Caballero was the greatest living war hero, who was captured by Brazilians on 8 April 1870 near the Apa River after the Battle of Cerro Corá and released in May 1871.

Caballero returned to Asunción and became involved in politics, joining the López loyalist faction led by Cándido Bareiro.

After the death of Juan Bautista Gill in 1877, he helped to ensure that his political ally Cándido Bareiro was elected to the Presidency.

On 4 September 1880, after the death of Cándido Bareiro his Vice President Adolfo Saguier was arrested by the Minister of War and Navy Pedro Duarte.

During his rule Civil Register was established, the city of Villa Florida was founded and the General Department of Immigration created.

[4] During his presidency much of the land previously owned by the state and the ruling López family was sold off in order to raise money.