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Early American Intervention
1910 ~ 1912
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Determined to crush once and for all the menace of an aggressive
dictatorship in Central America, Knox and Taft decided to intervene. Estrada,
badly beaten, had fallen back upon Bluefields to re-equip his troops and to
obtain reinforcements. The government countered by buying a steamship,
mounting guns on her, and using her to blockade Bluefields. When the vessel
moved into position to bombard that city, the United States showed its hand.
As early as February 1910, Marine units and Navy vessels had begun to
concentrate in Nicaraguan waters. On the western coast, a regiment led by
Colonel James E. Mahoney was aboard the BUFFALO off Corinto; but the area of
operation shifted rapidly to the opposite coast, and in March, the unit
returned to Panama. The task of halting the fighting around Bluefields fell
to the seamen and Marines of the DUBUQUE and PADUCAH. On May 19, landing
parties from both ships went ashore to guard American property and to
establish what came to be called in later revolutions a "neutral zone." Once
the situation ashore had been stabilized, the vessels took turns shuttling
reinforcements to Bluefields. While one prevented any attempt at bombardment
or blockade, the other would steam to Panama to load elements of a Marine
battalion commanded by Major Smedley D. Butler, a hero of the Boxer Rebellion.
The forces of President Madriz were stopped cold in their tracks. Their
converted freighter could not hope to stand up to the guns of American
cruisers nor could their poorly disciplined army be expected to make any
headway against Butler's men. Worse than the military impasse was the fact
that Estrada had been allowed to take over the Bluefields customs office, thus
cutting off the government from one of its prime sources of income. Faced
with this dilemma, the Liberals fell to quarrelling among themselves, their
troops began deserting, and the regime crumbled like a castle of sand.
Estrada marched triumphantly into Managua to try his hand at running the
country. Most of the Liberals were pardoned, but Zelaya accepted an offer of
asylum in Mexico.<17>
On 4 September 1910, Butler's battalion sailed for Panama, its mission
accomplished. Estrada was holding the reins of government, the American
property in Bluefields was intact; but, for the State Department, the task was
just beginning. European creditors were demanding payment on the loans
negotiated by Zelaya.
Secretary Knox sent Thomas C. Dawson to assist the Nicaraguans in overhauling
the nation's finances. Estrada promised to revoke the concessions granted by
Zelaya and to call a constitutional convention which would draft a more stable
form of government.
Secretary Knox moved quickly to negotiate a treaty with Nicaragua. The
document was to give American bankers the protection they demanded before
making any substantial loan to the Estrada government. The bankers requested,
and Estrada agreed, that the United States should have control over the
collection of Nicaraguan customs duties and that the money derived from
customs should be used to repay the loan.
The treaty then went before the Senate of the United States, and while it
was being debated, two American banking firms made some $15 million available
to the Estrada government at 5 percent interest. Then, to the surprise of
everyone, the Senate rejected Knox's treaty. The bankers did their best to
insure that their money would not end up in the pockets of Nicaraguan cabinet
members. To handle the stabilization of the country's currency, they set up a
National Bank of Nicaragua in which they retained a controlling interest.
These investors also advanced enough money to defray the operating expenses of
the national government in return for stock in Nicaragua's National Railway.
Last, they got permission to appoint the collector of customs.
In spite of the sudden influx of capital and the improved handling of
revenue, Estrada soon found himself in the usual financial difficulty. He
tried too hard to redress the wrongs of his predecessor. Conservatives, whose
property had been confiscated by Zelaya, demanded some sort of settlement. It
was the payment of these claims which set the government tottering on the
brink of bankruptcy.
Another difficulty dogging Estrada was the fact that as a recent convert
from Liberalism he was not the real leader of the Conservative party. At the
head of the "machine" was Emiliano Chamorro, an aristocrat, who kept a close
watch over the President's actions. The presence within the official family
of an unrepentant Liberal, Jose Maria Moncada, and a headstrong Conservative,
Luis Mena, made it even harder for the President to adopt any consistent
domestic policy.
Estrada, nevertheless, might have weathered the storm had it not been for
the loans. This issue proved a rallying point for the Liberal opposition who
claimed that the Conservatives had sold out to the United States. To have a
foreigner in charge of Nicaragua's finances was doubly galling, for besides
halting political graft, it wounded the national pride. Not only were the
Liberal politicians aroused, the peasants themselves were angered by this
affront to their homeland. The loan, then, marked a change in Nicaraguan
political life. Those religious conflicts which had brought about the forming
of the rival parties had long ago been forgotten. Civic pride was dying.
>From now on, subservience to the United States would be the major issue, with
the Liberals being militantly anti-American while the Conservatives depended
upon the support of the United States to remain in power.
In the autumn of 1911, the constitutional convention set up by the Dawson
Agreement had pledged itself to retain Estrada for another term, but it
suddenly changed its mind and reported out a constitution which would have
stripped the chief executive of most of his powers. Estrada immediately
dissolved the convention; but Luis Mena, in the meantime had pressured the
National Assembly into electing him president. Mena promptly was jailed, but
a band of officers gathered in Managua to release their leader. Fortunately,
the American Minister was able to restrain the rebels long enough for Estrada
to resign. With the army under his thumb, Mena was in control. He declined,
however, to take office until his elected term should begin; so Adolfo Diaz
succeeded Estrada.<18>
During the spring and summer of 1912, Nicaragua seemed headed for
anarchy. The great issue of the day was the acceptance of the loan and the
subsequent surrender of control of the nation's customs. The Liberals were
violently anti-American, while Mena's followers, most of them Conservatives,
resented Diaz's negotiations with the United States. What followed was a
three-cornered battle, with Diaz trying to maintain the old order, Mena
struggling to control Diaz, and the Liberals, under Benjamin Zeledon, trying
to destroy both Conservative factions. Hostilities began on the last day of
May, when the Liberals blew up Loma Fort at Managua. Some 60 people were
killed in this blast, which was followed in a few days by the destruction of a
powder magazine in the same city.
To Diaz, control of his own party seemed more important than suppressing
the Liberal revolt. Apparently, he felt that once he had rid himself of Mena,
the United States would be induced to support him. On 29 July 1912, he
replaced Mena with Emiliano Chamorro. The ousted cabinet member fled to
Masaya site of a federal arsenal. There, his son, commander of the army
barracks at Granada, joined him with troops. Since Mena was opposed to the
loan, a great many Liberals flocked to his standard; but his distrust of that
party and of Benjamin Zeledon, its leader, prevented the forming of a united
front.
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