Second Chaco?

With the dispute between Bolivia and Paraguay over the steamy Gran Chaco region still unsettled after three years' armistice, another long-disputed area last week loomed as a second Chaco. For almost 400 years the peoples of Ecuador and Peru have been squabbling over the Oriente, a dank, roadless, city-less jungle, which lies east of the Pacific Andes, and sprawls between the two little nations. The territory, about the size of New York, is now divided by a temporary demarcation line, pending final settlement under U. S. direction.

Fortnight ago Peruvian and Ecuadorian soldiers tangled around the border mark and the two nations exchanged heated re-monstrances. The entire Cabinet of army officers, under Ecuador's military dictator, General G. Alberto Enriquez, resigned in a body to take their places in the army, were replaced last week with civilian ministers. All week mobs roamed the plazas of Quito, Ecuador's little capital, chanting "Down With Peru! Long Live Ecuador!" Peru's Foreign Minister Carlos Concha was calmer. "In Peru we have not yet lost our heads. Our country is in a process of prosperous development and the Government heads would have to be completely mad to think of war," he said.* Nevertheless, observers allowed that the Oriente still contained plenty of combustibles at week's end as Peru's President General Oscar R. Benavides pushed additional troops into the disputed jungle, concentrated army planes on the fringe to balance the Ecuadorian soldiers reported moving up to their side of the dividing line.

*Peru, 482,133 square miles sloping away on both sides of the snowcapped, towering Andes, operates on a budget ostensibly balanced, but one which does not show its borrowings and its failure to service its sizable debt. Sweden and Finland are the only two nations with orthodox balanced budgets. Almost self-sufficient in raw materials except for wheat, rice and steel, Peru enjoys a favorable foreign trade balance ($35,400,000 in 1936) largely through extensive exports of cotton, sugar, silver, oil, copper, vanadium and the high-smelling guano (bird manure). Social reforms were pushed by the late, ironfisted, dapper little President Augusto Bernardino Leguia (1919-30), who borrowed heavily to build roads, improve sanitation and ease the lot of Peru's predominantly Indian population. Wide-girthed President Oscar Raimundo Benavides has continued this program with increased road building, industrial development, compulsory social insurance, severance pay.

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