Chaco War of 1932–35

a war between Bolivia, which had ties with monopolies in the USA, and Paraguay, which was dependent on Great Britain.

The Chaco War was fought over a disputed border region in the Chaco, where petroleum deposits had been discovered in the 1920’s. Armed clashes took place as early as 1927, and war broke out in July 1932. During the war, the USA openly supported, and supplied arms to, Bolivia. Great Britain did the same for Paraguay. By June 1934, Paraguay controlled most of the disputed territory.

Both sides suffered heavy casualties: a total of 250,000 were killed or wounded. The war exhausted the resources of both countries and sharply aggravated their internal political situations. In June 1935, after mediation by the USA, Argentina, Brazil, Chile, Peru, and Uruguay, a truce was declared. The peace treaty of July 1938 gave Paraguay most of the territory at issue. By the 1940’s, however, the area was controlled by US oil monopolies.