Daniel Salamanca Urey - Presidency

Presidency

Immediately upon assuming office, Salamanca introduced an unpopular austerity program and clamped down on political opposition to his government. In what was likely a measure to avert public attention to the economic problems still facing the country, he also revived hostilities with Paraguay in the disputed Chaco region. Indeed, Salamanca had been for a long time one of the "hawks" in Bolivian politics, advocating firmness against Paraguay in the territorial dispute. Upon taking office, his motto became "We must stand firm in the Chaco." Given that the parched region of the Gran Chaco (largely uninhabited) had been under dispute between Bolivia and Paraguay ever since the creation of both republics, each proceeded to establish a line of small garrisons (fortines), simply to establish a national presence and press their claims. Sporadic battles would occur, but cooler heads tended to prevail, especially because (neither) Bolivia nor Paraguay (the only landlocked and poorest countries in South America) could (ill) afford a full-scale war over the Chaco. Neither, however, relinquished much in their claim to the entire Chaco region either.

All of this changed when oil was found on the foothills of the Andes, deep in Bolivian territory. It was then widely assumed that the nearby Chaco also contained oil, possibly in vast quantities. In addition, the explosive economic and political situation prompted President Salamanca to use the dispute to shore up national unity and distract attention from his government's shortcomings. He ordered a stepped-up effort at establishing more fortines wherever Paraguay wasn't established already. A Bolivian army exploration unit was sent deep into the Chaco early in 1932, whereupon they chanced to find a large lake in the middle of the desert-like scrubland. It was a perfect location for a permanent garrison. Unfortunately, the lake—named Pitiantuta by the Paraguayans—turned out to be occupied by the Paraguayan military. Upon the arrival of the Bolivian expedition, a battle ensued and the Paraguayan troops fled. This, in essence, started the disastrous Chaco War (1932–1935).

The quick escalation of the war only exacerbated already severe economic problems in Bolivia (and in Paraguay), while causing many thousands of casualties. To make matters worse, Salamanca had very poor relations with the Bolivian high command from the beginning of the conflict, when he demoted a Bolivian general and placed the German Hans Kundt at the head of the country's armed forces at war. Kundt had led a military mission to Bolivia prior to World War I. A string of devastating defeats on the southern front of the war at the hands of the Paraguayans, who knew the terrain much better than the Bolivians (most of whom hailed from the Altiplano Highlands) precipitated Kundt's replacement by General Enrique Peñaranda at the end of 1933. Salamanca's relationship with the general only got worse, as the mercurial president (then in his mid 60s) tended to blame the military leadership for the continuing setbacks on the field. Things came to a head when Salamanca decided to replace Peñaranda and a number of his increasingly mutinous commandants.