General José Felix Estigarribia, commander of the Paraguayan forces in the Chaco War, was inaugurated president on Aug. 15, to serve a four-year term. The presidential election, indirect in Paraguay, which took place April 30, was the first since the outbreak of the Chaco War in 1932. The new president, a Liberal, was the only candidate, since the National Republican Party boycotted the election.
On June 13, the United States Export-Import Bank agreed to extend credits to Paraguay, not to exceed $500,000 at any one time, to support the peso and to liquidate Paraguay's commercial obligations to United States citizens. The agreement provided for additional credits, in amounts not yet determined, to finance the purchase of North American materials for road-building and other public works. This credit arrangement is in line with those already made with other Latin American countries with the dual object of stimulating trade and industry in the Western Hemisphere and of thwarting German and Italian economic penetration and influence. Earlier in the month a German offer to build an automobile road across Paraguay to the Brazilian frontier was reported. In addition, a number of industrial enterprises and colonies were to be established along the way, the entire project to be paid for by a surtax on gasoline and other petroleum products handled by a projected State petroleum monopoly to handle Bolivian oil (see BOLIVIA.). The German project met with strong opposition in the Paraguayan Congress. The new president's supporters are also opposed to the oil agreement with Bolivia, which requires ratification by the Congress, because of the exclusive right it grants the Bolivian State Petroleum Board to exploit for thirty years any oilfields discovered in Paraguay.
By a decree issued June 2, import quotas are to be allocated by countries and will amount, as a minimum, to three-quarters of the amount of Paraguay's exports to each individual country. A commercial treaty between Paraguay and Bolivia is reported to be under negotiation.
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