Paraguay, an inland republic of South America, divided into two distinct portions by the river so named. Eastern Paraguay, or Paraguay proper, is a well-defined territory, nearly in the shape of a parallelogram, extending from to S. lat. and to W. long., bounded on the N. by the rivers Apa and Estrella, on the E. by the mountain-chains of Amambay and Mbaracayú and by the river Paraná, and on the S. by this same river. It contains an area of about 99,000 sq. m., and is bordered by the Brazilian and Argentine republics. Western Paraguay, or the Chaco (see GRAN CHACO), is a quadrilateral, of which one side is formed by the river Paraguay between the mouth of the Pilcomayo and that of the Rio Negro. On the west the only definition of a boundary is a line of separation between the Chaco and Bolivia, which has never yet been geographically determined, but which is supposed to pass along the meridian W. The total area of Paraguay is estimated at about 142,000 sq. m.—a territory considerably larger than Great Britain and Ireland. The population of Paraguay is composed of whites of Spanish descent, Indians, a few negroes, and a mixture of these several races, and in 1895 was estimated at 500,000, exclusive of the Indians in the Chaco. A mountain-chain called Sierra Amambay, running in the general direction of from north to south, and bifurcating to the east and west towards the southern extremity, under the name of Sierra Mbaracayú, divides the tributaries of the Paraná from those of the Paraguay, none of which are very considerable, although they are liable to frequent and destructive overflows. The northern portion of Paraguay is in general undulating, covered by low, gently-swelling ridges, separated by large grass plains, dotted with palms. There are mountains in the north-east and north-west corners. The southern portion is one of the most fertile districts of South America, consisting of hills and gentle slopes richly wooded, of wide savannas, which afford excellent pasture-ground, and of rich alluvial plains, some of which, indeed, are marshy, or covered with shallow pools of water (only one lake, that of Ypoá, deserving special mention), but a large portion are of extraordinary fertility and highly cultivated. The banks of the rivers Paraná and Paraguay are occasionally belted with forest; but in general the lowlands are destitute of trees. The climate, for the latitude, is temperate, the temperature occasionally rising to in summer, but in winter being usually about . In geological structure the southern part belongs generally to the Tertiary formation; but the north and east present greywacke rocks in some districts. The natural productions are very varied, although they do not include the precious metals or other minerals common in South America. Much valuable timber is found in the forests, and the wooded districts situated upon the rivers possess a ready means of transport. Among the trees are several species of dye-wood, several trees which yield valuable juices, as the india-rubber and its cognate trees, and an especially valuable shrub, the Maté (q.v.), or Paraguay Tea, which forms one of the chief articles of commerce, being in general use throughout great part of South America. The shrub or tree grows wild in the north-eastern districts, and the gathering of its leaves gives employment in the season to a large number of the native population. Native orange woods are common, and more than fifty million oranges are exported annually. Many trees also yield valuable gums. Wax and honey are collected in abundance, as is also cochineal, and the medicinal plants are very numerous. The chief cultivated crops are maize, rice, coffee, cocoa, indigo, manioc, tobacco, and sugar-cane.
The animal world is largely represented in Paraguay, and game, both large and small, is very abundant. Tapirs, jaguars, pumas, ant-eaters, wild-boars, peccaries, and deer of many descriptions are inhabitants of the forests and plains; birds are innumerable, and for beauty and variety of plumage are perhaps unsurpassed by any in the world; the rivers teem with fish, and their banks are the resort of alligators and coypus. Snakes are numerous, but very few of them are venomous. Some of the boas are exceedingly large, and there is a remarkable water-serpent which is said to sometimes attain a length of eight yards.
The commerce of the country greatly increased during the decade 1880-90, and several banks and other mercantile institutions have been established. In 1880 the total value of exports was £252,000, that of imports somewhat less; in 1889-90 their respective values were £597,903 and £344,037. In this latter year the total revenue was £824,935, and the expenditure somewhat in excess. The chief exports are yerba-maté, tobacco, hides, oranges, timber, bark for tanning, and lace; the imports, cotton goods, hardware, wine, grain, rice, linen, silk, petroleum, &c. Trade in the towns is almost wholly in the hands of Italians, French, and Germans. The principal native industries are tanning and the manufacture of pottery and bricks, laces, ponchos, soap, food-pastes, brandy, &c.
Until the war of 1865-70 Paraguay had no national debt, but the utter ruin into which it had then fallen compelled it to have recourse to foreign aid. Two loans were contracted in London in 1871-72, the nominal amount of which was three millions sterling, but only about one-half was placed. The republic defaulted in 1874, but at the end of 1885 a settlement was made with the bondholders whereby the loans were reduced to the sum of £850,000 bearing 2 per cent. interest at the commencement, and gradually increasing to 4 per cent.; and furthermore, 500 square leagues of public lands were ceded by the republic in payment of arrear interest. The service of the new debt has been regularly maintained. There are also obligations or polizas assigned as an indemnity to Brazilian and Argentine subjects for losses sustained by them during the war. The total external indebtedness amounts to £4,704,308. There is no internal debt. The military force consists of 500 men. The established religion is the Roman Catholic, the ecclesiastical head of which is the Bishop of Asuncion. Education is free and compulsory; but of the adult Paraguayans only one in five can read and write.
The history of Paraguay is highly interesting. It was discovered by Juan Diaz de Solis in 1515, and further explored by Diego Garcia in 1525, and by Sebastian Cabot in 1526; but the first colony was settled in 1535 by Pedro de Mendoza, who founded the city of Asuncion, and established Paraguay as a province of the viceroyalty of Peru. The warlike native tribe of the Guaranis, however, a people who possessed a certain degree of civilisation, and professed a dualistic religion, long successfully resisted the Spanish arms, and refused to receive either the religion or the social usages of the invaders. In the later half of the 16th century the Jesuit missionaries were sent to the aid of the first preachers of Christianity in Paraguay; but for a long time they were almost entirely unsuccessful, the effect of their preaching being in a great degree marred by the profligate and cruel conduct of the Spanish adventurers, who formed the staple of the early colonial population. In the 17th century the home government consented to place in the Jesuits' hands the entire administration, civil as well as religious, of the province, which, from its not possessing any of the precious metals, was of little value as a source of revenue; and, in order to guard the natives against the evil influences of the bad example of European Christians, gave to the Jesuits the right to exclude all other Europeans from the colony. From this time forward the progress of civilisation as well as of Christianity was rapid. On the expulsion of the Jesuits from Paraguay in 1768, the history of which is involved in much controversy, the province was again made subject to the Spanish viceroy. For a time the fruits of the older civilisation maintained themselves; but as the ancient organisation fell to the ground great part of the work of so many years was undone, and by degrees much of the old barbarism returned. In 1776 Paraguay was transferred to the newly-formed viceroyalty of Rio de La Plata; and in 1810 it joined with the other states in declaring its independence of the mother-kingdom of Spain, which, owing to its isolated position, it was the earliest of them all to establish completely. In 1814 Dr Francia (q.v.), originally a lawyer, and the secretary of the first revolutionary junta, was proclaimed dictator for three years; and in 1817 his term of the office was made perpetual. He continued to hold it till his death in 1840, when anarchy ensued for two years; but in 1842 a national congress elected Don Mariano R. Alonzo and Don Carlos Antonio Lopez, a nephew of the dictator, joint consuls of the republic. In 1844 a new constitution was proclaimed, and Don Carlos was elected sole president, with dictatorial power, which he exercised till his death in 1862, when he was succeeded by his son, Don Francisco Solano Lopez, whose name has become notorious in connection with the tragic struggle of 1865-70, in which the Paraguayans made a heroic but unavailing fight against the combined forces of Brazil, the Argentine Confederation, and Uruguay. The war was brought to a close by the defeat and death of Lopez at the battle of Aquidaban, March 1, 1870. The results of the war may be read in the returns of the population—(1857) 1,337,439; (1873) 221,079, including only 28,746 men and 106,254 women over fifteen years of age. The sexes are now, however, again nearly equally balanced. Paraguay has had its share of the general emigration of recent years from Europe to South America; and in every way the country has made considerable progress. In June 1870 a congress voted a new constitution, which was proclaimed on the 25th November. It is modelled on that of the Argentine Confederation, the legislative authority being vested in a congress of two houses, and the executive in a president, elected for four years. A curious feature in the recent history of the state was the settlement here of 500 Australian Socialist workmen, one colony of whom was thriving in 1896.
Asuncion, the capital, had in 1895 a population of 45,000, and has a railway 160 miles in length, designed ultimately to connect with the Argentine railway system.
See Histories of Paraguay by Demersay (Paris, 1865) and Washburn (Boston, 1870); Daire, Letters from Paraguay (1805); Robertson, Francia's Reign of Terror (1840); Du Graty, La République du Paraguay (Brussels, 1861); Burton, Battlefields of Paraguay (1869); Martinez, El Paraguay (Asuncion, 1885); Knight, Cruise of the Falcon (1887); Criado (trans. by Winsweiler), La République du Paraguay (Bordeaux, 1889); La Dardye,
Le Paraguay (Paris, 1889); Vincent, Around and About South America (1890).