History of Honduras (1838–1932)

One of Bonilla's greater accomplishments was the delimitation of the border with Nicaragua, especially in the area of the Mosquito Coast where there had been a long dispute after the Treaty of Comayagua and Managua with Great Britain.

The following year, Lindo's own vice president revolted and was prevented from seizing power only through the military intervention of El Salvador and Nicaragua.

General José María Medina served as president or dictator eleven times during that period, but Guatemalan intervention in 1876 drove him and his conservative supporters from power.

Unlike most of its neighbors, Honduras did not develop a significant coffee industry, and one of the results of this was that much of its export wealth ended up being generated by foreign firms, often creating little local capital.

The recurring civil conflicts and the resultant confiscation of stock by various military commanders, however, put a damper on efforts to develop the cattle industry and contributed to its rather backward status.

A census of 1899 revealed that in northern Honduras, that over 1,000 people in the region between Puerto Cortes and La Ceiba (and inland as far as San Pedro Sula) were tending bananas, most of them small holders.

Marvin Barahona in his book Honduras in the 20th century relates that "the Vaccaro brothers, a family of Italian origin that traded bananas in New Orleans, received land grants on the north coast.

In 1904, in order to reach an agreement about the upper part of the border, the representatives of the two nations turned to King Alfonso XIII of Spain as a neutral party to the dispute.

When the Nicaraguan army entered Honduras in 1907, the American government, thinking that Zelaya wanted to dominate the entire region, sent marines to Puerto Cortés to protect the banana businesses.

The treaty installed a provisional government composed of Miguel Oquelí Bustillo, Máximo Rosales Betancourt and Juan Ignacio Castro, until the end of March 1907.

In that year, to reach agreement on the upper part, the representatives of the two nations picked King Alfonso XIII of Spain as a neutral, third member of the commission, in effect making him the arbiter.

With the assistance of Salvadoran troops, Manuel Bonilla tried to resist, but in March his forces were decisively beaten in a battle notable for the introduction of machine guns into Central American civil strife.

The five presidents signed the treaty which first incorporated the Tobar Doctrine[21] and established the Permanent Central American Court of Justice, to resolve future disputes.

During his administration, Miguel Dávila tried to modernize the country, but in addition to struggling against the opposition, the president had the difficult task of leading at a time when the external debt of Honduras had reached US$120 million.

When the Nicaraguan army entered Honduras in 1907 to overthrow Bonilla, the United States government, believing that Zelaya wanted to dominate the entire region, landed marines at Puerto Cortés to protect the North American bananas trade.

The five presidents signed the General Treaty of Peace and Amity of 1907 pledging themselves to establish the permanent Central American Court of Justice, which would resolve future disputes.

[25] The government expected that in exchange for land the railroad companies would ultimately build a national rail system, providing the capital with its long-sought access to the Caribbean.

The strike was suppressed by the Honduran military, but the following year additional labor disturbances occurred at the Standard Fruit Company's holding in La Ceiba.

Young's investigations clearly demonstrated the desperate need for major financial reforms in Honduras, whose always precarious budgetary situation was considerably worsened by the renewal of revolutionary activities.

Young's recommendations for reducing the military budget, however, found little favor with the new López Gutiérrez administration, and the government's financial condition remained a major problem.

However, the liberal PLH was unable to unite around a single candidate and split into two groups, one supporting former president Policarpo Bonilla, the other advancing the candidacy of Juan Angel Arias.

In February the United States, warning that recognition would be withheld from anyone coming to power by revolutionary means, suspended relations with the López Gutiérrez government for its failure to hold elections.

Even the presence of the USS Denver and the landing of a force of United States Marines were unable to prevent widespread looting and arson resulting in over US$2 million in property damage.

An agreement was worked out that provided for an interim presidency headed by General Vicente Tosta, who agreed to appoint a cabinet representing all political factions and to convene a Constituent Assembly within ninety days to restore constitutional order.

To put pressure on Tosta to conduct a fair election, the United States continued an embargo on arms to Honduras and barred the government from access to loans—including a requested US$75,000 from the Banco Atlántida.

Furthermore, the United States persuaded El Salvador, Guatemala, and Nicaragua to join in declaring that, under the 1923 treaty provision, no leader of the recent revolution would be recognized as president for the coming term.

In August 1922, the presidents of Honduras, Nicaragua, and El Salvador gathered on the USS Tacoma in the Gulf of Fonseca, under the attentive eye of the ambassadors of the United States to these countries.

Because conflicts between these companies had frequently led to support for rival groups in Honduran politics, had produced a border controversy with Guatemala, and may have even contributed to revolutionary disturbances, this merger seemed to promise greater domestic tranquility.

Thousands of workers were laid off, and the wages of those remaining on the job were reduced, as were the prices paid to independent banana producers by the giant fruit companies.

As the depression deepened, the government's financial situation deteriorated; in 1931 Mejía Colindres was forced to borrow US$250,000 from the fruit companies to ensure that the army would continue to be paid.