Editing History of Paraguay (section)

===First Colorado era===
[[File:Bernardino Caballero.jpg|thumbnail|left|Bernardino Caballero]]
[[File:Paraguay 1890-1940stamp-50ct (2).jpg|left|thumb|[[Paraguay]] 1890 anniversary stamp]]
[[Cándido Bareiro]], López's former [[commercial agent]] in Europe, returned to Paraguay in 1869 and around him grew a group of López loyalists, including [[Bernardino Caballero]] and [[Patricio Escobar]] but also López opponents, including [[Juan Bautista Gill]], who eventually was elected to the presidency. After President Juan Bautista Gill was assassinated in 1877, Caballero used his power as army commander to guarantee Bareiro's election as president in 1878. When Bareiro died from a stroke in 1880, Caballero seized power in a bloodless coup and dominated Paraguayan politics for most of the next two decades. His accession to power is notable because he brought political stability, founded the Colorado Party in 1887 to regulate the choice of Presidents and the distribution of spoils, and began a process of [[economic reconstruction]].

In 1878, the international commission led by US president [[Rutherford B. Hayes]] awarded Paraguay the disputed Chaco area between the [[Verde River (Paraguay)|Río Verde]] and [[Río Pilcomayo]]. In his honor the [[Presidente Hayes Department]] was created.

Governments led by two former López-era officers [[Bernardino Caballero]] (1880–86) and [[Patricio Escobar]] (1886–90) started a more earnest national reconstruction. A general political amnesty was proclaimed and opposition allowed in Parliament. [[Universidad Nacional de Asunción|National University]] was founded in 1889. A census in 1886–87 showed a population of 329,645. To improve this, foreign immigration was encouraged.<ref name="google7"/>

The Colorados dismantled Francia's unique system of state socialism. Desperate for cash because of heavy debts incurred in London in the early postwar period, the Colorados lacked a source of funds except through the sale of the state's vast holdings, which comprised more than 95% of Paraguay's total land. Caballero's government sold much of this land to foreigners in huge lots. While Colorado politicians raked in the profits and themselves became large landowners, peasant squatters who had farmed the land for generations were forced to vacate and, in many cases, to [[emigration|emigrate]]. By 1900, seventy-nine people owned half of the country's land.

Although the Liberals had advocated the same land-sale policy, the unpopularity of the sales and evidence of pervasive government corruption produced a tremendous outcry from the opposition. Liberals became bitter foes of selling land, especially after the 1887 elections, which were marked by State-sponsored violence against the opposition. Ex-Legionnaires, idealistic reformers, and former Lopiztas joined in July 1887, shortly after these elections, to form the ''Centro Democrático'' (Democratic Center),<ref name="Doratioto">{{cite journal |last1=Doratioto |first1=Francisco F. M. |title=A participação brasileira no golpe de Estado de 1894 no Paraguai: A Missão Cavalcanti |journal=Textos de História |date=1994 |volume=2 |issue=4 |pages=151–152 |url=https://www.periodicos.unb.br/index.php/textos/article/view/27713 |access-date=23 October 2022 |archive-date=23 October 2022 |archive-url=https://web.archive.org/web/20221023164904/https://www.periodicos.unb.br/index.php/textos/article/view/27713 |url-status=dead }}</ref> a precursor of the Liberal party, demanding free elections, an end to land sales, civilian control over the military, and clean government. Caballero responded, along with his principal adviser, [[José Segundo Decoud]], and Escobar, by forming the Colorado Party one month later, thus formalizing the two party system. Both parties had internal divisions and very little ideology separated them, allowing Colorado and Liberal members to change sides whenever it proved advantageous. While the Colorados reinforced their monopoly on power and spoils, Liberals called for reform.

Electoral violence provoked an aborted Liberal revolt in 1891; then Liutenant Colonel [[Juan Bautista Egusquiza]], who commanded the capital's troops and was responsible for fighting off the revolt, gained massive political capital and, in 1894, overthrew Caballero's chosen president, [[Juan Gualberto González]]. Egusquiza startled Colorado stalwarts by sharing power with the Liberals, a move that split both parties. Ex-Legionnaire Ferreira along with the ''cívico'' (civic) wing of the Liberals joined the government of Egusquiza, who left office in 1898 to allow a civilian, [[Emilio Aceval]], to become president. Liberal ''radicales'' (radicals) who opposed compromising with their Colorado enemies boycotted the new arrangement. Caballero, also boycotting the alliance, plotted to overthrow civilian rule and succeeded when Colonel [[Juan Antonio Escurra]] seized power in 1902. This victory was Caballero's last, however. In 1904 the old nemesis of Caballero, General [[Benigno Ferreira]], with the support of ''cívicos'', ''radicales'', and ''egusquistas'', invaded from Argentina. After four months of fighting, Escurra signed the Pact of Pilcomayo aboard an Argentine gunboat on 12 December 1904, and handed power to the Liberals.