Toro instituted YPFB as the state-owned petroleum enterprise, established a state monopoly on the sale of hydrocarbons, and nationalized the holdings of Standard Oil in 1937.

Installed in the Palacio Quemado, Toro immediately faced a number of pressing crises, not least of which were a massive federal deficit stemming from the war and continued economic dislocation associated with the ongoing Great Depression.

Tens of thousands of Bolivian Indians had been conscripted to fight in the war and had made major sacrifices on behalf of a government that discriminated against them and barred them any meaningful participation in national affairs.

During the turbulent, crisis-racked decade, a number of Communist, Stalinist, Trotskyist, anarchist, and reformist parties had been created, and new currents of thought began to call for major changes in Bolivian society.

Toro and the young officers who had installed him called their experiment "Military Socialism," but, fearful of the still considerable power of the economic elites, failed to go far enough with their reforms.