State, Sovereignty, and Capital: the Railroad as the Axis of Reconstruction Efforts in Occupied Paraguay (1869–1876)

Abstract

This article analyzes the role of the railroad in the reconstruction of the Paraguayan State during the Allied occupation (1869-1876) and its subsequent privatization. It proposes reading its trajectory as a barometer of the fundamental postwar tensions: sovereignty, state capacity, and the urgency of private capital. The railroad, the main asset inherited from prewar Paraguay, became the epicenter of the disputes that defined the failed national reconstruction, culminating in its sale in 1877—an operation that masked the first major alienation of public lands. The research examines four stages: the control of the railroad as spoils of war by the occupation forces; the weak attempts by the provisional government to manage an asset that was imposed rather than recovered; its use as collateral to obtain foreign capital, with consequences that plunged the State into debt and discredit; and finally, its privatization as a mechanism for the appropriation of adjacent lands, marking the beginning of the systematic sale of state assets whose consequences persist in contemporary Paraguay.