The Chargé in Paraguay (Trueblood) to the Secretary of State
427. Government forces now reported to have lost further ground to rebels who are approaching Salado line which is 35 kilometers from city. Government still holds Altos and Arroyos to east. Cannon fire now [audible?] in Asunción. Issue depends on arrival of government troops from north who General Staff claims are now close to rear of rebels. Gunboats attempted force passage of Paraná at Perritos yesterday but government report they were put out of commission by artillery.
Argentine Ambassador has ordered two minesweepers to stand by at Puerto Pilcomayo and Brazilian Ambassador has two planes in readiness at Brazilian frontier if conditions should require evacuation. We consulted all Americans within reach yesterday and offered fly women and children to Foz Iguassu today. Air Attaché proceeded Rio this morning with several women and children but most preferred remain. We are recommending citizens living in especially exposed locations move to Grand Hotel if fighting reaches city.
Understand government here in event of loss of Asunción will join its army in north.
Ordinary business in city practically at standstill, refugees are crowding Argentine and Brazilian Embassies and foodstuffs getting scarce.
Sent Dept 427, repeated Rio 104, Buenos Aires 145.