The industrial impetus already acquired by the Argentine Republic is sufficient to carry it over all obstacles, and it seems assured that there will be a rapid settlement of the whole of this immense and fertile plain. Here nature has done everything to make communication easy, and a temperate climate insures crops suited to modern European civilisation. Two grave perils have so far been encountered--namely, a tendency toward political disintegration and an abuse of the taxing power. The former is now remote, for since the railways began to concentrate wealth and influence at Buenos Aires, and to destroy the prestige and political power of the provincial capitals, the national structure built by the patriots of 1853 has stood firmer each year. The Argentine has had a bitter lesson of the evils of governmental extravagance, and still groans under the burden of a debt which seems disproportionately heavy, but the growth of population and wealth will soon overtake it, and the very difficulties of meeting interest are the cause of an economy in administration, of which the good effects will be felt long after the debt itself has been reduced to a reasonable per capita. A nation is in the process of formation in the Plate valley whose material greatness is certain, and whose moral and intellectual characteristics will have the widest influence on the rest of South America. PARAGUAY CHAPTER I PARAGUAY UNTIL 1632 The beginnings of the settlements in Paraguay have been sketched in the introductory chapter on the discoveries and conquest. In 1526, Cabot, searching to find a route to the gold and silver mines of the centre of the continent, penetrated as far as the site of the present city of Asuncion. He had already, in the exploration of the Upper Parana, skirted the southern and eastern boundary of what has since become the country of Paraguay. Ten years later the exhausted and discouraged remnants of Mendoza's great expedition sought rest and refuge among the peaceful agricultural tribes of this region. Under Domingos Irala, these six hundred surviving Spanish adventurers founded Asuncion in 1536, the first settlement of the valley of the Plate. They reduced the Indians to a mild slavery, compelling them to build houses, perform menial services, and cultivate the soil. The country was divided into great tracts called "encomiendas," which, with the Indians that inhabited them, were distributed among the settlers. Few women had been able to follow Mendoza's expedition, so the Spaniards of Asuncion took wives from among the Indians. Subsequent immigration was small, and the proportion of Spanish blood has always been inconsiderable, compared with the number of aborigines. The children of the marriages between the Spanish conquerors and Indian women were proud of their white descent. The superior strain of blood easily dominated, and the mixed Paraguayan Creoles became Spaniards to all intents and purposes. Spaniards and