Despite his reputation as a democrat, Chaves imposed a state of siege three weeks after he took office, aiming his emergency powers at the supporters of González and ex-President Felipe Molas López. Mounting economic problems immediately confronted the new government. Two decades of extreme political and social unrest-- including depression, war, and civil conflicts--had shattered Paraguay's economy. National and per capita income had fallen sharply, the Central Bank's practice of handing out soft loans to regime cronies was spurring inflation and a black market, and Argentina's economic woes were making themselves felt in Paraguay. Still, Chaves stayed in office without mishap; the country simply needed a rest.
By 1953, however, the seventy-three-year-old president's political support began to erode markedly. His decision to run for reelection disappointed younger men who nursed political ambitions, and rumors that Chaves would strengthen the police at the army's expense disappointed the military. Early in 1954, recently fired Central Bank Director Epifanio Méndez Fleitas joined forces with Stroessner--at that time a general and commander in chief of the armed forces--to oust Chaves. Méndez Fleitas was unpopular with Colorado Party stalwarts and the army, who feared that he was trying to build a following as did his hero, Juan Domingo Perón, Argentina's president from 1946 to 1955. In May 1954, Stroessner ordered his troops into action against the government after Chaves had tried to dismiss one of his subordinates. Fierce resistance by police left almost fifty dead.
As the military "strongman" who made the coup, Stroessner was able to provide many of his supporters with positions in the provisional government. About two months later, a divided Colorado Party nominated Stroessner for president. For many party members, he represented an "interim" choice, as Morínigo had been for the Liberals in 1940. When Stroessner took office on August 15, 1954, few people imagined that this circumspect, unassuming forty-one- year-old commander in chief would be a master politician capable of outmaneuvering and outlasting them all. Nor was it apparent that his period of rule, known as the Stronato, would be longer than that of any other ruler in Paraguayan history.