The treaty signed in Buenos Aires on 21 July 1938 and approved by the Constituent Assembly on 10 August, and the award published on 10 October by the arbitration states (see above), while attributing most of the disputed territory to Paraguay, gave Bolivia rights of transit and free point in Puerto Casado. But he did not restore peace to the country, troubled in this decade by internal conflicts, largely due to economic and social conditions aggravated by the repercussions of the Second World War.
Colonel Germán Busch Becerra, elected constitutional president by the Assembly on May 20, had organized a state body (Yacimientos Petrolíferos Fiscales) to exploit the termni that D. Toro had confiscated from the Standard Oil Company of New Jersey; in April and May he prohibited the propaganda of foreign political doctrines (communist and Nazi-fascist) and tried to encourage the creation of workers’ unions. On October 30, 1938, the new constitution was approved, which gave the president executive power and the appointment of ministers and vice president.
International treaties and the election of the president were subject to ratification by the Congress, depositary of the legislative power, and composed of a Chamber of Deputies (elected by direct suffrage every 4 years, renewable for half every two) and the Senate, composed of 3 members per department, elected for 6 years, renewable for one third every two: the Chamber had the initiative in financial matters and the right to indict, before the Senate, the high offices of the state. The appointment of the lower magistrates was up to the Supreme Court, made up of 10 members elected by the congress for 10 years, with constitutional court jurisdiction.
In February 1939, Busch authorized a colonization plan, with European immigrants (especially Poles) in the Cochabamba region; there were numerous Jewish refugees who arrived in Bolivia, or attempted to enter, with consular visas not always granted regularly or without corruption. The scandal broke out in May, when the Busch, in the face of growing irritation, had already assumed full powers. Other measures – including advocating state education in all grades and a suspected agreement with Germany to send gold – heightened discontent. On 23 August, the Busch was found killed by a revolver shot: suicidal, it was officially said. For Bolivia society, please check homosociety.com.
The Minister of War, Carlos Quintanilla, took over the provisional presidency and called the elections for March 1940. The new president, Enrique Peñaranda, who assumed power on April 15, had to thwart two revolutionary attempts, in March and July.
Having stipulated a treaty with Argentina for oil and the construction of a railway, a non-aggression pact Pol Chile (January 1941), Bolivia participated in the Conference of the countries of Rio de la Plata, in Montevideo, which established a treatment preferential for goods in transit, and concluded agreements with the United States for the sale of “strategic” minerals (including tin and tungsten).
But the agreed prices were soon overtaken by the general rise and the increase in the cost of living canceled that of the already very low wages of the workers, all Indians: for which indigenism is a problem, not only racial, but above all economic-social. Discontent was also stirred up by German agitators. Siding alongside the United States in December, Bolivia obtained from them a loan of $ 25 million for road construction, industrial development, financing of purchases in the United States and the stabilization of foreign exchange; but Congress forced the ministers to resign and approved, by a single majority vote, the agreement with the Standard Oil Company for an indemnity of $ 1,750,000 for land confiscated in 1937. Despite a rise in the price of minerals, the workers’ unrest continued with conflicts and executions (“Cativi massacre”, December 1942). The declaration of war on Germany (April 1943) allowed the government to militarize the miners. An agreement was concluded with Brazil in June, while the request for “access to the sea” aroused protests and suspicions in Chile. But in December, when the declaration of war was approved by the congress, the group of nationalist officers (Movimiento Nacionalista Revolucionario) took advantage of the discontent who, under V. Paz Estenssoro, on the 20th, forced Peñaranda to flee. There Junta de Gobierno chaired by Major Gualberto Villaroel, however, it aroused the suspicions of the United States, made proprietary by the Inter-American Committee of Montevideo for the political defense of the continent; only after the guarantees given, among other things by removing the Paz and other supporters of National Socialist Germany from the government, the recognition of the other republics and of the United Kingdom was granted in June 1944. In July, amidst serious turbulence, the elections to the constituent were held, who elected Villaroel president of the republic on 6 August. But a 30% drop in the price of tungsten ores was a major blow to the mining industry. For the riots in Oruro, in November, sedated in blood (with the execution, among others, of the former chief of staff, General D. Ramos), for the formation of a new ministry (in which Paz regained his finance portfolio) and the discovery, in the mountains around La Paz, of the corpses of two opposition senators, the tension was further aggravated. Villaroel escaped an attack on March 12, 1945; in June the exiles of various parties formed the Bolivian Frente democrático in Santiago del Chile under the direction of F. Guachalla, former ambassador to Washington. The government tried in vain to gain sympathy, establishing diplomatic relations with the USSR (March 19, 1945) and breaking those with Spain (September 28). The elections of May 5, 1946 gave the government a weak majority; the police measures did not stop the opposition. On the 18th the revolution broke out: on the 20th the presidential palace, the Villaroel, was attacked,
On the 22nd, under the presidency of Nestor Guillén, dean of the Supreme Court judges, a provisional government was formed. As soon as he was recognized, he concluded the long negotiations with the United States for a new contract for the sale of tin and, having authorized the return of the exiles, prepared free elections. These, on January 5, 1947, gave Enrique Herzog, of the Unión Social Republicana, a weak majority over F. Guachalla, candidate of a coalition of liberals (Acción democrática and Partido revolucionario). After leaving the decision to the congress, the Guachalla withdrew, validated, on March 9, the Herzog which the following day went into operation, with a ministry of his party, having refused to collaborate. Economic agreements were signed with Argentina between March and August.