The Terma
Terma Motorcycleta SA de Cv was founded in 1919 by Ernestazio Terma and Ricardo Matos in Ciudad de Este Paraguay, to produce affordable small displacement motorcycles. After securing a small business loan from his Uncle, Ernestazio set up shop in the bustling capitol city of Asuncion. His first motorcycles were nothing more than heavy bicycles fitted with a Felix Millet wheel mounted rotary engine. These early attempts to produce a reliable motorcycle fell short of what the Paraguayans would tolerate, as quite a few caught on fire, or exploded, and caused grave injury to the operator. Also the front fork assembly was of some concern, and was labeled unsafe by most Paraguayans, who by that time considered the Terma to be somewhat of a bad joke. 
1919 Terma Oceleto
In 1920 due to some bad business deals, and an alleged affair Ernestazio & Ricardo had with the local police chief’s wife, Terma and Matos had to flee for their lives from Asuncion, with only the clothes on their backs. Local hooligans ransacked and looted the Terma factory, and soon after one of Terma’s old creditors turned the building into the largest brothel in Asuncion. It is now an insecticide factory, and a national landmark.
Ernestazio and Ricardo made they way north into the great desert region known as "The Chaco," and in 1923 opened another small factory in Porto Vallem, close to a copper mine. With tooling allegedly “borrowed” from a rival bicycle company in Brazil, Terma once again started producing cheap motorized bicycles, with a motor of their own construction, a wheezing poppet valve design that barely made 10 miles per hour, due to a thirty pound flywheel and inferior design/materials.
Here is a picture of the prototype built in the Porto Vallem factory. Please note the bad condition of the tires, which were produced using a formula designed by Ricardo Matos’ nephew Kiko, that used wood bark bonded under heat to gutta percha & chicle, not a good choice, but resources were limited in “The Chaco”. 
1923 Terma Mangusta Prototype
In 1924 after bizarre mechanical accidents befell Terma motor-bicyclists around Porto Vallem, sales tapered off to only one or two units a month. Most of these went to foreigners from Argentina and Brazil. The problems of frames breaking, and violent engine explosions were mostly caused from inferior workmanship by the local Xnxu Indian tribe who worked in the Terma factory only for fish and the local liquor distilled from Bananas.
In 1925 Terma moved operations across the Rio Paraguay into the Pantanal region of Brazil, to exploit the lower taxes, a lack of law enforcement, and cheaper labor.
1929 saw a new type of Terma motorcycle, designed with the acquisitions of French patents from DeDion & Tissoit (that some say were stolen, with no royalties ever being paid to the French companies). Terma had gotten away from the motorized bicycle concept, and seemed to have built a well constructed motorcycle the Mangusta II, with a radical motor design based on the DeDion hot-tube ignition & Gnome monosoupape theories. 
1929 Terma Mangusta II Sport
The Terma Mangusta was popular with motorcycle riders in Paraguay, and Southern Brazil. Word got out about the Terma and local Customs officials wanted to know why a Paraguayan company was operating in the Brazilian jungle with no work permits or authorization. And according to Brazilian officials, Terma had tricked the local Xinqzu Indian population into living and working full time at the factory, by getting them hooked on “Chako” a narcotic fermented drink made from tree bark. The squalid conditions at the factory caused the Brazilian Health Department to shut it down in 1930, and exile Terma & Matos back to their native Paraguay.
Terma and Matos were met at the border by Paraguayan Federal Troops, and promptly escorted to prison on a variety of charges. The Federal Prosecutor who was in charge of the trial said he was sad to send them both away for such long sentences, but it was good for all concerned, since so many innocent people got injured and maimed by malfunctioning Terma motorcycles.
Terma was paroled in 1966, and became a cashew nut vendor in his native Porto Vallem. Terma died in 1973 from accidental lead poisoning, with Matos following him in 1977 from the effects of syphilis.
A group of wealthy Paraguayan motorcycle fanciers tried to resurrect the Terma marque in 1984, but a lack of funding and licensing problems with Honda resulted in only a few motorcycles ever being built, the Terma Model X. These are considered rare in South America, and command a very high price for used models. 
1984 Terma Model X
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