción. His goal was government concessions by which the construction of a railroad through Paraguay, connecting with projected Brazilian lines, would be facilitated. Rodríguez distributed bribes to politicians, manipulated factions within the Liberal party and finally, through financial support of the Radical faction that led a successful revolt in 1912, obtained a government friendly to Farquhar’s enterprise. All this, of course, was effected at great cost to internal political peace.
On the verge of success, economic difficulties in Brazil and caution in European money markets before World War I caused the collapse of Farquhar’s transcontinental dream. No line from Brazil was ever constructed; however, the economic impact on Paraguay in this era of frenzied speculation was considerable. Subsidiary investments in various companies had brought capital into the nation in anticipation of a railroad boom. Land values doubled, and the pastoral industry received an impetus which served it well during the wartime demand for cattle products. A similar expansion occurred in the yerba mate and timber industries. At the same time, the contrived rise of the Radicals had a profound impact on the Paraguayan political scene.
An unavoidable problem of this work is the lack of conclusive evidence tying Farquhar directly to the ruthless manipulation of Paraguayan politics. Perhaps solid evidence of an organized financial-political conspiracy would be difficult to discover in any case; Farquhar was a careful man. Still, by use of available business records, Public Record Office correspondence, secondary sources, and official government papers, the author presents a convincing argument. This work is well written, well illustrated, and contains in its appendix an important debate of the Paraguayan Congress on the railroad issue. Regardless of any qualifications about documentation, Herken’s study cannot be ignored. It is recommended to those interested in Paraguay’s economic and political history, as well as to business historians of the Río de la Plata.