When Paraguay won the arbitration, it showed its gratitude by naming one of its localities Villa Hayes.
As time went on, however, its population increased and hid many of the scars of war.
On the western side of South America there broke out the struggle known as the "War of the Pacific" between Chile, on the one side, and Peru and Bolivia as allies on the other.

In Peru unstable and corrupt governments had contracted foreign loans under conditions that made their repayment almost impossible and had spent the proceeds in so reckless and extravagant a fashion as to bring the country to the verge of bankruptcy.

Bolivia, similarly governed, was still the scene of the orgies and carnivals which had for some time characterized its unfortunate history.

One of its buffoon "presidents," moreover, had entered into boundary agreements with both Chile and Brazil, under which the nation lost several important areas and some of its territory on the Pacific.

The boundaries of Bolivia, indeed, were run almost everywhere on purely arbitrary lines drawn with scant regard for the physical features of the country and with many a frontier question left wholly unsettled.