Both Paraguay and Bolivia claimed an uninhabited desert region known as the Gran Chaco. Bolivia, landlocked after war with Chile, wanted the territory in order to give it river access to the Atlantic. Paraguay, having lost most of its territory to its neighbors during the War of the Triple Alliance, needed the Gran Chaco just to stay on the map. Both sides believed that there were rich oil reserves in region as well.
The dispute heated up considerably when Bolivia issued a stamp featuring a map of Bolivia that included the Gran Chaco, now marked as "Chaco Boliviano." Paraguay soon issued even bigger stamps than Bolivia, with an even bigger map of the Gran Chaco, but this time marked as "Chaco Paraguayo."
Bolivia then forcefully asserted its claim by moving troops into the Gran Chaco. Paraguay responded by doing the same. In 1932, philatelic warfare gave way to the real thing.
The Chaco War saw the use of armor and aircraft on both sides. British, American, French, and Italian arms makers took the opportunity to profit from the carnage by exporting some of their newest weapons to the combatants. German and Russian veterans of the First World War served as staff members and mercenaries on both sides, advising the armies of Bolivia and Paraguay on how to butcher one another more efficiently.
In the end, after casualties and losses numbering about 100,000 were sustained by both countries, the Paraguayans won. The Paraguayans got the Gran Chaco, but it turned out that the oil that everyone had thought was there didn't exist.