The economic development of Uruguay was retarded by the corruption of successive governments, by revolutionary outbreaks, by the seizure of farm stock, without adequate compensation, for the support of military forces, by the consequences of reckless borrowing and over-trading in 1889 and 1890, and also by the transference of commercial undertakings from Montevideo to Buenos Aires between 1890 and 1897, on the opening of the harbour and docks at that port.
The port is connected with Buenos Aires and Montevideo by regular lines of river steamers, which are its only means of trade communication with the outer world, and with the inland town of Villa Rica (95 m.) by a railway worked by an English company.
The war with Paraguay that followed, which lasted until 1870, made Montevideo the base of supplies for the Brazilian army and navy and added largely to its trade and wealth.
The siege of Montevideo led to a joint intervention of England and France.
The American rebellion, the French Revolution and the British invasions of Montevideo and Buenos Aires (1806-7), under GeneralsAuchmuty(i 756-1 822)andJohnWhitelocke (1757-1833), all contributed to the extinction of the Spanish power on the Rio de la Plata.
It was gradually consummated by the military and commercial settlements of the Portuguese, and subsequently by the Spaniards, who established themselves formally in Montevideo under Governor Zavala of Buenos Aires in 1726, and demolished the rival Portuguese settlement in Colonia in 1777.
Whenever the trade of southern Bolivia becomes important enough to warrant the expense of opening a navigable channel in the Pilcomayo, direct river communication with Buenos Aires and Montevideo will be possible.
The troops in Montevideo also embarked for Portugal, and the Banda Oriental remained a part of Brazil with the title of the Provincia Cisplatina.
From Montevideo river steamers are sent up the Parana and Paraguay rivers to Corumba and Cuyaba, in the state of Matto Grosso.
A railway connects with Quarahim (47 m.) on the Uruguayan frontier, and thence by a Uruguayan line with Montevideo by way of Paysandu.