Skip to main content

Full text of "CENTRAL AMERICA THE CRISIS AND THE CHALLENGE"

See other formats


Central America 



Central America 

The Crisis and the Challenge 



by 
JOHN D.MARTZ 



Chapel Hill 
THE UNIVERSITY OF NORTH CAROLINA PRESS 



COPYRIGHT, 1959, BY 
THE UNIVERSITY OF NORTH CAROLINA PRESS 

Manufactured in the United States of America 



The Library of Congress has cataloged this publication as follows: 

Martz, John D 

Central America, the crisis and the challenge. Chapel 
Hill, University of North Carolina Press [1959] 

356 p. 23 cm. 
Includes bibliography. 



1. Central America Politics. 

F1436.M36 972.805 59-8105 

Library of Congress 



Dedicado con carino 
y abrazos fuertes a 

ANITA y HUMBERTO 



Preface 



FOR SOME TIME I have been puzzled by the kck of attention in the United 
States to that vast territory and conglomeration of peoples loosely referred 
to as Latin America. It is perhaps understandable that Latin America 
is not well known. Less apparent, however, is the reason for semi-active 
resistance to knowledge of and interest in the area, particularly in scholarly 
circles. A few years ago one of my university professors an erudite, 
rational interpreter of political affairs and international relations speaking 
of a general university examination on international government, offered 
the following question: "What would happen if Latin America suddenly 
sank into the seas, engulfed by the surrounding oceans? Discuss in 20 
words or less!" While this remark was made lightly, it was in part 
serious. Such an attitude is too common in the United States today. 

I have no personal desire to "beat the drum" for Latin America in a 
frenetic claim that no area is more important to the U. S. today. That 
is clearly contrary to fact. At the same time, there is a definite need 
for aroused attention to Latin American affairs. Today's attitude is too 
similar to that of a few years ago toward other regions. Nowadays, 
knowledge of the entire region is altogether perfunctory; persons searching 
for a basic understanding of the area must weed their way through an 
underbrush of false generalizations and unsubstantiated opinions. In 
recent years Latin America has made headlines in but a few instances the 
overthrow of the Peron dictatorship in Argentina, the communist threat 
in Guatemala, and the anti-Nixon riots in Peru and Venezuela. The 



viii PREFACE 

melodrama of such moments is soon forgotten, news turns cold, public 
notice is even more frigid. Readers of the New Yor{ Times find relatively 
little in its pages except in moments of civil crisis or communist obstruc- 
tion. Many other journals fail to cover even these elements of Latin 
American current affairs. 

Central America itself is even more slighted. General surveys of 
Latin American politics devote perhaps fifty of five hundred pages to the 
six republics the "banana states," a misnomer in itself. Even Latin 
Americans often commit the same errors of omission. To my knowledge 
there is no recent book dealing exclusively with Central American politics; 
I have been frustrated in my search for one during the past few years. 
What follows is an attempt to fill that gap. 

For the novice this book will provide an initial encounter with some 
of the facts, persons, and characteristics of Central American political 
affairs. Should he propose to pursue the subject further, the bibliography, 
while not exhaustive, should serve as a guide. Several of the opinions 
expressed for example, what one friend has already called my "cavalier 
treatment" of Nicaraguan dictator Anastasio Somoza are admittedly 
debatable. I have no wish to impose my opinions; I feel at the same time 
the need for their expression. They have been formed on the basis of all 
the facts I have been able to assemble. For the person who questions my 
opinions, let him read further to verify or refute them. I should like to 
think this book might encourage further reading and, perhaps, even 
further research. 

This is primarily a treatment of Central American politics in the post- 
World War II period. At times I have had to go back much farther; 
individual circumstances in the six republics have dictated that. In these 
cases I have tried to summarize without great detail. Only the last ten 
or twelve years years of transition and disappointment are carefully 
detailed and analyzed. 

Research on this subject began some five years ago; since 1954, my 
academic work has been centered on the subject, and I have spent much 
of that time in Central America. I have traveled the length of the region 
twice by car and made countless individual trips by other means of trans- 
portation. I also spent ninety days as member of a delegation touring 
the South American nations. Political figures throughout the Americas 
are uncommonly easy to interview. Few men are inaccessible. Of per- 
haps greater value is the opportunity to talk and discuss affairs with 



PREFACE ix 

the people themselves, especially the rural elements, so often overlooked 
by journalists and political analysts. Their testimony has always been 
interesting and, at times, highly provocative. 

I am indebted to the staffs of the Widcncr Memorial Library at 
Harvard, the Library of Congress, and the national libraries of Guatemala, 
Honduras, Costa Rica, and Nicaragua. All were eager to help at times 
in the face of what must have seemed perculiar requests from the 
visiting "yanqui." My personal debt to friends and associates is too large 
to specify. I urge them to include their names on the unwritten list of 
those to whom I give thanks. Of all these I can mention but the two to 
whom the book is dedicated, Anita and Humberto, whose help was 
non-academic but certainly essential. 

I wish to acknowledge my indebtedness to the Ford Foundation for 
generous aid in the publication of this book by a grant under its program 
for assisting American university presses in the publication of works in 
the humanities and the social sciences. 

Absolving others of errors of authorship is an unwritten tradition, one 
that has always irritated me greatly. However, I cannot but follow the 
same course. Errors in the pages that follow are necessarily mine. 

John D. Martz 



Contents 



PAGE 

PREFACE vii 

I. SUB-CONTINENT IN CRISIS 3 

II. GUATEMALA 27 

III. EL SALVADOR 80 

IV. HONDURAS in 
V. NICARAGUA 164 

VI. COSTA RICA 210 

VII. PANAMA 264 

VIII. CHALLENGE TO THE UNITED STATES 320 

NOTES 341 

APPENDIX 346 

BIBLIOGRAPHY 347 

INDEX 350 



Central America 



Chapter One 



SUB-CONTINENT IN CRISIS 



THE MOST TRAGIC BLOODBATH in the history of that human folly called 
war came to a close over twelve years ago. Once and for all the enemies 
of democracy, enlightened progress, and so-called Western civilization 
had been annihilated. At last the world was prepared to launch its most 
determined drive toward that miUenium of perfection augured by the 
advent of atomic energy. For the more advanced, civilization would 
provide the ultimate in scientific and mechanical achievement. For less 
fortunate peoples, standards of living would be raised. Disease, illiteracy, 
and ignorance were to be banished. After centuries of hardship, these 
elements of the world population would receive the inheritance that 
twentieth-century industry and intelligence could bestow. 

Among the different areas attracting attention was Latin America, 
including that part of the Western hemisphere known as Central America 
the six republics bridging North and South America. In the first 
blush of postwar optimism, no geographic region seemed unpromising. 
For material, economic, and political reasons elaborated below it was 
reasonable to assume that with the passing of rime the region might lift 
itself from its antiquated existence and take a position alongside older 
members of the global community. What has happened, instead, is a 
gradual series of events culminating in the little recognized crisis of today. 

For better than a decade the nations of Central America have followed 
the course of least resistance. Possible sources of aid, notably the United 
States, have failed dismally to capitalize upon the potentialities of the 



4 CENTRAL AMERICA 

immediate postwar period. This same span of time has seen the growth 
of the very specters which were to be dissipated: communism, rampant 
nationalism, illiteracy, abject poverty, rigid social class stratification, 
political unrest, economic infirmity, and dictatorship. It is the growth 
of these factors that makes tragic the story of the past ten or twelve years 
in Central America; even more critical is the present situation which 
threatens further deterioration. No true progress can come to Central 
America without first a modicum of stable, relatively mature political 
government. Yet an individual examination of the six republics shows 
extraordinary lack of maturity. Guatemala has experienced a repressive 
communist government, a full-scale revolution, and more recently a 
presidential assassination. Costa Rica, after the bloodiest civil war in 
its history, followed four years of tranquility with an administration 
which opened old wounds and divided the populace. Panama has 
witnessed a series of revolutions, a presidential assassination, and the 
complicity of a vice-president in the same incident. Honduras barely 
survived a nationwide communist-manipulated strike and completed al- 
most three years of government by decree before returning to constitu- 
tionality. Nicaraguan dictatorship was ended only by an assassination 
that left the murdered president's family in power. And El Salvador, 
finally, has recently elected a new "official" president who was virtually 
unopposed in the electoral contest. 

The causes of this decade of failure are complex and varied. Many 
will become obvious after examination of the six individual Central 
American countries. Reserved for the concluding chapter will be sug- 
gestions and speculations as to future policies and potentialities. There 
also the role of the United States and the Department of State will be 
analyzed. For the present, concern will be directed toward environmental 
circumstances and characteristics by which these nations must be viewed. 

THE REALITY OF GEOGRAPHY 

Six sovereign nations lie between Mexico and the United States, to the 
north, and the continent of South America. Comprising what is known 
as Central America, these nations form a geographic bridge between the 
two halves of the hemisphere. At times diminishing to a width of barely 
sixty miles, the Central American sub-continent withstands oceans on 
two sides to link the continents. Geographic reality simultaneously has 
converted this connective into a land barrier which has contributed to the 



SUB-CONTINENT IN CRISIS 5 

marked contrasts between the Anglo and Latin races in the New World. 
Some of the world's most varied geography is found on this sub- 
continent. Running northwest and southeast throughout Central America 
is the central cordillera, a plateau from three to six thousand feet above 
sea level. On this plateau lives the great bulk of the population, and 
nearly all capital cities and commercial centers excluding seaports are 
located here. But above the plateau itself is projected a series of mountains 
jutting as high as eleven thousand feet. These are uniformly rugged, 
often craggy. In other places they are heavily forested and the vegetation 
is thick. This is but one barrier to land communication. Although high 
altitude itself is not exceptional, the impassable nature of the mountains 
is. After twenty years of construction there is only a dirt road leading 
over the mountains of northern Guatemala. Costa Rica, with the highest 
peaks, has a highway rendered useless during most of the eight-month 
rainy season. In addition, most of the heights are shrouded in fog 
throughout the year; bright sunlight is uncommon. Such, then, is the 
barrier to direct land communication. 

Elsewhere, Central American geography is completely different. From 
the mountainous regions, extending toward the two coasts, the land slants 
down toward sea level in a gently rolling fashion, finally becoming flat 
along the Pacific and Caribbean. In the lowlying coastal areas tempera- 
tures are high, air sultry, the climate strictly tropical. Lush jungle 
foliage, verdant plants, strange animals and insects, and hours of 
relentless sun, all characterize these regions. Population is relatively 
sparse and, in deference to the heat, indolent. Only at the large banana 
plantations or in the sugar cane field is activity likely to proceed except 
at a slow pace. The entire sub-continent is subject to severe, steady rain. 
Even in the highest elevations the rainy season generally extends from 
mid-April or May into November, and few days pass without at least a 
little rain. In the higher regions, annual rainfall will near 75 inches. 
Toward the seas it will easily pass 160 inches. Indeed, parts of Guatemala 
average 195 inches of rainfall a year. While this has a certain nuisance 
value, it is of considerable importance for other reasons. The basic 
agricultural economies are geared to the rainy season, without which crops 
wilt and die. Early rains, for example, have been known to bring the 
coffee plants into blossom prematurely. A dry spell may then destroy 
nearly all the plants. And an occasional rainy season may be dry enough 
that the agricultural products are poor as a result. At the other extreme, 



6 CENTRAL AMERICA 

excessive rains can substantially damage or even destroy a year's crop. 
This is a periodic occurrence in the banana industry. High winds, 
tropical storms, and days of unrelenting rain may completely inundate 
acres of bananas, ravaging the harvest. Complete recovery may take as 
long as two or three years. 

Such realities can be offset by a variety of features which contribute 
to the geographic beauty of Central America. There are literally dozens 
of volcanic formations, most of them readily accessible to travelers. In- 
cluded among these are El Salvador's Izalco, the "Lighthouse of the 
Pacific," visible for miles from the Pacific. Poas, in Costa Rica, reputedly 
boasting the world's largest crater, is visited by those hardy enough to 
make a four-hour hike through the countryside. Each of the other 
republics can boast of at least a few volcanoes. Many are still active. 
Izalco caused considerable damage with an eruption in 1947, and Nica- 
ragua's Cerro Negro took lives in the late 1940'$. Not a few of the 
volcanoes are situated near mountain lakes which are untapped tourist 
attractions of considerable charm. Many, only a few hours' travel from 
one of the national capitals, lack only the investment of ambitious 
businessmen to become major tourist attractions. Others dot the country- 
side, including Lake Nicaragua, second largest lake in the hemisphere 
south of the United States. Roughly twice the size of the Great Salt 
Lake, Lake Nicaragua is, along with its sister, Lake Managua, one of the 
more attractive sights of the region. 

Although these geographic facts have evident importance, population 
itself is a vital factor. Representing a variety of racial and national strains, 
ten million people live in Central America. Whites, Negroes, Indians, 
mulattoes, mestizos, and all imaginable combinations of cross-breeding 
are found in the area. Contrary to popular opinion, the racial complexion 
of the different countries is far from uniform. To the north, for example, 
Guatemala has a 62 percent Indian population. Many are unacquainted 
with the barest elements of modern life. They continue to worship their 
ancient gods, speaking an Indian dialect, not Spanish. On the other hand, 
Costa Rica's population is 97 percent mestizo, of which the greatest part 
is pure white. This region was never densely populated, and as a result 
of Spanish colonial policies, most of the indigenous elements were wiped 
out or relocated elsewhere. Today there may be fewer than seven 
thousand Indians in the country. 

Between these extremes lie the other countries. In most, the pre- 



SUB-CONTINENT IN CRISIS 7 

dominant strain is mestizo, a mixture of European and Indian blood. 
In El Salvador 78 percent, in Panama 65 percent, and in Nicaragua 69 
percent o the population is mestizo. The pure white percentage is 
generally around fifteen, with the Indian element roughly comparable. 
Pure-blooded Negroes are not numerous and tend to live in concentrated 
areas. Most were brought from Haiti or Africa generations ago to 
contribute their labor at rock-bottom prices. In Panama, for example, 
thousands of Negroes were imported from Jamaica, Haiti, and neighbor- 
ing islands at the turn of the century to build the Panama Canal. Their 
labor was extremely cheap, and they withstood better than others the 
rigors of physical labor under tropical conditions. To the north this 
same procedure was adopted, although on a smaller scale, at banana 
plantations and palm oil installations. With this diversity of racial 
backgrounds, there is a relatively low amount of intolerance. Discrimina- 
tion is not unknown, to be sure, yet it is less a factor in the social structure 
of Central America than in other parts of the world. Intermarriage 
began centuries ago between Spanish colonists and soldiers and the 
Indian girls. This rapidly became an accepted practice, and no stigma 
was attached. Consequently, the people have lived in this fashion for 
several hundred years. Today the lot of pure-blooded Indians and 
Negroes is greatly inferior to that of mestizos or Europeans, although not 
generally as a direct result of intolerance. This inferior social position, 
particularly that of the Indian, is the result of other factors. 

After years of servitude under Spain, the Central American Indians 
retreated to a secondary position. Most retired to less accessible or some- 
what undcrsirable parts of the land. In Guatemala they live high atop 
the mountains, scratching out a meagre existence. Elsewhere they have 
also drawn away from the centers of population, effectively bypassing the 
mainstream of modern life. Rather than venture out among the city 
people or the land-owning mestizos they instinctively avoid all contact 
with other groups, living an extraordinarily narrow existence with fellow 
natives. Through the years, the Indian has fallen even farther behind 
the rest of the population. If he goes to market in one of the more popu- 
lous areas, he is bewildered, frightened, and in the end possibly duped 
of his goods. Under such circumstances, the Indian exists on a social level 
inferior to the bulk of the population. This is no result of great in- 
tolerance on the part of others, however. Like the Indians, the Negroes 
generally lead a subordinate existence. Here, intolerance is more evident. 



8 CENTRAL AMERICA 

In Panama, the treatment of the Negroes has been a problem for some 
years. This is dealt with at greater length in Chapter Seven. Suffice it 
to say that they have not been able to integrate themselves satisfactorily 
into society. This despite their willingness and desire to improve their 
status, a willingness utterly lacking in most Indians. Panama excepted, 
the Negroes have banded together because of economic factors and from 
social choice to form small groups from which there is no great desire 
to mix with others. On the part of the mestizos and whites, the Negroes 
as a group are viewed with condescension. Individually, however, there 
is less discrimination. In most of the capitals there are colored lawyers, 
businessmen, and legislators active in the life of the city. For an ambitious 
and intelligent young Negro, the obstacles to advanced education and a 
professional career are ones of poverty and financial need, not racial 
persecution. 

The potential economic role of Central America will increase greatly 
in the next few years as the result of a general population expansion, 
among the most rapid in the world. According to a 1950 survey by the 
United Nations, this population is increasing at the rate of 2.3 percent 
annually. This will bring the population far past the twenty million mark 
by 1980. Few things could potentially be more fortunate, in view of the 
low population density. In El Salvador the density is 161.1 per square 
mile. None of the other five is even half so densely peopled. In future 
terms, this means that the many untapped economic resources may be 
developed by an augmented population. This, however, is dependent 
upon successfully coping with the existing handicaps of an overwhelming- 
ly rural population. Nearly 70 percent of the population is rural. Con- 
sequently, society is generally oriented along non-urban lines, and no 
government can escape the fact. Rural life has characteristics bearing 
upon the education, culture, political participation, and the very nature of 
the people. Such factors as isolated, unevenly distributed population 
centers, inefficient use of total land area, and rigid social structure have 
led to the existing system of agricultural units of production. No more 
than a few hundred families own the great bulk of land. For them, 
Central America is a region of wealth and prosperity. But the vast 
majority is subordinated to these few and leads a weary life of drudgery. 
More than 70 percent of the population earns two hundred dollars or less 
annually. This points up the striking contrast of wealth and poverty so 
characteristic of these countries. The rich control the money and show 



SUB-CONTINENT IN CRISIS 9 

little willingness to reinvest it. New opportunities are consequently 
closed to the peasant. Untapped natural resources remain a potential of 
what could be; government programs of public works and economic 
improvement are crippled by consistent refusals of the large landowners 
to reinvest their money, to open new vistas of progress. 

In rural areas the family group is universal. Authority is basically 
patriarchal. From generation to generation there is little change. Child- 
hood is a brief part of life. From the age of six or seven, children arc 
expected to participate in the endless task of family-feeding. There is 
no time or opportunity for childhood games or youthful fantasies. Chil- 
dren work in the fields alongside their parents, brothers, sisters, and other 
relatives. Little attention is given to education. It is compulsory from the 
age of seven, to thirteen or fourteen, but seldom enforced. Home pres- 
sures contribute to poor attendance. After perhaps a year or so of study 
a child is taken from school by his parents, die process assured by bribing 
the teacher to remove his name from the class roll. In many areas, the 
school may be several miles from the home of the child which raises 
higher barriers. As children grow up, marry, and pursue life, their 
attitude is one of complacency, not defiance. The rural people accept 
their lot, hard though it is. They ask no more than adequate food and 
a minimum o sickness. The world is accepted as it is. There is no 
desire to dominate life, but rather to come to terms with it as fully as 
possible. Manual labor is considered by rural people the most honorable 
form of work; persons who do not pursue an agricultural existence and 
those trying to change the way of life arc regarded with scorn. 

A characteristic of rural areas is the system of land holdings. Like 
many of the things discussed above, this is subject to variation from 
country to country. In general, it is true that land holdings are either 
quite large or extremely small. The large holding is the latifundio, 
frequently several thousand acres large. Nathan L. Whetten once wrote 
that these expanses are often held for purposes "of prestige, not eco- 
nomics." The owner of the latifundio usually keeps out of production 
large portions of the land, and he rarely reinvests much of his income 
in improvement. Labor is paid a beggarly sum, and its efficiency is cor- 
respondingly low. The unbalance between labor and capital is a serious 
factor in maintaining the inequitable wage system. On each latifundio 
the owner is absolute ruler. His word is law, and those who defy it find 
themselves without home, job, or food. At the other extreme is the small 



io CENTRAL AMERICA 

holding, the minifundio. This is usually a poor chunk of land. It may 
be on a mountainside, where the problem of erosion must be dealt with 
but never is. There is barely enough space to cultivate the staples with 
which the owner must feed his family. Year after year the same crops 
are cultivated, and the soil becomes understandably poor. In a matter of 
time the family gathers together its few possessions and trudges a few 
miles to a similar location. Seed is inferior and crops sparse. Planting 
and harvesting methods are primitive, time-consuming, and ineffective. 
Even plowing is often done by hand scratching or digging the surface, 
dropping in the seeds by hand, and covering the space with tired topsoil. 
Such an existence is almost as complete an economic slavery as that to 
which the latijundio laborers are subjected. 

The effect of the population, then, is a factor to be dealt with by each 
individual government. Future economic development depends upon 
the rural population and, under existing conditions, it seems almost pro- 
hibitive. As for political activity, the problem is also imposing. To much 
of the rural population there is nothing less interesting than politics. It 
is viewed with suspicion as an evil, incomprehensible specter conjured by 
the urbanites, who are generally distrusted. Particularly by those living 
on small land holdings, there is great distrust of the outsider. And those 
living on latifundios are less members of the country than of the individual 
plantation. Their whole life revolves about the events of the latijundio; 
speeches and politics seem remote, unreal. With such attitudes, future 
leaders have many obstacles to overcome. Yet they must be conquered 
if economic development and political maturity are to come. 

HERITAGE OF DARKNESS 

Few parts of the world have struggled with more energy and less 
success in the search for representative democratic government. All of 
Latin America has pursued the reality of free government while every- 
where it has been more chimera than fact. There are many aspects of 
this continuing quest for political maturity. None is more important 
than the Spanish political heritage. After the conquest, a system of rigid 
civil authority was instituted. On no level was there individual partici- 
pation. Spanish government was highly centralized. The natives, lacking 
self-government, lived under absolute despotism, obeying the royal edicts 
from Spain or, more often, the monarchical regents in Central America. 
There was a pervasive atmosphere of suppression; democratic government 



SUB-CONTINENT IN CRISIS n 

was something alien. Colonial rule was usually administered by a viceroy 
sent from Madrid and, in cases of sudden trouble, there was no time 
for royal consultation. From this beginning grew the tradition of "per- 
sonalism" which lives today. 

When the Central Americans threw off the Spanish yoke in 1821 
there was no basis for democratic government. All that had been ob- 
served and experienced was of authoritarian nature. Constitutionalism 
was unknown, democratic institutions unheard of. There were few men 
with the education, ability, or following to unify the region once inde- 
pendence was won. Various attempts at Central American federation 
failed. Even in the individual countries people were split by warring 
factions. In the absence of traditions of legitimacy, those men with per- 
sonal following and ambition and there were many pursued power by 
the only means at their command, violence and revolution. The result 
was over a century of fratricidal strife. There was an almost total absence 
of political parties. Instead, political affairs revolved about a personal 
leader to whom the people might rally. 

The Latin principle of caudillismo is a prevalent political phenomenon 
in Central America. The caudillo is a personal ;<?/<?, or "boss." Often 
the representative of a small geographic section, he is followed passionately 
by a small coterie of followers, almost entirely on the basis of personality. 
Central Americans think in terms of the personality; policy is generally 
secondary and may be formulated once power has been won. Often the 
caudillo is a magnetic, charismatic individual. He wins converts to his 
cause by making occasional public appearances at which he paternalisti- 
cally listens to individual problems and complaints, issues sweeping 
promises, fills the listeners' hearts with fervor and their stomachs with 
cheap liquor, and rides off with even greater popularity. Caudillismo has 
been a major reason for the century-long instability of these six states. 
Through the years, it has become intimately connected with two other 
principles of authoritarianism personalismo and continuismo. Once a 
caudillo wins access to power, he immediately turns to personalismo as 
the instrument upon which to anchor his future. Supporters and 
sycophants are brought into public office, national administration is 
overloaded with his supporters, and their tenure is dependent upon per- 
sonal fidelity to the caudillo. Nepotism is widely practiced; even remote 
members of the official family receive jobs of one sort or another. Once 
the caudillo has firmly entrenched his backers in positions of control, he 



12 CENTRAL AMERICA 

can turn to the problem of establishing his continuation in office. Thus 
he invokes continuismo. 

Even the most dictatorial rulers make a fetish of cloaking their despo- 
tism in the mantle of freedom and democracy. To the outer world a pic- 
ture of a bucolically happy peasant democracy must always be given, even 
if no one is deceived. A regime coining to power following a coup d'etat 
will usually call itself a "provisional" government pending the "stabiliza- 
tion of conditions and quelling of public disorders." Opposition is re- 
pressed and electoral machinery placed in the hands of the revolutionaries. 
Then a vote is held, often with the official candidate unopposed. Later 
elections may be conducted to "affirm the will of the people." A personal 
twist to the process was developed by Tiburcio Carias in Honduras. He 
arranged for the subservient legislative organ to draft a new constitution, 
extending his presidential term several years more. This was repeated 
when the law limiting presidential terms to six years was waived in his 
case, that he might continue at the service of the Honduran people all 
without any referendum from the people. 

The fiction of legitimacy is further buttressed by constitutions calling 
for complete separation of powers. Unicameral assemblies only Nica- 
ragua has two legislative bodies are entrusted with a carefully en- 
numerated list of duties. In practice these legislatures are rubber stamp 
institutions with no real authority. Accustomed to receiving orders from 
the presidential palace, they treat these instructions like commandments 
handed down from on high. In the rare instances when the legislators 
have a chance to exercise significant authority, they are either unable or 
unwilling to do so. Under such personal government, constitutional 
traditions have never developed beyond the formative stage. No Central 
American country has survived its 135 years of independence without 
a fistful of constitutions, most of them scrapped or rewritten by an 
insurgent band of revolutionaries. Constitutional statutes and laws 
rarely fulfill their function of permitting and facilitating a smooth proc- 
ess of government and democratic succession. Almost without excep- 
tion they have prohibited a president from succeeding himself without 
the intervention of a term served by another person. This has either been 
ignored, revised, or else circumvented by die selection of an "official" 
candidate pliable to the wishes of the outgoing executive. 

Another important crutch of the dictatorial government is the "state 
pf siege," or "state of emergency." Most constitutions have a catch clause 



SUB-CONTINENT IN CRISIS 13 

permitting unilateral executive declaration of a national state o emergency 
during which all civil liberties, guarantees of personal freedom, constitu- 
tional rights, and exercises of individualism are suspended. The govern- 
ment rules by executive decree, unilateral decisions emanating from the 
ex-caudillo. Martial law may be declared, often a signal to turn loose 
bands of ruffians which roam the city, attacking and beating anyone who 
crosses their path. For the opposition, hounded and persecuted though 
it may be, this prolonged state of emergency can be met in only one way 
revolution. 

Constitutional means of opposition usually end in failure. When elec- 
tions are finally held, they are conducted by election boards manned by 
supporters of the regime. Campaigning is restricted, and opposition meet- 
ings are often forbidden under the justification of preventing political 
disturbances. Candidates are harrassed at every turn. They may even 
be declared ineligible for the election. The open cynicism of election 
officials is startling. On election day, voters may be intimidated if they 
show signs of opposition to the government. The secret ballot is only 
occasionally employed. Even if all the above procedures are ignored, it 
still lies within the power of election workers to falsify returns in favor 
of the official candidate. With only these men reporting the results, the 
opposition has no assurance that the returns will have any validity. In 
the face of all this, the common answer is revolution. 

Nowhere has the practice of violent change been more openly espoused 
than in Latin nations. In Central America, any government is fair game 
for revolutionaries. This is perfectly in keeping with the curious ethics 
of politics there. In the same spirit a government persecutes the opposition 
at every opportunity. The opposition, if building military strength for a 
revolt, bides its time until the moment seems propitious, then strikes. 
The government, in fighting back, rarely expresses ethical resentment 
against the opposition. Most regimes would admit that, if they were too 
weak to suppress a revolution, then indeed the rebels would deserve a 
chance in power. Nicaraguan dictator Anastasio Somoza expressed this 
philosophy once after narrowly escaping an assassination attempt, some- 
thing highly unprincipled in the great game of politics. "Hell, it's no 
crime to overthrow a government in a fair fight, but murder is something 
else." This revolutionary habit has long been the traditional means of 
reversing election results. Thus a vicious circle has developed denying 
the growth of democratic practice. Power is used to justify fraud since, 



I 4 CENTRAL AMERICA 

once a government leaves office, it lacks constitutional means of regaining 
power. This very refusal prolongs the system. After a few years, the 
opposition determines to follow the same pattern once it is in power, and 
so the cycle is repeated. And the people, too often unaccustomed to 
democratic procedure, accept the situation calmly. 

Concomitant evils are graft and corruption. Even the staunchest 
supporters of the president receive ridiculously low wages. If they are 
to live at more than subsistence level, they must rely on financial aid 
from the public monies. Custom has dictated that a government worker's 
existence depends upon various unofficial supplements to the salary itself. 
Often this is done quite openly, and the practice extends throughout the 
hierarchy. On the top level, a cabinet minister may negotiate a series of 
contracts directly beneficial to private enterprises of which he is a major 
stockholder. Most high officials are also quick to use the influence of 
their position for personal financial profit in the form of discriminatory 
or beneficial commercial agreements and tariff walls. At the other ex- 
treme, the porter or office boy so common to most government offices may 
well accept a small tip from a visitor in order that he may see the office 
chief before others who may be waiting. Government hierarchy is honey- 
combed from top to bottom with such procedures. 

One of the most serious effects is that exerted on political parties. The 
usual idea of Western democratic political parties is almost totally absent 
in the Central American republics. There is no system of traditional 
parties. The great majority are small personal machines created for the 
express purpose of promoting one individual. Once this man leaves 
power, is defeated, retires, or dies, the party disintegrates. Such men as 
Castillo in Guatemala, Osorio in El Salvador, Ulate and Figueres in Costa 
Rica, Rem6n in Panama, and Lozano in Honduras are, or recently were, 
in power supported by a party created with one idea in mind to elect 
the man or, by some other means, to put him in power. Often these 
parties bear long, involved tides. Typical are the National Liberal Party, 
Patriotic Front Coalition, National Liberation, and National Popular 
Alliance. Such parties dedicate themselves to the destructive opposition 
of rival political elements. Execrable insults flow back and forth, even in 
countries with a controlled press. The slightest possible incident is blown 
up into absolute proof of a dastardly scandal perpetrated by the government 
or a rival political faction. A Costa Rican newspaper once headlined 
"HONDURAN GOVERNMENT OVERTHROWN IN POPULAR REVOLT." It was later 



SUB-CONTINENT IN CRISIS 15 

explained that government-supported candidates were trailing in the early 
returns o a small local election. 

Positive criticism or formal programs of action are almost non- 
existent. A party, if it may be referred to as such, is concerned solely 
with tearing down the opposition. Its own plans are nebulous. The 
attitude seems to dictate that there will be plenty of time to make plans 
once actually in office. The platform, if indeed one is issued, will be filled 
with half-truths, platitudes, generalizations, and promises of something 
for everyone. Even in recent years exceptions have been rare. Parties 
have been founded with the purpose of forming a permanent stable 
political organization. One of the most recent attempts was that of 
Costa Rica's Jose Figueres. Yet the permanence of his effort seems 
questionable too. Under such circumstances, the only sort of party which 
can continue to operate effectively is a highly disciplined extremist organi- 
zation. The Nazis had local parties until they were weeded out following 
Pearl Harbor. The Central American communist parties are the only 
such groups at present, and they withstand all attempts to wipe them out, 
although in several cases their activities have been drastically reduced. 
Although the communist parties receive orders from abroad, they are 
composed primarily of nationals and thus have a certain initial respecta- 
bility. As they can provide well disciplined, carefully trained adminis- 
trators, the Communists are often able to move into government posts. 
This was notably true in Guatemala, where two successive regimes relied 
heavily upon the administrative and political skills of the thoroughly 
trained Communists. 

No political tradition is older than that of army domination. Since 
the 1821 break with Spain, the republics have conducted affairs with active 
participation by the military. Even in recent years, with military coups 
diminished somewhat since the nineteenth century, the army is the key 
factor in any disturbance. Governments universally rest upon the backing 
of the army. Without this there can be no assurance that the regime 
will survive from one day to the next. In El Salvador, the last two presi- 
dents have been military officers, firmly supported by the military. The 
Somoza regime in Nicaragua is backed by the National Guard. In 
Honduras, the army was loyal to General Carias for sixteen years and 
then transferred support to his hand-picked presidential successor. Guate- 
mala's Castillo, as army officer, won his 1954 uprising only when the 
regular army officers refused to fight for communism-tinged Jacobo 



16 CENTRAL AMERICA 

Arbenz, himself a former officer. And in Panama, only four years ago, 
the chief executive, Jose Rem6n, was the former chief of national police, 
Panama's only military force. The record fails to reveal any general 
trend in army action. Frequently it has proved loyal to the existing 
government, bound as it can be by the high wages and plush living 
conditions with which civilian presidents ply them. At the same time 
this may be of no use, as in Guatemala in 1954. The army may well 
decide to sit out any pknned revolution, in which case the regime has 
little chance of survival. Other times it will rally to the support of a new 
rebel, throwing its weight against the government it is sworn to uphold. 
Only a small circle of ranking officers need be influenced, and the subordi- 
nates follow unquestioningly. Thus the army is the one indispensable 
tool with which the regime must cope. Many governments have existed 
only at the whim of army leaders, an insecure tenure at best. 

Students are another potent force in political affairs. Universally, stu- 
dents are young adults with energy and spirit to burn, often motivated 
by the highest form of idealism. In Latin America, this combines with 
natural Latin volatility to produce a dynamic, incendiary, and often 
irresponsible person. As a former representative of the United States 
National Student Association, the author has met, traveled among, and 
argued with these people for countless hours. Many are quite sincere. 
However, they look around and see the social and political inequalities of 
their country. The automatic response is to rectify all wrongs at once. 
And so the students take it upon themselves to be the conscience and 
guide of the nation. In their misguided enthusiasm they become involved 
in political rallies, defy government troops from the sanctuary of uni- 
versity walls where the military are traditionally forbidden to enter 
and only rarely do positive good. Nonetheless, they do have at least a 
strong nuisance value and, occasionally, may be instrumental in some 
important political event. 

A final force which often goes unrecognized is that of the commercial 
interests. With the growing urbanization of the Central American capital 
cities, the old latifundio owner is slowly wielding less political power. His 
position is being suppknted by the city business interests. Only the 
shrewdest and most secure regimes are able to take personal control of 
business. The others the great majority are obliged to deal with the 
merchants. This gives commercial people a role that is often powerful 
and frequently at odds with the wishes of the populace. The most recent 



SUB-CONTINENT IN CRISIS 17 

example is the commercial pressure brought on the Panamanian govern- 
ment to influence the 1955 Canal Treaty with the United States. This 
will be demonstrated in Chapter Seven. The important thing is to 
recognize the hidden but sizeable role played by business interests today, 
without any reference to foreign enterprise. 

"The fundamental fact upon which the dc facto governments or 
outright dictatorships of Latin American postulate their existence is a 
semantic subtlety by which they maintain the outward semblances of a 
free democratic system for export purposes while a thoroughgoing despo- 
tism holds sway within their borders." 1 

In such words does an outstanding liberal commentator speak of Latin 
American and, inclusively, Central American dictatorial governments. 
One of the most outspoken critics of despotic government, Arciniegas 
has observed that the fundamental conditions of democracy are nullified 
where critics and opposition are silenced, elections fraudulent, radio and 
press censored, and rival organizations outlawed. Despotic governments 
repeat the promises the people want to hear but continue the pursuit of 
repression, corruption, and authoritarianism. Opponents are jailed, exiled, 
or bribed into ineffectiveness. 

Central America has become synonymous with political instability 
and revolutionary government. The colonial tradition has led to the 
continuation of anarchy and despotism. Persecuted majorities continue 
to fight dictatorial minorities with limited success. Where minority gov- 
ernment may be less repressive, people arc occasionally aroused by prom- 
ises of democracy, elections, and representative government. Governments 
continue to mouth the principles of democracy as the vanguard of regional 
progress. When words conflict with deeds, however, confusion and doubt 
are engendered. An attitude of cynicism and mistrust results. To 
Arciniegas and others, all this is even more odious since they feel Spanish 
America was conceived in the ideals of freedom no less than the United 
States. To be blunt, this is absurd. An examination of the historical 
background of the area, even as cursory as that which preceded, reveals 
the lack of liberal democratic principles. This area was founded in the 
spirit of the Spanish monarchy and the Inquisition. From the very first, 
authority was repressive, despotic, and brutal, with individualism 
thoroughly discouraged. Private conscience was not a factor. Only 
unquestioned decisions of the throne or its representatives carried authori- 
ty. Woe to him who dared reject it. This atmosphere continued for more 



18 CENTRAL AMERICA 

than three hundred years. Only then was royal rule thrown aside. 
During 135 years of independence there have been only glimmerings of 
true democratic spirit. These have been extinguished periodically by the 
flood of caudillismo, dictatorship, revolution, and the flaunting of human 
rights. 

In view of these historical facts, the presence of traditional liberal 
political ideals seems the thinking of a wishful imagination. Certainly 
there is little indication of long-existing democratic principles. To say that 
the area was first conceived in liberty is to ignore that democracy is a 
commodity the Spaniards never brought to the New World. Where such 
ideals do exist today, they are not the result of past history. No doubt 
many nationals today nurse the ideals of democracy. These principles, 
to those who have come into contact with them, are cherished as well they 
should be. Among these people are teachers, journalists, workers and 
leaders. Unfortunately, these people form a tiny segment of the popula- 
tion. For every one of these men there are at least four others to whom 
the most elementary liberal political ideas are foreign. The basic fact 
that the Central American population is over 50 percent illiterate* is in 
itself a strong explanation. Geographic and economic factors are also 
strong contributors. So isolated are many of the country people that they 
are almost never reached by city folk and ideas, let alone political 
participation. Rarely is a political candidate seen, and then probably 
only a minor local official. The land-holding system heightens the 
isolation of the individual. Thoughts of democracy and freedom are 
severely handicapped under such circumstances. To the extent that any 
human being must have hidden desires for individual freedom and ex- 
ercise of opinion, Central America has many democratic sympathizers. 
In any more literal sense, however, the great mass of the population is 
much too inert to constitute an articulate democratic majority. 

In Central America, few men have been more criticized than the 
military rulers and dictators with which the area has been plagued. It is 
often said that these men, from their arrogance toward democratic pro- 
cedures, are totally unrepresentative of public opinion. This is one of 
many popular illusions that should be thoroughly debunked. It is not 
unusual for a caudillo to have the unquestioned support of the majority of 
his people. He may have first won office as a representative of free and 

*Figures are unreliable to the point of absurdity. This one is probably less than 
the actual percentage. 



SUB-CONTINENT IN CRISIS 19 

liberal political ideals. He may indeed be a vociferous orator in favor of 
democratic principles. Having taken office, he may also pose as an 
advocate of progress, and in time bring material benefits to his country. 
Subsequent chapters will deal in some detail with two notable figures 
who fit this pattern Tiburcio Carias of Honduras and Anastasio Somoza 
of Nicaragua. Canas, for half a century a dominant figure in Honduran 
affairs, was for sixteen years his country's president. During these 
years a number of measures were introduced and developed which ad- 
vanced Honduras in different ways. These were quite inadequate in 
view of his long administration, although there is no real question that 
he was the most popular politico in Honduras during his earlier years 
in office. 

Nicaragua's Somoza is somewhat different. Although running in 
several elections after becoming chief executive in 1937, General Somoza 
was never openly opposed by a strong anti-government candidate. There 
were a large number of Nicaraguans, even excluding political exiles, who 
hated him with undying bitterness. They would have stopped at little 
to remove him from power. Several assassination attempts were made 
prior to the fatal attack in 1956. At the same time, Somoza was genuinely 
popular with many Nicaraguans. To those who never crossed him 
politically, General Somoza was generally liberal. Public liberties and 
individual freedoms were generally respected, while business flourished. 
Open and honest elections in Nicaragua would very likely have returned 
him to office. Even more surprising than this is the affection in which he 
was held by many. This belies some of the more common generalizations 
about Central American despots. As Chapter Five reveals, Somoza 
undeniably accomplished much in many fields, regardless of the degree of 
democracy he permitted. 

Such examples suggest a conclusion which many have chosen to ignore. 
Under the retarded circumstances of Central American life, dictatorship 
if competently administered and genuinely concerned with national 
progress has an important role to play. Of course, any government 
resting on military strength in place of public opinion earns opprobrium. 
Unless democratic elections, civil rights, and political liberty are com- 
pletely untrammeled, a government leaves much to be desired. Yet 
these conditions are so retarded that they can scarcely mature while 
material circumstances are so shockingly inadequate. There is, it seems, 
a role of value for the authoritarian government. This is not to suggest 



20 CENTRAL AMERICA 

the thesis that backward sections must pass through a period of dictator- 
ship on the path to political enlightenment. However, the situation in 
Central America is significantly different from that of, for example, 
Indonesia, or other fledgling Far Eastern nations. There, history records 
peoples being subservient to foreign powers through centuries of domina- 
tion. Only since World War II have such countries won their inde- 
pendence and vented nationalistic passions. 

In Central America, colonial rule was followed by a pattern of 
authoritarian government administered by countrymen of those subjected 
to the rule. To be sure, there are voices raised against United States 
dollar diplomacy and economic imperialism. Even without this, a state 
of extreme political insecurity continues. The absence of improper inter- 
ference from abroad does not solve the critical problems of government 
and economy. This lends credence to the belief that true democracy is 
severely handicapped, if not completely handcuffed, by the extraordinarily 
involved economic complexities. Key to this analysis is the factor that 
is too often overlooked: the low standard of living. The great bulk of 
the population is gnawed at by sheer hunger, not a passion for democracy. 
The Central American peasant thinks of one thing, feeding himself and 
his family. His whole life is a continuing battle to fill the stomach, not 
always a winning struggle. When we call Central America underde- 
veloped, it does not mean the lack of machine-line industry, a car in the 
garage, a recreation center for the children, and a radio in the house. 
Central Americans live on the brink of starvation. Hunger is a familiar 
specter. In rural areas it is rare to see an overweight person. There is 
too little food. Poverty, illness, poor crops, disasters of nature, all these 
sweep up the peasant in the continuing grim battle for existence. 
Only rarely does he lose, but the possibility is omnipresent. The 
hunger for democracy and representative government can only be treated 
when physical hunger itself is curbed. 

Of Central America's twin problems of economic wellbeing and 
political competence, the first must receive priority. A starving traveler 
lost in the desert will submit to another in order to be led to the oasis. 
He will not wait for someone promising equal treatment or democratic 
government at the oasis. In such circumstances, there is a place for 
absolutist government in the scheme of things. Somoza of Nicaragua is 
again an excellent example. In two decades he did for Nicaragua what 
more than a century of irregular governments found impossible. If his 



SUB-CONTINENT IN CRISIS 21 

political regime was far from democratic, it was scarcely more undesirable 
than the endless succession of revolutionaries, military leaders, and out- 
right bandits who stole power from one another, generation after genera- 
tion. It may well be that, if Nicaragua seems ready for true democratic 
government today, it is a result of the material progress achieved by the 
Somoza regime. 

This is not an isolated case, for there are other examples. In Guate- 
mala the thirteen-year regime of Jorge Ubico brought a number of im- 
provements. These were admittedly inadequate and, in 1944, he was 
overthrown. However, Ubico had helped create an economic situation 
under which a greater desire for democratic ideals was aroused. Indeed, 
his regime was followed by nearly a decade of continuous government, 
including a free election, until communist infiltration upset the picture. 
In Panama, a number of critical matters were alleviated economically dur- 
ing the brief government of strongman Jos Rem6n. These in time may 
well have led to an atmosphere more conducive to the encouragement of 
political freedom. His death at the hands of assassins interrupted the 
general trend. 

The point is this: Central America cannot enjoy freedom and indi- 
vidual liberty until democratic ideals become a reality to the people. This 
in turn can come only when the basic problems of subsistence and living 
conditions are met. So inculcated are the people to authoritarian and 
disciplined rule, that they are most likely to find economic satisfaction 
under strong governments. Country after country gives evidence of this 
reality, bitter though it may be. In Guatemala, the revolutionary military 
government of Castillo, while dedicated to democratic government, im- 
proved the economic situation with the authority of an increasingly 
insistent regime. El Salvador, enjoying its greatest prosperity in years, 
has not freely elected a president in ten years. Nicaragua is economically 
the soundest country of all the isthmus, after a full generation under the 
Somozas. Honduras lost its small measure of prosperity when it failed 
to elect a president by constitutional means. In Costa Rica, by far the 
most democratic, a series of government scandals added to generally poor 
administration created economic conditions the new government has yet 
to alleviate. Panama, finally, is thriving on the fruits of the economic 
policies and contractual negotiations of former police chief Rem6n. 

So deeply rooted are the ways of political chaos and anarchy in Central 
America that no rational, progressive leader has more than a narrow 



22 CENTRAL AMERICA 

chance of success. Only the strong personality can gain the necessary time 
and means to establish political stability and meet the crying material 
needs of his country. Once the worst of these are fulfilled, democratic 
leadership has a substantial opportunity to achieve genuine political 
freedom. No matter what the volume of writing, the number of speeches, 
the behind-the-scenes maneuvering, the cries for liberal leadership and 
an end to authoritarian government Central America is first a land of 
illness and hunger. 

WEALTH AND POVERTY 

Rich, fertile land is a geographic endowment of the Central American 
isthmus. There is no need for reliance on one or two products alone. 
Yet with mineral deposits limited, the emphasis must naturally be placed 
on agricultural products. The region has traditionally exported raw 
materials to the industrialized nations, importing manufactured goods. 
The result has been an economic unbalance of trade which increased 
harvests have not removed. Disparate economic conditions have multi- 
plied through the years. Despite dormant wealth, the republics of 
Central America exist in a state of poverty. Most people are deprived of 
the most elementary services civilization has to offer. 

While prices are high and continue to rise, inflation is steep, and real 
incomes are falling. Government financing, something unheard of until 
the postwar years, is often ill-planned and inflationary. Facts show that 
state planning has failed with a discouraging consistency over the past 
years. Government intervention notably under Figueres in Costa Rica 
and now in the other republics as well has succeeded in establishing a 
complex hierarchy that consistently fails to improve the lot of the people. 
As government gradually becomes a major business of a nation, the 
capitals become increasingly overcrowded from the influx of people from 
the countryside in search of an urban existence on higher than subsistence 
terms. Most are sorely disappointed. The general failure at official 
planning has increased budgets, swollen national debts, and brought a 
greater reliance on the government than ever before by those dependent 
upon it directly for a livelihood. Measures have unhappily proved im- 
possible of realization and aggravated the grave state of economy and 
trade. With private financing usually limited and extremely conservative, 
government participation in matters of exchange and finance has even 
greater impact on prices, taxes, the rate of exchange, and money supply. 



SUB-CONTINENT IN CRISIS 23 

The rush to assume the trappings of a modern, twentieth-century govern- 
ment shrouds a general inability to grasp the problems and machinery 
inherent in this kind of state. 

National economies in this area have traditionally relied on one or two 
products as the staple of international trade. El Salvador's chief export, 
coffee, accounts for more than 80 percent of her outgoing goods. In 
Guatemala the figure is 77 percent. Panama and Honduras, their 
economies tied to bananas, send at least half of their total exports from 
banana plantations. Costa Rica and Nicaragua are only a little less 
hampered. With this dependence on one or two crops to provide the 
necessary income for expansion, development, and the importation of 
finished products for the home consumer, there is a dangerous reliance on 
the international market. High prices in coffee, bananas, or cotton can 
temporarily swell national income. Comparable decreases in the price 
level over which the exporting countries have little control throw 
finances into a crisis. Confronted with the apparent impossibility of 
stabilizing international prices by leveling future demand in accordance 
with supply, the countries can do little more than expand their agricultural 
output in these critical products while prices are high. Yet the rate of 
progress in the last decade has been slight. Terms of trade have been 
advantageous, yet economic productivity has remained much the same. 
Increased productivity is crucial for increased per capita national income. 
There are exceptions, of course. Nicaraguan cotton has climbed amazing- 
ly in recent years, after having been a minor commodity. And Salvadoran 
coffee production has risen slightly. Yet, on the whole, there has been 
almost no increase in the physical volume of Central American exports 
since 1947-8. 

The terms of trade are but one of several economic factors. They 
give little value to sheer volume, which is often a major determinant of 
international prices. They also exclude the quality of the product, par- 
ticularly in the case of industrial products. Thus, in the absence of 
increased production, the hope must be for continued high prices. The 
value of the export dollar has quadrupled in the last forty years. Had 
it been otherwise the republics would have suffered severe economic 
dislocation. The postwar rise in coffee prices has been particularly spec- 
tacular. The 1955 price was more than four times as high as in 1944. On 
such uncontrollable rises in international prices rests the economic pros- 
perity of these countries. Recession and retrogression is a present danger. 



24 CENTRAL AMERICA 

One of the most familiar complaints heard from Central Americans 
is criticism of highly industrialized countries in paying too little for 
raw materials. If the United States, Great Britain, and West Germany, 
for example, were to pay higher sums for raw materials, these republics 
would have greater flexibility in expanding their economies and general 
productivity. This, in turn, would be advantageous to industrial nations. 
This is supplemented with the statement that too much is charged, in 
turn, for the shipment of industrial products. In short, the industrial 
country should pay more for raw materials while lowering its own prices 
on finished commodities. This is complicated by an insistence on levying 
higher duties on incoming products. This is rationalized by the argument 
that Central America cannot compete against highly efficient mass pro- 
duction goods without the aid of a high protective tariff. This is more 
noticeable in such small regional industries as shoes, leather goods, 
liquor, cigarettes, and processed foodstuffs. The contradiction is obvious. 
In the first place, if foreign companies pay more for raw materials and 
charge less for the end product, profit becomes impossible. Furthermore, 
if import regulations hike duties, no foreign producer can meet the higher 
duties while charging lower prices. Costa Rica has been particularly 
guilty of this curious economic theory, and it has backfired outrageously. 
Foreign imports have been reduced, business has declined. Imports are 
priced far out of the range of average Costa Rican pocketbooks. Most 
citizens either buy inferior Costa Rican products or else do without. 
Costa Rica has stubbornly insisted its theory is sound, but both in practice 
and in principle it is badly flawed. 

With Central America increasingly plagued by such problems, the 
solutions must come from the individual countries, their resources, and 
native genius. Economic production must rise, both through improved 
production techniques and individual industry. A concomitant problem 
is the balance between specialization and diversification of industry. A 
series of economic reports has recommended without exception the 
creation of small light industry throughout the area. Particularly with 
lower individual tariff walls, the region could be serviced by its own small 
industries. At present, there has been little effort to develop these po- 
tentialities. Certainly national trade barriers remain formidable. Countries 
prefer to buy a greater volume of foreign goods through specialization in 
one or two commodities. They rely upon foreign exchange currency re- 
ceived from the exportation of these crucial commodities; from these funds 



SUB-CONTINENT IN CRISIS 25 

are purchased consumer products and capital goods. The same money 
services foreign investments. 

Light industry itself faces serious problems. Large scale production 
and small unit profits are not necessarily effective. A factory in any 
one of the republics can produce enough in a period of weeks to meet 
demand for nearly a year. Present efforts aim at the lowering of mutual 
walls. In this way, Honduras, for example, might set up a paper factory 
supplying the entire region. Other nations could be represented by 
small factories devoted to other products. Until tax measures permit this, 
however, the high initial investment in even a small factory can scarcely 
be repaid. Yearly profits would be small indeed. Today there is neither 
mass production nor the demand of a large mass market. Commercial 
values are also an obstacle. Central American merchants are embued with 
a set of commercial values completely foreign to Europeans and North 
Americans. They are notably indifferent to the long term effects of any 
one transaction. Each sale provides a new opportunity for great profit. 
Wherever possible, one party will take advantage of the other. A busi- 
nessman may swindle a customer today, although the customer will cancel 
a valuable order the next day as the result. Always the merchant sells as 
high as possible, buying as cheaply as he can. There is little interest in 
mass production for wide demand. The merchant of Central America 
is little impressed by the promises of selling cheaply on a large scale. To 
him, each sale is an individual opportunity to make a killing. He cannot 
be convinced that small profit and high volume can produce a substantial 
profit. 

Perhaps the most crippling of all regional economic practices is that 
of reinvestment or, rather, lack of it. While consumption levels should 
be allowed to rise, investment must be encouraged. There is a fierce 
need on the part of the wealthy to put more of their savings into 
productive undertakings. In response, the well-to-do invest either in real 
estate or, even more frequendy, in foreign enterprises, tying up their 
money in solidly conservative commitments from which the countries 
themselves cannot benefit. Government financing, attempting to lead 
the way in development and financing itself, has tended to pursue in- 
flationary policies. Home inflation and the normal amount of political 
disturbances only force die more prosperous to extend their investments 
to secure enterprises, continuing, in turn, to withhold capital from their 



26 CENTRAL AMERICA 

own countries. The circle is unending unless interrupted by political 
chaos or economic collapse. 

Subsequent chapters deal with the six countries individually, while 
the concluding passages will pose some of the more ticklish problems and 
suggest whatever solutions might alleviate existing conditions. For the 
present, several characteristics should be re-emphasized and borne in 
mind while considering the individual republics. Although each nation 
has its own endemic peculiarities, it stands in juxtaposition with its 
neighbors. To a varying extent, these countries are passing through 
critical times. Past events have often borne such bitter fruit that today's 
conditions seem but a continuation of the rough-hewn tradition of 
revolutionary politics, disregard for constitutional practice, flaunting of 
public opinion, and reliance on the omnipotent strong man. Yet the 
crisis is today more severe than ever before. To the United States, the 
gravity stems in large part from the presence of the international com- 
munist movement. The discarded idea of the popular front, of socialism 
through representative government, is being re-adapted and twisted to 
fit local conditions. The relaxation of international tensions certainly 
improves the atmosphere in which Central American Communists con- 
spire against their respective governments. 

The Central American himself, however, is the direct target of the 
present crisis. For years, he has lived amidst poverty, misery, illiteracy, 
and the very lowest conditions of human servitude. It is more than a 
little surprising that this has not long since passed into personal and 
moral degradation. Now, after years of backsliding, the danger is acute. 
No bonfire can flicker unguarded without becoming in time a conflagra- 
tion. In 1954, the entire sub-continent escaped utter anarchy by the 
narrowest of margins. Since then there has been nothing to halt the 
erosion of spirit, body, and soul. The accumulations of over a century 
of exploitation first from abroad, now primarily from the interior have 
increasingly weighed down the ten million population. Unless the wide- 
spread causes of suffering are remedied, by both emergency and long- 
term measures, no one can prophesy the magnitude of the inevitable 
disaster. The critical moments are arriving the tide of Central American 
history is sweeping toward desolation, if not complete destruction. 



Chapter Two 



GUATEMALA 



AMID THE LUSH GREENERY of Central America, two hours' flying time from 
the Panama Canal, lies Guatemala. In appearance, it is a sleepy republic 
far removed from the outer world. To the north, a high plateau extends 
to Mexico and the Caribbean. In the south, a dense jungle sweeps 
toward a series of high lakes and volcanoes. This is the country that, in 
the last decade, has experienced the most violent outbursts of all Central 
America. Since World War II Guatemala has seen a communist govern- 
ment come to power and insinuate itself into the social fabric. Only 
after a tumultuous upheaval has the republic returned to a kind of 
normality. Communist designs on Guatemala, although temporarily 
diverted, have affected the country profoundly. There has been no true 
return to the past. Many families retain the memory of loved ones 
tortured or executed by the Red regime. Others today suffer reprisals 
from the existing government for suspected transgressions before the fall 
of communism. For the United States, Guatemala is living proof that 
the tentacles of international communism have reached to its very back 
door. And to the Communists, many valuable lessons are apparent. 
Future subversion in Central America will be planned in accord with 
Guatemalan successes and failures. 

The bulk of recent Guatemalan history is the tale of Red infiltration, 
expansion, consolidation, and ultimate defeat. Yet there is more, for 
Guatemala today is attempting to look ahead, to formulate plans that will 
lead it further away from the tragic experience of communism. While the 



28 CENTRAL AMERICA 

communist experience is fresh in national memory, it is also important 
to follow what has happened since then. Ultimate survival and progress 
may well be predicated upon this search for the path to economic de- 
velopment and legitimate political existence. 

COMMUNISM GAINS A FOOTHOLD 

Ever since its independence was established in 1839, Guatemala has 
suffered recurrent revolutions and dictatorial regimes. In 1931 a feuda- 
listic government under General Jorge Ubico began paving the way for 
communist subversion, creating circumstances under which communism 
was first to assert itself. One commentator has said that the Guatemalan 
custom of despotism reached a "savage climax under the megalomaniac 
General Jorge Ubico." 1 Suppressing opposition ruthlessly, he employed a 
secret police force to assure his uninterrupted rule. Elizabeth Velsmann 
wrote that "if Guatemala resembled a prison, it was an efficient one." 2 
Admittedly, there were certain material improvements. The pathetically 
inadequate education system was expanded. Roads were built narrow, 
rough, unusable in the rainy season but nonetheless an advance over 
previous construction. And, thanks to an agreement permitting free 
entry of Guatemalan coffee into the United States, economic prosperity 
managed to keep the country from sliding backward. But for all this, the 
country was sunk in a morass of inefficiency, personal graft, and govern- 
ment corruption which could not continue indefinitely. 

Finally, in 1944, Ubico's model prison became a rebellious one, and 
the warden was unable to meet the inmates' demands. As criticism snow- 
balled, businessmen, lawyers, and students led the growing wave of pro- 
test. They marched to the National Palace. Ubico promptly declared 
a state of siege in Guatemala City, soon extending it nationally. In the 
capital, people closed their shops, businesses were shut, movie theatres 
locked their doors, and the university suspended classes. Faced by grow- 
ing opposition and army discontent, Ubico surrendered power to a 
three-man junta headed by Federico Ponce. Named provisional president 
on July 4, 1944, Ponce promised elections at an early date. After forcing 
Congress to approve his presidency, Ponce proceeded to emulate Ubico. 
He reinstituted press censorship. One journalist who published critical 
editorials was murdered. Intent upon consolidating his position, Ponce 
followed Ubico in reverting to the strongman tradition. Ponce had failed, 
however, to reckon with the public. The overthrow of Ubico had freed 



GUATEMALA 29 

a Pandora's box of hidden aspirations and dreams. Ponce was not the 
man to handle the situation. A small group of army officers led uni- 
versity students in an attack against the government on the morning of 
October 19. By a stroke of luck they scored a hit on the main govern- 
ment ammunition arsenal, and after that victory was swift. By afternoon 
Ponce had taken refuge in the Mexican Embassy. With a loss of one 
hundred men, the young military leaders had won control of Guatemala. 
This was the moment that marked the transition from right-wing 
despotism to something else. Few anticipated the swing of the pendulum 
as it started toward the extreme left. Elections were immediately 
scheduled and, much to the surprise of most observers, held as planned at 
the close of 1944. The temporary government put forward the candidacy 
of Dr. Juan Jose Arevalo. It was under his presidency that the Com- 
munists first gained a foothold. 

A virtual unknown, Arevalo was a forty-two-year-old professor who 
had spent the previous ten years in Argentina lecturing at the University 
of Tucuman. He had the advantage of being disassociated with all 
political parties and personages. Quickly capturing the fancy of the 
populace, Arevalo proved an excellent campaigner. His vigorous two- 
hundred-pound frame became familiar during the two-month campaign. 
Scattered opposition argued that his years of absence had given him 
Argentine citizenship, and he was ineligible to run. Ignoring these 
charges completely, Arevalo proceeded to win the election overwhelming- 
ly. Different tallies gave him from 85 to 92 percent of the vote, and on 
March 13, 1945, he became President of Guatemala. 

The new President was in the curious position of being free from 
political obligation. Though elected following a revolution, he was 
disengaged from the revolution itself, free to follow his own course 
without prior commitment. Arevalo himself acknowledged this position. 
On September i, 1945, he said in a radio message from the presidential 
study, 

My personal position in the government is clear and definite. I do not 
belong to any political party nor to any social class. I realize fully the position 
of a democratic president, one who does not consent to decrees nor those who 
foment them. . . . The first duty of a president is to save and integrate all 
the forces of which the nation is composed. ... I have an absolute faith in 
all Guatemalans. There are no longer distinctions, preferences, exclusivity. 
There is no more than one direction [toward] national dignity. . . . Let us 
be spiritually strong and we shall maintain the pace toward it. And 



30 CENTRAL AMERICA 

if the task is fatiguing and hard and painful to us, we will continue in it 
because that very fatigue, hardness, and pain will not be experienced again 
by our children and our children's children. 8 

In view of this, Arevalo's six year term appears devoid of accomplishment. 
No one has quite succeeded in pinning down Arevalo's politics. 
Perhaps this indicates to a certain measure the lack of a positive program. 
In a radio address on February 15, 1945, the president-elect placed 
Guatemala in a revolutionary period, a time of flux, of experimentation 
and of development. 

Guatemala has stopped being a democratic masquerade in order to convert 
itself to a democracy. Thus, with this new social reality and with this new 
moral investiture, we can continue without blushing or being abashed. . . . 

The government of Guatemala is aware of certain prejudices of the social 
order. The workers, the farmers, are seen with distrust, perhaps even with 
scorn. . . . There has been a fundamental lack of sympathy for the workers 
. . . now we are going to install a period of sympathy for the man who works 
in the fields, the factories, the shops, and in commerce. We are going to 
re-evaluate civically and legally all the men of the Republic. 4 

Ar^valo called his philosophy of government "spiritual socialism." 
Just what this embraced has never been clear. The President announced 
that his socialism recognized the inherent inequalities of man, and that 
it demanded the spiritual liberation of all men. "We aim to give each 
and every citizen not only the superficial right to vote, but the funda- 
mental right to live in peace with his own conscience, with his family, 
with his property, and with his destiny." 5 In later years, many have 
referred to Arevalo as an out-and-out Communist. There are some 
grounds for the supposition. During his presidency the Communists 
burrowed into the vitals of Guatemalan life. He was aware of their 
presence and made only half-hearted efforts to uproot them. But in spite 
of this, the author is inclined not to believe Arevalo was a Communist. 
That he was a leftist is unquestioned. No one can deny that he ignored 
the communist threat during his six years in office. 

Yet it would be preferable to believe that he was simply incapable of 
taking positive action of any sort, whether concerning communist in- 
filtration or some other phase of national policy. His years in office 
reveal no accomplishments of real significance. Unlike his successor, 
Arevalo frequently donned the garb of anti-communism. He once wrote 
that "Communism is contrary to human nature, for it is contrary to the 



GUATEMALA 31 

psychology of man . . . basic theories of communism . . . [are] impossible 
of realization as long as man is man. Here we see the superiority of the 
doctrine of democracy, which does not seek to destroy anything that 
man has accomplished but humbly seeks to 'straighten out the crooked 
paths.' " 6 In the final analysis, the important fact is not the question of 
Ar^valo's communism or anti-communism. What does matter is the 
extensive infiltration of the Reds during his administration. Regardless 
of his politics, this is something which cannot be excused, and for which 
Guatemalans are never likely to grant forgiveness. 

According to communist doctrine, the key to revolution is organiza- 
tional strength. Lenin wrote, "give us an organization of revolutionaries 
and we shall overturn the whole of Russia." Guatemala was no exception. 
There, as elsewhere, the Reds directed their energies to the construction 
of a monolithic organization of conspiracy. Communist expert Bertram 
Wolfe has written of the revolutionary ideal succinctly: "They would 
penetrate everywhere, gather news, spy out information, report on moods, 
carry commands, recruit the best in every locality and bind them closer 
to die movement. They would acquire influence over the working 
class . . . blowing every spark of class struggle and popular indignation 
into a general conflagration." 7 

The earliest evidence of communism came with the founding in 1944 
of the first Guatemalan labor union. The Confederaci6n Guatemalteca 
de Trabajadores (CGT) was created in response to dissatisfaction with 
the paternalistic authority of the landowner over the worker. Leadership 
at this stage was negligible, and there was nothing to indicate communist 
participation. This lack of leadership fostered a vacuum in which Com- 
munists were quick to press their opportunity. Following shrewd advice 
from Mexican marxist Vicente Lombardo Toledano, Guatemalan Com- 
munists swiftly reached for positions of influence. Past training in 
organizational matters, primarily in Mexico, had prepared them well. 
This knowledge of organizational techniques was a precious commodity 
in Guatemala, and Communists were quickly lent for service. They soon 
claimed many posts of leadership in the CGT, and their influence grew 
by leaps and bounds. 

The Communists also helped form a students* party, the Frcnte 
Popular de Liberaci6n (FPL), and at the close of 1944 the Sindicato de 
Irabajadores Educacionales Guatemaltecos (STEG). From the start 



32 CENTRAL AMERICA 

they began to solidify their positions. Content at first to work behind 
the scenes, they were conciliatory, hardworking, and generally helpful. 
Political subjects were skirted, communist dogma played down, and 
political theory discussed in philosophic terms. The evils of capitalism 
drew considerable criticism. In March of 1945 the Communists opened 
Escuela Claridad, an indoctrination school in conjunction with the CGT. 
Salvadoran Communists Abel Cuenca and Virgilio Guerra were directors. 
Teachings there turned to discussions of yankce imperialism and capitalist 
decadence. Marx was studied slavishly. The first dispute over communist 
tactics arose at mid-year, when non-communist factions of the CGT ob- 
jected to continued operation of the school. The union's future seemed 
in jeopardy, and shutting down the school might silence government 
criticism. A minority of Communists agreed, fearing an outburst of 
public opinion, opinion that might be steeled against future communist 
activity. This point of view, as it turned out, gave an exaggerated value 
to Guatemalan public awareness. 

The issue itself was not intrinsically significant, except as the first 
serious obstacle to the Reds. After hesitating, they forced the issue and 
succeeded in maintaining the school despite opposition. In November, 
1945, the issue finally came to a head, and the CGT leadership definitely 
decided not to close the school. At once the non-Communists splintered 
from the CGT and formed the Federaci6n Sindicalista de Guatemala 
(FSG). Of the defecting member unions of CGT, the only important 
one was the union of railway workers, the Sindicato de Accion y 
Mejoramiento de los Fcrrocarrileros (SAMF). But, while the Reds 
hated to see the departure of SAMF, they were reconciled to it. Having 
thus passed their first real crisis, Communists faced the future with 
greater confidence. With authority in the only important labor federa- 
tion, they had consolidated control within a short time. Collective leader- 
ship had gone to the Communists. 

The center of the controversy, Escuela Claridad, finally was forced by 
the government to close in January, 1946. Arvalo's interior minister 
cited as grounds a constitutional provision forbidding "political organiza- 
tion of a foreign or international character." Results were, from the 
government standpoint, ineffective. Small "study groups" continued to 
train Guatemalans in marxist ideology. The number of secret units in- 
creased, and a nucleus of young people was built. Throughout their 
Guatemalan adventure, the Reds never slackened efforts to prepare 



GUATEMALA 33 

through indoctrination as many native Guatemalans as possible in com- 
munist ideology. These trainees were the ones to pose in the mantle of 
nationalism a few years hence while actually following the communist 
line. Having created the groundwork for a well-trained monolithic 
organization, the Communists turned to the second stage in their sub- 
versive ideal: the consolidation and expansion of control. The principal 
task on hand was to subvert the independent FSG, which had left the 
Red-dominated CTG in late 1945. They planned to gain control of the 
railway workers and, through them, the parent organization, the FSG. 

In 1946 a young ambitious man named Manuel Pinto Usaga apparently 
adopted communist doctrine for the sake of personal advancement. In 
February, 1947, he signed a document establishing the integration of the 
FSG with the CGT. This so-called merger, actually a subordination of his 
group to that of the Communists, was legalized as the Comit Nacional de 
Unidos Sindicatos (GNUS). The announced goal was coordination of 
overlapping activities and administrative efficiency. The practical result 
was further centralization of communist authority. Satisfied with their 
labor organization, the Reds visualized the next step on the road to power 
as the formation of an official political party. Thus the Vanguardia 
Democditica was created on September 20, 1947. Precursor to the Guate- 
malan communist party, Vanguardia was the first communist political 
organization with hierarchical organization and bureaucratic channels of 
policy-making. Red leader Manuel Fortuny kter recognized September 
20 as the date of the founding of the communist party in Guatemala. 

Fortuny, congressional secretary following the 1945 elections, trod 
gently in succeeding months. It was some time before he felt free to 
establish a genuine "communist party," one referred to as such. Two 
years after the formation of Vanguardia Democritica, he rechristened it 
the Partido Comunista de Guatemala (PCG). From that time Sep- 
tember 28, 1949-^the communist party was a full-fledged member of the 
national political scene. Continuing party consolidation hit a serious 
snag shortly after Fortuny founded the PCG. Victor Manuel Gutierrez, 
an important labor leader, personally created the Partido Revolucionario 
de Obreros Guatemaltecos (PROG). The result was a double communist 
organization in Guatemala the PCG under Fortuny and the PROG 
under Guti&rez. Both men were avowed Communists, both were in ac- 
cord with basic Red policies. The tactical orientation of the two was 
quite different, however. Daniel James describes Fortuny as a "Russia 



34 CENTRAL AMERICA 

Firster," an internationalist following Moscow directives assiduously. 
Installation of the party in power in Guatemala would be another step in 
the march of international communism against the Western world. On 
the other hand, Gutierrez was a "Guatemala Firster," an ardent nationalist 
concerned more with communism as a remedy for Guatemalan ills. Op- 
posed to close bonds with Moscow, he was willing to follow their advice, 
but to him it was advice, not command. 

By mid-1950, then, there were not one but two communist organiza- 
tions. At first there were no moves to rectify the matter. Both PCG 
and PROG went their separate ways, ignoring one another. When 
conflict was impending, they backed away from a clash. Nonetheless, 
the modus vivendi was necessarily shaky. Mexican communist director 
Toledano, apparently on orders from Moscow, "visited" Guatemala for 
a vacation, talking with both Fortuny and Gutierrez. He failed to bring 
the men together, and hopes for mediation shattered. Rapprochement 
became imperative. Further delay brought growing friction which was 
likely to ignite inter-party strife. In November, 1950, Gutierrez attended 
the Red-sponsored World Federation of Trade Unions Congress in 
Berlin and went from there to Moscow. He toured the satellite countries 
as well as the Soviet Union, returning to Guatemala after two months. 
What or who convinced him to join forces with Fortuny we do not know. 
In any event, he released a proclamation to the members of PROG on 
January 25, 1951 : "Announcing the dissolution of the Revolutionary Party 
of Guatemalan Workers, we wish to make it quite clear that the members 
are absolutely free to choose their political affiliation. But the Central 
Committee takes the liberty of recommending that comrades join the 
Communist Party of Guatemala." 8 Thus the two communist organiza- 
tions were one. Gutierrez entered the ranks of PCG and brought his 
followers along. He could claim to have given a free choice to die dis- 
banding PROG, but he obviously had acted on a Moscow directive, and 
the membership of PROG complied faithfully. One month later, For a 
Lasting Peace, For a People's Democracy! ', the official cominform news- 
paper, editorialized that "The act of the Revolutionary Workers' Party 
of Guatemala [PROG] is a striking demonstration of the correct attitude 
. . . and of the deep understanding of the historic need to strengthen and 
develop the Communist Parties as the militant staff of the working class 
and all working people, of the entire national liberation movement against 
foreign imperialism." 9 



GUATEMALA 35 

The second congress of the PCG revised its name once again in late 

1952. It became the Partido Guatemalteco de Trabajo (PGT) and 
continued under that name until the 1954 revolution. The change was 
made to fit local conditions. Party theorist Alfredo Guerra Borges, 
secretary of the central committee, has since explained that it was adopted 
to avoid the emotional and legal handicaps of the word "communist." 
The Reds could avoid association with communism in the eyes of the 
masses by using another name, and "labor" seemed adequate and safe. 
As the Labor party, the Communists were also in a position to dodge 
Constitutional Article Thirty-two. This prohibited registration of any 
political party with foreign or non-Guatemalan tendencies. The January, 

1953, congressional elections could scarcely be entered by the "communist" 
party, regardless of government orientation. But as the "labor" party, 
nothing could be more simple. The "new" PGT was free to associate 
with other organizations, campaign as a legitimate national political 
party, appeal to the masses on non-marxian terms, and further tighten 
the communist noose. 

As is the case in most political movements, the personalities and indi- 
viduals involved were highly important. In Guatemala, party workers 
and leaders alike were divisible into two groups. There were many pro- 
fessional Communists, non-Guatemalans, who had no dedication to 
Guatemala but only to the international cause of communism. These in- 
cluded Mexicans, Salvadorans who had survived their ill-fated revolt in 
1932, and even Balkan adventurers. Thorough-going "Bolsheviks" in 
every sense of the term, these were battle-scarred veterans of the eternal 
Red war against capitalism. These were not idealistic, fuzzy-cheeked 
youths, but practical, hard-headed political experts. They were the men 
who first gave impetus to the Red drive during the hesitant existence of 
the movement in the early 1940*8. 

Native Guatemalans formed the second group. Most had been trained 
in the Escucla Claridad or small study groups; they were, in many cases, 
sincerely convinced that communism was the answer to Guatemalan 
difficulties. Extremely young, they formed the most pliable segment of 
the population and were the easiest for hard-core Reds to mold in the 
proper image. In 1945, Fortuny was the oldest, although not yet thirty. 
Many others were barely out of their teens. Young self-styled intellectuals 
of the lower middle class, they were students, teachers, kwycrs, and often 
former employees of foreign enterprises in Guatemala. They were indeed 



36 CENTRAL AMERICA 

ripe for the subtle communist suggestion that marxism would soften and 
then dissolve completely the rigid and archaic social system of Guatemala. 
Frustrations of the preceding decade left the minds of the youths 
particularly impressionable. Desperately searching for something better, 
they felt their hopes buoyed by the promises and blandishments of com- 
munism. Experienced instructors in the study groups listened patiently 
and with sympathy to the plaintive queries of the depressed young men. 
The U. S. State Department, in its White Paper, credited the study groups 
with making "international Communist agents of a nucleus of young men 
in the revolution . . . matters soon progressed to the point where the 
clandestine Communist party was successfully organized with these 
younger men. ... Its members hid the conspiracy by continuing to 
present themselves to the public as leaders of the pro-Government revolu- 
tionary parties. . . ." 10 

Most influential of the Red bosses were Fortuny and Gutierrez. 
Fortuny, who eventually became the communist leader in Guatemala, 
was born in 1916, living through the years of Ubico's dictatorship in 
Guatemala while others were preparing in Mexican training schools. 
A one-time law student, former radio newscaster, and ex-employee at the 
British Legation, he first gained public prominence in 1945, when he won 
election as congressional secretary. It was during the time he held this 
post that he founded the Vanguardia Democratica and the Partido 
Comunista de Guatemala. After the 1952 merger with PROG, he became 
secretary-general. From that time, Fortuny was the top Guatemalan 
Communist. His only serious rival was Gutierrez, who for a time seemed 
about to eclipse him. Six years younger than Fortuny, Gutierrez advanced 
through the labor union while Fortuny was pursuing a political path. 
He quickly became the head of the labor union (CGT), and after his 
1946 election to Congress as a non-Communist, expanded his role to 
include both labor and political matters. Once he disbanded PROG in 
1952 and joined Fortuny, Gutierrez was destined to play a secondary role, 
for Fortuny successfully packed the six-man party secretariat with his own 
followers. 

Party organization has never been completely revealed, although 
more than four years have elapsed since the overthrow of Guatemalan 
communism. We do know that the secretariat directed the party and 
issued all decrees to the organization. To bolster the communist claim 
for quasi-representation, a twenty-one-member central committee was 



GUATEMALA 37 

elected to the party congress, with authority to conduct party business when 
the congress was not in convention. The committee was actually a rubber 
stamp body and never failed to approve decisions handed down from the 
secretariat. As is always the case with communism, policy came down 
from the top. 

THE ARBENZ ADMINISTRATION AND COMMUNISM 

The ascension of Colonel Jacobo Arbenz to the presidency was an 
important event in the communist advance. To Arbenz clings more 
guilt than Arevalo in permitting Red subversion. When he became 
president, in March, 1951, Arbenz had the means at his disposal to smash 
the communist menace. It would have been difficult, clearly, but the 
possibility existed. Instead, Arbenz pursued the same course as Ar&ralo, 
going even further in aiding the conspirators. Like Ar^yalo, Arbenz 
was never a Communist, although never declaring himself an anti- 
Communist as had his predecessor. Arbenz was an enigmatic figure in 
1951, as he is even today in exile. Born in 1913, in Quezaltenango, Guate- 
mala's second city, he won a scholarship to the national military academy, 
the Escuek Polit&nica. Winning the second highest honors in the history 
of the school, he went on military duty and served in various Guatemalan 
departments (states), receiving promotions at an unspectacular rate. 
While a lieutenant he married Maria Christina Vilanova, and that 
wedding had much to do with his later political orientation. 

The daughter of a wealthy coffee-planting family, Senora de Arbenz 
married without her parents' approval and was disowned. Accustomed 
to a more luxurious living standard than that possible on a junior officer's 
pay of sixty dollars a month, she determined that her husband would 
reach high position. Her ambitions for Arbcnz were perhaps greater 
than his own. The young officer became increasingly aware of social 
injustices which he felt continually dogged his footsteps and became an 
avowed enemy of the upper classes. General Ubico was despised as a 
feudal overlord without interest in the people. Arbenz' personal feelings 
pushed him toward an inflexible position. Prodded continually by his 
wife, he became involved in the conspiratorial manipulations culminating 
in the overthrow of Ubico, and then in the brief tyranny of Federico 
Ponce. Once Ponce was defeated, Arbenz joined Colonel Francisco 
Arana and a civilian, Jorge Toriello, in organizing elections and drafting 
a new constitution. 



38 CENTRAL AMERICA 

During the Arevalo government, Arbenz prepared for the 1951 elec- 
tions. As defense minister, he was able to create a personal machine 
through patronage and army support. Before long there were many 
arbencistas in the bureaucracy. At the same time Arbenz became the 
recipient o a flood of communist propaganda, much of it passed on by 
his wife and by communist intellectuals especially Fortuny. Sefiora de 
Arbenz, versed in marxist ideology, advanced its tenets to her husband 
in reply to his dissatisfaction with the conditions of poverty and inequality. 
She had little difficulty in convincing her military-minded non-intellectual 
husband of the intrinsic value of marxism. To Arbenz, marxist doctrine 
seemed an answer to the rigid social stratification and upper-class 
discrimination existing in Guatemala. Before long he was a regular 
reader of La Uni6n SovUtica. Arbenz, in short, was duped into valuing 
communism as a panacea for national ills. While not unintelligent, as 
his academic record shows, he was no deep thinker. Failing to examine 
marxist doctrine critically, he gained a quick superficial knowledge of it 
and adopted the dogma as his own. His wife continued to invite com- 
munist personalities to their home; Vicente Toledano turned up at the 
Arbenz' with surprising frequency, and Fortuny, Gutierrez, and Pellecer 
were among the Red leaders who were regular guests. Considering his 
background, it is easy to understand how Arbenz was led to accept 
communism. 

President Arevalo, in the meantime, was constitutionally unable to 
succeed himself in 1951, and there was prolonged jockeying for position 
by the two possible candidates, Arbenz and Arana. Arana, a stout, 
jovial, and highly popular man, was chief of the armed forces. While 
nominally dividing military power with Defense Minister Arbenz, he was 
actually in complete control of the army. His popularity and the coldness 
of Arbenz' personality seemed to assure Arana's candidacy and election 
in 1951. Repeatedly urged by advisers to seize control by a military blow, 
the staunchly democratic Arana determined to wait for the election. 
This was literally a fatal mistake. 

In July, 1949, advised of a supply of anti-government arms cached 
near Lake Amatidn, Arana investigated personally, accompanied by an 
aide and a chauffeur. Arbenz was told of the trip. Near a bridge by the 
lake, Arana's car was ambushed, and he was riddled with submachine 
gun bullets as he stepped from the car, dying instantly. The driver 
managed to return to the capital and charged that the assassins had 



GUATEMALA 39 

driven away in the car of Senora de Arbenz. After several days of 
incommunicado questioning by the government, he meekly retracted his 
statement. The army rose in immediate protest and marched to the 
Presidential Palace demanding the resignation of Arevalo and his 
cabinet, including Arbenz. The next thirty-six hours were chaotic. The 
army revolt was poorly organized and executed; its very spontaneity 
robbed it of any possible success. Many forces remained loyal to the 
government. Arbenz' forces finally quelled the disturbances and the 
government remained in power. This was but another "incident in 
the revolutionary life," commented Arbenz afterwards. 

With Arana dead, Arbenz was assured the presidency. On February 6, 
1950, his candidacy was announced by the Partido Acci6n Revolucionaria 
(PAR) and the Renovaci6n Nacional (RN), staunch Arevalo supporters. 
Two weeks later Arbenz accepted the bids, agreeing to support die PAR 
platform. This was a loosely written, eighteen-plank nationalistic plat- 
form urging knd reform, equal distribution of tillable land, and opposition 
to the penetration of foreign interests. On the twenty-first Arbenz re- 
signed as defense minister and began an active campaign. 

The November election pitted Arbenz against three men, none offering 
serious opposition. The closest approach to a formidable candidate was 
General Manuel Ydigoras Fuente, a conservative of the Ubico regime. 
He was conveniently exiled when the campaigning became heavy. Minis- 
ter of Health Victor Manuel Giordani ran for the Frente Popular de 
Liberacion (FPL), spending his campaign denouncing Arbenz in 
vituperative language before sparse crowds. And Dr. Jorge Garcia 
Granados formed his own party and ran on his record as president of 
the 1945 constituent assembly. He asserted his certainty that he was not 
a darkhorse candidate and honestly expected to win, no matter what 
observers thought. Of course, the election was a runaway for Arbenz, 
who doubled the vote total of his three opponents. Ydigoras also out- 
distanced the other two. 

Before fifty thousand spectators in the national stadium, Jacobo 
Arbenz took the oath of office on March 15, 1951. Over thirty special 
delegations from abroad were present. After a short speech, outgoing 
President Arevalo transferred the blue and white silk presidential sash 
to Arbenz. At thirty-seven, the youngest of all American presidents, the 
new chief of state harangued the crowd in a flaming speech of hollow 
rhetoric and sweeping half-truths. Of his proposed program he said: 



4 o CENTRAL AMERICA 

"Our government proposes to start down the road of economic fulfillment 
for Guatemala, toward the following three fundamental objectives: to 
convert our country from a dependent nation with a semi-colonial economy 
to an economically independent country; to convert Guatemala from a 
country bound by a predominantly feudal economy into a modern, capi- 
talistic one; and to make sure that this transformation carries at the same 
time the greatest possible elevation of life for the great mass of the 
people." No indication of his future intimacy with communism was 
suggested in the address, and he concluded that "we will make of 
Guatemala a prosperous, modern country, a model democracy, and ... we 
will achieve for our inhabitants greater well-being and prosperity. Our 
motto will always be: Forward to a Better Guatemala." 11 These are the 
words of a man who four years later was, in the words of James, "one of 
the chief architects of the ... Communist revolution." 

From this day forward, the Communists had in the youthful president 
a major ally. The bonds between the two were powerfully forged. 
Arbenz, never a card-carrying Communist, followed the party line on 
important matters. Few people today are sure whether he was merely a 
weak man swayed by wife and friends, or something else. Arbenz 
repeatedly commented on his power to expel the communist party from 
his administration and Guatemalan affairs, but was never "ready" to do 
so. Perhaps this was true at first. As the months passed, however, 
Arbenz fell increasingly under their control and was soon heavily in 
their political debt. By 1954, the author has suggested, the Communists 
"would have broken his efforts on the altar of international com- 



lit 9 

mumsm. 



The Communists were openly elated with Arbenz. Manipulation of 
the president, of all persons, was an unheard-of stroke of fortune. On 
February 20, 1954, communist propagandist Guerra Borges explained the 
Red position: "We Communists . . . loyally support the Government for 
the simple reason that its policy continues to reflect the interests of the 
majority of Guatemalans and the national interests. To this end the 
Communists are dedicated." 18 The reader might substitute for "majority 
of Guatemalans," the phrase "majority of Communists." For the Reds 
indeed supported Arbenz for precisely that reason: the policy of the 
government continued to reflect the best interests of the communist party. 

Under the Arbenz administration, communism increased its grip on 
different phases of public life. These included the courts, legislature, 



GUATEMALA 41 

propaganda media, and the much-discussed agrarian law. The Guate- 
malan Supreme Court was used only once to advantage by the Reds; 
yet that instance was important and clearly indicated its subservience to 
Arbenz and the Communists. In the early days o 1953, as a result of 
the controversial Agrarian Reform Law (see below), a farmer named 
Ernesto Leal Perez appeared before the Court, asking an injunction pre- 
venting the seizure of his land. Purpose of the case was to test the 
constitutionality of the law. Perez' backers hoped for an opinion that 
would nullify the law, based on Constitutional Article 172 relating to 
abuse of executive power. Their hopes were justified when the Chief 
Justice and three associates upheld the petition for injunction. The fifth 
opposed it. Instructions also went out to lower courts ordering particular 
care in all disputes emanating from land expropriation under the new 
law. President Arbenz, named as defendant in the case, was asked to 
present a full report on land seizures within twenty-four hours. 

Arbenz responded promptly. Instead of reporting to the Supreme 
Court, he appeared before the Legislative Assembly. Rejecting the Court 
request, he called the action a usurpation of executive prerogative and 
claimed total executive immunity from judicial action. This principle, 
at best highly questionable, was supported by immediate legislative 
action. The Assembly condemned the Court and, by a forty-one to nine 
vote, with six abstentions, dismissed the errant judges. Acting on its 
constitutional right to appoint and remove Supreme Court justices, the 
Assembly chose more tractable individuals. They would presumably not 
be so impolitic as to accept a petition for injunction. 

Twelve hours of debate were consumed in arguing the extraordinary 
action. Gutierrez declared that "a people cannot live subordinated to a 
constitution. . . . The duty of congress is to support the president of 
the republic in this historic case because to accept the recourse to injunction 
would signify the overthrow of the agrarian reform law." 14 Ernesto 
Marroquin Wyss, an avowed Communist, was even more outspoken. 
Calling the injunction petition an attack by "feudalists and imperialistic" 
interests against President Arbenz, he cried that "we have arrived at the 
time for complete liquidation of the reactionaries." Congress admittedly 
had authority to dismiss the justices. Removal of a judge from the 
highest judicial bench was authorized in cases of criminal intent or 
"notorious bad conduct or manifest incapacity," according to the constitu- 
tion. This was the only legal basis for dismissal. But no charges were 



42 CENTRAL AMERICA 

ever brought against the four dismissed judges. If there were indecent 
standards of conduct, the guilty should have been prosecuted. After being 
ejected, however, their case was quickly forgotten. 

The bar association of Guatemala leapt to the attack and passed a reso- 
lution that the dismissals "flagrantly violate the articles of the constitution 
that guarantee the right of injunction." A bill of grievances charged 
Arbenz with constitutional violations, and the Legislative Assembly was 
condemned for improper action. Widespread protest strikes also followed 
the dismissals. Seven thousand students and anti-government partisans 
marched to the national palace to object. Street fights broke out; windows 
and lights were smashed. Enraged youths burned copies of the constitu- 
tion in front of the palace. The demonstration ended quickly when the 
palace guards fired on the crowd, killing one and wounding several. 
President Arbenz' only public statement called on the opposition to accept 
the decision. He was determined, he said, to pursue the good of the 
people and had no intention of deserting the revolutionary cause because 
of reactionary attacks. He was "very tired" of the whole affair. More 
than a few of the citizens themselves were "very tired" to hear their presi- 
dent say, in effect, that he knew best what was good for them and would 
pursue the course of his judgment regardless of the constitution or public 
opinion. 

The fifty-six-member Legislative Assembly was also a pliable tool in 
communist hands. Its attitude was so innocuous that many important 
issues never came before it. Nonetheless, there is ample evidence of its 
pro-communist orientation, despite the fact that there were never more 
than four avowed Reds sitting in the Assembly. In one instance, the 
legislators paused for a minute of silence honoring the "buen amigo, Jose 
Stalin," who had just died. Red leader Gutierrez offered the motion. 
Manuel Pellecer called the Soviet tyrant a true champion of democracy. 
His opening remarks referred to Stalin as a benefactor of mankind. One 
of the few vocal anti-Communists rose to speak, and referred to Stalin 
in his opening remarks as a modern Nero, Genghis Khan, and Ivan the 
Terrible. His words were drowned out by a roar of protest, and when 
order was restored the chair ruled him out of order. 

In the same month (March, 1953), the Assembly responded to un- 
official presidential prodding by one of the most petty acts imaginable. 
Spruille Braden, former United States diplomat and Latin American 
expert, attacked the Guatemalan government in a speech to the Great 



GUATEMALA 43 

Issues course at Dartmouth College. Charging that ex-President Arevalo 
had delivered the country into the hands of Communists, he spiced his 
address with several accurate but inflammatory statements. The Legisla- 
tive Assembly adopted a resolution cancelling the 1945 award to Braden 
of the Order of the Quetzal, a high Guatemalan honor. Arbenz, ap- 
proving the action, called Braden disloyal to democratic principles in 
denouncing the Guatemalan government. 

Probably the most important piece of legislation during the Arbenz 
government was the highly controversial Agrarian Reform Law, which 
provoked great public dispute, as well as the removal of the four Supreme 
Court justices. The reverberations from this legislation were heard for 
months afterward, and it was still a matter of dispute when the Arbenz 
government was toppled by revolution. The heart of the bill was an effort 
to rearrange the agricultural land-owning situation. As early as 1949, 
Leo Suslow had commented that an agrarian program was one of 
Guatemala's primary economic needs. 15 He recommended a program of 
governmental expenditures to co-ordinate an agrarian program to teach 
techniques of hygiene, nutrition, sanitation and production. As he noted, 
revision of the antiquated land system had been slow in coming. Under 
Ubico, the peasants were landless and continually exploited by the small 
group of land owners. The ignorant Indian worker, shackled to a system 
of bondage, had no recourse but to accept the situation and almost 
literally scratch out a minimal existence. 

In 1949, the Communists began agitating for reform. Gutierrez and 
railway chief Pinto Usaga drafted proposals for congressional action, and 
a bill was developed by a legislative committee headed by Gutierrez 
himself. Arbenz announced his support before his election and, after 
taking office, issued several public statements reiterating his approval. 
In early 1952, he addressed the Legislative Assembly to urge adoption of 
reform. The proposal demanded redistribution of all estates seized from 
Germans during World War II. The government was to redistribute all 
land on private estates worked by a sharecrop system. Uncultivated land 
on estates of over 220 acres, where less than two-thirds of the estate was 
under cultivation, also was subject to expropriation and redistribution. 
Some three hundred thousand families were to receive land under the law. 
The program was to be financed by an issue of government bonds, both 
internal and external. 

Reaction was immediate. Leaders of the five-hundred-member Na- 



44 CENTRAL AMERICA 

tional Association of Agriculturists warned the bill would create severe 
economic dislocations. Peasant uprisings would be inevitable. Others 
spoke of likely riots in the capital, and a few hotheads cried that civil 
war was near. Both supporters and opponents of the measure were 
apprehensive. The Association of Agriculturists, all landowners, offered 
an alternative to the government reform. Suggesting the opening of tracts 
of land in northwest Guatemala, they claimed that improved transporta- 
tion and communication would make the plan workable. The govern- 
ment disagreed. Too much government financing would be needed; 
previous resettlement plans on a smaller scale had failed, and there 
was no time to wait for implementation of such a program. Minister 
of Economy Roberto Fanjul said that "it would be dangerous to postpone 
it [reform] because the peasants are aroused and if we do not do it now 
they will take the law into their own hands with bloody results . . . our 
main interest in passing the law quickly is to stave off serious trouble 
with the peasants." 16 President Arbenz, in a typical display of inflexibility, 
announced that he would rather fight the opponents of the bill on military 
battlefields than yield its fundamental principles. If the opposition would 
not or could not curb its criticism, war would result. 

On June 15, 1952, the Agrarian Reform Law was passed by the As- 
sembly and sent to Arbenz for his signature. In addition to the features 
described above, it offered recompense to owners of expropriated land. 
Payments were to be made in government bonds redeemed over a twenty- 
five-year period. Small landowners were to take comfort in the provisions 
of Article 10 which exempted estates more than two-thirds under cultiva- 
tion. Ultimate administrative authority ("the supreme executive organi- 
zation of the Agrarian Reform") was granted the President. He had 
complete authority in any disputed expropriations or compensatory pay- 
ments. As such, the President was placed above the Constitution. This 
was all grist to the communist mill. In July, the cominform paper edi- 
torialized that the "Communist Party of Guatemala leads . . . the demo- 
cratic forces fighting for the agrarian reform," winning "not land 
purchase but complete expropriation and its distribution." For the Reds, 
the important thing was the extension of domination across the country- 
side. Satisfaction of peasant aspirations was entirely secondary. Adoption 
of the law created the National Agrarian Department (DAN) to ad- 
minister the measure, with subordinate regional and local agrarian 



GUATEMALA 45 

committees to execute its orders. This was but another opportunity for 
the Communists to infiltrate the Guatemalan social fabric. 

Director of the DAN was a non-Communist, Alfonso Martinez, but 
he was a close personal friend of Arbenz and rumored to have arranged 
and possibly executed the ambush of Arana. His deputy was a Com- 
munist, Waldemar Barrios Klee. Another Communist, Major Mario 
Sosa, was Inspector General. Of the nine members of the managing 
National Agrarian Council, three came from the CGTG* and the newly 
formed leftist peasants' organization, Confederaci6n Nacional de 
Campesinos Guatemaltecos (CNCG). Sub-councils, representing roughly 
one thousand people per department, were composed of members of the 
DAN and labor and peasant organizations. Normally, two or three of the 
five members were fellow-travelers or Communists. Thus gaining con- 
trol of DAN machinery, the Reds bolstered their influence once more. 
And their determined insistence on the legislation enhanced their position 
of favor with President Arbenz. Fortuny exulted that "We Communists 
recognize that, due to its special condition, the development of Guatemala 
must be accomplished for a period through capitalism . . . [however] it 
is no longer historically inevitable that the people . . . must pass through 
long capitalist periods." 17 

The Agrarian Reform Law, then, was another example of the As- 
sembly almost mutely accepting the program of the executive and enacting 
it into law. In Guatemala, as elsewhere in Central America, there was no 
tradition of legislative independence. For years the Assembly had been 
a rubber stamp body, acting on the whim of a dictator. So it was that 
the Communists subverted the Legislative Assembly with consummate 
ease. 

Another important tool in Central American politics is the collective 
news-gathering agency. Despite relative public unawareness, propaganda 
media have through the years been vital pillars of any government. The 
Communists were quick to realize this. Both governmental and private 
sources of dissemination fell to the Reds. In June, 1950, the Communists 
founded a weekly, Octubre. The maiden issue featured anti-yankee 
articles under a masthead bearing the hammer and sickle. The jni.tfel 
issue carried exaggerated praise for the Soviet Union, and Gutierrez was 

*In October, 1951, after absorbing several small previously independent labor groups, 
the CGT was renamed the Confederation General de Trabajadores de Guatemala (CGTG). 
It remained essentially the same organization, but in expanded form. 



46 CENTRAL AMERICA 

the first director. To underscore its beliefs, the paper held a communist 
meeting of some two thousand persons to celebrate the first issue as it 
rolled off the presses. June 21, 1951, a comparable gathering of Com- 
munists and sympathizers commemorated the first anniversary of Octubre. 
Variedades Theatre was used for the meeting, city officials having granted 
its use in accordance with a regulation requiring owners to offer their 
theatres to the government for twice-monthly use for "cultural acts." 
The stage was backed by enormous pictures of Lenin, Stalin, and Fortuny. 

Diario de Centra America, long the official government organ, moved 
to the left following the election of Arevalo in 1945. Its editor, for some 
time one of the six members of the Secretariat, was Alfredo Guerra 
Borges. This was supplemented in time by a party daily, Tribuna Popu- 
lar, which began publication in August, 1953. Guerra Borges was its 
editor, as well. The semi-official Nuestro Diario never won widespread 
circulation, but was for a time edited by Communists. TGWA, the 
government radio, spread daily propaganda and lies for the Reds. The 
United States was continually attacked. Opposition to communist 
aspirations was violently condemned. As early as April, 1945, the staff 
had communist members, thanks to the appointments of Arevalo. Later, 
party propagandist Pedro Geoffrey Rivas became manager of the 
station's board of directors, and in the following years the board in- 
cluded several other Communists. Arevalo also gave Fortuny an im- 
portant post in the Department of Press, Propaganda and Tourism, an 
official part of the government. Mario Silva Jonama, an experienced 
agitator and agent, followed Fortuny into the organization in 1949 and 
in time became undersecretary. Humberto Alvarado, yet another Red, 
directed the department after 1950. 

Typical of communist propaganda was a huge cartoon in Diario de 
Centra America on January 15, 1953. It pictured a gigantic figure, labeled 
"democratic forces," supporting the people with votes in their hands. 
Prostrate under the figure was a formless face labelled "anti-Communist." 
One of the bloodstained hands clutched a dagger. 

It is true that there were anti-Communists in press and radio. Some of 
these were vocal throughout the years under Arbenz. Yet, try though 
they might, they were unable to raise their voices over the barrage of 
pro-communist, pro-Arbenz propaganda. The U. S. State Department 
felt justified in announcing on January 30, 1954, that Guatemala was 
engaged in an "increasingly mendacious propaganda campaign." Its 



GUATEMALA 47 

report concluded that "The official Guatemalan press and radio offices, to 
which President Arbenz has appointed a group of dedicated propagandists 
of communism . . . have a long record of circulating false charges, typical- 
ly communist in their technique, against the United States, the United 
Nations, and particularly those countries which have been actively 
resisting communist aggression." 18 

ANTI-AMERICANISM: AN OUTWARD LOOK 

For the better part of a century, nationalistic forces have run rampant 
through Central America. During this time the United States has com- 
mitted countless blunders in the area. Today, the residue of resentment 
is a regional characteristic. Years of exploitation, insincerity, intervention, 
and outright bungling have left their imprint on the temper of the 
people. Consequently, emotional appeals can and still do succeed in 
arousing latent resentment against the United States. For Arbenz and 
the government officials, anti-Americanism was a rewarding policy. The 
President, as have so many other leaders through the pages of history, 
found an advantageous practice in attacking an external power, in con- 
structing what the Chinese call a "paper tiger," one sufficiently menacing 
to divert the attention of the people. As internal dissatisfaction mounted, 
Arbenz tried increasingly to turn national resentment against the United 
States. Such diversionary tactics, invoking the specter of fear, distracted 
the people from internal problems. In Guatemala, the United Fruit 
Company provided an ideal target. The Reds were not so inept as to 
overlook its potentialities. 

The United Fruit Company of Boston (UFCO), founded in 1871 as a 
small trading company dealing in bananas, has expanded into one of the 
major international enterprises. Its empire in Latin America is un- 
rivalled. With major investments in a dozen republics, it has recendy 
spread to Europe, as well, and deals in many commodities besides bananas, 
including sugar, cacao and palm oil. The Guatemalan division of UFCO 
first opened in 1906, and the government leased acreage to the company on 
the Caribbean coast the Bananera division. In 1936, a second division 
was added, in the Pacific region of Escuinda. Terms of the 1936 agree- 
ment, negotiated by General Ubico, were kter called by the Communists 
an imposition by the United States company. But Archer Bush, a stern 
critic of UFCO policies, admits that Ubico insisted the laborers be paid 
a daily wage of fifty cents rather than one dollar. 19 He wanted to hold 



48 CENTRAL AMERICA 

prices down to the level paid by private Guatemalans in related labor. 
The 1936 contract granted UFCO concessions including exemption from 
internal taxes, and import-free machinery and construction goods, as well 
as the privilege of establishing various "marginal" facilities for employees. 
Bear in mind that these concessions were willingly accepted by General 
Ubico, the legally-recognized chief of state. The company did not coerce 
the government in any way. 

The flames of dispute were fanned by expropriatory action by the 
government in 1953. The original expropriation, promising recompense, 
applied to the Pacific holdings of the company, at Tiquisate. The govern- 
ment seized 233,973 acres - This figure later rose to 413,573 acres, when 
additional land was taken from the Bananera division. The action 
touched off a round of arguments, protests, claims, and counterclaims, and 
the atmosphere was one of increasing acrimony and rancor. 

Despite earlier denials of expropriation by government authorities, the 
seizures were not entirely unexpected. In a speech to the Assembly in 
March, 1953, the President assured that he would neither expropriate 
UFCO properties nor expel the company from Guatemala. At the same 
time he warned that impending negotiations to renew contracts for the 
Tiquisate plantations had to be consummated quickly. A violent storm 
in September, 1951, had destroyed much of the Pacific division, resulting 
in a long lay off for many workers. The government unreasonably in- 
sisted, in early 1952, that, when these workers returned, they should be 
paid unearned wages for the inactive interim period. This totalled some 
seven hundred thousand dollars; UFCO refused to pay. A forced auction 
was scheduled to sell the company's buildings and equipment on March 
5. Faced with implacable government opposition, UFCO capitulated 
and agreed to terms. 

Expropriation itself was the central issue in the dispute between the 
government and UFCO. The Guatemalans justified expropriation under 
terms of the Agrarian Reform Law. Among the articles of the law was 
one referring to large uncultivated holdings. Land seized at Tiquisate 
was uncultivated, and the expropriation was perfectly consonant with the 
existing law. However, in later months, acreage was taken from UFCO 
which was actually under cultivation. Unable to justify the action in 
constitutional terms, the government blandly denied the seizure of 
cultivated soil. 

Several points at issue are important. It would be false to assume that 



GUATEMALA 49 

the government was entirely to blame. UFCO made several strikingly 
near-sighted decisions which contributed to the basic disagreement. In 
the first place, terms of the existing 1936 contract were clearly inadequate. 
Guatemalans, with complete justification, could state that UFCO gave 
inadequate financial compensation to the government for concessions 
granted it. Duties and taxes totalled one-tenth of UFCO annual profits. 
When Arvalo requested a new arrangement, he was coldly rebuffed. 
With the contracts several years short of expiration, UFCO had no legal 
obligation to renegotiate, and refused to do so. This policy proved 
disastrous in the long run. In time, UFCO recognized its short-sighted- 
ness and offered new terms. By then, however, Arbenz was in power 
and the Communists exerted much more influence. Renegotiation was 
out of the question. A ripe harvest of propaganda was the Communists* 
for the taking, and xenophobic appeals to the populace seemed more 
worthwhile to the government than arranging new contracts for the 
benefit of the people. 

UFCO relationships with the railways were another painful subject 
to Guatemalans. This was based on the relationship of UFCO to Inter- 
national Railways of Central America (IRCA). In 1936, UFCO pur- 
chased a large chunk of IRCA stock just under 50 percent. At first, 
UFCO intended to build a Pacific port to ship bananas from its Pacific 
division. This would have cut deeply into IRCA business on the railway 
between Puerto Barrios, on the Atlantic, and the capital. The agreement 
of September 17, 1936, stated that UFCO would not build a Pacific port. 
In exchange, it would pay IRCA a shipping rate below existing price 
levels. The rate was overtly preferential. As a result, IRCA retained its 
UFCO business, without the competition of a Pacific port. UFCO was 
saved the expense of building it and also received preferential shipping 
treatment. 

"Price discrimination irked the Guatemalans, but even worse was the 
fact that foreigners controlled the major railway in the country. The 
highways, of course, were not foreign controlled, but none crossed the 
country from Pacific to Atlantic. The railway was the only means of 
traveling from one side of Guatemala to the other. National pride- 
always touchy was rubbed raw by continual communist carping on this 
manifestation of "yankee imperialism." 

The government finally intervened by seizing IRCA assets on April i, 
1953, claiming non-payment of charity taxes. The railway owners denied 



50 CENTRAL AMERICA 

the applicability of any such tax; no evidence has ever contradicted the 
opinion that this was a trumped-up charge by which the government could 
examine the company books and determine its ability to pay taxes. In 
early 1954, the government issued a demand for the payment of 
$10,500,000 in back taxes "charity taxes," they announced. A strike in the 
fall of 1953 also confused the issue, and in time the government set up a 
receivership. It was after this action that the demand for back taxes was 
made. As had been the case in the UFCO dispute, payment for con- 
cessions was based on outdated contracts that had paid the government, 
through the years, a ridiculously low sum. Once again, United States 
capitalists had, by short-sighted financial policies, jeopardized their own 
future and at the same time given the government another issue to exploit 
in the continuing anti-yankee campaign. 

Even more important to the Communists and to the Arbenz adminis- 
tration was the issue of UFCO's labor policies. UFCO paid its banana 
worker more generously than his counterpart working for Guatemalan 
employers. However, the banana industry is a changeable business; the 
position of the common laborer is perilous, his job status very tenuous, 
at best. Banana farming is a shifting enterprise, for no plantation can 
survive longer than one generation. The onslaught of Panama disease 
or lack of crop rotation inevitably exhausts the soil, and new lands must 
be cultivated. This transitory form of agriculture works obvious hardships 
on the worker. Changes of location and part-time labor are not designed 
to give the laborer much security. And so, in compensation for this, the 
worker demands higher wages and increased marginal benefits from the 
employers. 

UFCO has resisted labor organization throughout Central America. 
In Guatemala, the late 1940*5 and early 1950*5 brought an increasing de- 
mand for organization. The Communists naturally contributed to this 
movement, hoping to drive a wedge between company and employees, 
thus exacerbating national passions and increasing anti-U. S. feeling. 
While there was no official UFCO recognition of labor, the company was 
forced on different occasions to deal with labor leaders. A major strike 
in 1948-9 demanded increased medical care, new housing, and a $1.50 
daily wage. The company relied that profits were too small to finance the 
proposals. The workers struck, and UFCO instituted a lockout. The 
Arvalo government intervened and, when the courts decided in favor of 
the laborers, insisted on partial concessions from the company. In sue- 



GUATEMALA 51 

ceeding years, there were other, though smaller, strikes and protests. 
An atmosphere of ill-will developed between labor and management. 
The intractability and intransigence of company officials created almost as 
much rancor and misunderstanding as the well-organized attacks of 
communist propaganda. 

In all fairness, however, UFCO had elements of justice in its position. 
Certainly the welfare of the workers was not ignored. The lot of the 
banana worker was better than that of other Guatemalans working 
outside this industry. Housing conditions provided modern sanitation, 
sewage disposal, plumbing, electricity, and disease-prevention. No 
Central American observer need be reminded how scarce are these 
commodities elsewhere. The modest physical surroundings of the workers 
were plain but pleasant. A few miles from a UFCO village are the 
miserable grass-roofed huts in which other laborers live. The contrast is 
unforgettably vivid. Banana workers were also treated, inoculated, fed, 
and cared for in hospitals and dispensaries at no extra charge. Schools 
were built and administered for children of the workers. In 1953 alone, 
5,397 pupils attended company-established schools taught by 103 company- 
paid teachers. Commissaries supplied food at lower prices than Guate- 
malan markets. Yet there was no compulsion, and workers could buy 
their food elsewhere. Entertainment, movies, recreation, and churches 
were all provided, as well. 

As for wages, the average Guatemalan banana worker today receives 
almost a thousand dollars a year. The annual individual Guatemalan in- 
come in the 1950*8 is barely three hundred dollars. Thus the UFCO 
employee receives an average of three times as much pay. This disparity 
is so favorable that, even today, officials feel justified in rejecting demands 
for increased pay. 

No action was fought as bitterly by the company as the expropriation 
of its plantations. Officials pointed out that, for them, lands under 
cultivation were only a little more important than untilled ones. For in 
a few years, existing lands would have to be abandoned and new sites 
established on the uncultivated lands. Thus the seizure of uncultivated 
lands was damaging to future prospects. Only by maintaining these fields 
at all times could UFCO hope to continue successful operations. With- 
out them, one bad plague of Panama disease which completely kills 
the plant it attacks could wipe out UFCO holdings. Tropical storms 
often flooding or blowing down fields of bananas would have the same 



52 CENTRAL AMERICA 

result. A 1951 storm near Tiquisate destroyed the year's crop there. 
UFCO's final point was that the expropriation was totally unnecessary. 
Coffee, not bananas, was and is the major source of economic strength 
in Guatemala. Bananas provide the principal, but less important, 
economic assistance. In the last analysis, the enraged attitude of the 
company officials usually boiled down to a dogmatic belief that "they 
can't do it to us!" When "they" did, company officials were dumb- 
founded. 

Realizing that it had no recourse in Guatemalan courts, the company 
applied to the U. S. Department of State. On March 23, 1953, the Guate- 
malan ambassador in Washington was handed a note requesting adequate 
compensation for UFCO as soon as possible. Two months later an 
official memorandum from the Guatemalan government rejected the 
request. It argued in favor of Guatemala's legal right to seize property 
on the basis of sovereignty, A second Washington request, more 
forcibly worded, went ignored for a period of six months. On April 201, 
1954, the United States officially demanded $15,854,849 as compensatory 
payment for the expropriated acreage. Foreign Minister Toriello 
refused to accept the note. He called it "another attempt to meddle in 
domestic affairs of Guatemala," and attacked the U. S. position fiercely. 
The dispute was temporarily suspended, and the June fall of the Arbenz 
government put an end to the case, for the time. 

In review, there are things to be said for both sides. The Guatemalan 
government had a legal right to expropriate land, and there were many 
causes for doing so. On the other hand, the method of approach and, 
finally, the refusal to pay adequate compensation, were both morally and 
legally wrong. As for UFCO, while it had provided many benefits for 
the workers, it was not unreasonable to grant further concessions, as well 
as negotiate a new contract with the government. Past years of paternalis- 
tic authority and downgrading of nationalistic dreams and aspirations 
piled up a mountain of resentment and rancor. The bondage of half 
a century for such was the usual Guatemalan interpretation had to be 
erased as a matter of national pride. UFCO inability to recognize this 
fact was but another factor contributing to the communist drive for power. 

ATTACK AT CARACAS 

The peak of "anti-imperialist" outpourings was reached at the Tenth 
Inter-American Conference convened in Caracas, Venezuela, in March, 



GUATEMALA 53 

1954. Never before had the United States been so viciously attacked by a 
Latin nation. Denunciations were bitter, vitriolic, and prolonged. The 
Communists not only put the colossus of the north in its place, but 
diverted popular attention back home. Criticisms were eagerly repeated 
and discussed in Guatemala. Guatemala went to the conference with one 
idea exploitation of the historic Latin resentment of the United States. 
Headed by Foreign Minister Guillermo Toriello, the Guatemalan dele- 
gation quickly realized it had an incomparable sounding board for its 
propaganda and determined to exploit the opportunity fully. Flaunting 
their defiance of the United States outspokenly, the Guatemalans became 
heroes at home by their display of bravado. Expecting an anti-communist 
resolution from the United States, they cared little about the outcome. 
They knew the U. S. could probably force adoption of any resolution it 
wanted, but no such agreement was expected to change the nature of 
things inside Guatemala. 

The United States position was not as simple. The North American 
delegation, led by Secretary of State John Foster Dulles, intended to spot- 
light Guatemalan communism and at the same time pass a stern anti- 
communist resolution. The U. S. was handicapped by personal factors, 
however. John Moors Cabot, Dulles' top Latin American expert, had 
just resigned as Assistant Secretary of State for Inter-American Affairs, 
reportedly due to differences with Milton Eisenhower over economic aid 
to the area. He accompanied Dulles only in the role of advisor, and his 
newly-named successor, Henry Holland, was an unknown quantity. At 
the same time, Dulles miscalculated badly the climate of opinion. He 
failed to realize, despite repeated warnings, that the republics of Central 
and South America were relatively unconcerned with communism and 
wanted a small-scale Marshall Plan, or at least some form of increased 
economic assistance. This fact was not recognized by Dulles until the 
conference had been in session several days and was not, unfortunately, 
the first indication of Dulles' lack of understanding of Latin American 
relations. 

Toriello launched the Guatemalan offensive in his first convention 
speech on March 5, 1954. In a wide-ranging, unrestrained attack, he 
lashed out at U. S. policy as that of "the Big Stick, tarnished dollar di- 
plomacy, and the landing of the Marines in Latin American posts." His 
fifty-five-minute address said many of the things other Latin delegates 
hoped to hear but dared not say themselves. The official Guatemalan 



54 CENTRAL AMERICA 

information bulletin headlined "TORIELLO PLEADS CAUSE OF UNDERDEVELOPED 
COUNTRIES," and the foreign minister was praised for raising important 
questions despite the oppressive "steamroller atmosphere." Denying 
Guatemala's communism, he asked why this was the U. S. characteriza- 
tion. The answer he provided promptly: "The answers are plain and 
simple. The plan of national liberation which my government is exe- 
cuting had to affect the privileges of foreign enterprises which were hold- 
ing back the progress and economic development. . . ."~ As for the pro- 
posed U. S.-sponsored resolution against communism, he declared that 
this meant any government in Latin America touching interests of 
foreign companies controlling basic resources would be called communist. 
The result would be foreign intervention. Guatemala, categorically op- 
posed to a resolution trampling on the principles of democracy, would 
fight it with determination. 

The speech was enthusiastically received. There was a warm ovation 
the greatest of the conference. The Guatemalan information bulletin 
triumphantly bragged that "There was no doubt that Guillermo Toriello 
. . . had voiced the deepest aspirations of millions for democracy, justice, 
and peace between nations." 21 Secretary Dulles responded immediately 
with a press statement, warning that he would discuss the issue of 
international communism without having the issue "obscured by an 
abusive attack upon the United States." He was anxious to see Guate- 
mala's position toward the intervention of communism when that part of 
the agenda was reached. He charged Toriello with opposing any declara- 
tion against international communism: "We are confident this conference 
. . . will go on to declare that domination and control of political in- 
stitutions of any American State by the international Communist move- 
ment would constitute intervention by a foreign political power and be 
a threat to the peace of America." 22 

Two days later Toriello issued a counter-statement, denying Guate- 
malan opposition to any anti-communist resolution. He refused to con- 
cede that Guatemala's stand on communism would be tested when the 
item was readied on the agenda. Though he made many pronounce- 
ments and took part in various committee meetings, the Toriello magic 
slowly slipped away. He continued to be lionized by Caracas society; 
his prominence in the conference itself was a different matter. On 
March 9 he alienated other delegates by walking out of a plenary session 
when Dominican Minister Joaquin Balaquer sided with the United States. 



GUATEMALA 55 

Calling for an end to anti-Americanism, he criticized countries that helped 
Soviet Russia but only attacked the United States. Toriello snapped at 
reporters that he had "more important things to do than to hear such 
people in the ridiculous and stupid role of discussing democracy." 

Secretary Dulles hoped to enlarge the 1947 Treaty of Rio de Janeiro, 
making subversion and communism a cause for hemispheric conferences. 
In this event, there would be a call for action in accord with existing 
treaties. The object was to cloak with collective intervention measures 
necessary to eradicate communist governments, whenever they might 
arise. Despite Latin fears that the resolution would bring heavy abuse, 
the United States pushed it. After a fortnight of backstage maneuvering 
and heated discussion, the declaration, informally called the "Dulles 
Doctrine," was passed by a vote of seventeen to one. Guatemala opposed 
the declaration, with Argentina and Mexico abstaining. 

The resolution, officially called the "Declaration of Caracas," denounced 
international communism as incompatible with the concept of freedom 
and constituting a threat to inter-American security. Calling for col- 
lective action in time of need, the critical passage argued "That the 
domination or control of the political institutions of any American State 
by the international communist movement, extending to this Hemisphere 
the political system of an extracontinental power, would constitute a 
threat to the sovereignty and political independence of the American 
States, endangering the peace of America, and would call for a Meeting 
of Consultation to consider the adoption of appropriate action in ac- 
cordance with existing treaties." 28 

Machinery was set up to meet seizure of a republic by a foreign power. 
Each American government was to fight communist activities internally, 
exchanging information with one another. Consultation was provided 
for in cases of apparent communism. This was to precede action, and 
was a Colombian amendment designed to placate fears of abusive inter- 
vention. "This declaration of foreign policy made by the American re- 
publics in relation to dangers originating outside this Hemisphere is 
designed to protect and not to impair the inalienable right of each 
American State freely to choose its own form of government and economic 
system and to live its own social and cultural life/' 24 

Passage of the resolution was hailed in the United States as a triumph 
for the Dulles diplomacy, a "striking victory for freedom and self- 
government in this part of the world." 25 The Latins were less sanguine. 



56 CENTRAL AMERICA 

One delegate was quoted by the New Yorf^ Times as saying that if "the 
U. S. wanted to badly enough, it could have a resolution passed declaring 
two and two are five." Another representative said that "you don't al- 
ways have to see the sun, but you know it is there." 20 The United 
States, certainly, gained no prestige in Latin America from the conference* 
In addition, much good will was lost. A Brazilian delegate claimed the 
United States had reached its lowest ebb in its role of hemispheric leader 
of democracy. 

For Guatemala, its purposes were achieved: increased prestige abroad, 
added popularity at home, the communist position stronger than ever, 
and the government locally hailed in the press. Guatemala City dailies 
cheered Toriello, the brave patriot, for having unmasked U. S. policy. 
President Arbenz told a large rally in Guatemala City that, "Some of the 
legal positions maintained by us were defeated, but Caracas constituted 
a victory for our delegation, because it defeated the forces of imperialism 
and feudalism that raised the banner of anti-Communism in order to 
intervene in the affairs of the Latin American nations. ... I am con- 
vinced that Guatemala is not alone in the fight against the forces of 
imperialism." 27 The Communists hoped to isolate the United States from 
the other American republics, and thus destroy the most severe threat to 
their power. They were unable to do so; yet they succeeded in creating 
widespread suspicion and mistrust of U. S. motives. Transformation 
of emotional hate of "yankee imperialism" into communist partisanship 
was one of the means by which the Reds intended to gain complete power. 
They were only following the line laid down by Stalin in 1924. 

FROM TERROR TO LIBERATION 

In the spring of 1954, the Arbenz government became the object of a 
war of nerves from rebel forces in Honduras. Led by an obscure little 
exile, Lieutenant Colonel Carlos Castillo, the anti-communist forces 
prepared for invasion. Headquarters were in the Honduran capital, 
where Castillo begged and cajoled for all the arms and financial aid 
available. Throughout the early months of 1954, he issued repeated ap- 
peals to the Guatemalan populace for support, promising the overthrow 
of communism before year's end. Increasingly unsure of his position, 
President Arbenz instituted a wave of political arrests and brutal beatings. 
The Communists anxiously joined in the wave of violence. Popular 
opinion finally began to rise against the government. Reprisals and 



GUATEMALA 57 

physical violence were unparalleled in the annals of Central American 
politics. In a now-famous interview, U. S. News & World Report 
questioned two victims who managed to survive. Davila Cordova told 
how he was seized one evening as he closed his law office and driven 
blindfolded in a car to Civil Guard headquarters. 

Q. What kind of tortures? 

A. They applied electric shocks to my body. They applied a steel band 
to my head which caused such pressure on my brain that I lost consciousness. 

Q. Where were these things done? 

A. These tortures were applied every three or four hours in a special room 
at ... Civil Guard headquarters, where they took me from my cell. . . . 

Q. Were others arrested and tortured? 

A. When they finally took off the blindfold, I saw that five other prisoners 
had come with me and that they bore on their bodies horrible marks of the 
tortures they had undergone. On one of these men, Horacio de C6rdoba 
Monz6n, the injuries were so bad that he could not walk, because his feet were 
completely useless. 28 

The stark terror continued into the late spring. Arrest, conviction, torture, 
reprisal all were common in Guatemala. Under the direction of Civil 
Guard Chief Rogelio Cruz Wer, the police were merciless in treatment of 
prisoners. Photographs of mutilated, tortured victims were found after 
the fall of Arbenz. Atrocities were unspeakable. Veteran newsmen who 
visited Buchenwald and Dachau in the last days of Hitler's Third Reich 
testified to the brutality of the Guatemalan security forces. One wishes 
that the countless Latins who have argued that the Arbenz regime was 
"democratic," might have seen these examples of barbarism. 

Lashing out blindly at all within its reach, the regime expelled NBC 
broadcaster Marshall Bannell and New Yorl^ Times correspondent Sydney 
Gruson on February 2 for slanderous defamation and inaccurate reporting. 
Actually, Bannell had denounced Soviet subversion. Gruson, ousted for 
having "defamed and slandered this republic and its Government," was 
blamed for a dispatch calling Arbenz a prisoner of the Communists. Yet 
the story had been cabled to New York in November, two months before 
anyone noticed the supposed "insult." Foreign Minister Toriello re- 
sponded to an outspoken wire of protest from the Inter-American Press 
Association by claiming that freedom of the press was still existent. 
Meanwhile, independent Guatemalan newsmen, wearing black ties of 
mourning, accompanied Bannell to the Guatemala City airport. 



5 8 CENTRAL AMERICA 

In the midst of rampant terrorism, the outer world was told on 
May 17 that a shipload of arms was on the high seas to Guatemala from 
Stettin, Poland. Loaded with two thousand tons of weapons and am- 
munition, the freighter Aljhem had steamed through the Skagerrak, and 
after twice changing course, first from French West Africa and then 
the Dutch West Indies, docked at Puerto Barrios, Guatemala. The cargo 
"steel rods, optical glass and laboratory supplies" was unloaded on a 
dark night under the personal direction of Defense Minister Jose Angel 
Sanchez. The weapons, reportedly mortars and rifles, were shipped to the 
capital. The news exploded like a bombshell. In the United States, 
Rep. Patrick Hillings said the report made it "imperative that we deny 
the use of the Panama Canal to suspicious vessels." 20 Secretary Dulles 
told his news conference that arms could build a communist stronghold 
near Panama, endangering "the peace of America." The United States, 
he said, was ready to act in accord with its fellow members in the 
Organization of American States to prevent war. And Guatemala's 
Latin compatriots were equally startled. In New York City, General 
Antonio Seleme, the Bolivian military attache, suggested a U. S. air base 
in the Bolivian Andes as an additional defense of the Canal. Panama's 
Washington ambassador, Roberto Heurtematte, said that "through similar 
military assistance Russia converted her neighbor countries into satellite 
police states." 80 

Even the shortsighted Arbenz realized the magnitude of the action 
and acted hastily to calm his neighbors. Toriello tried to laugh his way 
way out of a corner in an interview with Edwin A. Lahey. Asked about 
charges that Guatemala was communist, he said "that's a lot of baloney," 
and added that Guatemala could buy no arms from the U. S. Questioned 
about the origin of the military equipment, he sidestepped the issue with 
"I'm only the Foreign Minister, not the Defense Minister." The United 
States speeded additional arms to Honduras and Nicaragua, redressing 
the Central American balance of power. At the same time it called for 
a foreign ministers' meeting to chart multilateral action. After a brief 
delay for diplomatic amenities, it was scheduled for early July in 
Montevideo, Uruguay. 

At home, Guatemala continued to retrieve its miscalculation as well as 
possible. The President suggested a personal meeting with President 
Eisenhower. Toriello met with U. S. Ambassador Peurifoy to ease 
tension with the United States. He insisted that all the diplomatic 



GUATEMALA 59 

problems were directly attributable to the UFCO dispute. If only that 
could be settled, "everything would be different." But an unidentified 
foreign service officer framed the U. S. position succinctly: "If the Guate- 
malans paid the United Fruit Company's full $16 million daim tomorrow 
and decorated every last United Fruit official with the Order of the 
Quetzal, we wouldn't be one whit less concerned about the danger of 
Communism in Guatemala." 81 

Ever since June, 1954, there has been an exceptionally widespread 
feeling among all Latin Americans that the United States, with Secre- 
tary Dulles in the direct pay of UFCO, intervened against a popular 
democratic government because of imperialistic economic interests. They 
fortify their opinion with amazing statements since published by Toriello 
and Arevalo in a pair of books denouncing "yankee imperialism." It is 
superfluous to repeat the innumerable proofs that Guatemala under 
Arbenz was communist, undemocratic, and almost totally cynical. And 
while the United States did intervene, it was strictly for political and not 
economic reasons. Most Latins refuse to accept the fact that the United 
States was badly troubled by what was obviously a communist regime. 
It had taken no action for more than twelve months after the expropria- 
tion of UFCO properties. Only when the communist threat became acute 
did the United States become active. Despite longstanding resentments, 
no intelligent Latin in possession of the facts can honestly attack the 
United States for interfering in the name of economic interests. 

In June, 1954, impatient for the expected internal army revolt, Colonel 
Castillo launched his invasion from Honduras, and the battle was joined. 
For weeks Guatemala had protested to the Honduran government about 
the formation of Castillo's troops. The government of President Gilvez, 
aroused over Guatemalan infiltration of Honduran banana laborers and 
general communist meddling, coldly refused to recognize the existence 
of any such revolutionary group. The government of Galvez was 
criticized for this position, often called a tool of the United States. The 
truth of the matter is that the continual intervention by Guatemalans in 
national affairs of the other republics was so blatant and inexcusable that, 
after a certain point, Guatemala was anathema to her sister republics. 
All, including Honduras, were anxious to retaliate in any way possible 
against the Arbenz regime. 

Responding immediately to the attack, the Arbenz government dis- 
patched troops to meet the rebels, taking the case to international agencies. 



60 CENTRAL AMERICA 

Toriello wrote the United Nations, demanding an emergency session of 
the Security Council to stop "the aggression in progress against Guate- 
mala." The Council complied by hurrying into session on June 20. The 
Soviet Union blocked a move to transfer the question to the Organiza- 
tion of American States; then the Council adopted a resolution calling 
for a cease-fire. The Guatemalans simultaneously appealed to the OAS, 
as well, requesting an examination by the Peace Committee. In ap- 
pealing for UN aid, the government made another grave blunder, this 
time by calling on the Soviet Union for aid. Russia had always "come 
forward resolutely against aggression," according to Toriello. This served 
no purpose; the case continued before the Security Council. The Western 
hemisphere was uniformly amazed by the appeal. For the U. S. Duljes 
could announce with complete candor that Foreign Minister Toriello 
"openly connived . . . with the Foreign Minister of the Soviet Union. 
The two were in open correspondence and ill-concealed privity." 82 

While the Security Council was debating further action, several 
American republics requested from the Council of the OAS a special 
ministers' meeting. Their statement declared: "Our governments view 
with increasing concern the demonstrated intervention of the international 
Communist movement in the republic of Guatemala. . . . The recent 
outbursts of violence in the area intensify considerably this concern and 
pose an urgent need to hold a meeting of the organ of consultation." 83 ' 
The Peace Committee, in the meantime, was scheduled to leave for 
Guatemala City on June 27 for a report to present to the meeting of the 
American ministers. Their plans were cancelled when President Arbenz 
resigned the same day. 

The five hundred to one thousand heterogeneous soldiers of Castillo 
gathered in Honduras for some six months before launching their in- 
vasion. Their commander had hoped to force internal revolt in the 
form of army rebellion. But the Guatemalan Army, one of the most 
powerful factors in national affairs, chose to remain aloof until the 
very end. Its apparent unwillingness to take the initiative led Castillo 
to attack in June. His forces were armed almost entirely by the United 
States. This has been denied repeatedly by U. S. officials. Yet there can 
be no serious doubt of U. S. intervention. Castillo was not a wealthy man 
and certainly could not raise enough money to buy the arms with which 
he eventually attacked. For weeks before, it was no secret in Tegucigalpa 
that U. S. arms were going to Castillo. Visitors in the city reported the 



GUATEMALA 61 

rebels training, drilling, and irritably killing time until they went into 
action. A few even saw scattered ammunition boxes with United States 
seals. Even with these arms, however, Castillo was outgunned and 
outmanned by the regular Guatemalan Army, nearly ten thousand strong. 
While his troops groped through southern Guatemala searching for 
government forces, events in Guatemala City moved quickly toward a 
decision. It was only after a series of semi-comic palace intrigues that 
Arbenz was ousted and replaced by Castillo. 

Sunday afternoon, June 27, U. S. Ambassador John Peurifoy, one of 
the key figures in behind-the-scenes manuvering, received a summons to 
visit army chief of staff Colonel Carlos Enrique Diaz. Traveling through 
shuttered streets with a pistol under his coat and accompanied by a mem- 
ber of the embassy Marine Guard, he met Colonel Diaz and other army 
officers. Almost three hours of discussion followed; Diaz said that army 
morale was low, and he wanted to stop the fighting. He suggested the 
formation of a junta abolishing the PGT and expelling the Communists 
from Guatemala. Peurifoy approved but insisted that the Communists 
had to be completely uprooted. Diaz* previous association with Arbenz 
left the ambassador skeptical of his motives. 

Heartened by the cautious encouragement, Colonel Diaz and two 
assistants went to the National Palace for an interview with the President. 
They insisted that Arbenz resign. The usually stoic President lost his 
composure and flew into a rage, arguing vehemently against his fellow 
officers. During the meeting he received news of several cabinet resigna- 
tions. His communist advisers, even Fortuny, were unavailable for advice, 
having deserted him. Faced with an impossible situation, abandoned by 
associates and Communists alike, he had no choice but to step down. 

Later that same evening, Arbenz addressed the nation by radio for 
the last time. Alone in his personal disaster, the embittered President 
addressed the country with uncharacteristic emotion: "I say goodbye, my 
friends, with bitter sorrow, but still firm in my convictions. Preserve 
what has been so costly; ten years of struggle, tears, and sacrifices, of 
democratic gains, are many years to gainsay history. I have not been 
confronted by the enemy's arguments, but by the material means for the 
destruction of Guatemala. With the satisfaction of a man who believes 
he has done his duty, with faith in the future, I say: Long live the 
October Revolution! Viva Guatemala!** 8 * 

Colonel Diaz followed immediately, pledging a fight against the rebel 



62 CENTRAL AMERICA 

forces. At 4 :oo A.M. Monday morning he awoke Peurifoy, accompanied by 
fellow junta member Jose Angel Sdnchez, asking the ambassador to 
contact the rebels and negotiate a cease-fire. Peurifoy at first agreed but 
hours later learned that Diaz was letting fleeing Communists scatter in 
all directions. Diaz obviously hoped to maintain the Red government 
in some semblance. 

Another meeting at 2:00 A.M. Tuesday morning brought Peurifoy 
from his bed to Diaz' home once more. Again riding armed through 
silent streets, he was met by Diaz and Sanchez. Col. Elfego Monz6n, 
the third member of the junta, was absent. Peurifoy, hopeful that Monzon 
at least was sincere, insisted that he be called before the discussion began. 
After calling Monzon, Diaz and Peurifoy talked for a few minutes. 
Noise in the adjoining room caused Diaz to excuse himself briefly and 
leave the ambassador. Sounds of a brief argument carried through the 
door, and then Monzon suddenly stepped into the room. "My colleague 
has decided to resign. I am replacing him," were his first words. Sanchez 
was also ousted, Peurifoy, pleased with the turn of events, agreed to 
arrange a conference between Monzon and Castillo. The two colonels 
met the following afternoon, June 30, in San Salvador. 

Negotiations hit a snag, and after several hours of haggling the an- 
nounced cease-fire had to be extended. On the next day, Friday, July i, 
Peurifoy received reports that Monzon was withdrawing after a collapse 
of negotiations. He immediately flew to San Salvador, muttering as he 
left that "we will get this straightened out." Arriving in an outlandish 
checked jacket and green Tyrolean hat, he sat down with the two men 
at once and, in a short time, they agreed to stop the two-week-old war. 
Determined to wipe out communism, they established a five-man junta 
including Monzon and Castillo. After fifteen days a temporary chief 
would be elected by the junta. 

Terms of the peace pact outlined four goals. Castillo's forces were 
incorporated into the regular army. The new junta took full legislative 
and executive powers, maintaining command of the army. Third, the 
junta was empowered to abolish the constitution or suspend certain articles. 
And lasdy, national elections were promised once the constitution was re- 
vised or a new one enacted. In Guatemala City, Castillo was received 
by a crowd of over fifty thousand lining the streets along his approach. 
Addressing the cheering throngs in the main plaza, he promised "true 
justice for the workers and all sons of this . . . land." He referred to 



GUATEMALA 63 

Arbenz and his aides only briefly: "These men are criminals . . . responsi- 
ble for torturing and killing many people." 35 

Approval and encouragement followed from the United States. John 
Foster Dulles announced that, "As peace and freedom are restored ... the 
United States will continue to support the just aspirations of the Guate- 
malan people. A prosperous and progressive Guatemala is vital to a 
healthy Hemisphere. The United States pledges itself ... to help alleviate 
conditions in Guatemala and elsewhere which might afford Communism 
an opportunity to spread its tentacles throughout the Hemisphere. Thus 
we shall seek in positive ways to make our Americas an example which 
will inspire men everywhere." 86 

PUTTING THE PIECES TOGETHER 

The first task facing the new government was recovery of political 
calm and national stability. Castillo devoted himself tirelessly toward 
this objective, but his regime was soon shaky. A wide variety of problems 
frequently swept up his government and carried it along powerless. Weeks 
after the temporary junta took power, Castillo was installed as temporary 
president, and in time the junta was completely dissolved, leaving 
Castillo indisputably in command. Early in October, 1954, he announced 
elections to decide whether he should retain power. To reduce "unneces- 
sary paper work," the elections were to be conducted orally, with voters 
telling election boards their choice. Secret ballot was ignored. The 
voters were given two assignments: first, to choose members of a 
constituent assembly to draw up a new constitution, and second, to decide 
whether to continue Castillo in power. Delegates to the assembly were 
members of the new-born National Anti-Communist Front; there were 
no opposition candidates. Officials would ask voters if they wanted 
Castillo to continue in office for a term decided by the assembly. Voters 
could answer yes or no, but if no, had no alternate candidate to select. 
Terms of the plebescite obviously assured Castillo's "re-election." De- 
spite this undemocratic procedure, Castillo was genuinely popular in 
Guatemala and was returned to office overwhelmingly. In November, 
following the election by one month, the pro-Castillo constituent assembly 
set the term of office to extend until March 15, 1960, giving Castillo nearly 
six years to accomplish his goals in Guatemala. 

The pressing need was still for tranquility. Despite the legitimatizing 
effect of the plebescite, Castillo was faced by hostile elements, notably 



64 CENTRAL AMERICA 

ambitious right-wing landowners envisioning a return to the days of 
conservative dictatorship. On January 22, 1955, with the moral support 
of these men, a small band of conspirators attempted to overthrow the 
government. Gathering at Aurora airfield, some hundred men attacked 
through the main gate, only to be confronted by two tanks and govern- 
ment forces, which opened fire. The Interior Ministry later announced 
that the government had known of the conspiracy for several days and 
had preferred to stop the rebels in the very act of revolt. Some half-dozen 
men were killed and several others wounded before the conspirators sur- 
rendered. Ringleader of the attempt was Colonel Francisco Cosenza, 
former ambassador to Italy and one of numerous arbencistas still in 
Guatemala. A long-time friend of the deposed president, he planned the 
attack and, when it failed, fled to the Salvadoran Embassy for diplomatic 
asylum. Castillo's popularity wore well, and the arbencistas and other 
dissident groups were without widespread support. A state of siege was 
imposed for a few days, and an early curfew cleared the streets of the 
capital. 

Perhaps the most startling development was the implied involvement 
of Colonel Monzon, who had helped engineer the end of the Arbenz 
government from the inside. Having been squeezed out of the governing 
junta some months before, he remained highly popular, especially with 
the army. Regular army officers had resented the intrusion of Castillo's 
irregulars into the ranks, and Castillo was both apprehensive and jealous 
of Monzon's popularity. Previous efforts to give Monzon a foreign 
diplomatic post had been rebuffed. Fearing his popularity, Castillo 
hesitated to force the issue. After the plot, however, government sources 
let it be known that Monzon had been immediately assigned to a South 
American diplomatic post. Aware of his earlier refusal, reporters pressed 
the issue. The government would say only that the colonel was a "focal 
point of dissension." They refused to involve him in the abortive plot. 
No one could prove any definite connection with the conspirators. He 
was known to have been on good terms with several of them, but this 
was implication, not proof. In the end, Monzon was forced, much against 
his will, to accept the foreign diplomatic assignment. His wife testified 
that he was accompanied by armed guards from his home to the airport 
and placed on a southbound plane. 

Although Monzon was gone, the battle for survival and stability 
continued. On May i, Herbert Matthews cabled the New Yor\ Times 



GUATEMALA 65 

that the government was at last emerging from the tempestuous post- 
revolutionary chaos, with both remaining arbencistas and right-wing 
conservatives beaten off. In pursuing a middle-of-the-road course, the 
liberation leader had managed to buttress his position by winning at least 
tacit approval of regular army officers who had turned their backs while 
the Communists subverted national life under the Arbenz administration. 
Traveling through Guatemala continually, Castillo worked to build up 
his personal popularity, particularly in more remote areas. 

When Castillo first took power, he was confronted with virtual govern- 
ment bankruptcy. Widespread looting by the Communists and by 
Arbenz left the national treasury empty. Arbenz himself deposited some 
six million dollars in Swiss banks after fleeing the country. The com- 
munist treasure was also large, with the Reds taking it to finance future 
adventures and a possible return to power. Castillo was thus barely able 
to operate a government at all and could scarcely consider plans to attract 
more capital or alleviate widespread unemployment. Finances haunted 
him continually in his fight for political and economic recovery. 

Besides operational government expenses, Castillo had the pressing 
debt of back pay to the irregulars of his tattered Army of Liberation. And, 
after returning to the capital, he had promised indemnification for the 
victims of the senseless reign of terror that preceded the communist defeat. 
At first, he appealed to the moneyed landowners to contribute to a one 
million dollar fund. Landholders responded by proposing a tax plan 
including both wealthy and poor. Castillo, pursuing a middle way as al- 
ways, ignored the outraged protests of friends and supporters and studied 
the suggestion. Almost simultaneously, he discovered that strong financial 
support was being given anti-government conservative politicians by the 
same rich businessmen and agriculturists. 

Thoroughly aroused, he levied a capital tax calling for payment valued 
at 3 percent of property assessed at over five thousand dollars. It also 
provided for a tax of i percent on business capital over five thousand 
dollars, 10 percent of the average monthly earnings of professional men, 
one dollar a head from cattle owners, and ten thousand dollars from large 
sugar mills. Estimating total needs at $6,200,000, Castillo allotted funds 
for new roads, workers' housing, and repair of hurricane damage At the 
same time, promised aid from the United States was slow in coining. 
The expected flood of financial assistance was a bare trickle. The words 
of shining optimism from Secretary Dulles in June, 1954, were not 



66 CENTRAL AMERICA 

followed by actions. President Eisenhower himself had spoken of making 
Guatemala an anti-communist showcase. Initially, $6,425,000 was 
promised. Little more than half that amount reached Guatemala in the 
first eighteen months of Castillo's government. This sum was contributed 
with strings attached. No money would go to Guatemala until the U. S. 
received specific explanations as to its use. Even then, the money had 
to be matched by Guatemala. The amount for roads was set at $4,425,000, 
providing Guatemala would add $1,500,000 more. In the early Castillo 
days, unfortunately, there was no matching money available. The 
$6,500,000 first contributed barely equaled the amount of back wages owed 
government bureaucrats. Daniel James editorialized that the donation 
was "as helpful as feeding aspirin to a man with appendicitis." Total 
Arbenz and communist looting was estimated at $20,000,000. The U. S. 
contribution, by comparison, was a drop in the bucket. For Castillo, U. S. 
declarations of friendship were hardly adequate. Only in 1956 did U. S. 
financial aid begin to arrive in significant quantities. 

Economically, few measures have been more important than land 
reform. The prestige of both Castillo and the United States was riding 
on this program, always inviting comparison with the work of the com- 
munist-controlled DAN. Arbenz' legislation was in operation for two 
years. An estimated fifty-five thousand families were moved onto plots 
of their own, many taken from UFCO, a lesser number from large land- 
owners. Most settled on ten-acre plots, and selection was contingent 
upon political obedience. The Arbenz government retained a lien on land 
titles and, after the death of the owner, lands would revert back to the 
government, presumably to be sold. These families took over both 
uncultivated and cultivated land. Bloodshed and violence often resulted, 
with many illegal seizures. Landless Indians, hearing of the reform, 
would take land and claim it as their own, exercising squatters' rights. 

After the revolution, large landholders reversed the procedure and 
snatched back all the land available, often sending squads of "bully boys" 
where intimidation was necessary. Castillo, finding nearly eighteen 
thousand people unemployed in June, 1954, put jobs before farms and 
began his ambitious road-building program (see below) with unemployed 
labor. He refused to abolish the Arbenz law precipitously, and the gov- 
ernment dispossessed no Indian peasant from land unless new property 
was available for him. At the same time, the President called upon U. S. 



GUATEMALA 67 

farm experts for advice. He explained the attitude of his government 
to ward the issue: 

The Communists had their land reform, but ours will be better. To make 
sure that it works, I have asked the American Department of Agriculture 
for ... experts. . . . 

We have laid down the principles and it is up to the Americans to help 
advise us how to apply them. The first principle is that the fanner gets the 
land for keeps. There are no strings. The Communists pretended to give 
land outright, but actually they only gave a deed of lifetime use. We want a 
nation of small owners, not state share croppers. 

The Communists "reformed" the easy way, by grabbing land that was 
already cleared. We shall let the squatters keep some of the land already 
seized. But mostly we shall open up new frontiers. Fresh roads built with 
American help will penetrate the wilderness. We have plenty of unused land 
waiting for setders. 87 

Not until March, 1956, was the land reform law completely revised. 
Castillo announced in an executive decree that the plan intended to settle 
landless peasants on government-owned lowlands, where prices for 
homesteads were low. At the same time, combatting Indian reluctance 
to leave the mountains after living there for centuries, additional lands 
in the highlands were provided, in most cases by expropriation of unused 
portions of large estates. The new law protected ownership by giving 
outright possession and forbidding resale without government permission 
for twenty-five years. This latter provision would prevent landowners 
from buying their land back from the peasants. Technical assistance, 
low-cost housing, and easy credit were included in the comprehensive 
plan, and agricultural education was set up in hopes of improving farming 
methods. 

Financing the reform was part of a mammoth five-year economic 
development program costing $250,000,000. The new program, announced 
as the reform went into effect in March, hoped for some $50,000,000 from 
the United States. Additional funds for the reform program came 
from a new tax outlined by the agrarian law. Untilled sections of large 
farms would be taxed while left unproductive, the tax increasing 25 per- 
cent a year for five years. The obvious object was to force large land- 
owners to farm their land, rather than hold some of it as a long-term 
investment. Effects of this program could well have revolutionary results 
for Guatemalan agricultural life. If successful, it would raise the entire 
national economy to a higher stratum. 



68 CENTRAL AMERICA 

Unfortunately, preliminary results have been poor. As 1957 drew to 
a close, the program was bogging down. Some thirteen thousand families 
had applied for land as early as mid-1954- But three years later, even the 
government claimed only seventy-four hundred had received plots under 
land reform. And while families were to receive fifty acres instead of the 
ten granted by the Communists, only one in six have actually received 
a full fifty-acre plot of land. Of the other six thousand, most are illegal 
squatters who still operate and live on land seized during the first post- 
revolution confusion. Roughly 2 percent of the Guatemalan population 
still owns 70 percent of the land. The government also found itself with 
less land than anticipated. UFCO transferred some hundred thousand 
acres to the government, which retained 134,000 acres seized by the Com- 
munists in 1953. This is still proving inadequate. A clearing contract 
was recendy let for $525,000 roughly 20 percent of the national budget. 
Under the agreement, however, the company will clear only five of each 
fifty acres, a slow pace indeed, and one more suited to private capital. 
At this point, the government cannot point with pride to the achievements 
of land reform. Future prospects are better, but the problem of land 
distribution will not wait indefinitely. 

Land reform, obviously, was not the only economic problem to be dealt 
with, and the others were lumped together under a Council of Economic 
Planning created in November, 1954. Castillo discussed its work in an 
interview with Latin American Report in June, 1956. The Council of 
Economic Planning, he commented, was "charged with preparing a basic 
five-year plan. After six months of specific research ... the plan emerged 
as a reality. Covering the period from 1955 to 1959, the plan deals with 
works on public roads, development of agriculture and the native economy, 
light and power systems, budgetary reorganization, taxation, and technical 
coordination among the various agencies. With this blueprint to advance 
the systematic economic development of the country, it is felt that solid 
foundations have been laid for the welfare of the Gutamalan people." 881 

Guatemala's greatest dollar-earning product, coffee, has been one of 
the central problems of the Council. Like other coffee growers, the 
Guatemalans have ridden for years on the increasing international price 
for coffee, without expanding their production. This attitude is gradually 
changing. Idle land is being planted and fields increased. Greater care 
is given to the process of planting and to the seeds themselves, in hopes 
of bettering the product. Most growers are also centering production 



GUATEMALA 69 

around the heart of the estate, in lieu of scattering plantings in remote, 
non-contiguous fields. 

At the same time, coffee growers are complaining bitterly about the 
inadequacy of transportation. Feeder roads are needed in Guatemala if 
the products of the finca are to go to market, and then abroad. Low-cost 
transportation is vital. While the government is actually engaged in a 
major road-building effort, it does these planters little good. By the end 
of 1958, the so-called "Big Three" were nearing completion. These are 
the Atlantic Highway, running from the Caribbean port of Puerto Barrios 
to Guatemala City; the Pacific Highway, from the Mexican to Salvadoran 
border; and the Inter American Highway, between the same borders 
through the capital. While these are important, they will be of primary 
value to the tourist business. Whether or not this will bring more 
revenue than would feeder roads from farm to market remains to be seen. 

The reviving agriculture was given a serious blow by the corn shortage 
of 1954-55, when production fell short of demand. After a second shortage 
appeared in 1955-56, the United States shipped corn to Guatemala. Guate- 
mala's usual eight to ten million hundredweight of corn production was 
drastically down, just at a time when the ten million hundredweight de- 
mand was increasing with the 3 percent annual population rise. U. S. 
corn shipments began arriving on March 25, 1956, and were valued at 
$2,500,000. This was financed from the $15,000,000 in economic aid ap- 
propriated by the United States, including $5,000,000 earmarked for 
scarce commodities. Despite individual problems and setbacks, the key 
to Guatemalan agricultural wellbeing lay in the $250,000,000 economic 
development program mentioned above. Its five-year aim roadbuilding, 
communications, public health, electrification was well set forth. The 
major question was that of financing. Organs of international cooperation 
loaned $32,400,000, and the U. S. committed itself to $21400,000 for further 
road construction. The remaining 75 percent was to be financed by 
internal income. Whether this can be done is an important question for 
Guatemala. 

Foreign investors are discovering a "new deal" in Guatemala with the 
expulsion of the Arbenz regime. President Castillo promptly offered 
friendship to foreign investors. UFCO's Pacific division, Compania 
Agricok de Guatemala, relinquished its claims on the hundred thousand 
acres seized by the Communists, receiving in return a promise of non- 
discriminatory legal treatment. "The best pattern for the future is for 



7 o CENTRAL AMERICA 

our farmers to take over the land and grow the bananas for themselves, 
with the big companies selling them insecticides and fertilizer and giving 
them advice." 89 These words of Castillo probably were received with 
less than enthusiasm by UFCO officials, but they were pleased to be 
receiving reasonable treatment once more after years of official opposition. 
Further negotiations were completed in spring of 1956. While offering 
120,000 acres of holdings near the mouth of the Motagua River to the 
government, UFCO agreed to pay a tax of 30 percent of its annual profits 
from the Adantic division. This was almost identical to the understand- 
ing reached earlier by the Pacific division. The new contract, which im- 
mediately went into effect, is to last until 1981. The old contract, of 
course, stated that UFCO paid no tax or duty other than two cents on each 
bunch of exported bananas plus a fourteen thousand dollar annual fee 
for land rental. 

Business with other important foreign investors was pursued at great 
length. Negotiations extended well through 1956 between the govern- 
mant and International Railways of Central America, as well as Empresa 
Electrica de Guatemala. The talks with the railroad sought modification 
of complicated existing laws, combining and condensing into a new bill. 
The highly confidential talks neared agreement very slowly, due in part 
to a dispute over several million dollars in tax cases. Final agreement 
was a compromise of conflicting views. 

Of most immediate importance to Guatemala was the discussion with 
Empresa Electrica. Like other Central American countries, Guatemala is 
sorely in need of additional electric power. Empresa, a subsidiary of 
American and Foreign Power Company, has been negotiating with the 
government since December, 1954. Supplying the central zone of 
Guatemala with power, it offered to invest over sixteen million dollars 
in expanding its capacity from the present 21,000 kilowatts. An estimated 
30,000 kilowatts are now needed. Guatemala, impressed by the Salvadoran 
electrical system and plant recendy put into operation, insisted on in- 
creased investment. Empresa reportedly has been willing to include a 
thirty million dollar plan to expand generating capacity and install the 
first Central American nuclear power plant in 1959. But no definite 
agreement has yet been reached, despite long months of discussion. 

A final but very important step was revision of existing petroleum 
laws, which discouraged foreign investors from the initial outlay of bring- 
ing in equipment and personnel to pioneer Guatemalan oil fields. Castillo 



GUATEMALA 71 

decreed all Guatemala open to exploration by reputable firms. Relying 
upon expert technical advice, he employed a team of Venezuelan tech- 
nicians who recommended the measures adopted. This temporary decree 
was replaced in July, 1955, with passage of a new petroleum law requiring 
fifty-fifty profit sharing between the exporter and Guatemala. Bids were 
accepted to begin operations. Ninety-two separate applications reached 
the government, with twenty-nine different companies asking concessions 
for exploration. These included California Standard, the Texas Company, 
Standard Oil, Sun Oil, Atlas Petroleum Company, and Central American 
Oil and Mining Company. With an application fee of five hundred dol- 
lars, the government received $46,000 before granting a single concession. 
Applications are now under study by government officials and foreign 
technical advisers. 

Castillo, when asked if he thought oil would answer all Guatemala's 
economic problems, said: "Oil is a potential wealth whose exploitation 
could result in new sources of well being for the country. Nevertheless, 
the answer to all of Guatemala's problems lies in a plan of develop- 
ment. . . . The government, concerned with promoting adequate and 
sane exploitation of all natural resources, gave special importance to the 
possible exploration and subsequent exploitation of oil. With this in mind, 
it formulated the Petroleum Code, which adequately guarantees the in- 
terest of the state, of private citizens, and of the petroleum industry." 40 

RETURN TO CRISIS 

As Castillo's presidential term lengthened, doubts increased about his 
government's orientation. Abroad he was still admired as the doughty 
communist-fighter he was. Various errors in judgment or undemocratic 
actions were viewed as those of an inexperienced politician. Born in 
Santa Lucia Cotzumalguapa on November 4, 1914, he entered the military 
academy in the capital, began his army career, later serving as com- 
mandant of the school during the Arevalo administration. Strongly op- 
posed to that and the following regime, Castillo had administrative 
experience only as the commandant. Extremely soft-spoken, Castillo was 
moderate to the point of mildness. But he could be an unrelenting 
individual when aroused. Undemocratic leanings showed themselves 
on several occasions. Legal suggestions of dictatorship were written 
into the new constitution in early 1956. Article 77 guaranteed civil rights 
except "in the case of activities against the security of the state, perturba- 



72 CENTRAL AMERICA 

tion of the peace, public calamity or invasion." This law categorized five 
different emergencies. All could be declared by presidential decree except 
the most severe total war which required legislative approval. Thus, 
on any pretext, the president could suspend writs of habeus corpus, impose 
press censorship, instruct police to fire on demonstrators, and outlaw all 
political parties. 

Early in his regime Castillo had used a secret National Defense Com- 
mittee Against Communism to help root out remaining Reds and 
arbencistas. This group, given power to search homes and make whole- 
sale arrests without a warrant, ranged far and wide over the countryside 
for months. Its operations were not unlike the Ku Klux Klan. Gradual- 
ly, the jails filled. Castillo, alleging that he needed such an organization 
to uproot communism, nevertheless was persuaded to relent, largely be- 
cause of the practical reason that jails were overflowing. Some forty-five 
hundred vigilante victims went free. For a long time, criticism was 
light. After passage of the Law of Public Order, for example, which made 
a crime of "speaking ill of the President," Prensa Libre editorialized that 
"an unpopular government could use the law to maintain itself. . . . This 
law looks like it had been written by Generalissimo Trujillo. . . ." At 
the same time, Castillo was not criticized directly, for he was a 
"tolerant man, but let us remember that we are legislating not only for 
now but for the future as well and the future may bring a capricious or 
oppressive President." 

A sudden outburst in June, 1956, re-aroused doubts as to government 
orientation. Guatemalan students were involved, and trouble started 
on May i, Guatemalan Labor Day, when three law students grabbed the 
microphone at a labor gathering and turned it into an anti-government 
demonstration. The government looked askance and prepared for the 
next national celebration that of the fall of Ubico on June 25. A sub- 
secretary of the Interior Ministry said, "we are waiting for the Com- 
munists well show them on June 25." And Mario Lopez Villatoro 
added that "what happened on May i will not happen on June 25." 

On Saturday, June 23, pamphlets allegedly published by the leftist 
National Civic Committee were distributed throughout the capital. There 
was tension all day. Late Saturday the cabinet met and revoked permis- 
sion for a student demonstration on Sunday. It declared a state of alarm 
and suspended thirteen constitutional rights for thirty days. The 
emergency decree claimed that the Communists were meeting to carry 



GUATEMALA 73 

out "actions designed to spread panic and disorder in the country and 
thus prepare a propitious atmosphere for the development of their sub- 
versive intentions." Early Sunday morning a group of students met to 
begin a parade honoring Maria Chinchilla, a school teacher instrumental 
in the 1944 overthrow of General Ubico. Over four hundred students 
and workers gathered to begin the march to her grave. Police attacked 
with clubs and rifle butts to disperse the crowd. The entire city was 
angered by the intervention. Jose Trinidad Ucles, president of the 
Asociacion de Estudiantes Universitarios (AEU), met with Castillo on 
Sunday night to protest, but the President gave no satisfactory reply. 

Monday, a large group of students assembled at noon to discuss the 
incident. After a heated meeting it was decided to demand government 
abrogation of the state of alarm. AEU also decided to go on strike if 
demands were not met within twenty-four hours. A committee of three 
withdrew to draft a manifesto. At 7:00 P.M. the students reconvened, 
approved it, and decided to read the protest in Central Park despite 
government warnings not to congregate in the streets. A few students 
were opposed to open defiance of the government, but the majority 
favored a reading. At 8:18 the meeting adjourned and five hundred stu- 
dents began marching toward Central Park. Despite a police warning 
that "we will sweep you off the streets by whatever means we have," 
the students were confident. They marched and sang the national hymn. 
Students were five blocks from the park on Sixth Avenue when met by 
police. Witnesses are divided on what happened, but the best knowledge 
seems to be that police fired on the students without any indication of 
student violence. Shots fired in the air failed to stop the marchers, and 
police turned their fire onto the column. Ucl&, in the meantime, was 
foolishly trying to read the manifesto on the street corner. Casualties 
increased, students dispersed, and the incident was ended. However, one 
student died on the spot and three others later that night. None were 
considered Communists. Estimates of the wounded varied from 18 to 27; 
168 were arrested and 17 exiled to Honduras in a matter of hours. The 
latter included Mario Monteforte Toledo, editor of the opposition socialist 
newspaper Hoy, who was accused of writing editorials calculated to 
"incite sedition and the overthrow of the government." 

Monday night the government declared a state of siege, placing 
Guatemala under martial law for thirty days. Police charged that after 
the restoration of order, eight revolvers, three hand grenades, and assorted 



74 CENTRAL AMERICA 

knives were taken from the students. All students denied the charge, 
blaming the police for opening fire on demonstrators while they marched 
peacefully, unarmed. The government soon added that in view of com- 
munist activities, there was need for "immediate repression with the 
adoption of severe and drastic measures." The state of siege suspended 
all constitutional rights, censorship was ordered, and the army established 
a 6:00 P.M. to 9:00 A.M. curfew. Arrests and expulsions continued through 
the week. On Wednesday President Castillo stated: "My choice is either 
to surrender Guatemala again to the Communists or to crush them wher- 
ever they raise their heads. I have chosen to hold Guatemala. . . . The 
state of siege will be maintained to ... eradicate agitation and complete 
the capture of those responsible. . . ." 41 Later, student meetings with 
Castillo brought the release of most imprisoned students. Police involved 
in the shooting were not, of course, dismissed. Castillo later told inter- 
viewers that he "had to choose between allowing chaos or ... acting rapid- 
ly and energetically to guarantee security and life by suffocating this 
subversive attack." 42 

Briefly, there is little question that AEU was justified in protesting the 
original beating of students, and later, the arrest of students and suspen- 
sion of constitutional liberties. It was both foolhardy and illegal to defy 
the government by marching to Central Park, however. Even so, there 
was no real justification for police brutality in firing on the marchers. 
Efforts to justify its position by the government were unsuccessful. The 
episode was a clear example of a jittery government hopping at the slight- 
est sign of difficulty, then passing it off as a communist plot. Castillo 
was slowly finding Guatemalans less and less impressed by his cries of 
communism whenever opposition reared its head. Castillo never realized 
that the presence of some Communists did not mean they were con- 
spiring under every bed. 

The one firm bulwark of support for Castillo throughout all difficulties 
was the Catholic Church. After some eighty years of anti-clerical rule, 
the Church was for the first time beginning to enjoy favorable govern- 
ment attitudes. Castillo relied upon it for much of his support. During 
the Arbenz regime the Church fought the Communists under the leader- 
ship of Archbishop Mariano Rossell y Arellano. The Archbishop, a man 
of "remarkable courage and moral authority who is yet humble and 
simpatico,"* 1 * led a continual attack against the Communists. When 
Castillo came to power, Guatemala got a government tolerant of Church 



GUATEMALA 75 

activities. Catholic newspapers appeared, deputies were elected to the 
constituent assembly, and on the first anniversary of liberation Castillo 
decorated the Archbishop with the Order of the Liberation. There was 
but one occasion when there was disagreement between the two. In 
mid-1955, when the "Committee of 17" was drafting the new constitution, 
Rossell y Arellano wrote asking pre-eminence for the Church. He 
threatened that the Church would assume a "position of estrangement" 
if not made the state religion. Castillo called a press conference, an- 
nounced that such pre-eminence negated democracy, and added that 
Catholicism was already pre-eminent. 

Castillo won his argument. Article 51 of the constitution guaranteed 
"free exercise of all religions." While this rejected the Catholic position, 
it at least assured religious freedom. Article 50 preceded it by stating 
that religious institutions could "acquire and possess properties . . . pro- 
vided they are devoted exclusively to religious ends. . . ." All this prodded 
the Catholics into greater activity, and their influence was strong. Most 
hoped to expand programs of social recovery. To Daniel James, the 
Church appeared a positive force for progress, as "the State is letting 
the Church breathe again." 44 

Labor elements began to assert themselves in May, 1957, threatening 
through their Trade Union Council to stop co-operating with the govern- 
ment. The Council, supported by the ORIT and AFL-CIO, issued a May 
Day proclamation attacking Castillo's administration: "Conditions in 
the countryside, in industry, and in commerce are similar only to the 
anguished times of need we went through before our glorious revolution 
of October, 1944 . . . unless labor gets back the legitimate gains given 
to it by the 1944 revolution, we may have to decide upon a recess of all 
union activities." 45 Three points were criticized. First, the government 
elimination of a labor code clause permitting re-instatement of workers 
unjustifiably dismissed a measure recently enacted was to be reversed. 
The Council also asked that the operation of labor courts be speeded up 
and not oriented toward the government. Finally, decrees barring public 
employees from organizing and from striking were called "monstrosities" 
that made the labor struggle "almost untenable." 

There was no immediate official reaction, but within a month pro- 
labor measures were initiated. A minimum-wage kw was granted giving 
the government power to impose minimum wages whenever necessary. 
Although not invoked at first, it was a sweeping power that later was 



76 CENTRAL AMERICA 

held over landowners' heads to reduce the continual change of wages. 
This wage law called for the unionization of farm workers through the 
Syndical Council of Guatemala. Despite opposition of the General As- 
sociation of Agriculturists, rural workers thus were organized for the 
first time. In addition, a long-tabled legislative proposal for increased 
property taxes was brought back to life, calling for increased taxes on 
property recently improved by new public works. 

By the middle of 1957, Guatemala was beginning to show favorable 
economic signs for the first time. The accumulated injection of almost 
$90,000,000 began to be felt. Unemployment was on the decline, invest- 
ments had increased, and the search for oil was proceeding on an un- 
precedented level. Roads and buildings were dotting the countryside, 
and foreign technicians were working for the improvement of agricultural 
techniques. Bank deposits had reached $100,000,000, and savings were 
$10,000,000 compared to $3,000,000 only three years earlier. A record high 
of $129,000,000 was in circulation. The 1957 coffee crop brought over 
$100,000,000 in extra captial that was promptly poured into new projects. 
Long-time observers of the Guatemalan scene could not remember such 
prosperity. Castillo's measures were finally taking hold. Increased 
political stability was permitting the unprecedented economic progress. 
Then, in late July, one well-placed bullet upset all calculations. 

On the night of July 27, 1957, Castillo and his wife walked down a 
long corridor in the Presidential Palace toward the dining room. A 
member of the Presidential Guards, Romeo Vsquez Sanchez, snapped to 
attention, brought his rifle to his shoulder, and shot the President through 
the heart. Moments later he shoved the muzzle toward his head and fired 
into his skull. Castillo already lay dead in the hallway. Vice-President 
Luis Arturo Gonzalez took office the next morning after a nocturnal 
session of Congress. The army was called out, troops patrolled the city, 
and the regime prepared for uprisings or an invasion from abroad. The 
transition was surprisingly smooth, and there were few incidents to disturb 
the city. Gonzalez received pledges of support from the armed forces. 
The next day Castillo lay in state at the National Palace as crowds 
shoved past the coffin to pay their final respects. Later investigation re- 
vealed the assassin to be a fanatic without political connection with either 
communism or other anti-Castillo elements. But the incendiary nature of 
Latin politics had claimed another victim. The loss was a cosdy one. 
It left a tremendous vacuum, for there were no members of his ad- 



GUATEMALA 77 

ministration to whom succession was clear. Despite the initial strength of 
constitutional succession, no one expected acting president Gonzalez to 
stay in office until 1960. Gonzalez soon announced elections on October 
20 to select a new president. Three men entered the race. From govern- 
ment ranks came former Supreme Court Chief Justice Miguel Ortiz, 
fully supported by the administration as Castillo's heir. Sixty-two-year-old 
Miguel Ydigoras, a high official under Ubico and losing candidate for 
president against Arbenz in 1951, was supported by extreme right-wing 
groups, and staged a vigorous campaign in the outlying areas. His 
strength was clearly in rural constituencies. The third candidate, Miguel 
Asturias Quin6nez was entering politics for the first time, and his 
chances were slim. The left-wing Revolutionary Party had hoped to run 
his leader, Mario Mendez, but government decrees prevented his partici- 
pation. 

Unofficial returns gave Ortiz a long lead, and he immediately claimed 
the presidency. The vote was 198,131 to 128,323. Quin6nez was far in 
arrears. Ydigoras promptly charged fraud and threatened "rivers of 
blood will flow" if Ortiz took office: "We shall march, people of Guate- 
mala." Ydigoristas and left-wingers marched to the National Palace and 
demonstrated violently. The government announced a state of siege and 
sent troops fanning out through the city, but rioters were not to be 
denied. Several days of continual incidents and rioting followed; on the 
third day the army stepped into the breach and named Second Vice-Presi- 
dent Guillermo Flores Avendano as chief of state. "The last election is 
vitiated, because there was no full guarantee to the citizenry of the legiti- 
mate exercise of its rights. ... A new electoral event will normalize the 
political activities of the country." 48 

New elections were called for January 19, 1958, and government direc- 
tion during the interim period was not noticeable. Preoccupation was 
entirely with the forthcoming vote and succession of power. Once more 
Ydigoras was a candidate, and backed again by conservative and business 
interests, made a strong bid for votes. Thirty-seven-year-old Jos Luis 
Cruz, an original member of the Castillo military junta, and now ambas- 
sador to Washington, returned as candidate of a middle-of-the-road coali- 
tion that included support of the former Castillo grouping. He promised 
to continue Castillo policies. The previous agitation over Ortiz, who 
was only a minor figure, caused the Castillo group to drop him, and he 
soon faded into the background. The Revolutionary Party was able to en- 



78 CENTRAL AMERICA 

ter its leader Mario Mendez as a result of court action setting aside govern- 
ment prohibition of his candidacy. There was considerable doubt as to 
the influence of communist elements in the party, although non-com- 
munist Mendez claimed that his party had purged Red sympathizers. 

A close tabulation finally showed Ydigoras the winner with 140,802 
votes. Mendez received 98,238 votes, and Cruz 97,668. Despite the 
clear-cut victory for Ydigoras, he lacked a plurality, and the election was 
thrust into the legislature where Castillo supporters were expected to 
return Cruz to office. Amid cries of electoral fraud, observers forecast 
civil war if Ydigoras was denied office. It is to the credit of Cruz that he 
instructed members of Castillo's old Movimiento Democratica Nacional 
to fall in line behind Ydigoras, whose votes had been 41 percent of the 
total. Cruz and Ydigoras agreed on the need for national unity. On a 
more practical level, the MDN received several cabinet posts and Cruz 
was promised another ambassadorial position. The final vote in Congress 
gave Ydigoras forty votes, Cruz eighteen, while seven were blank. 

On Sunday, March 2, 1958, Miguel Ydigoras was sworn in as President 
by Julio Prado, President of Congress. Ydigoras was pictured by many 
as a dictatorial type, and many had misgivings. Born in 1898, he became 
a career officer and, until 1944, never took part in political affairs. After 
serving as governor of two departments, however, he was forced to resign 
following the anti-Ubico revolution of 1944, and he remained abroad 
until 1950, having served as a diplomat in both Washington and London, 
where he attended the London School of Economics and Political 
Science. After his 1950 loss to Arbenz, he went into hiding once more. 
After Castillo took power he was sent to Colombia as ambassador, re- 
turning only in August to enter the race precipitated by Castillo's assassina- 
tion. 

Elected primarily with the support of landowners and members of the 
upper middle classes, he insistently reiterated his belief in democratic 
methods. Aides claimed that the years in exile had mellowed the man, 
although in manner he remained curtly precise. After the inauguration 
he took great pains to dispel fears about autocratic procedures. A trip 
to the United States was made precisely to assuage doubts about his 
political orientation. As Guatemala looked forward with very guarded 
optimism to the days that would follow, Ydigoras asserted his complete 
dedication to democracy. Whether or not he was sincere was not im- 



GUATEMALA 79 

mediately evident, but in a pre-inauguration "prayer" he addressed 
Guatemala with a pledge to maintain basic freedoms: "During the recent 
electoral campaign I was accused often of aspiring to be a dictator. I 
have always rejected this unjust accusation because what I want most is 
to rule the country with freedom and respect for the laws." 47 Only the 
experience of his new government would be able to bear out his state- 
ment. Guatemala was waiting for proof. 



Chapter Three 



EL SALVADOR 



NESTLED BETWEEN THE mountains of Honduras and the jungles of 
Guatemala is El Salvador, smallest and most densely populated of the 
Central American states. The only republic on the isthmus lacking a 
Caribbean coast. El Salvador has for some years been the rallying point 
for supporters of regional union and increased Central American political 
maturity. Many significant efforts for unification have originated from 
the small country. Most existing regional organizations make their head- 
quarters in the capital city, San Salvador. Today, the very offices of the 
secretary-general of the Organizacion de Estados Centroamericanos 
(ODECA) are operating in San Salvador. 

While leading the vanguard of regional economic and political co- 
operation, El Salvador has repeatedly lent its offices in mediation of various 
regional disputes. Several times in the last chaotic decade, only Salvadoran 
conciliation has prevented the powderkeg that is Central American politics 
from exploding. Increasingly, its neighbor republics have turned to it in 
time of danger for advice or assistance in softening grave situations. The 
reasoned approach of El Salvador has been the very antithesis of the usual 
breast-beating Latin volatility. 

Yet, paradoxically, Salvadoran internal politics have remained unpre- 
dictable. After the last revolution, in 1948, national stability seemed just 
around the corner. For the next eight years political unrest was at a 
minimum. And then the 1956 presidential elections evoked once more 
the familiar picture of an outgoing leader handpicking his successor, 



EL SALVADOR 81 

handcuffing the opposition, and thus perpetuating the government, though 
in new and less familiar garb. And the assumption of power by the new 
chief of state has brought no guarantee of maturing political awareness. 

Crowding 2,122,000 people into a nation the size of New Jersey, El 
Salvador has the densest Central American population at 161.1 per square 
mile. Relying largely upon the revenue of its coffee exports, it is another 
one crop country, so typical of the geographic region. Its economic re- 
sources, of course, include other products, such as cotton and corn. Small 
quantities of minerals primarily gold and silver are also found. How- 
ever, as we shall see later, the economic wellbeing of the country is de- 
pendent upon coffee; all plans and projects aimed at development are 
based on this premise. There is no alternative. 

Such is the general outline of El Salvador today. Small, populous, 
a stabilizing influence on regional affairs, this coffee country is faced 
with a scries of national problems, the gravity of which must not be 
underestimated. At the same time, its future prospects seem as bright 
as any other Central American republic. Events of recent years suggest an 
upswing in national fortunes. With enlightened leadership and economic 
luck, El Salvador may well lead the way for its neighbors, if any are to 
arrest the backsliding of the last decade. 

ECONOMICS FROM INERTIA TO ACTIVITY 

Since 1931, El Salvador has been ruled to varying degrees by military 
authorities. There have been a few brief governments of pacific and 
purely civilian orientation, but the army has maintained a sizeable share 
of power, wielding its influence continually in national affairs. During 
this time economic development slowed to a standstill. Until the revolu- 
tion of 1948, these were indeed unproductive years. The man first re- 
sponsible for this pattern came to power a quarter of a century ago by 
means of the usual anti-government coup. He was Maximiliano Her- 
nndez Martinez, one of the more unusual figures of contemporary 
Central American politics. Martinez, heading a military government, 
based his appeal on a continual succession of magical formulas and 
imaginative impossibilities. Ignoring the educated Salvadorans, he ap- 
pealed directly to the poverty-stricken peons who, in their ignorance, gave 
him the support necessary to remain thirteen years in power. Himself a 
mestizo like most Salvadorans, Martinez became a complete dictator. 
For thirteen years no Central American country, not even the Guatemala 



82 CENTRAL AMERICA 

of Jorge Ubico, was dominated so thoroughly by one man. Few were 
as bloody as Martinez. 

A Theosophist, Martinez captured the minds of the peasants in various 
ways. He devised unheard-of methods of corn planting which fascinated 
the agricultural workers although growing no more corn. He filled green, 
yellow, and blue vials with plain water and set them in the sun on the 
roof of the Presidential Palace. After a period of "aging," these vials 
became potions guaranteeing relief from rheumatism, heart disease, or 
dysentery. Before any of his schemes became an obvious failure, the 
tyrant would concoct a new one, surpassing all the others in captivating 
the uneducated mind. Called "a Merlin, a wizard," by German 
Arciniegas, the dictator also buttressed his position with control of the 
military. At opportune moments this burgeoned into bloody suppres- 
sion. Uprisings were frequent and were dealt with cruelly. He once 
was quoted as saying "it is a greater crime to kill an ant than a man, for 
when a man dies he becomes reincarnated, while the ant dies forever." 
The worst blot on his record is the suppression of a 1932 revolution. 
Officially, a communist plot by Mexican agents was put down with the 
loyal support of all patriotic Salvadorans. Actually, poverty-blighted 
peasants agitated for land reform and were shot by landowners for their 
trouble. This touched off a general bloodletting in which the government 
intervened. The most accurate guess estimates nine to twelve thousand 
were killed as a result of the grisly suppression. Periodically re-elected 
against token opposition, Martinez had his own way until 1943. Then a 
young doctor, Arturo Romero, began to organize anti-Martinez forces. 
A revolution was put down in December, 1943. The fleeing Romero was 
badly injured by machete wielding border guards unaware of his identity. 

Taken to a hospital, Romero became the center of a tug of war. The 
authorities wanted to keep him, while friends and supporters hoped to 
free him from virtual imprisonment. By the time Romero was released, 
the dictator had instituted a policy of execution, hoping to quell increasing 
opposition. Wide reprisals followed the slightest breach of public order. 
To critics, he replied, "let my enemies reincarnate when I am dead." 
In May, 1944, the eccentric dictator was finally forced to resign when a 
nation-wide strike paralyzed life completely. At first, he relinquished his 
position to an acquaintance, General Andr& Ignacio Men^ndez, retaining 
a share of power himself. In the subsequent years he lost all support and 
was exiled. 



EL SALVADOR 83 

The next four years found a succession of men passing through the 
presidency rapidly a chief justice, a police officer, and a Falangist. In 
1948, the army united under the leadership of a four-man "Council of 
Revolutionary Government" to unseat General Salvador Castaneda 
Castro. Most of those in positions of influence today in El Salvador were 
prominent members of this revolutionary group. The four-man junta 
spent some eighteen months solidifying its position and tempering the 
national sentiment. In the elections of March 26, 1950, Lieutenant Colonel 
Oscar Osorio, one of the junta leaders, was placed in the presidency. 
His election was unopposed. Firmly entrenched and well supported by his 
party, Osorio initiated what he hopefully called a period of honest 
reconstruction. At the time, few observers realized how well he might 
fulfill the prophecy. 

Before election, the story of Oscar Osorio was not an exciting one. 
Like many Salvadorans before and since, he attended the military acade- 
my and, upon graduation, began active army service. Advancing through 
the officer ranks, he succeeded in evading Martinez* sporadic thrusts at 
opposition within the army. When the military overthrew the existing 
government in 1948, Osorio was a member of the ruling Council of 
Revolutionary Government. By the time elections were held, he had 
asserted his leadership of the Council and ran as the official candidate of 
the PRUD Partido Revolucionario de Unificaci6n Dem6crata. Opposed 
by Colonel Jos6 Asencio Men6adez, Osorio won by a vote of 345,239 to 
266,271. In view of his backing from PRUD and army leaders, the margin 
of victory was unspectacular. 

On assuming the presidency in September, 1950, Osorio set out to 
remedy pressing national problems, all of them deteriorated by preceding 
years of inaction. The list of needs was not short. Economic develop- 
ment, power and electrification, highways, housing, national finances, a 
balance of imports and exports, communist infiltration from Guatemala, 
and unionism all these problems confronted Osorio. His immediate 
and most determined action was directed toward economic development. 

El Salvador is decidedly agricultural. Sixty-two percent of the popula- 
tion is rural. Of its different products, none rivals coffee in importance. 
Eighty to 85 percent of its exports are coffee, and without this the balance 
of revenues and expenditures would be non-existent. Like other coffee 
producers, El Salvador shared in the post World War II prosperity as 
coffee prices climbed to record highs on the international market. At the 



84 CENTRAL AMERICA 

same time, the quantity of coffee produced remained nearly the same. 
National coffee growers grew alarmed at the danger of an international 
price decline, bringing with it decreased income. 

Such was the coffee situation when Osorio assumed power. With 71 
percent of Salvadoran land under agricultural cultivation, there was little 
chance of expansion. There was simply no land on which more than the 
existing 118,800,000 coffee trees could be grown. Under the Coffee De- 
fense Law of 1933, a commission had been established to deal with the 
industry. Composed of private coffee growers and government officials, 
the commission had skidded into a trough of inactivity. President Osorio 
promptly gave new impetus to the commission. Government appointees 
were instructed to participate in its affairs enthusiastically. Government 
funds were diverted to bolster the organization and industry financially. 
United Nations experts were called in to make suggestions, and coffee 
growing techniques were improved. United Nations assistance was ac- 
companied by further government action. In August, 1954, the Ministry 
of Agriculture and Cattle announced the study and imminent creation of 
an Institute of Investigation of Coffee. Designed to regulate and improve 
coffee production in El Salvador, it was to rely in large part upon sugges- 
tions and advice of members of a UN commission. The government 
announced its intention of putting the Institute in operation by the begin- 
ning of 1955. It was actually months later before the Institute opened. 

Despite adverse natural phenomena, the coffee industry flourished. 
The 1952 crop was threatened by a chacuatete* invasion; fortunately, at 
the last moment the menace disappeared. The following year, in July, 
the president of the Central Bank of El Salvador, Luis Alfaro Durn, 
stated in an interview that the coffee harvest for 1953 would be very poor. 
With little rain, the coffee plants had flowered prematurely. The only 
hope for coffee growers was possible compensation from high international 
coffee prices if they didn't fall. In late September, just when the rainy 
season usually ends, the country was hit by a violent, prolonged storm. 
Highways, railroads, and telegraph lines were damaged. The rains, 
continuing in early October, raised rivers to a dangerous level. Many 
coffee fields were inundated. Winds were clocked as high as seventy miles 
per hour. Strangely, financial damage was slight. The inflated inter- 
national coffee prices held steady, and coffee growers suffered little. 

Notwithstanding flooded fields, the harvest in 1954 was larger than 

* A disease destroying coffee plants, ruining a year's output entirely. 



EL SALVADOR 85 

ever. On July 21, 1954, the Direction General de Estadisticas y Censos de 
El Salvador announced that the annual volume of coffee harvested was up. 
Volume for the 1954-55 crop was estimated at 1,600,000 quintalesf of 46 
kilos, as compared with 1,200,000 quintales in 1953-54. The percentage 
increase was over 30 percent in the west, 20 percent in the east. Even in 
the central regions, where the 1953 rains had been most severe, there was 
a 5 percent increase. And this estimate proved substantially correct, de- 
spite the Brazilian coffee crisis at the end of the year which slightly re- 
duced the anticipated volume of sales. All these efforts both govern- 
ment and UN oriented produced gratifying results. In 1953, El Salvador 
sent 134,741,334 pounds of coffee to the United States with a value of 
$64,367,828. By 1955, the net quantity was 174,900,000 pounds, valued at 
some $83,549,730. This was a financial increase of about 30 percent in less 
than three years. 

The susceptibility of the national economy to fluctuation in interna- 
tional prices remained great, however. On November 30, 1954, Foreign 
Minister Roberto E. Canessa explained the position of the coffee pro- 
ducers at the convention of the National Coffee Association in Boco 
Raton, Florida. North Americans must realize, he noted, "that the coffee 
growing investor, even after risking his capital for five years, has to take 
still more risks in order to obtain superproduction of his product. . . . 
When you undertake a campaign to lower the price of coffee [in the 
United States], what you are doing is limiting, in effect, North American 
exports to Latin America." 1 Without the revenue of profitable coffee 
production, a country like El Salvador lacks the basic capital to deal 
significantly with North American business. 

Apprehensive of the obvious dangers of a one-crop economy, the 
Osorio administration sought diversification of agriculture. Aided by 
abundant low-cost labor and low production costs, other products were 
encouraged. Corn became the second agricultural product after coffee. 
Sugar increased in importance, with several refineries devoted to the 
preparation of sugar for local consumption. At the same time, a United 
Nations commission studied means of improving the economy. On 
December 10, 1952, the head of the UN commission recommended limited 
industrialization as the best means of elevating the economy. Dr. 
Bertrand F. Hoselitz, of the University of Chicago, announced that de- 
velopment of Salvadoran industry was feasible, notably in the field of 

f A quintal is the Latin equivalent of a hundred-weight. 



86 CENTRAL AMERICA 

textiles and construction materials. There were two principal elements, 
as he saw it. First, "the introduction of more efficient methods of pro- 
duction and the use and distribution of available resources." Second, pro- 
motion of the "highest possible grade of integration and economic col- 
laboration with other Central American countries," permitting a regional 
division of labor. Gradual expansion of the tourist industry and economic 
direction by the government were added possibilities for development. 

Six weeks later in New York City, Dr. W. J. Feuerlein, chief of the 
Auxiliary Technical Aid organization of the United Nations in El 
Salvador, also advised industrialization as the key to higher living con- 
ditions. Noting the agricultural predominance in the economy, he said 
that even highly increased agricultural production would be insufficient 
for the needs of the republic, "there is simply not enough land for the 
size of the population." The very size of the population, he felt, was 
large enough to contribute effectively to industry. With mineral resources 
limited, the emphasis would be on light industry general textiles, kitchen 
utensils, and construction materials. He concluded that while the mission 
of his group would end in March, several members would remain to help 
carry out recommendations. 

One of the administration's responses was a concerted effort to create 
a domestic market for coffee bags. For years a small local factory had 
manufactured these bags, almost all of which were sent abroad. The 
government built an addition to the factory and urged national coffee 
producers to use local coffee bags exclusively. Employing over four 
hundred nationals permanently, and others on a part-time basis, the factory 
has now increased its production to well over 1,200,000 bags annually. 

Over a year later, in July, 1954, the government reached an agreement 
with the United States giving additional propulsion to its program of 
increased productivity. This agreement established a cooperative program 
of productivity through which El Salvador would develop its resources 
of industrial production. Interchange of technicians, trainees, and experts 
would presumably help raise Salvadoran knowledge of industrial and 
productive techniques. The United States agreed to give technical aid in 
the study and planning of additional factories as well as selection of ma- 
chines and training for its maintenance. The program also established a 
center of industrial production to serve as an organ of the Salvadoran 
government, with authority over the administration program of produc- 
tivity on a cooperative basis. 



EL SALVADOR 87 

To further rural living conditions and public health, the Osorio 
administration proposed on February 18, 1953, the founding of a rural 
credit bank. This proposal, after months of study by the government, 
was presented with the strong support and personal encouragement of 
President Osorio. In announcing the projected bank, Minister of 
Economy Jorge Sol Castellano attacked the problem of rural conditions. 
The Rural Credit Bank was to work in collaboration with the national 
Central Reserve Bank, operating with an initial capital of five million 
dollars. Through financial and technical assistance, it hoped to promote 
rural production and related agricultural efforts, with particular attention 
to the individual small scale farmer. While the Bank was being organ- 
ized, Sol Castellanos formed advisory committees for small industries, 
including the soap, shoe, cigar, and hat factories. These groups worked 
closely with manufacturers to stabilize national prices, strengthen eco- 
nomic stability, and raise the public standard of living. 

Beyond the rural credit bank, the most highly publicized economic 
plank of the Osorio administration's development drive was the Program 
of Economic Development and Social Wellbeing. Proclaimed shortly 
after Osorio's inauguration, it decreed the establishment of the Sal- 
vadoran Institute for the Promotion of Production. The autonomous 
organ channeled public and private efforts toward greater national riches, 
in hopes of building a more efficient production in accord with the 
country's needs. The new Institute was to promote activities in the fields 
of agriculture, mining, and fishing. A small investment bank, subsidiary 
to the Institute, was set up to promote national investment. It began 
with three and one half million colones capital (approximately $1400,000), 
and was progressively augmented by the government as new circumstances 
required. The Institute had full liberty in its operations, for its founding 
law granted complete autonomy. The Directive Council, entrusted with 
administration of the Institute, was composed of both public and private 
figures. The Program of Economic Development also outlined plans to 
increase the Salvadoran fishing industry, surprisingly important to the 
economy in view of the short, i6o-mile Pacific coast. The government, 
supporting the industry earnestly, developed a scries of technical studies 
to determine the true potential of fishing in Salvadoran coastal waters. 
Forms of fish cooperatives were also studied by members of the Ministry 
of Labor and Social Progress. An impractical plan of increasing the 
importance of fish to the national diet was short-lived. 



88 CENTRAL AMERICA 

The third project outlined by the Program was national tourism. A 
Junta National de Turismo was created under the Ministry of Economy, 
with a view to improving facilities and disseminating tourist information, 
particularly in the United States. The success of this program is highly 
suspect. The same obstacles are faced by other tourist institutes. Costa 
Rica has found its institute unsuccessful. However, in the absence of 
extensive Indian ruins or natural wonders other than Izalco Volcano, the 
tourist organization hopes to publicize El Salvador's attractions as quiet, 
out of the way rest spots which are undisturbed by the usual effects of 
heavy tourist onslaughts, as in Mexico. New parks and improved high- 
ways are being planned. 

The three H's health, housing, and highways were also attacked 
by the Osorio program. Prospects for improved public health were en- 
couraged with the January, 1945, announcement of plans to construct 
a National Medical Center in San Salvador. It was planned by the 
Corporation de Alojamientos, a branch of the IBEC (International Basic 
Economy Corporation) in New York City. The IBEC was in turn a 
branch of Casa Rockefeller, receiving its funds from the Rockefeller 
source. The Corporation planned the buildings and arranged technical 
aid. At this writing, the National Medical Center is reaching completion. 
Designed to control 40 percent of all medical cases in the country, it has a 
Central Hospital building of nine stories, with adjacent, smaller structures 
housing research and administrative personnel. The cost was amortized 
over a six year period by an issue of government bonds valued at three 
million colones. 

Housing was one of the more highly vaunted Osorio projects. In 
September, 1953, the government launched a bond issue of eleven million 
colones to finance construction of housing in Valle La Esperanza, an area 
destroyed in May, 1951, by an earthquake. Further low-cost housing 
eventually followed, although its significance was exaggerated by govern- 
ment spokesmen. Housing at different times was shunted aside in def- 
erence to other plans. Many of the buildings erected were temporary 
prefabrications, and others never left the drafting board. 

Highway construction was a major part of Osorio's plan of economic 
development. Despite the feet that the Salvadoran road net was, and still 
is, the best in Central America, with over two thousand miles of roads 
crisscrossing the tiny republic, construction continued on new routes. The 



EL SALVADOR 89 

countryside was linked more closely to the markets of San Salvador, Santa 
Ana, San Miguel, and smaller business centers. At the same time, the 
Inter American Highway, in large part only a dirt road south of the 
capital, was improved and surfaced. By mid-1956, only a few miles north 
of the Honduran border remained unsurfaced. The highway in the 
north, deteriorating from years of usage without repair, was also re- 
patched in many places. 

If any one work will in future years be identified with the Osorio 
government, that will be the power dam and plant on the Lempa River. 
This was, above all else, the outstanding material contribution of President 
Osorio. National power in El Salvador had been supplied, since 1890, by 
the Compania de Alumbrado Electrico, one of the oldest power companies 
in Central America. Its first power station, Agua Caliente, was set up 
near San Salvador, with 70 horsepower. It was increased through the 
years and, by the close of World War II, was equipped with four diesel 
electric units with a capacity of 2,000 kilowatts. Nonetheless, this was 
inadequate for postwar El Salvador; electrical needs increasingly out- 
stripped production of the old system. 

In 1950, faced with this crisis of electric energy, the government 
initiated the construction of a new power plant on the unnavigable Lempa 
River, the main Salvadoran water artery. Some thirty-five miles northeast 
of San Salvador, a two-hundred-foot dam was erected, flooding nearby 
lands to create an artificial lake of twenty square kilometers, with a 
capacity of four hundred million cubic meters of water. The volume of 
lake water thus would permit a reasonable and controllable level in the 
Lempa River. This project was drawn up and administered by the 
Comisi6n Ejecutiva Hidroelectrica del Rio Lempa (CEL), an autonomous 
organ. The contract was let to the U. S. construction firm of J. A. 
Jones. This plant, "La Chorrero del Guayabo," was wisely planned so 
that it could be put into operation as soon as possible the end of 1953 
with a capacity of 30,000 kilowatts. This would later be increased to 
45,000, and eventually 75,000 kilowatts. With the total cost estimated at 
twenty million dollars, the government promptly went to the International 
Bank for Reconstruction and Development, of which El Salvador is a 
member. It was granted a loan of $12,545,000. This was supplemented 
by a bond issue as well as a new government internal loan of two million 
dollars. 

The expected 1953 opening was delayed, and the main turbine and 



90 CENTRAL AMERICA 

generator were not in service until the summer of 1954. On June 19, 1954, 
President Osorio inaugurated the plant amid sirens, whistles, horns, and 
the cheers of a large crowd. Additional generators and another turbine 
were being completed in Switzerland and, in 1956, three more generators 
were added, increasing the capacity to 45,000 kilowatts. 

At the same time, the CEL extended its plans. Sub-stations were 
constructed in San Miguel and San Rafael Carlos. An irrigation project 
was initiated with the use of waters in the lower Lempa, with vast coastal 
extensions continually increasing its production. And outside the CEL, 
the Compania de Alumbrado Electrica developed its own construction 
program. In the fall of 1955, a new distribution circuit of 22,000 volts was 
completed around San Salvador. It was based on four modern automatic 
sub-stations, one of which, with 10,000 kilovolt-amperes, is the largest of 
its kind in Central America. In eastern El Salvador, the Compania 
El&trica de Oriente also expanded its services, on a smaller scale. The 
result of these prolonged efforts for increased power and electrification 
has been the most thorough power system in Central America; with the 
plant at La Chorrero del Guayabo soon to reach its 75,000 kilowatt 
capacity, the national power problem is a thing of the past. With no 
serious power shortage, extensive electrical service is possible, and irriga- 
tion and flood projects are progressing. 

The sum total of these economic plans is reflected, at least in part, by 
the national financial status. This gives additional testimony to the 
inherent soundness of the Osorio economic policies. Assisted by bumper 
coffee crops, exports in recent years have exceeded imports, assuring a 
flow of capital into the country. At the same time, the various measures 
of economic policy contributed to an upward trend in the value of inter- 
national trade. In 1948, with the country badly battered economically and 
spiritually from a series of political upheavals, imports were valued at 
$41,496,731, with exports at $43,605,876. Six years later, figures showed 
increases of over TOO percent. Imports had reached $86,720,000; exports 
shot to $104,920,000. The external and internal debts, both of which had 
been on the rise, were checked and held steady. At the start of 1955, 
the external debt was $7,522,000, redeemed at $800,000 annually. The 
internal debt was $3,837,000. Added revenue from exports permitted 
the government to increase its expenditures each year, devoting more and 
more money to national improvements. The revenue and expenditures 
almost tripled from 1948 to 1955, with very little disparity between the 



EL SALVADOR 91 

two. During most years expenditures slightly exceeded revenue, but 
never enough to create a serious financial situation. The budget was 
fully balanced in 1954, and the 1955 estimate revealed only a minor dis- 
crepancy: revenues $62,212,774, expenditures $65,100,000. 

A corollary to recent financial soundness is the impressive growth of 
the money supply. The last twenty years have shown an eight-fold in- 
crease, and much of this has come in the last decade, despite international 
trade uncertainties. Considering the end of December, 1949, as par of 100, 
the supply had risen to 172 by 1953, and today is some 35 to 40 points 
higher. In 1945, it was barely 45. On the basis of such data, Dr. Enrique 
A. Porras, Minister of the Treasury, announced on October 31, 1955, that 
the Salvadoran financial situation was in excellent condition: commercial 
balance healthy, revenue up, trade increasing, and money supply growing. 

COMMUNISM THREATENS 

In the midst of this expansion and development, El Salvador found 
itself confronted by a communist problem of serious proportions. Due 
to the successful Red infiltration of neighboring Guatemala, Osorio him- 
self spent valuable time fighting the Communists. His success is ample 
testimony to his anti-communist orientation. 

Many people forget that El Salvador and not Guatemala was the first 
Central American victim of attempted Red revolution. In 1932, the 
Salvadoran communist party, then the strongest in Central America, tried 
to organize the peasant revolt mentioned earlier and use it for their own 
ends. Dictator Martinez suppressed it ruthlessly, but the first overt Red 
action in the region had been made, and suggested future possibilities. 
Captured documents referred to a "Revolutionary Military Committee," 
calling for the formation of workers' and farmers' cells. In January, 
1932, an order from the "General Headquarters of the Red Army of El 
Salvador" was issued urging peasants, workers, and soldiers to revolt and 
seize power. Bolshevik in operation, the Red attempt was a dismal failure, 
and literally thousands were shot down or executed, including many in- 
nocent victims of reprisals. But the lesson of this failure was the inap- 
plicability of bolshevik patterns in a Latin framework, and this they were 
careful to remember in the subsequent Guatemalan interlude. 

When the Red-tinged Arbenz government took power in Guatemala, 
in 1951, many former Salvadoran Communists established a Guatemalan 
base while creating the nucleus of a new organization in El Salvador. 



92 CENTRAL AMERICA 

Agents, propaganda, and money crossed the border illegally. In Guate- 
mala City, the pro-government press continually attacked the Osorio 
administration, maintaining a steady barrage in support o growing 
subversive elements in El Salvador. By September, 1952, relations were 
so bad that President Osorio met Arbenz at the border. Arriving shortly 
before noon, the impeccably clad Arbenz was accompanied by the Presi- 
dent of Congress, the U. S. Ambassador, and minor officials. Osorio, in 
a plain, tieless military uniform, included in his party the Ambassador to 
Guatemala, Lieutenant Colonel Funes, and the U. S. Ambassador to El 
Salvador. The two presidents exchanged a hearty abrazo and the short 
meeting was generally friendly. In both capitals, wide attention was given 
to the supposedly symbolic gesture of friendship, the abrazo. Newspapers 
published pictures of the scene and editorialized that relations were again 
on an even keel. Yet Ambassador Funes pointed out, on returning to 
Guatemala City, that his president had gone to the meeting for one reason, 
"to make it perfectly clear to Arbenz that El Salvador intends to use every 
weapon available to combat communist infiltration," 2 

Less than a week later, Osorio uncovered a communist plot in El 
Salvador. On September 26, 1952, he placed the republic under a thirty- 
day state of siege. Justifying the declaration as necessary to control the 
communist movement, he took painstaking precautions to check Red 
activities. In his decree to the National Assembly, he stated his purpose 
was "to counteract the infiltration of the Communists and other activities 
to the left." The border to Guatemala was sealed. On the twenty-seventh, 
the government announced the capture of Captain Jose Napoleon Ortiz, 
lawyer Armando Calderon, and two cadets, charging them with leader- 
ship of a revolutionary plot. Osorio explained that the plot had been 
discovered a week earlier, before the meeting with Arbenz. Whether or 
not this was discussed is unknown. In any event, the Osorio government 
continued the anti-communist crackdown. The police located several 
different caches of arms, most of which had been smuggled across the 
border from Guatemala. Osorio accused local Reds of building home- 
made bombs "with the object of terrorizing the people and endangering 
the future of the country." Written plans were uncovered revealing a 
communist created disorder to be led by local terrorists. Once there was 
lack of confidence in the government, the Reds hoped to lead a "popular" 
uprising. All in all, some twelve hundred Communists and assorted 
unsavory persons were rounded up. 



EL SALVADOR 93 

Relations continued to be strained. In October, the communist- 
dominated Workers' Syndicate in Guatemala presumptuously announced 
that the entire Guatemalan working class was united against the Osorio 
government. It condemned Osorio for his Fascist treatment of the 
workers of El Salvador, treatment initiated with the object of destroying 
the democratic labor movement in that country. In January, the Com- 
munists plotted the assassination of Foreign Minister Roberto E. Canessa, 
an ardent Central American unionist and bitter anti-Communist. There 
was never any official comment on the attempt, but on Wednesday, Jan- 
uary 28, the San Salvadoran daily La Nation headlined the plot, revealing 
that it had been discovered by the police, who jailed several conspirators. 
The paper reproduced a statement of the chief criminal investigator 
saying that the plot was a result of Canessa's anti-communist activities. 
The government never contradicted the investigator's statement. It was 
later revealed that three Guatemalans, a Costa Rican, and a Czechoslovak 
adventurer had entered the country illegally to ambush Canessa, but were 
apprehended before the attempt. 

At the same time, the government initiated anti-communist legislation 
to restrict subversive activities. On November 27, 1952, the National 
Assembly promulgated a law, effective December 13, declaring any person 
propagating "totalitarian or communist doctrines" punishable by imprison- 
ment. Supplementary offenses, such as actions "contrary to democratic 
principles," were also punishable by prison terms, ranging from three to 
seven years. 

As the communist designs became more evident in Guatemala, her 
neighbor became increasingly embroiled in the situation. On April 22, 
1953, the Salvadoran government submitted a message to the Secretary- 
General of the Organization of American States (OAS), Colombia's 
distinguished Alberto Lleras Camargo. They asked him to put before 
the Council of the OAS a recent exchange of notes. Guatemala, said 
Carlos A. Siri, the Salvadoran representative, 

has complained of a campaign of defamation and calumny against it from 
El Salvador. El Salvador denies the charges and demands an investigation 
of Communist activities in Central America by the OAS. My Government 
hopes that the Government of Guatemala, after examining calmly and tin- 
excitedly the refutation of its charge on the part of El Salvador, and of the 
other Republics affected, will reconsider and will rectify its attitude. Never- 
theless, before the controversy before us can become one of international con- 
cern, acquiring a graver aspect ... my Government believes the possibility 



94 



CENTRAL AMERICA 



exists, in the future, of invoking the pertinent parts of the charter of the 
OAS. . . . 8 

The charges were laid before the Council in its session of April 29, 
but it recommended bilateral action between the two governments, and 
then, if no satisfaction was forthcoming, a return to the OAS for re- 
consideration. As it developed, tension continued, in varying degrees, 
until the fall of the Guatemalan regime in June, 1954. Osorio remained 
on guard against subversion from Guatemalan communist agents. 

Testimony to Osorio's militant anti-communism came from Angier 
Biddle Duke in June, 1954. Duke, returning to the United States after 
serving as ambassador in San Salvador, cited the nation as one taking 
"positive action" against the blandishments of communism. In describing 
the Osorio course of action, he said that it "is based on a frank program 
of true social progress and already [is] well along the road to making 
itself a small nation's example of democracy in action." 4 President Osorio 
remained quick to purge questionable elements from his own government 
as well. December 29, 1953, Impacto released the news that Salvadoran 
Chief of Staff Colonel Oscar Adan Bolanos, a long-time leader of PRUD, 
was dismissed due to a friendly attitude toward the Arbenz government 
and prolonged flirtation with the Guatemalan communist party. In such 
cases, Osorio responded with prompt if somewhat peremptory action. 

Policy toward Guatemala remained unchanged until the downfall of 
Arbenz in 1954. Despite his scorn for their system of government, plus 
repeated provocations from Guatemala-directed conspiracies, Osorio pur- 
sued a course of scrupulous neutrality and non-intervention. We have 
seen elsewhere that both the Nicaraguan and Honduran governments 
cooperated openly with the rebels of Colonel Castillo, before the revolu- 
tionary invasion of Guatemala. Yet Osorio refused to play a part. He 
repeatedly rejected overtures from Castillo and suggestions from Nica- 
ragua's Somoza to let Castillo launch his revolt from Salvadoran territory. 
There were good reasons for this. In the first place, El Salvador's well- 
trained army was and is small, composed of three thousand men. The 
air force consists of a bare handful of obsolete, prop-driven planes. 
Unlike Nicaragua and Honduras, it had not signed a treaty of military 
cooperation and assistance with the United States. As Osorio commented, 
this would have put a severe strain on the budget, which was oriented 
toward public works, the dam on the Lempa, and other construction 



EL SALVADOR 95 

projects. Osorio preferred to rely upon the good offices of the Organiza- 
tion of American States should the Guatemalans launch an attack. 

At the same time, Osorio was convinced that the proper role of El 
Salvador was to remain aloof from the internal affairs of Guatemala. 
Obviously, this was legalisdcally correct under tenets of international 
law. And, as Osorio privately commented, he was convinced of the 
inherent instability of the Arbenz regime, preferring to disassociate his 
own government from its difficulties. This was in keeping with the 
traditional Salvadoran role of Central American mediator and advocate 
of regional union. 

On May 27, 1954, barely two weeks before the end of the Arbenz 
government, Osorio told the Associated Press that the slightest spark 
could start a wave of violence engulfing the entire isthmus, although no 
Central American country wanted war. He related with quiet pride that 
Salvadoran relations with Guatemala were unchanged. Communists were 
not infiltrating, and there was no cause for alarm. He significantly de- 
clined to say that Guatemalan-based communism was no longer agitating 
in other American republics. After Castillo came to power in Guatemala, 
relations were correct but noticeably frigid. Castillo remembered 
Osorio's denial of Salvadoran territory to prepare his invasion. However, 
with the passing of time, he came to appreciate Osorio's position and 
reasonably cordial relations developed. Castillo and Osorio held several 
personal interviews. As late as November 5, 1955, the two issued a joint 
bulletin reviving the idea of a meeting of Central American presidents 
within the framework of the Central American Union (ODECA). 
While no such meeting was forthcoming, it was added evidence of the 
good relations between Guatemala and El Salvador. 

Since the downfall of the Red government in Guatemala, communism 
has not disturbed the Salvadoran pattern of affairs. At present there is 
no evidence of a resurgence. The orientation of Osorio's successor, Colonel 
Jose Marfa Lemus, seems strongly anti-communist. However, El 
Salvador presents a possible field for future Red exploitation. The 
Guatemalan case history shows how workers' organizations and national 
unions provide the Communists with an opportunity to entrench within 
society. This can scarcely be overemphasized. 

Again and again it must be repeated that the underdeveloped, ignorant, 
poorly-organized ranks of laborers and rural workers in Central America 
are an excellent field for subversive organization and operation. The 



96 CENTRAL AMERICA 

population density of El Salvador makes it an especially inviting target 
for Red agitation. In the 1940*85 directors of the Rerum Novarum, then 
the leading Costa Rican labor organization, tried to direct and control 
Salvadoran labor. Their efforts went unrewarded. In 1948, a representa- 
tive of the Confederaci6n Internacional de Trabajadores (CIT) visited 
El Salvador and, at the end of his visit, reported, "the future danger lies 
in the fact that the working class, inexperienced in politics and confused 
as it is today, might believe in the communist leaders." 

Labor organization was never constitutionally recognized until the 
ruling junta in 1949-50 drew up a new constitution. A supplementary 
decree in August of 1950 permitted formation of trade unions, with the 
exception of agricultural workers and those in seasonal labor such as sugar 
refining and coffee milling. The elective trade union posts could not be 
filled by foreigners. In October, 1951, the first kbor convention in the 
history of the republic was convened in the capital. It announced that 
"El Salvador must adopt a position consonant with the [UN] Declaration 
of the Rights of Man. . . . Both totalitarian systems of the extreme left 
and those of the extreme right must be eschewed. . . . And as a patriotic 
ideal the hope of a Central American Union must be maintained. . . ," 5 
Salvadoran unionism and labor organization is still in its infancy. The 
government has not devoted itself with much interest to the problem, 
and thus far there has been little cause. The agricultural workers remain 
generally independent of organization, and play no role in political affairs. 
Yet, as the succeeding years bring advancement of labor, the existing 
authorities will need to bear in mind the tragic consequences of ignoring 
the workers. Guatemala provides a vivid reminder. 

POLITICS wrra PRUD 

After his electoral victory in 1950, Oscar Osorio devoted his ad- 
ministration increasingly to matters beyond internal politics. However, 
he never forgot the fact that he was head of PRUD, the Partido Revo- 
lucionario de Unificacion Dem6crata. The former revolutionary move- 
ment, now engaged in running the government, was confronted only by 
ineffective opposition during the Osorio administration. When the 1956 
presidential elections were held, as we shall see, all the candidates were 
or at one time had been influential members both of the government and 
of PRUD. In the earliest years of the Osorio presidency, the memory of 
recent revolution was fresh, and opposition was negligible. The new 



EL SALVADOR 97 

constitution, promulgated by Osorio when inaugurated in September, 
1950, mentioned no restrictions on political opposition. And for the time 
being, there was almost none. 

The first elections after Osorio's administration were the congressional 
contests of 1952. The dominant note was apathy. This was to become 
the pattern of subsequent elections. On May 12, the three-day balloting 
began, supervised by the Consejo Central de Elecciones which, true to 
tradition, was controlled by the government. The night before, the 
opposition parties withdrew their candidates en masse, accusing Osorio 
of having rigged the elections in the interests of retaining total legislative 
command. Amidst complete calm, some 280,000 of a possible 700,000 
voted. (Women had received complete suffrage for the first time.) All 
fifty-four deputies of the National Assembly were members of PRUD or 
friendly toward it. The opposition promptly hailed the results as proof 
of their claims. 

Two years later, the congressional elections followed an identical 
pattern. No candidates were entered in opposition to the fifty-four-man 
PRUD slate. The director of the Acci6n Renovada published a manifesto 
on March 22, 1954, explaining his party's non-participation. "The electoral 
laws and those in defense of the democratic and constitutional order now 
in effect, for the free and honest electoral exercises . . . will not be present 
at this election. . . . The right to respect determination and to adjust the 
public and private conduct to the postulates of decency and the exercise 
of civic duties is ... ignored." He concluded with the hope that "the 
Salvadoran people before too long will have the opportunity of going to 
the electoral urns to select from among the popular candidates the 
officials they deserve." 6 With this widely published abstention a con- 
tributing factor, the public again reacted with apathy. On May 5, 1954, 
San Salvador's Diario de Hoy wrote that the elections, completed without 
disturbances, had only 631,390 of a possible 1,047,358 voting. By Latin 
standards, less than 70 percent participation is an indication of strong 
voter apathy, whether or not voting is compulsory. 

Preparations for the presidential elections of March, 1956, began a year 
before the actual voting. Roberto E. Canessa, Osorio's foreign minister 
for almost five years, had resigned after a series of differences with the 
president. Early in 1955 he unofficially launched his campaign, although 
no public announcement was made. On March 10, 1955, PRUD held its 
national convention with several thousand delegates present. After a 



98 CENTRAL AMERICA 

day-long discussion and a scries of speeches, Minister of the Interior Jose 
Maria Lemus was selected as official candidate. A month later, at an 
all-night meeting of party leaders, with Osorio presiding, the candidacy of 
Lcmus was accepted, after Osorio and others overrode objections of a 
small minority. 

Almost at once the papers began to trumpet Lemus' candidacy. Even 
before his July resignation, the Minister of the Interior was enthusiastical- 
ly discussed by several San Salvador dailies and, in two instances, received 
prompt endorsement. Canessa raised a cry of press censorship and of a 
paid press. Two other candidates entered the race in June ex-ambassa- 
dor to Guatemala Colonel Jos Alberto Funes, and army Inspector- 
General Colonel Rafael Carranza. Both joined the attack on press 
partisanship. 

On June 7, speaking appropriately enough on Freedom of the Press 
Day, Osorio declared, "Freedom of the press means the development of 
one of the first constitutional maxims that we defend. With satisfaction 
I declare that while my government, in different situations, may be 
alleged to curtail personal liberties ... it never curbs freedom of ex- 
pression. We have maintained and will continue to maintain freedom of 
the press in spite of its activities, hoping that it will improve with ma- 
turity and experience." 7 Most impartial observers felt that the govern- 
ment was not actively pressuring the press into support of Lemus' 
candidacy. At the same time, several of the newspaper directors may 
have felt it more prudent to back the government choice. In any event, 
the fact that Lemus was the PRUD candidate undoubtedly seems to have 
been an important factor. 

Attention was temporarily diverted from the campaign activities with 
the unexpected return to the capital of ex-dictator Martinez, who, after 
his fall in 1944, had spent succeeding years in Honduran exile. Now 
ailing, he had reportedly been advised to seek special medical treatment 
in Boston. Instead, he grandiloquently announced his intention of return- 
ing home: "I want to die in El Salvador." After arriving in San Salvador 
on July 8, he found his return had initiated formal charges in the 
National Assembly accusing him of executing twelve military leaders 
and various civilians during his last days of power. The populace was 
more aroused over Martinez' return than any aspect of the election 
campaign. The great majority, remembering only too well his thirteen 
years of despotism, demanded punishment for past misdeeds. As the 



EL SALVADOR 99 

Assembly was completing its charges against him, the seventy-three-year- 
old ex-dictator flew to the United States. In New Orleans, he announced 
that his departure was for medical treatment. Granting that few would 
believe him, he insisted nonetheless that he would return home after 
treatment for ulcers. He did not. 

The rest of 1955 brought sporadic and coldly received campaigning 
on the part of the candidates Lemus, Cancssa, Funes, and Carranza. In 
July, Dr. Jos Maria Peralta Salazar, PRUD President of the National 
Assembly, asked for a commission to study the electoral law, with a 
view to reforming it in response to constant criticism. The only positive 
result was a proposal, eventually, accepted, that the presidential and vice- 
presidential elections be verified the same day. Previously, verification of 
the Central Election Council had been a two-day task. 

El Salvador grew increasingly jittery as the election approached. In 
mid-January 1956, Time reported that the presidential press secretary had 
issued a bulletin denying a revolution, a rumor resulting from army target 
practice in San Salvador one morning. Imperturbable Osorio was 
troubled to the point of clamping censorship on outgoing press reports. 
Rumors flew about San Salvador, and the capital gossiped of possible 
revolution, government graft, personal dishonesty, and the morals of the 
candidates. 

As Osorio's handpicked candidate, forty-five-year-old Lemus had the 
undivided support of PRUD finances and its well-greased political ap- 
paratus. Opponents charged him with .spending upwards of $100,000 a 
month, largely from government funds. "My supporters cheer me every- 
where," he said. "Peasants want to touch me and hug me, and some even 
spit on me for good luck. A presidential candidate here can't be 
squeamish." 8 The author, traveling through El Salvador at the time, 
saw countless slogans, "Vota Lemus," painted on the paved highways. 
Large billboards advertised "Hoy Osorio, Mariana Lemus" today Osorio, 
tomorrow Lemus. But not a single poster, billboard, sign, or notice for 
other candidates was observed. 

The Canessa candidacy, in early 1956, seemed to have a reasonable 
chance of success. Running for the Acci6n Nacionalista, the handsome 
ex-foreign minister, respected throughout Central America as a polished 
diplomat and ardent supporter of regional union, financed his campaign 
from personal funds. A wealthy coffee grower, he could afford reasonable 
expenses, although his outlay was far outstripped by Lemus'. Attacking 



ioo CENTRAL AMERICA 

high prices, government corruption, and the lack of a land reform pro- 
gram, he said little about his own policies. Canessa hoped to win support 
on the strength of an attractive personality and a "throw the rascals out" 
approach. 

The two other army candidates, Colonels Funes and Carranza, agreed 
on January 12 to unite forces. Recognizing Lenius as the man to beat, 
they settled upon a joint slate of congressional candidates and tentatively 
decided for Carranza to withdraw in favor of Funes. At 38 the youngest 
candidate, Funes campaigned vigorously through the countryside, hoping 
to draw the bulk of his support from rural areas. In a local adaptation 
of the "chicken in every pot" slogan, he offered landless tenant farmers 
four acres and a yoke of oxen. 

The race was unexpectedly turned topsy-turvy on February 26, 1956, 
when the government controlled Central Election Council invalidated the 
candidacies of Canessa and Funes. Canessa's birth certificate, submitted 
months before with his petition for candidacy, was ruled inaccurate. 
Colonel Funes was accused of a fantastic plot to smuggle secret treasure 
out of Guatemala while serving there as ambassador from 1951 to 1955. 
Both men protested bitterly. Canessa noted bitingly that his parents were 
both living, as well as the doctor in attendance at his birth. Their 
testimony could clarify any birth certificate inaccuracies. And Funes 
grumbled that the story of secret treasure, an old charge, had been denied 
by the government a year earlier when, as ambassador, he was still a 
member in good standing of PRUD. Predictably, the election board gave 
the protests no notice. 

In a final effort to salvage something from the wreckage, Canessa and 
Funes met with a minor candidate, Jose Alvaro Diaz. The three agreed 
to coordinate their efforts through a Comit Coordinador del Frente 
Unido, backing Carranza as a desperate gesture of defiance against Lemus, 
the Central Election Council, and official hostility. The next night 
Canessa was arrested for "promoting public scandal," as the government 
termed a bitter speech he had delivered attacking election officials. The 
radio station, La Voz del Tr6pico, was closed down for seventy-two hours. 
The opposition announced, "If we are living today in an atmosphere of 
unrest, it is due to the words spoken by the President of the Republic, 
Oscar Osorio, before the people and the armed forces offering to guarantee 
electoral liberty. . . . The official party flourished the banner of dema- 
goguery, lie, and illegality. . . . The machinery of the government has 



EL SALVADOR 101 

inaugurated a system of electoral fraud. . . . The National Guard and 
the police oppose terror to the exercise of rights of citizenship." 9 

On March i, 1956, three days before the election, Carranza also with- 
drew, leaving the field completely free for Lemus: "We withdraw from 
the elections because we do not want to justify with our presence the 
electoral fraud of the government. Salvadorans : we must not go to the 
polls in order to show some sign of protest over the illegality of a fraudu- 
lent election which is impending." 10 The disqualified Canessa and 
Funes, as well as Diaz, joined Carranza in signing the statement. In an 
electrifying conclusion that suggested impending violence, they wrote, 
"The people of El Salvador will leave the results of its civic struggle in 
the hands of the armed forces. . . . Together, the military and the 
citizens will undertake a struggle to regain possession of our country 
and re-establish constitutional government." 11 In the face of this near 
ultimatum President Osorio manned the dikes in anticipation of a flood 
of demonstration. He placed army units loyal to Funes under jurisdiction 
of the National Guard, which had been headed by Lemus for six years 
as minister of interior. He also commanded the ranking officer at 
Zapote Fort, in the capital city, to resign his post. The commander 
studiously ignored the order, remaining at the Fort. Many felt this was 
a tip-off to imminent violence. 

On election eve, two days later, San Salvador was enveloped in a 
cloak of foreboding. Few people walked the streets after dark. Movie 
houses were without audiences. Salvadorans waited apprehensively for 
election day. They were fearful, prepared for almost any eventuality, 
and hopeful of surviving the storm as safely as possible. Yet a series of 
last minute developments climaxed what Paul Kennedy described in the 
New Yor^ Times as "by all odds the most rancorous and confused 
campaign in El Salvador's recent history." 

The morning of March 3 the opposition filed suit against Lemus, 
charging him with falsifying his birth certificate to prove constitutional 
qualifications for candidacy. At the same time, Roberto Canessa attacked 
lie police, crying that they were hunting the editor of his newspaper, 
Patria Nueva, after having broken into his home the night before. The 
government made no reply. In the meantime, a special election com- 
mittee, appointed by Osorio to assist the election board, sanctioned the 
withdrawal, weeks before, of the major parties. At the same time it 
refused to permit the withdrawal of two minor parties, including that 



102 CENTRAL AMERICA 

supporting Carranza, who had retired from the race on the first of 
March. Ruling that the two could not quit since ballots had already been 
printed, they ordered party leaders to urge members to vote. In an act 
of defiance, the leaders bought newspaper advertisements instructing 
members not to vote or even go near the polls. 

Many observers feared army intervention, for Carranza had been well 
thought of as Inspector-General prior to his pre-election resignation. 
Strong army elements openly favored his election. In an interview, he 
announced that he would not leave his house during election day. In a 
further attempt to avoid disorder, he instructed supporters to avoid all 
demonstrations. Observing that the army had not intervened, he none- 
theless did not reject the possibility of future interference. Funes, on the 
other hand, feared outbreaks of violence. The ex-candidate of the Inde- 
pendent Democrats told interviewers that the probability of increased 
confusion was great. Less sanguine than Carranza, Funes claimed the 
government was anxious to seize upon the smallest possible incident in 
order to attack the opposition and, in the event of a Lemus defeat, annul 
the results. Alert to all possible dangers, President Osorio restricted the 
army to barracks, calling on the National Guard to maintain order on 
election day. All leaves were cancelled. Bars were shut down, and liquor 
was not available in stores and markets. While there was no curfew in 
San Salvador, people stayed off the streets the night before elections. 

On March 5, enough returns had been tabulated to determine two 
facts: Lemus had been elected easily, and the 1956 vote registered the 
most apathetic turnout in history. Newspapers in the capital claimed that 
the vote was very low, although the constitution makes voting compulsory 
for those eligible to participate. Many people immediately assumed that 
Lemus, scheduled to take office in September, would be able to do so only 
after putting down a revolution. The opposition was reportedly preparing 
a military blow. Policemen ringed the home of Carranza, hoping to keep 
him from contact with followers. Prensa Grdfica, noting indications of 
an extremely small vote for Carranza, claimed his withdrawal was a last 
minute maneuver when he realized victory impossible. Unification of 
the opposition forces should have come much earlier. There is little 
question that the anti-government leaders damaged their cause by 
squabbling among themselves almost until the polls opened. At the 
same time, considering all the forces operating in favor of Lemus, it is 
unlikely that the final verdict would have been different. 



EL SALVADOR 103 

President Osorio, interviewed as returns recorded the Lemus victory, 
said he felt no steps were necessary against the opposition, although he 
did attack their "illegal" withdrawal. He denied any possible need of 
restricting civil liberties. Discussing the outcome, the swarthy face of 
the usually phlegmatic Osorio lit up with satisfaction. He lamented the 
withdrawal of other candidates, repeatedly characterizing the other parties 
as mere personal groups without ideas. He openly admitted restricting 
minor civil guarantees on March 3 and 4, but claimed it had been neces- 
sary due to widespread uncertainty. He warned that any forthcoming 
turmoil would severely damage Salvadoran economy. 

The final results, tabulated several days later, awarded Lemus 677,748 
votes, almost double the total won by Osorio in 1950. A record number of 
718,000 votes was reported, the figure swollen by the addition of women 
voters. Opposition parties received 40,000 votes. With the announcement 
of the results, the opposition claimed totals had been falsified, with 
government figures inflated some three times. In the capital, most guesses 
ranged from 150,000 to 200,000 votes cast. In San Salvador itself, most 
observers insisted that no more than 10,000 voted. Yet the government 
claimed that the forty-six polling places handled 75,000. A projection of 
this percentage through the countryside, where apathy was supposedly 
even greater than in San Salvador, would mean a vote of 150,000 at best. 
Whatever the total, there is no question that voter disinterest resulted 
in the lowest participation in history. 

President-elect Lemus held a series of press conferences in the days 
following his election. He told interviewers he intended to continue 
PRUD policies. Expressing complete confidence that nothing would 
impede his assumption of office in September, he extended the olive 
branch to his opponents, refusing to criticize their withdrawal. Lemus 
said he disagreed with the action, but the opposition leaders must know 
how best to follow their needs. He hoped all the ex-presidential candi- 
dates would become members of the new National Assembly. Certainly, 
he said, they were among the most capable people in Salvador, and he 
intended to have the most able men in his government, regardless of 
party. 

Despite this quiet approach, the opposition scorned his peace offering. 
Two days after the election, opposition forces issued a manifesto re- 
jecting the legality of the elections and stating that the people did not 
support the government-selected candidate. Instead, "Salvadorans gave 



104 CENTRAL AMERICA 

on the occasion a great example of civic spirit in refusing to justify its 
fraudulence by abstaining from the vote. . . . The parties that form the 
united front repeat . . . their unbroken decision to continue struggling 
against the dictatorship of the official party." 12 

On March 8, 1956, interviewed by the Costa Rican paper La Nacidn, 
Carranza declared the election a total farce. He attacked Lemus as a 
foreigner, claiming his true nationality in doubt. The electoral law of 
the government dominated Assembly, he stated, made free expression of 
choice difficult. That was the main reason for his withdrawal. The 
elections constituted a clear repudiation of the government through 
omission of voting. Such was the great moral victory of the people against 
indifferent leaders. 

Despite an aura of uncertainty in the capital, the passing of time 
brought no military movements, subversion, or strike protests. It seemed 
increasingly apparent that too many Salvadorans didn't care one way or 
the other. Whether or not they were pleased with election results, none 
were about to throw the country into violent reaction to redress the 
decision. 

JOSE MARIA LEMUS 

Lemus himself was a familiar and not unpopular figure in Salvadoran 
politics. Born the son of a professor in July, 1912, in Puerto Oriental de 
la Uni6n,* he had to fend for himself after his father died. During a 
youth of poverty he peddled candies in the streets, helped deliver mail, 
and took any chore which paid. Entering the elementary military acade- 
my as a teenager, he later attended the Military Academy of El Salvador, 
graduating at the top of his class in 1933. After study in the United 
States, he returned to his republic and began advancing through National 
Guard ranks, gradually progressing to lieutenant colonel. He was ap- 
pointed Undersecretary of Defense in 1948, although not an active 
conspirator in the revolution that brought the PRUD to power. Briefly 
serving as military attache in Washington, he returned in 1950 as Minister 
of Interior under Oscar Osorio. 

Lemus also became active in other circles. A member of the Ateneo de 
El Salvador, he helped found the Sociedad Bolivariana in El Salvador in 
December, 1949, and was elected its first president. He also published a 

* Due to the early death of his parents and vague birth documents, opponents have 
accused him of not being native born. No evidence sustains this. 



EL SALVADOR 105 

number of slender volumes, including The Military Ethic, For Country 
and For Freedom, Eulogy for Venustiano Carranza, and Art and Trades 
with the Social Problems of Youth. He has been awarded citations from 
the governments of Colombia, Venezuela, Mexico, Panama, and the 
Dominican Republic, among others. 

A well-dressed, husky six-footer, Lemus succeeded in building up 
considerable personal popularity. A genial individual, his moderate post- 
election comments only underlined the potential popularity his character 
might bring. George Weller wrote that 

Jose Maria Lemus, the genial handshaker who has just become Salvador's 
president . . . [has his] door open to the unwashed public ... to reach him I 
had to penetrate through seven antechambers of patiendy waiting people, 
all eager to wring his hand and whisper in his ear. . . . His favorite way of 
talking to men I watched him handling dozens is to place his left hand on 
their shoulder, hold their right hand tighdy clamped in his, and listen to 
every word they say while staring into their eyes with the solicitude of a 
psychiatrist. 

When he breaks out of this double grip, the suppliant instinctively knows 
the interview is over. 18 

Before his 1955 nomination he had said "The plan of the present govern- 
ment is the plan of the party fPRUD] and therefore I consider it to be 
the platform of PRUD now. I will accept it and will continue similar 
policies, which in this case can have direct connection to the political 
situation." 14 

Just what, in specific terms, did Lemus hope to do? He soon made 
this more obvious than it had been during the campaign itself. The 
composition of his government, he hoped, would be national, not partisan. 
He wanted the cooperation of capable, patriotic elements of the citizenry 
during his six-year administration (1956-62) . He declared himself satisfied 
with small farmers' credit and housing for city poor. He praised the 
stabilization of wages and increased economic compensation for the pro- 
ductive efforts of the worker, noting that the value of the colon had 
remained much the same for many years. He also expected to continue 
taxation of the wealthy families who control Salvador economically. He 
promised to push the drive for electrification begun by Oscar Osorio. 
Nearly one million persons half the population still lived where electric 
plants were lacking. Until they were serviced, the power program 
was unfinished. As for capital, Lemus said that his country needed 



106 CENTRAL AMERICA 

medium industries financed by foreign capital, and hence foreign capital 
was invited. 

In foreign affairs, the President-elect announced continued non- 
interference in internal affairs of neighboring republics. He reiterated, 
as he had during the campaign, his fervent belief in Central American 
union. He called on the area to adopt total amity, a common customs 
system, and to repudiate plots and intra-country subversion. Central 
America, with a common population destiny and common problems, had 
no valid reason for existing in six separate subdivisions. Union was slow- 
ly, but much too slowly, being approached. Work and sacrifice had to be 
dedicated to the cause. "The formation of the ODECA has obeyed the 
desire to make Central America realize it must become a power entity . . . 
[to] authentically interpret their destiny." No nation, he repeated, was 
more devoted to regional union than El Salvador. If Lemus was speaking 
from patriotic motivations, he nonetheless was quite accurate. 

Through 1957, the Lemus administration devoted itself to fiscal and 
trade policies. Special commissions met with the United States to take 
up the problem of double taxation, which had been recently negotiated in 
Honduras removing articles from taxation in both that country and the 
U. S. As his officials began to study the Honduran agreement, the 
President announced interest "in bilateral negotiations with the United 
States. We want to reach an accord on this matter." Long months lay 
ahead for the group. Business dealings with West Germany and Japan 
also increased. West Germany offered technical assistance, sending 
Germans to Salvador as well as training nationals in German universities. 
Costs were to be split between the governments. Satisfactory negotiations 
were eventually completed. 

The capital was briefly stirred up by other measures designed to stabil- 
ize wages and prices. A new rate of municipal taxes was approved for 
San Salvador, eventually passed into law over Lemus' veto. Monthly 
water and property charges were raised. Taking effect in May, 1957, the 
new scale was designed to affect only the rich. Those of more modest 
means soon joined in the protest against it. In time the rate was accepted, 
and found to contribute only in part to a gradual wage-price increase. 
Long overdue legislation was passed later in 1957 against the common 
practice of usury. Funds were authorized the Rural Credit Cooperatives 
to protect civil employees against outrageous interest rates and credit 
grants. Due to the organization's large scale loans to small businessmen 



EL SALVADOR 107 

and farmers where collateral was lacking, the national level of interest 
rates was reduced. 

The impressive achievements of the Osorio government increasing 
electric power nationally were added to by Lemus. The Lempa River 
Hydroelectric Commission announced projected construction of two new 
generating plants, one with 30,000 and the other with 15,000 kilowatts, 
equalling the capacity of the Lempa hydroelectric station. The first phase, 
costing over two million dollars, would include a dam for regulation 
of the waters of Lake Guija. Control of Guija, which belongs equally 
to Guatemala, would guarantee year-round water supply for the Lempa 
station. Development was given priority over final expansion of the 
"Cinco de Noviembre" dam to its maximum 75,000 kilowatts. The total 
project at Guija was estimated as a $9,200,000 investment. Guatemala 
gave approval to the plan with the proviso that Guatemalan users would 
be furnished power at the same rate as Salvadorans. 

Lemus' over-all efforts were favorable in the first half of his term. 
By espousing national non-partisanship he lured into his government 
capable men who had shunned politics previously. His idea envisaged 
the distribution of wealth through legislative and social experiment. In 
Salvador, where the wealth has for generations been controlled by a re- 
markably small number of families, the thought was almost revolutionary. 
It gradually caught on, aided by large projects, such as low-cost housing, 
aimed at raising living standards. Those with great wealth began to 
invest their funds in the country, not sending them abroad as before. 
With the growth of investment possibilities, a more stable political and 
economic system developed which, at this writing, has meant the only 
Central American government with a sturdily reliable national at- 
mosphere. 

The budget for 1958 was among the highest in history, some seventy- 
two million dollars. President Lemus announced in September, 1957, 
that Salvadoran industrial products were annually exceeding forty million 
dollars in export value, with raw materials bringing in an additional 
twenty million. Foreign investment was up, agricultural commodities 
steady. The exportable crop of coffee was the greatest in history, 
But, 1958 also meant a time for reappraisal. The coffee harvest dropped 
from the previous record nearly 20 percent. Restricted export volume 
and lowered prices brought a concomitant reduction in revenues. 

An international agreement to support coffee prices held out hope for 



io8 CENTRAL AMERICA 

greater stability in future years. El Salvador met with six other coffee- 
producing nations in Mexico City to negotiate the agreement under 
which she was allotted 552,484 sacks as her export quota during the early 
1958 period. The hope was to apply partial control to the international 
coffee market, adjust to demand, and maintain equitable price controls. 
Only Brazil and Colombia were granted larger allocations. Lemus had 
rushed legislation through Congress in November, 1957, to meet the 
agreement, establishing a National Coffee Department to operate the 
program. Salvadoran exporters received quotas of 40 percent of the 
previous year's export totals. The agency bought up coffee withheld from 
trade. 

Mild but necessary belt-tightening was engendered by coffee restric- 
tions. The budget was not reduced, however, and by the close of the 
1958 fiscal year there was a small treasury surplus from 1957. With small 
industry being emphasized, the Department of Economic Promotion 
continued to invest capital in development projects. And the highway 
system was pushed along with additional appropriations. The coastal 
highway along the entire Pacific coast was cut through previously 
underdeveloped areas. Although the scheduled September, 1958, com- 
pletion date could not be met, the road was already bringing new areas 
into national economic planning for the first time. While the economic 
picture continued to improve, El Salvador remained, on the international 
front, the moving force behind the drive for regional unity. For the last 
decade no other nation has devoted itself to this project with such determi- 
nation. When the other republics have quarrelled over matters of hyper- 
sensitive nationalism, El Salvador has stepped in and pacified the 
disputants. 

Spring of 1954 was such a time of regional crisis. Seldom has the 
isthmus been more sorely beset. To the south, Nicaraguan President 
Somoza, narrowly escaping assassination, laid the blame on the doorstep 
of Costa Rican President Figueres, and the two countries were at one 
another's throats. A flurry of diplomatic notes only created greater 
rancor. In Honduras, the Galvez government was laboring to end a 
disastrous strike by banana workers which was crippling the national 
economy. Meanwhile, communist Guatemala was spreading subversion 
far and wide. Abortive incidents against the Honduran government led 
to eventual severance of diplomatic relations. And the raggle-taggle band 
of revolutionaries under Castillo was preparing to launch its invasion of 



EL SALVADOR 109 

Guatemala from Honduran soil with the unofficial sanction of that gov- 
ernment. Finally, Panama was immersed in vital negotiations with the 
United States over terms of the Canal Zone contract of 1936. 

In the midst of all this, El Salvador herself was hard pressed to main- 
tain impartiality. We have seen earlier how she refrained from meddling 
in the Guatemalan case. President Osorio, although opposed to the 
Arbenz government, felt obliged to stay aloof from what proved to be 
that regime's death throes. He also rejected overtures from Castillo, 
refusing to permit his invasion of Guatemala from El Salvador. A per- 
sonal plea from Somoza left him unmoved. 

Despite this welter of bitterness and anxiety, El Salvador was a model 
of calm propriety and disinterested assistance. Following the downfall 
of Arbenz, the Guatemalan revolutionaries were divided in allegiance be- 
tween Castillo and Monz6n, the latter a friend of Osorio. The eventual 
agreement between the two was reached at a long interview in San 
Salvador, watched over by U. S. Ambassador Peurifoy and Osorio. And 
after the mutual pacification of the rival groups, Osorio promptly extended 
diplomatic recognition. On September 29, the two nations signed a treaty 
of friendship and cooperation, further cementing relations. 

The enmity between Costa Rica and Nicaragua belongs in another 
chapter. However, in this context, we must record Osorio's April, 1954, 
offer to mediate the dispute between the two, which had brought them 
to the verge of war. Costa Rican Foreign Minister Mario Esquivel im- 
mediately accepted the offer. But Nicaraguan policy, in keeping with 
the outraged indignation of Somoza at escaping assassination so narrowly, 
refused to sit down at the same table to negotiate with Costa Rica. How- 
ever, a series of little-publicized talks and discussions were held in San 
Salvador, with Osorio continually cautioning a more rational approach. 
In mid-August, the Salvadoran Ambassador to Guatemala, Felix Osegue- 
da, made President Figueres quite angry while attempting to reduce 
friction. Figueres' outburst was ignored by Osorio who quickly sent 
Osegueda to Managua and transferred Roberto Castillo from there to 
Costa Rica. 

Almost simultaneously, on August 17, Carranza went to Managua for 
private talks with President Somoza. Four days later, Osorio announced 
from San Salvador that Somoza had agreed to mediation on the grounds 
that the agenda be drawn up beforehand. Foreign Minister Canessa 
flew to San Jos for a new series of talks with officials there, also stopping 



no CENTRAL AMERICA 

briefly in Nicaragua. The eventual pacification was a result of many 
factors which are detailed in Chapters Five and Six. None was more im- 
portant than the continual counseling by unexcitable Salvadoran officials 
against further inflammatory exchanges. 

At the same time El Salvador was sympathetically conscious of 
Honduran difficulties. External problems lessened with the overthrow 
of Guatemala's Red government. And there was little to be done regard- 
ing the strike, which was a purely internal matter. However, throughout 
1954, Osorio was in close personal contact with President Glvez, offering 
him moral support and reiterating the friendship of his government. They 
met several times for informal talks at the Goascordn River boundary. 

Panama also received Salvadoran backing in negotiations with the U. S. 
over a canal contract. While the transaction was negotiated in an at- 
mosphere of friendship, this made the matter no less critical to Panama. 
Foreign Minister Canessa declared, on July 23, 1953, that he was "sure that 
the government of the United States, giving a new demonstration of 
sympathy for the aspiration of the hispanic people, also is interested in 
revising relations with Panama in the light of modern international 
law. . . ." 15 

Such has been the role of El Salvador in recent Central American 
diplomacy. Repeatedly, this small republic has served as the catalytic 
agent turning neighbors' bellicose arguments into resolvable differences 
of opinion. In this respect every nation of the area is in its debt. The 
story of the movement for Central American union has often been the 
tale of Salvadoran initiative, leadership, and sacrifice in the face of studied 
neglect by others. So intimately is the Salvadoran role intertwined with 
the development of the ODECA, its contributions must be credited to 
Salvadoran leaders of different political leanings. With the initial success 
of the Lemus administration, new impetus was anticipated in the cam- 
paign for Central American union. 

Recent Salvadoran problems have been faced by Lemus with aplomb 
and confidence. Over and over he has reiterated his faith in the spirit 
of Central American unity and the part his nation must pky. No one has 
denied that El Salvador is home, hearth, and heart of regional amity. 
If the long sought unity movement is ever consummated, the years of 
labor by Salvadorans, both public and private, will bring fitting tribute. 

The future promises a more advanced El Salvador, better equipped to 
fulfill its destiny. Problems still abound: light industry is not yet a 



EL SALVADOR 

significant force, and national economics must be oriented away from 
reliance on coffee. Land reform is needed, distribution of income is still 
inadequate. But there is promise that these obstacles may be hurdled. 
The Osorio administration unquestionably contributed worthwhile works 
to national progress. The only serious black mark is the absurd electoral 
fiasco of 1956 that brought Lemus to power. Today it does not seem too 
visionary to hope that he will continue to follow Osorio on the path of 
national economic development and modernization. Perhaps the most 
important factor of all is the continuing influence El Salvador will assert 
in the movement for Central American unity. This, after all, is in the 
long run the best hope for progress throughout the isthmus. 



Chapter Four 



HONDURAS 



OF ALL THE Central American republics, none is more ruggedly moun- 
tainous and geographically isolated than Honduras, located in the very 
heartland of die isthmus. It is the pivotal area of the landbridge between 
Mexico and South America. Bordering Guatemala and El Salvador to 
the northwest and Nicaragua on the southeast, Honduras has been 
geographically and politically in the center of regional life since it shed 
Spanish colonial garb in 1821. 

Yet the predominant factor in Honduras today, as it has been for over 
a century, is the very fact of its geographic separation from its neighbors. 
The rough-hewn Honduran geographical factors are direct barriers to 
participation in regional politics. The visitor to Honduras need not be 
reminded of the imposing contour of theJHonduras terrain. Physiographic 
diagrams of Central America clearly represent the obstacles to national 
participation in regional affairs. Yet, as Honduran scholar William 
Stokes has observed, the central position of the republic has made it "a 
willing participant ... or unwilling victim of ... machinations of 
Central American power politics." 1 Invasions of bordering countries have 
been launched from Honduran soil as recendy as 1954. Political exiles 
have flocked there through the years, sometimes remaining years before 
directing a counterrevolution in their own countries, or perhaps passing 
into that obscure political twilight from which even Latin caudillos never 
return. Uncertain boundaries have created continual friction. Honduras 
and Nicaragua are still wrangling petulantly over a disputed slice of land 
that lies unproductive and largely uninhabited. 



HONDURAS 113 

The bulk of the population is located in the provinces of Francisco 
Morazan and Comayagua, in north central Honduras. This region is 
one of highland mountains and valleys. Much of the area is heavily 
timbered, but the mountains are conducive to village isolation and intense 
local feeling. Transportation has been improved at an insignificant pace; 
most Hondurans living outside the capital have never traveled more than 
a few miles from home. There are no roads, or else they are impassable 
much of the year. Towns develop and grow their own food staples and 
trade with one another. There is little knowledge of or interest in people 
living only a few miles away. 

However, the past decade has brought a gradual swing away from 
these geographic facts. The population has gradually been shifting toward 
the northern coast, gathering in the Caribbean ports of Puerto Cortes, 
Tela, and La Ceiba. This is directly attributable to the banana planta- 
tions of the United Fruit Company. Most of the migrating Hondurans 
have gone to work in the fields or at the company's wharves and loading 
facilities. It will be some years yet before the dominant Honduran popu- 
lation has left central Honduras, however. In the meantime, the facts 
of geography necessitate severe curtailment of political and economic 
developments. Greater shifting in population is needed before Honduras 
can correct the isolation and localism that are incontestably characteristic. 

Many Central American travelers, especially motorists, leave Honduras 
bearing stories of a barren, empty, utterly obscure little nation. This im- 
pression is easily come by. Motorists, entering the country from El 
Salvador at the Goascordn Bridge, follow a dusty, washboard-surface road 
toward Nicaragua. There is little scenery; the area is lowlying and hot, 
not tropical, but oppressive nonetheless. The few, distant mountains 
seem relatively small. There is little vegetation and few people. Only 
seldom are peasants seen trudging along the road. Few places give a 
more overwhelming impression of barren isolation, agricultural poverty, 
and scenic monotony. This, however, is a small part of Honduras. The 
regions around Tegucigalpa, the capital, and the banana coast to the north, 
are the two important areas, and upon them has been erected the national 
economy, oligarchic and backward though it may be. 

No Central American republic coincides more closely than Honduras 
with the popular, un-informed idea of a banana republic. To begin with, 
it is the only nation that is, literally, a banana republic. Bananas are the 
primary export and main staple of the national economy, although the 



ii 4 CENTRAL AMERICA 

percentage of banana exports has dropped in recent years from 65 percent 
to barely 50 percent. Still, this is a much higher percentage than its 
neighbors, to whom coffee is the more important. 

Honduras is 71 percent rural. The capital has a population of 72,385, 
excluding neighboring Comayaguela, which in recent years has been 
considered part of Tegucigalpa. No other population center compares 
with it. The rural population is 86 percent mestizo. 

Political preconceptions of Central American republics are appropriate 
to Honduras. The country's history has been dotted with revolutions, 
invasions, palace intrigues, and civil wars. A recent estimate in Time 
(December 12, 1954) credited Honduras with an average revolution a 
year for its 138 years of independence and this even though the past 
quarter century has been, by Honduran standards, politically stable. The 
heritage of Honduras is one of colonial centralism, absence of representa- 
tive institutions, and three centuries of subservience to autocratic Spanish 
rule. 

Perhaps the foremost preconception in the minds of most is of a 
caudillo, the dictatorial, paternalistic, authoritarian leader who runs the 
country high-handedly and disregards the usual tenents of democratic 
practice. Honduras met this requirement under the sixteen-year presi- 
dency of one man, General Tiburcio Carias, a figure who has been 
prominent in national politics for the astonishing span of sixty years. 
He is neither the most controversial nor impenetrable figure of regional 
contemporary affairs. Yet few can approach his former ascendency or 
rival the fascination of his career. Even today the political life of the 
country is close to that of Carias. 

GENERAL TIBURCIO CARIAS 

Recently, two North Americans were touring the hilly streets of 
Tegucigalpa. One of them noticed a figure on the other side of the street. 
Followed by several others, the man walked slowly along the road, oc- 
casionally nodding to a passerby. Obviously aged, he was of huge stature 
for a Honduran probably six feet, four inches, and easily 260 pounds. 
His stern countenance was delineated by a deeply lined face. His 
mustache was white, but a full head of hair was dark despite his age. 
"Look at that man over there," said one. "He looks just the way you'd 
picture a dictator down here, doesn't he?" His companion smiled and 
added, "That is Carias. He was president for years." This story is 



HONDURAS 115 

apocryphal and unsubstantiated, but it is illustrative of the impressive 
appearance of Carias. Even today the General has a dignified, somewhat 
grim, and notably commanding appearance. He gives the impression of 
authority, of self control, and control of others. For many years he 
exercised unchallenged political power in Honduras. To some, he was 
a ruthless tyrant. Others feel less harshly and have interpreted his years 
of power as ones of national progress, advanced by one-party rule in 
the absence of adequate democratic institutions. The difference is one of 
degree. Perhaps Carias' unquestioned dominance meant dictatorship. 
But conceding this, there are marks on his record which are un- 
characteristic of dictatorship. This makes him less easy to classify. To 
do so, it is first necessary to understand the background of the two 
Honduran national parties, as well as political events transpiring long 
before the last decade, with which we are primarily concerned. 

One of the rare qualities of Honduran politics has been the durability 
of its two political parties. Few Central American or Latin American- 
parties have been more than a personal vehicle. Once the star of the 
leader has fallen from the political heavens, the party disintegrates and 
reforms in other groups. But not so in Honduras. The Liberal party 
was first called into being at the close of the nineteenth century. For 
perhaps twenty years it existed tenuously as a personal machine for its 
founder, Celeo Arias. However, with the death of Arias in 1890, the 
party reformed under Policarpo Bonilla, who proceeded to create a 
political organization. The Liberals became a permanent organization 
with a predetermined hierarchy and policies. However, its policies have 
coincided, basically, with those of the second political affiliation the 
National party. 

The National party also was created before the turn of the century, 
although initially weaker than the Liberals. It was organized on a 
hierarchic basis in 1911 and, from 1920 on, exercised considerable in- 
fluence at elections. It drafted a program in 1919 under the leadership of 
Carias and Dr. Paulino Valladares, adopting the name Democratic 
National party. Since the national elections of 1923, it has been known as 
the National party. In 1923, its program was revised, and policies out- 
lined then have continued virtually unchanged to the present, thirty-five 
years later. The Nationals advocated "strict observance of the constitu- 
tion, establishment of a Central American Union when feasible, less 
politics and more administration in government, financial reform, free 



n6 CENTRAL AMERICA 

elections, harmony among the Honduran people, and protection of capital 
and labor." 2 

Honduras has no conservative group as such but there are conservative 
elements in both the National and Liberal parties. Many of the National 
leaders began as supporters of the Liberals. For example, Carias was 
one of the youngest participants in the revolution of 1894, a Liberal 
uprising. He also served as Fiscal General of Production in 1908 under 
Liberal President Davila. The two parties have followed and even today 
pursue remarkably similar principles. 

One fundamental difference exists between the two parties, and this 
is important in any evaluation of Carias. The National party has 
repeatedly attacked revolution and armed uprising as incompatible with 
the principles of democracy and therefore unjustifiable. Stokes has 
written that the party has demanded permanent peace within the country. 
While agreeing with the Liberal party on basic democratic ideals and 
the theoretic relationship of state and individual, the Nationals have 
insisted upon the immutable evil of anti-government revolt. The Liberals 
have never felt so constrained and, as recently as 1954, were narrowly 
prevented from staging a full-blown revolution. Their opponents have 
stubbornly maintained the principle regardless of circumstances. The 
election of 1923 provides concrete proof. 

' The National party supported Carias for president in 1923. At forty- 
seven, a veteran of years of political activity, General Carias, an ex- 
perienced farmer, mathematics professor, and part-time military leader, 
was opposed by Liberal Policarpo Bonilla. Carias, a robust and popular 
candidate, won with a clear plurality, but due to the participation of 
minor candidates, failed to win 50 percent of the total vote. The final 
count gave him 49,453 to Bonilla's 35,474. Needing an absolute majority 
of 53,134, Carias was therefore 3,681 short of the necessary total. The 
Liberals refused to attend congressional meetings, blocking the quorum 
necessary to take action. In such a situation the only recourse was 
revolution. Carias was the obvious choice of the people and enjoyed wide 
army support. Remaining faithful to his campaign promises, however, 
he refused to seize power. 

For several months the republic was in chaos, until the United States 
stepped in to conduct a meeting of disputing elements. In the meantime, 
Carias, as a result of the complete governmental disorganization, had led 
his forces into military action, and by April 28, 1924, he was in control of 



HONDURAS 117 

the capital and most of the outlying regions. Under the U. S.-sponsored 
negotiations, however, the General's vice-presidential running mate, 
Dr. Miguel Paz Baraona, was chosen chief of state. Carias relinquished 
command to the new president and withdrew to await the next elections. 
In recent years, his critics have conveniently forgotten these long past 
elections. Yet the fact remains that Carias not only won the election 
freely, and a military campaign as well, yet he handed over power to the 
person ultimately selected as President of Honduras. He formally gave 
Paz Baraona his support, and thus was instrumental in reducing national 
tension. 

In the elections of 1928, Carias was again the National candidate and, 
to the surprise of everyone, lost a close but clearcut decision to Liberal 
Mejia Colindres. Votes were re-tabulated, verifying Carias' defeat. The 
General sent personal representatives to meet Mejia Colindres; accepting 
the results, he promised to back the new government fully. Still in con- 
trol of the bulk of Honduras' military force, he might have seized power. 
Again he was faithful to the National party principle of peaceful succes- 
sion to office. 

So surprising was the General's action in these two elections 1924 and 
1928 that his support was much greater in 1932, and he won a decisive 
victory over Liberal Angel Ziiniga Huete. Following his victory, Carias 
met with outgoing President Mejia Colindres, exchanged pleasantries at 
the Casa Presidencial, and began to outline his plans. Just as he took 
office, a group of dissident Liberals rebelled and were suppressed after a 
series of bloody encounters. It had been the Liberals who resorted to 
revolution, not the Nationals. 

None can deny the fact, as we shall learn, that Tiburcio Carias was a 
dictator of the first order. However, one need not be an apologist to 
point out facts that are often overlooked. Carias scrupulously turned his 
back on obvious opportunities to seize power by force, when his opposition 
would have been slight. He refused to do so despite the urging of many 
advisers. In 1924, he not only won a free election but temporary military 
control of Honduras, yet he turned over the reins of government to the 
eventual presidential designate. And his election in 1932 was over- 
whelmingly accomplished in a vote controlled by the government of 
another political party. Criticisms that he was placed in office by foreign 
interests, contrary to the wishes of the people, are without the slightest 
foundation in fact. 



u8 CENTRAL AMERICA 

Carias was elected in 1932 to a four-year term, forbidden constitu- 
tionally to win re-election without a gap of at least one term. As 1936 
approached, members of the National party began to talk of Carias' con- 
tinuation in office. It was decided to draw up a new constitution ex- 
tending the presidential term. In January, 1936, a constituent assembly 
was elected, and two months later it promulgated the Constitution of 
1936. Article 202 permitted the President and Vice-President to remain 
in office until January of 1943. There was no change of the previous 
executive tenure sections, except to provide that the existing chief execu- 
tive continue until 1943. Thus was born the principle of continuismo. 

This was obviously a device whereby Carias might remain in power. 
The action was carefully legalized. Congress had authority to call a con- 
stituent assembly, which in turn had authority to draw up a new constitu- 
tion as it saw fit. There was nothing illegal about the constitution itself. 
But none can deny that it was a carefully contrived plan to continue the 
General's administration. Carias at that time may have been able to win 
new elections, for he remained reasonably popular. Nonetheless, he 
perpetuated his power through the doctrine of continuismo. Referring 
once more to Stokes, we read that continuismo "is difficult to justify, for 
it interrupts progress toward political objectives . . . charted by the people. 
It resulted in one-party government . . . produced fear that the funda- 
mental freedoms would no longer be protected . . . reconciled the opposi- 
tion to the use of the old and unsatisfactory method of revolution as a 
means of changing political power." 8 

Three years later continuismo was again invoked. On December 12, 
1939, the presidential tenure was extended until January of 1949. As 
revised, Article 202 of the Honduran Constitution read that "The con- 
stitutional presidency and vice-presidency of the republic exercised, re- 
spectively, by the citizens Don Tiburcio Carias Andino, doctor and gen- 
eral, and Don Abraham Williams Calderon, engineer and general, shall 
terminate January ist, 1949; and for this purpose the effects of Article 
117 of this constitution shall be suspended until January ist, 1949. . . ." 4 
Article 117 declared simply that "The presidential term shall be 6 years 
and shall begin January ist." c Nationals will still argue with determina- 
tion, as they did then, that continuismo was in reality democratic, because 
the people favored the doctrine. When pressed as to how they knew the 
people's will in the absence of elections, they say it was "commonly 
known" that the policy would be popular. That may have been so, but 



HONDURAS 119 

no recourse through the ballot box was offered. Hondurans could ex- 
press no acceptance or rejection of conrinuismo. Only in the fall of 1948 
were the people finally permitted the right of voting for a president, and 
at that time Carias appeared to be naming a sycophantic follower to the 
position. 

During his sixteen-year administration, Carias put through a number 
of important measures. When he first entered office, he was pressed by 
internal dissension stirred up by willful Liberals and a near-bankrupt 
treasury. Refusing to launch any reprisals against the opposition, the 
General set about pacifying the country by a series of conciliatory moves. 
Eventually he was successful in stabilizing the internal political situation. 
All political "enemies" of the regime were permitted to participate active- 
ly; the only restriction was an agreement by such to abstain from revolu- 
tion, conspiracy, or clandestine anti-government activities. Despite gov- 
ernment control of the military forces, there were rarely any repressive 
measures exercised against the populace. 

Financially, Carias adopted a belt-tightening economy program which 
soon alleviated the acute monetary difficulty. The budget was balanced 
for the first time in years, although at the expense of such unpopular 
measures as reduction of public servants' wages. Not until World War 
II were national finances again jeopardized. Honduran revenue accrues 
in large part from international trade, which was severely curtailed during 
wartime. Trade restrictions were serious enough to reduce total trade to 
its lowest figure in thirty-five years. Only after the Allied forces won their 
final victory was Honduras to right itself financially. 

With Honduran geography so seriously handicapping economic de- 
velopment, improved communication was, as it is today, a grave problem. 
The very construction of highways is difficult; passes are tortuous and 
elevated, if not non-existent. The central mountains, although rugged, 
are heavily forested, and cleared only with difficulty. There is a hardrock 
base beneath much of the more passable territory. President Carias 
inaugurated a road-building program to improve communications. Year 
after year he budgeted 10 percent or better of the national expenditures 
for road construction. In 1942, the Export-Import Bank loaned Honduras 
one million dollars to complete construction of the Inter American High- 
way. While never paved, the road itself was soon completed, linking El 
Salvador and Nicaragua with Honduras. Over one thousand miles of 



120 CENTRAL AMERICA 

roads were completed by 1945, and the impetus to improve the national 
road net has never been lost. 

Internationally, Carias maintained good relations during his long 
regime. Abstaining from conspiratorial activities with other Central 
American republics, Carias thus contributed to regional stability. Or, to 
be more precise, his aloof position did not weaken the already-shaky 
foundations of regional peace. Honduras was twice involved in a 
boundary dispute with Nicaragua, a controversy which is with us today. 
In both cases eventual negotiation salved the nationalistic irritations of 
both countries and reduced regional disagreement. 

Notable among Carias' "accomplishments" was the complete stifling 
of legislative initiative. From 1925 to 1933, the Congress for the first 
time began to exercise independent government action. Aided by 
querulous executive leadership, the legislative organ operated under its 
own motivation and developed sufficient strength to withstand and even 
challenge executive policy. Carias soon changed this. With fellow 
National party members dominating Congress, the General found it no 
hard task to reassert legislative subservience to the executive. It has 
never really recovered from sixteen years under his thumb. The General 
also kept a tight lid on the Honduran press. For nearly two decades it 
was restrained. Censorship of a sort always existed, even though negligi- 
ble at times. However, no paper publishing serious or continual criticism 
of the regime was likely to remain in business for long. Only La Epoca, 
of all Tegucigalpa dailies, operated with government approval, and that 
because it was the Carias paper, directed by a close ally of the General, 
Fernando Zepeda Dur6n. 

From this brief sketch of Carias' extended presidency, what con- 
clusions may be drawn? What was he dictator, devoted patriot, mis- 
guided politician, prophet of progress ? How might his years in power be 
evaluated? In the first place, there are a number of charges made against 
him which should be dismissed. Many have been voiced by liberal 
educator German Arciniegas. In The State of Latin America he has 
written scathingly of the triple scourge of the Caribbean the Three T's. 
This refers to Tiburcio Carias, Tacho Somoza of Nicaragua, and Rafael 
Trujillo of the Dominican Republic. In regard to Carias, Arciniegas 
criticizes the General for pioneering Latin American aerial bombardment 
in the 1924 fighting. He sarcastically credits Carias with a trail-blazing 



HONDURAS 121 

innovation in methods of blood-letting and points out that the same 
questionable tactics were repeated in 1933 when Carias assumed the 
presidency. To Arciniegas, this is but one example of his callousness. 

The question of military weapons is really irrelevant. Few military 
leaders have ever been constrained in the use of different arms against 
a belligerant opponent. Carias cannot justifiably be attacked for using 
bombing in the conduct of military operations either in 1924 or 1933. 
Had his opponents possessed the means, they would have employed the 
same tactics, and without drawing legitimate criticism. What is im- 
portant is the cause for which the General was fighting. 

We have already noted that he was blameless in the fighting of 1924 
and 1933. In 1924 he was the legally elected choice of the people. Re- 
pudiated by an irresponsible Congress, he refused to take power by force. 
Only when dissident politicos began to fight did the General take military 
action. After pacifying the country, he accepted a compromise agreement 
which delivered the presidency to his vice-presidential running mate. 
Eight years later the General was elected to office by a large majority. 
There can be no serious doubt that his election represented the will of 
the people. He took arms only when directly opposed by a segment of 
the defeated Liberal party. After he reduced the revolt to minor propor- 
tions, he declared a policy of pacification. Within two years political 
exiles were permitted to return to Honduras and work actively, as long 
as they refrained from conspiratorial activities. In each instance evidence 
strongly suggests that Carias was undeserving of any valid criticism. In 
fact, the incidents reflected credit on him, in his refusal to seize power 
in 1924, and in avoiding oppressive reprisals against his opponents in 
1933. There are many valid criticisms of the General which cannot be 
excused. These are not among them. 

Many have chided Carias for wiping out municipal autonomy. His 
supporters have countered that municipal autonomy in Honduras has 
always been a dubious proposition. Municipal governments have fallen 
under the control of the strongest government officials, and autonomy 
has been almost non-existent. This is basically true. However, Carias 
made no attempt to alter the situation, when he, better than any other 
president before or since, might have done so. Had he exerted his personal 
power, he might have reorganized municipal life, established the basis for 
democratic action, and conceivably eliminated the bitter local pride which 
has rebuffed continual efforts to unite the republic in spite of geographic 



122 CENTRAL AMERICA 

handicaps. And in 1940, he further centralized municipal government 
by a reorganization plan substituting nationally appointed officers for local 
representatives. Responsible only to the executive, these men were im- 
posed on communities by federal rule regardless of the appointee's bril- 
liance or sheer incompetence. This measure simply strengthened the 
established custom of local subservience to central control. 

Nepotism and government favoritism have also been charged against 
Carias. His government, as do most under dictatorial control, reflected 
his will completely. Many close friends received influential, well-paying 
government jobs. Two of his sons became ranking diplomatic representa- 
tives of Honduras abroad. Once again, Carias' defenders claim that this 
was typical of Latin American politics. Carias wanted important posi- 
tions filled with men who agreed with him. After all, "a cabinet is 
seldom dismissed for incompetency, but rather for disagreement with 
the president." 6 But again, Carias cannot be excused on the grounds 
that his Latin contemporaries followed the same practices. No doubt he 
could have unloaded many more government posts on eager, ungifted 
friends. Nonetheless, he was guilty of surrounding himself with a large 
number of agreeable yes-men. 

The staunchly conservative strain in Carias was evident in other 
policies which reflect no credit upon him. Despite his general lenience 
with political opponents and agitators, Carias felt an example should be 
made of serious lawbreakers as a deterrent to future criminals. As a 
result, some three hundred prisoners, including several political transgres- 
sors, were made to work in the capital while chained to heavy balls. 
Foreigners recall vividly the picture of these criminals slowy trudging 
through the streets under armed guard, dragging ball and chain by their 
ankles. Only within the last ten years has this practice been eliminated. 
His conservatism also led Carias to resist woman suffrage and labor 
organization, both integral parts of any developing democratic scene. 

The Constitution of 1936, which was still in effect when Carias left 
office in 1949, specified that all Honduran citizens must vote, that it was 
an obligatory, unrenounceable public duty. Article 24 granted citizen- 
ship only to males. There was no provision for female citizenship, and 
Honduran women were refused suffrage. In the field of labor, Carias 
was equally reluctant to recognize accepted twentieth-century practices. 
Section XII of the Constitution, "Concerning Labor and the Family," 
consisted of eight different articles (191-198). None of these made any 



HONDURAS 123 

mention of labor organization, nor the slightest hint of such a move. 
The near-disastrous results of this became apparent in the 1954 banana 
strike. 

All these, then, were negative results of the Carias administration. 
Final destruction of municipal autonomy, subjection of Congress to 
executive whim, nepotism and personalismo, harsh and ostentatious 
criminal punishment, non-recognition of woman suffrage, smothering of 
labor organization, suspension of national voting privileges from 1937 to 
1949 these were part of the Carias heritage. Others have been considered 
dictators for less. 

In any judgment of Carias, there are positive accomplishments which 
also belong on the record. From his earliest political activities Carias pur- 
sued a form of representative democracy. Over sixty years ago he fought 
as a youth in the 1894 Liberal revolution, a fight leading to recognition 
of presidential election by popular vote. He was the first presidential 
candidate in history to accept a defeat in open elections (in 1928) without 
starting a revolution. And earlier, in 1924, he had been the first Honduran 
to win both an election and revolution and yet accept the ironic course 
of events that awarded the presidency to his vice-presidential candidate. 

It seems certain that when he was elected in 1933, Carias' personal 
integrity, honesty, and goodwill were impeccable. He was highly popular. 
Few Hondurans have been so truly national leaders. Today, ten years 
after leaving the presidency, Tiburcio Carias is slowly becoming a figure 
of the past, although the octogenerian is still the power of the National 
party. All this cannot mask the fact that his accomplishments often fell 
sadly short of what he might have done. While in power he created a 
strict, one-man government, prolonging it for sixteen years by the pseudo- 
doctrine of continuismo which rejected the idea of free, honest elections. 
Monopolistic control of the state strangled any serious manifestation of 
public opinion. 

Carias may be considered in the context of Chapter One's discussion 
of the conflicting values of a Central American dictator. As the unchal- 
lenged chief of state, he was in a position to provide many material 
necessities for his people. This could partially justify and help explain 
his anti-democratic actions. However, considering the length of his rule, 
the inescapable fact remains that Carias' accomplishments were not con- 
sonant with the potentialities of his position. In short, he pursued actions 
that were often suspect and clearly contrary to democratic principles. His 



124 CENTRAL AMERICA 

failure to achieve more for Honduras while exercising absolute authority 
is the worst condemnation of his methods. 

In 1949, Hondurans were skeptical of Carias' intentions when he re- 
linquished the presidency to a friend and National party member, Juan 
Manuel Galvez. He removed himself more completely from the govern- 
ment than anyone expected, partly because of Galvez' complete inde- 
pendence. Only in the last two years has Carias again stepped into the 
political limelight, but never again will he stand for public office. How- 
ever, for sixty years, Carias has been a prominent political leader, and that 
he will probably remain until the day of his death. Above all else, he pro- 
vides striking testimony to Honduran admiration of decisive, authoritarian 
leadership. Only in recent years has this diminished. 

POLITICAL REDISCOVERY 

The first presidential change in sixteen years took place on January i, 
1949, when Dr. Juan Manuel Gdlvez took office in Tegucigalpa. A 
member of the National party, he had been a prominent lawyer for years 
and was relatively inactive politically. His selection by Carias bypassing 
Abraham Williams, Carias' only vice-president was considered an indi- 
cation that the aging General had handpicked a pliable successor to follow 
his orders. Those who knew Galvez were skeptical, and events were to 
prove him completely independent of his predecessor. Having won 
election in October, 1948, without opposition, Galvez took office supported 
by a pro-National Congress. There was no serious political opposition 
elsewhere. 

Dr. Galvez synthesized his objectives into four categories economic 
growth, education, health, and communication. Immediate efforts were 
initiated to advance road construction. Carias had insisted all funds 
appropriated for highways be channeled directly into construction and 
repair. None was used for land surveys. Galvez ordered survey teams 
to begin work at once, laying out new routes and improving the course 
of hastily-planned or improvised backcountry paths. Some 15 percent of 
the budget was devoted to road construction, and the sum increased later 
in Gdlvez' administration. The 1953 budget, for example, o $20,740,388, 
allotted over 25 percent to road construction. At the same time, small 
bridges were built on major arteries. Previously, most roads had dipped 
down into creekbeds and climbed up the other side. During the dry 



HONDURAS 

season this was adequate, but when the rains came, the streams could 
rise three or four feet in a period of minutes, leaving travelers marooned. 

The effect of this was to facilitate the movement of agricultural goods 
and products, as well as reduce the powerful forces of isolation and village 
localism. People were able to travel more easily from village to village, 
learning more of their neighbors and of Honduras. Fewer sections were 
left completely cut off from the outside, and small communities became 
less self-supporting. Instead, they could trade with neighboring vicinities. 
Much work remains to be done today -the only paved highway in the 
country leads south from Tegucigalpa to the junction of the Inter Ameri- 
can Highway at Jicaro Galn. Many areas remain basically isolated; the 
increasingly important economic activities of the north coast are in- 
adequately connected with the central mountain areas. The best trans- 
portation is a railroad operated by the banana interests. However, 
President Galvez gave new impetus to the problem. As the President him- 
self said, "My administration has tried to develop the following com- 
munications: to improve the interoceanic and inter-American route; 
construction of the highway to the west from San Pedro Sula to Santa 
Rosa de Copan . . . other branches of importance in other areas are being 
built also." 7 Transportation was also improved by continued expansion 
of air service by Tranvias Aereas de Centre America (TACA) which flies 
to some sixty different fields in Honduras. 

A healthy Honduran economy depended on much more than im- 
proved transportation and communication. President Galvez was well 
aware of the importance of economic development. Both in matters of 
finance and economic technical improvement, positive measures were 
required. National finances had been operating securely under Carias, 
but after the 1945 recovery from wartime curtailments less attention was 
paid to the situation. Foreign investments were negligible, except for 
the banana business; government revenues were not increasing, and the 
foreign debt began to mount. The need for additional expenditures 
could not be met without added income. 

In July, 1950, after a year's study by a group of Honduran and foreign 
experts, the Galvez government created two state banks, both autonomous 
organs, designed to protect and strengthen national finance. The Banco 
Nacional de Fomento offered low interest, long-term assistance to 
peasants. Money was also funneled into development projects designed 
to improve agricultural methods. Its sister bank, the Banco Central de 



126 CENTRAL AMERICA 

Honduras, was endowed with $250,000 capital and the power to adopt 
whatever measures necessary to control the worst vicissitudes of inter- 
national finances and to reduce the perils of sudden price fluctuations and 
financial dislocation. Promptly restoring complete freedom in foreign 
exchange transactions, the Banco Central enabled Honduran currency to 
seek its own level, where it has stayed ever since at a rate of approximately 
two lempiras to the dollar. The external debt, most of which was owed 
Great Britain, was reduced by a series of payments. In 1952, three years 
after Galvez took office it was down to only $361,937, and the sum was 
almost completely liquidated by the close of his administration in 1954. 

Activities of these two state banks were instrumental in the improve- 
ment of Honduran finances. For the first time in several years the 
financial situation could be characterized as healthy and growing. Reve- 
nues were up ten million dollars in four years. A small boom brought 
a rise in national prosperity. Exports increased 60 percent in the first 
three years of Glvez' presidency. Direct investments of the United States 
climbed to some seventy million dollars. The money supply grew from 
a value of 100 in 1949 to 142 in mid-1953, and economic and political 
disturbances in the next three years failed to reduce the total. After the 
first half of his six-year term, Galvez told Congress in a constitutional 
message on December 5, 1952, that the large increase in revenue was due 
not only to matters of internal policy, but also to encouragement of foreign 
investment in Honduras. He announced that the foreign debt would be 
paid off completely within a year and praised the new income tax as a 
"beneficent innovation of your government." 

Less instrumental in this financial resuscitation were two legislative 
measures which, nonetheless, were part of Gilvez' monetary policies. 
In 1950, Congress responded to his wishes by revising the income tax law. 
This increased taxes on individual businesses as well as commercial 
enterprises, and a new tax office was created to process tax collection. 
Like all Central Americans, the Hondurans had evaded payment of 
taxes and had falsified figures wherever possible. While they still avoid 
payment where possible, they are less able to do so; collections are still 
inefficient but improved over pre-1950 conditions. 

A law passed in the spring of 1952 strengthened Honduran finances 
by authorizing a new issue of government bonds designed to equate the 
seasonal influx of government funds with expenses. This flux, due to the 
seasonal nature of the banana industry, was an annual occurrence. The 



HONDURAS I27 

bond issue was first approved only for the approaching fiscal year of 
1953, but it was later extended after proving a mild success. 

Agricultural methods also had to be improved if the economy was to 
thrive. The banana industry, thanks to the efforts of UFCO, returned a 
handsome profit to the enterprise and to the Honduran government as 
well. But economic dependence on bananas was obviously dangerous, 
as was apparent in years of floods, tropical storms, or Panama disease. 
Progress was slow, but the Galvez years saw for the first time a slight 
reduction in the importance of bananas to the economy. For years 
contributing two-thirds of all Honduran exports, by 1955 bananas ac- 
counted for barely 50 percent. The work of foreign experts, including 
North Americans working through Point Four, helped the farmers im- 
prove their methods. Coffee, never very important, was given particular 
attention. Midway through his term in 1952, Galvez could report an 
annual increase in revenue of roughly three million dollars as a result of 
improved technology and the new lands opened up by loans of the Banco 
Nacional de Fomento. 

Cattle herds increased as well, and cattle remained the second most 
important agricultural item. With expansion of the road net, it became 
possible to market meat in neighboring villages, instead of consuming it 
at home. With this encouragement, cattlemen enlarged their herds. In 
July, 1953, a cattle committee began operations, intended by the govern- 
ment to orient cattlemen's technical activities and improve stock. The 
Committee was composed of five men, representatives of the Banco 
Nacional dc Fomento, the Ministry of Agriculture, Honduran catdemen, 
the Sanitation department, and North American assistance agencies. By 
T 955> figures revealed nearly one million head of cattle, the most of any 
Central American country. 

The last of Glvez' outstanding problems was education. Literacy in 
Honduras today is estimated at 35 percent; it was even lower in 1949 
when Carias left office. Educational opportunities at all levels were 
essayed. At the University of Honduras, the School of Economic Sciences 
and the School of Orthodondistry (the first in Central America) were 
established. The educational system was revised, and new buildings were 
built, although the scarcity of teachers was too often overlooked. Educa- 
tion received a large share of the annual budget, usually near four million 
dollars, or some 20 percent of the total. On a more lofty plane, the Casa 
de Cultura was opened in hopes of stimulating cultural interest. The 



128 CENTRAL AMERICA 

Ministry of Public Education, hoping to advance national culture, 
sponsored various concerts, plays, and lectures, as additional Casa de 
Cultura activities. President Galvez conceded that the effects might be 
small, particularly at the start. Still, it was hoped that such efforts 
would in time become more important. 

Surpassing perhaps all Galvez' material policies was his desire to 
breathe life into democratic ideals, to rejuvenate the long-dormant popular 
desire for individual freedom. Galvez bent to this task unceasingly, and 
won his greatest popularity and success as a result. At the start of his 
administration he set out to break the time-honored precedent of govern- 
ing the state and ordering its affairs from the Presidential Palace after 
a few quiet talks with trusted intimates. Rejecting this atmosphere of 
political machination and undemocratic government, Galvez converted 
the building into an open forum of sorts. Working daily at his desk from 
8 to 12 and 2 to 5, like any government employee, his door was always 
open to give citizens a hearing, to listen to their complaints and receive 
comments. His closest collaborators were also available to discuss busi- 
ness with any visitor, in fact, they were obliged to do so. 

On Saturdays, the President would take his private plane and fly to 
some part of Honduras, dedicating a new school building, visiting a 
hospital, riding muleback through the mountains to examine a suggested 
roadbed. Almost fanatically devoted to honest government, he felt it 
desirable to examine personally the expenditure of government funds if 
possible; for Galvez, it usually was possible. All his predecessors, in- 
cluding Carias, traveled very little, spending most of their time in 
Tegucigalpa. Instead of living withdrawn from the people, the President 
went among them at every opportunity. This was apparently entirely 
spontaneous. Believing passionately in the doctrine that only the people 
are sovereign, he tried to mingle as much as possible, being receptive to 
complaints, problems, and public opinion in general. From town to 
town and valley to valley he flew in his little plane, studying the needs 
of the people. On any weekend he might suddenly appear in a small, 
cloud-shrouded mountain village; he would often land at a tiny airport 
and ride by jeep or muleback to the nearest village, entering homes and 
shops unannounced. More than anything else, this explained his im- 
mense popularity. The people saw in Galvez a president of the republic 
who would come walking into their thatched hut, squat on his heels 
before the fire, and talk to them about family problems, their cow, or 



HONDURAS 129 

their ten acres of land. As one partisan journalist wrote somewhat too 
enthusiastically, the Galvez administration meant "here a new road, 
there a new acqueduct, elsewhere a schoolhouse where children need not 
sit on the ground." 8 Foreign reporters were only a little less enthusiastic. 

A Salvadoran daily wrote that he was accomplishing for Honduras in 
one administration more than anyone had thought possible, and all the 
while operating within the narrowest limits of his office. Costa Rican 
journalist Alfredo Martinez wrote of Galvez as comparable to Costa 
Rica's president at the time, popular Otilio Ulate. Galvez ran a govern- 
ment of associates and collaborators, not sycophants. He was providing, 
wrote Martinez, an era of probity and administrative honesty. When he 
strolled through Tegucigalpa streets, sitting down in a cantina to have a 
drink, he did more for the advance of democracy than any dozen speeches. 

One of Glvez' few critics has been a young Argentine journalist 
named Abel Alexis Latendorf . In a recent publication Latendorf attacked 
the Carias dictatorship, revealed to his readers the backwardness of 
Honduras, and ridiculed the de facto president in 1956, Lozano Diaz. In 
these comments he was basically correct. But in a feverish attempt to 
criticize North American imperialism even where it did not exist, he also 
called Galvez an ex-United Fruit lawyer who protected UFCO interests 
at the expense of the people. Galvez, he claimed, was also guilty of the 
deaths of many revolutionaries during the latter years of the Carias regime. 
In fact, he triumphantly summarized Galvez' government as using 
"persecutions and jail as favorite expedients." 9 

Such irresponsible criticism is an insult to the integrity and patriotism 
of the Honduran people, as well as Galvez. Gilvez was indeed at one 
time a UFCO lawyer. It would be difficult to find many competent 
Honduran lawyers who have not served at one time as UFCO lawyers. 
The other charge is without foundation, since Glvez simply had no 
connection with the events to which Latendorf referred. Normally, the 
Argentine's attack would not deserve any comment at all. Owing to the 
wide circulation of his writing, however, his gross misinterpretation must 
be mentioned. Latendorf, imbued with the need to find fault with U. S. 
intervention and interference, proceeded to splatter Galvez with the same 
brush used against Carias. This is an outright injustice to one of the 
most democratic Central American presidents of recent years one of the 
very, very few. 

Central American observers, not so far removed from the subject as 



I 3 o CENTRAL AMERICA 

Latendorf, have only the highest praise for Glvez. On June 19, 1952, 
Diario de Costa Rica praised him for directing the most active and pro- 
gressive government in Honduran history. He had raised investments 
by nine million dollars his first year in office, with succeeding years 
higher. Public freedoms were more fully developed than under any 
predecessor. Citizens had political and individual rights which were not 
abrogated at a minor provocation, and the Honduran people under his 
leadership were dedicating themselves to national, material, and even 
spiritual development. Galvez himself continued to live a modest, un- 
assuming life, ignoring the urging of friends to build up a political party 
founded on his evident popularity. He insisted he could only live by 
dedicating himself to a continuous defense of the national interests. 

All this is correct in essence. However, Glvez was not able to establish 
political maturity on a solid base. As Chapter One pointed out, many 
years of stability and democratic practice are necessary in Central America 
before responsible citizenship and mature political leadership may become 
an expectation, not a surprise. And in a little less than six years, certainly, 
Galvez could not do more than light the way toward the democratic 
ideals Honduras must learn to embrace. However, two major events 
occurred during his last year in office which indicated the continuing 
irresponsibility that had lain dormant for five years. One of these con- 
cerned the national elections scheduled for November, 1954. The other 
culminated in the strike of the banana workers, which in time threatened 
the government with bankruptcy, the country with civil war, and the 
people with communism. 

YANKEES, BANANAS, AND COMMUNISTS 

Acreage of UFCO and its various subsidiaries extends throughout the 
Central American states. In Honduras, the company owns 39,253 acres 
of banana lands. This far exceeds the acreage in Guatemala, over which 
so much disturbance was created by the Communists. Only in Costa Rica, 
of all the Central America states, does UFCO have more acres of banana 
plantations than in Honduras. For years, the company had plied the 
banana trade at great profit, enjoying a privileged position in the national 
economic situation. At the time, it scrupulously paid the government a 
percentage of its profits each year, money which came to be the bulk of 
the government's annual revenue. 

Through these years the workers were unorganized. Carias never saw 



HONDURAS 131 

fit to smile upon labor organization. As a result, there was none. The 
workers lived in backwardness and ignorance. Their wages, it is true, 
were by Honduran standards reasonably good. As in Guatemala, native 
laborers drew better pay from yankee employers than from Honduran 
management. It was only a matter of time, however, before the com- 
bined forces of poverty, illiteracy, disorganization, and exploitation would 
unite, demanding better working and living conditions, formal organiza- 
tion, and adequate land reform. That time came in May, 1954, with the 
first general labor strike in Honduran history. 

The crisis that was to endanger the very economic and political life 
of Honduras began on April 10, 1954. Dock workers at the UFCO 
wharves in Tela refused to load a ship about to embark for the United 
States. They demanded double-time pay for working on Sunday. At 
once the situation was brought before a labor court, where the judge said 
there was no legal provision for double-time. The men returned to the 
wharves. Few realized what was augured by this initial action. 

The same thing took pkce the following weekend, and again the 
workers were refused double-time pay. Labor relations worsened and, 
on April 28, President Galvez dispatched a detachment of troops to the 
major Caribbean port, Puerto Cortes, as a precautionary measure. By 
May 3, the strike had spread like wildfire through the different UFCO 
land divisions. All four Puerto Cortes, La Lima, Tela, and El Progreso 
were on strike. Thousands of workers were idle. They demanded 
immediate wage hikes and better working conditions. Company officials 
conceded that nearly twenty thousand men were on strike but declined 
to comment on the workers' requests. 

La Epoca, long the Carias paper in Tegucigalpa, blamed communist 
agents for instigating the action. Truthfully, the strike had begun with- 
out much prior planning. Quite naturally, communist elements were 
prompt to capitalize as best they might on the situation. However, they 
did not initiate it. The government, hearing reports of violence, sent 
additional troops on May 6, flying them to San Pedro Sula, from which 
they drove by jeep and truck to La Lima, a few miles from the coast. 
North Americans, threatened by thousands of strikers, were virtual 
prisoners in their homes. Servants joined the strikers' cause, making it 
more difficult for UFCO officials and families living in the area. Com- 
munications were cut, and armed bands roamed the streets of Progreso 
crying, "we are the law." , 



I 3 2 CENTRAL AMERICA 

Government radio station TGWA, in communist Guatemala, urged 
strikers to accept nothing less than a 50 percent wage increase. Honduras 
promptly sent a protest to Guatemala, demanding the end of such broad- 
casts, as well as an explanation. At the same time the government 
prepared to expel known non-Honduran Communists accused of agitating 
among the workers. Two consuls at the Guatemalan embassy were de- 
clared persona non grata and sent home. The government announced 
that any others found to be creating disturbances or inciting opposition 
to public order would follow. From UFCO, which had been presented 
with an ultimatum demanding a reply within forty-eight hours, there was 
no word. 

Saturday, May 8, the strikes extended to parts of the Tek Railroad 
Company, a subsidiary of UFCO which owned most of the Honduran 
railroads. In the coastal departments of Atlantida and Yoro, rail workers 
had quit. At the same time, laborers at La Ceiba, a port to the east of 
Puerto Cortes and Tela, also went on strike, and another port was com- 
pletely paralyzed. The government, remaining non-committal on the 
merits of the dispute, insisted on maintenance of public order. Observers 
were a little surprised when the national political groups, already organ- 
ized and preparing for November elections, promptly offered the Galvez 
government wholehearted support. The National party offered Galvez 
its help in maintaining order, and the newly formed Reformistas an- 
nounced an agreement with the President to support him in whatever 
measures were taken to end the strike and resolve the difficulties. The 
Honduran press, hailing these agreements, refused to take sides in the 
argument. As La Crdnica said, "we hope the dispute will end with the 
best solution for national well-being." 

Basically, the banana workers wanted an across-the-board 50 percent 
increase, and a forty-four-hour work week, instead of forty-eight. They 
also asked for additional health and educational facilities, as well as 
added housing and annual vacations. As Daniel James wrote, it was 
implicit that they receive recognition of labor's right to organize. "De- 
mands expressed the crying need for an enlightened social attitude on the 
part of Honduran leaders, and in UFCO's case seemed to indicate that 
the Company had learned little from its experience in Guatemala. . . ." 10 
UFCO stubbornly refused to give an answer in less than thirty days, in- 
sisting that a month was necessary to study demands. The government, 
recognizing the impossibility of rendering judgment in only forty-eight 



HONDURAS 133 

hours, suggested fifteen days as a compromise. However, officials in- 
sisted that thirty days were necessary, and no reply would be forthcoming 
before that time. J. Felix Aycook, general manager of the Tela Railroad 
Company, reiterated the company position on May 8, saying that dis- 
cussion of terms could not begin for thirty days, and not even then, if 
the strike continued. There could be no negotiation until the strike was 
ended. He also reported that the Tela Hospital operated by UFCO was 
about to run short of food for its three hundred patients as a result of the 
strike. He appealed personally to some two thousand workers camping 
on the Tela baseball field, but they were adamant. 

Three days later, Minister of Interior Juan Antonio Inestroza tried to 
end the strike during a personal visit to the northern zones. By this 
time the workers for the Standard Fruit Company had joined the strike, 
raising the number of strikers to some twenty-two thousand. In Tela he 
sat down with leaders to discuss the situation, but there was no agreement. 
Inestroza declared later that reports of coercion were exaggerated, that 
at the very most only 10 percent of the workers were on strike against 
their will, Tela remained completely shut down, as did Puerto Cortes, 
the largest port. The government reported the general situation worse, 
particularly when General Inestroza's efforts were rebuffed. In Tela, even 
the schools were closed. There, and elsewhere, strikers had closed UFCO 
commissaries, and North American families began to view with alarm 
their diminishing food supply. 

In Tegucigalpa, there was complete order, but activity was growing. 
University students and typographic workers organized to raise money 
to send strikers. The communist organization in Honduras, the Partido 
Democritica Revolucionario Hondureno came into the open after months 
of inactivity, distributing leaflets encouraging the workers and urging 
solidarity in the face of government pleas. The Honduran teachers' 
association added its official sanction to the strike. People were listening 
to Radio Guatemala City, which continued to encourage the movement 
despite protests of the Honduran government. Government officials 
themselves grew uneasy. At no time had they taken the action lightly, 
but UFCO and Standard Fruit officials warned them that bananas ready 
for harvest would soon begin to deteriorate. Damage to the harvest 
meant a commensurate dent in the national treasury, and much money 
might be lost. Already the Banco Central had lost almost a million 
dollars in foreign exchange as a result of Tela Railroad inactivity. El Dia 



I 34 CENTRAL AMERICA 

reported that the strikers appeared increasingly well supported financially, 
and might be able to hold out indefinitely. No end was in sight. 

The next phase of the strike began on May 13, and by the close of 
the week was in full swing. Only banana company employees had partici- 
pated, but now the laborers in other industries joined the movement. 
Workers for the Honduran Brewery, British-American Tobacco Company, 
New York Rosario Mining Company, several shirt-making factories, and 
a forest and timber company all went on strike. By May 18, nearly fifty 
thousand workers were on strike, out of a national population of 
1,608,000. The government stepped up official efforts to end the strike, 
sending a team of mediators by plane to La Ceiba to speak with Standard 
Fruit Company workers. Reconciliation at this point was impossible. 
Elsewhere along the coast, essentials were becoming scarce. With com- 
missaries shut, the ports closed, and railroads motionless, no new foodstuffs 
were arriving. Both employers and employees began to feel the pinch. 

Partial agreement was reached for the first time on May 19, when 
Standard Fruit workers agreed to return to work after talking with 
government mediators. They also recommenced operations on the rail- 
road from Tela through La Ceiba to Olanchito, a few miles inland. 
Details were unannounced, but as it turned out, the company had agreed, 
in principle, to accept the strikers' demands pending final arrangements. 
On the same day, UFCO began to negotiate with the strikers, with 
government mediators presiding. Before considering other matters, work- 
ers indicated that general superintendent Girdner and La Lima Hospital 
administrator Dr. Ramirez must be removed. There was no immediate 
announcement. 

Elsewhere, the strike was expanding. Workers at Santiago Balan y 
Compama, a Cuban firm, walked out after continual threats. Mediation 
at several of the minor firms was suspended. Only Standard Fruit could 
show substantial progress. At UFCO, where all the trouble began, 
workers' representatives presented petitions asking for wage increases of 
from 30 to 72 cents per hour, depending on salary. Common banana 
laborers got approximately 20 cents an hour; they wanted 72 cents per 
hour. The men receiving 39 cents per hour asked for a 30 cent raise. 
Other requests for which they petitioned included time and a half for 
extra work, and the usual demands for better living conditions, medical 
attention, and educational facilities. 

By this time, increasing attention was directed to the communist hand 



HONDURAS 135 

in proceedings, both internally and through Guatemalan meddling. 
Guatemala, severely pressed by its own internal problems, was nearing 
the end of its rope; in five weeks the government would be overthrown 
by Castillo. However, for the present, it was openly encouraging the 
strikers through radio and press, as well as by lending aid and agents to 
the strikers. By May 20 the situation was tense, and Guatemalan sources 
were claiming that Honduras had broken diplomatic relations. Four days 
later the Chicago Tribune, for years one of the best U. S. papers on Latin 
affairs, reported that war between Guatemala and Honduras was near. 
Honduran frontier guards had captured five Guatemalans crossing the 
border without papers, apparently on their way to assist strikers. Presi- 
dent Galvez was constrained to ask the United States to invoke the newly 
signed Pact of Mutual Assistance. Lincoln White of the U. S. Depart- 
ment of State announced that Honduras was being sent arms under terms 
of the new treaty. A shipment of small arms, jeeps, and trucks left from 
Mobile, Alabama. 

From Guatemala came reports that troops were seen moving around 
Chiquimula, only some sixty kilometers from Santa Rosa de Copdn, in 
Honduras. Honduran patrol planes also saw Guatemalan military forces 
much nearer the border and, a week before, troops had been spotted at 
Puerto Barrios, a Guatemalan port near the border. On May 25, Ambassa- 
dor Jacinto Octavio Duran was called home from Guatemala City for a 
conference and did not return. Guatemalan Foreign Minister Toriello, 
desperately grasping at straws to halt the deterioration of his country's 
position, sent a telegram to Tegucigalpa on May 27 proposing a non- 
aggression pact. After study, Honduras rejected the offer. Foreign 
Minister J. Edgardo Valenzuela said his government felt it unnecessary 
in view of other existing treaties guaranteeing the same friendship. 

While this was transpiring, it was still not clear just how large a role 
communism was playing in the strike. It had begun without Red agita- 
tion and, only as the weeks passed, did communist participation become 
more prominent. Eight Tegucigalpa newsmen had flown to La Lima to 
interview Professor Manuel Valencia, who was beginning to emerge as 
leader of the strikers. Calling himself secretary-general of the strikers, 
Valencia claimed to represent the sincere elements of the workers. At- 
tacking the committee in Progreso as riddled with Communists, he ac- 
cused them of harming the workers' plans. He also had rather un- 
flattering comments for UFCO officials and repeated to the journalists 



136 CENTRAL AMERICA 

the strikers' basic demands. In response, UFCO's William L. Taillon 
replied to the same newsmen that UFCO was delaying further negotia- 
tions until the arrival of an expected government commission. Even 
then, he did not expect immediate talks, for he questioned the identity 
of the strikers' representatives. He expected to wait until internal organi- 
zational difficulties were resolved. 

Tela Railroad Company officials explained, a few days later, that 
negotiations with its workers had also been halted. In a letter to the 
government mediation commission, they noted that the central committee 
of strikers had suspended negotiations on the last day of May, 1954. 
The company wanted to open commissaries to supply food both to 
strikers and isolated officials and their families, but plans were cancelled 
when the strikers refused to operate the trains necessary to carry food to 
the company's commissaries. The government mediation commission 
charged that the suspension resulted when the central committee of 
strikers refused to stand by an agreement they had accepted only two days 
before. For the first time, the government itself was angered by the 
laborers' actions. After such apparent bad faith on the part of the 
workers, the government doubted they could deal with the strikers as a 
responsible body. 

On June i, the strikers began to struggle among themselves for 
representation on the central committee of strikers. This effort lasted 
several weeks, during which time both employers and government media- 
tors marked time impatiently. It was immediately apparent that a large 
number of strikers were angered by the bad faith of their leaders in ne- 
gotiation with UFCO officials. The majority considered these men guilty 
of breaking off relations unnecessarily. Conditions which were accepted 
on one day were rejected by the strike committee the following day when 
they were to sign the agreement. Several members demanded the resigna- 
tion of Agusto Goto, who was instrumental in deceiving UFCO ne- 
gotiators. 

While the strikers were feuding with one another, Foreign Minister 
Valenzuela warned that the government would be forced to adopt 
"certain measures" if the paralyzing action were not soon ended. He 
explained in a press conference that the government was losing hundreds 
of thousands of dollars. Yet with talks broken off, there was no likelihood 
of immediate settlement. In addition, the minister said public order 
would be maintained. Regardless of the strike conditions, national peace 



HONDURAS 137 

was not to be jeopardized. The government was sympathetic to the 
strikers, but insisted upon retention of total public security. If necessary, 
emergency measures would be applied. 

By this time, Communists had succeeded in stirring up a great deal 
of trouble, hoping to establish their supremacy in labor. Honduran Reds 
appeared as strike leaders and influential members of local strike com- 
mittees. In Progreso, they soon seized complete command of the area 
strikers. One of the "legal advisers" was the secretary general of the 
Partido Democratica Revolucionario Hondureno, Jose Pineda Gomez. 
The party was recognized as the Honduran communist organ, but with- 
out much effect, at this point. Pamphlets were distributed clandestinely, 
falsely claiming the authority of the united strike committees. A radio 
was established, although never very important. Efforts to stir up the 
Liberal party, which had now been out of power for over two decades, 
were unsuccessful. 

Authorities of the government arrested four strike leaders at San 
Pedro Sula on June 2, after gaining reliable information that they were 
known Communists. The government gave proof that the efforts of the 
four were wholly communist-inspired, with no intention of helping 
Honduras. They were headed by Agusto Goto, who claimed the secretary- 
generalship of the strikers; it was he who had broken his word in UFCO 
negotiations. The others were Manuel A. Sierra, connected with the 
Guatemalan CGTG, Ruben Portillo, and Modesto Rubio. On receiving 
news of the arrest, leaders of other strike committees attached to Goto all 
responsibility for the recent failure of negotiations. Professor Valencia in 
La Lima said that his strikers recognized the economic danger they were 
creating. Expressing complete confidence in President Galvez, Valencia 
also announced the formation of the Union Sindical de Trabajadores 
Hondurenos (USTH), with himself holding the post of secretary-general. 
Miguel A. Ruiz was secretary of organization and Arturo Rivera Santa- 
maria the secretary of relations. 

The next day, Valencia emphasized in the San Pedro Sula daily paper, 
Orientaci6n, that his new organization in La Lima was completely re- 
moved from the strike committee of Progreso. He repeated accusations 
of extreme leftist orientation on the part of its leaders and attacked 
Agusto Goto, in particular, for conducting the negotiations that had 
brought the strikers to the present impasse. He further conceded the 
grave effects of the strike on the national economy. On June 3, one mem- 



138 CENTRAL AMERICA 

her of the government commission told newsmen at La Lima that he 
anticipated new negotiations in a matter of days. Roberto Arellano Boni- 
lla declared that his hope, and that of all concerned, was a new negotiating 
commission completely free of communist influence. In the same vein, 
Valencia said that "when we began the strike we didn't know that we 
had Communists among us. But we have had some communist in- 
filtration by Hondurans and therefore we have been slow in the matter 
of negotiations. We are now trying to eliminate the Communists and 
solve the strike as soon as possible." 11 Asked about Goto, he simply said 
that "we didn't want him to represent us." Workers told reporters the 
same thing the next day. They wanted to return to work as soon as 
possible. 

With employers still biding their time, strike delegates from Puerto 
Cortes, Tela, La Lima and Bataan met on June 5, without Progreso 
representation, in an effort to accredit an official delegation to meet with 
fruit functionaries the following week. Valencia was the moving spirit 
behind the conference. On the heels of this meeting came news of a settle- 
ment between the Tela Railroad Company and its workers. The rail- 
road strikers were granted a substantial pay increase plus other benefits. 
Both parties, reportedly pleased, returned to work on the lines. The 
picture seemed brighter. 

The day that railway workers agreed to terms, however, UFCO set 
back chances of an agreement by a move of extraordinary foolishness. 
With the strike now entering its fifth week on a wide scale, they dis- 
tributed by air twenty-three thousand leaflets stating a new company 
proposal on one side and a message from Galvez and his ministers on the 
other. UFCO offered workers a 19 percent increase for those receiving 
$1.1 8 a day. Those earning from $2.00 to $2.80 were conceded a 10 per- 
cent raise, while those earning from $2.80 to $4.00 a day would receive a 
5 percent increase. UFCO also offered free medical aid for families of 
employees paid less than $75 per month. Two-week vacations each year 
were guaranteed to all workers receiving $75 a month and up. 

Strikers were highly incensed by this move. Raul Edgardo Estrado, 
a high official of the reorganized strike committee, wrote an angry 
letter to Tela Railroad manager Aycook, accusing UFCO officials of bad 
faith in making a direct offer to the workers over the head of negotiators. 
Hinting that bloodshed might become unavoidable, he declared that the 



HONDURAS I39 

central committee of strikers was prepared to meet company negotiators 
at any time, any place. The new committee had total authorization to 
deal as representatives of the workers. However, the offer of higher 
wages and accompanying privileges expressed in the leaflets had to be 
withdrawn first, so that negotiations might again commence "before it is 
too late." The UFCO leaflet bombardment was termed an underhanded 
UFCO maneuver to divide strike leaders. Certainly the move could 
scarcely have been more ill-conceived. 

U. S. Ambassador Willauer, in Tegucigalpa, expressed the general 
opinion when he said he hoped the company and strikers could reach an 
agreement in "an equitable form," the sooner the better. He believed a 
strike solution "would be facilitated if both the Company and the workers 
realize that their common interests are greater than their differences." 12 
Notwithstanding his words, there was no apparent end to the work stop- 
page. The plight of those living in the paralyzed areas became worse. 
Tela Railroad manager J. Aycook telegrammed President Galvez that 
the Tela Hospital was in dire need of personal supplies. He blamed 
this directly on the strikers. Following government communication to 
the strikers, the situation was alleviated, although the hospital was still 
sorely pressed, as were families of North Americans living in the area. 

Finally, on June 12, came rumors that discussions would be reopened 
shortly in the six-week-old strike. Before the end of the day the govern- 
ment mediation commission officially announced that talks would begin 
the next day, which they did, at San Pedro Sula. Two weeks after the 
doublecross by communist Goto, the two sides were prepared to deal with 
one another again. The commission assured UFCO that the existing 
strikers' committee was truly representative. However, UFCO negotiators 
were understandably wary. One of them admitted that "the company 
has little confidence that tomorrow's meeting will bring any concrete 
result. There is still doubt that the new committee is authorized to 
represent all the strikers." 18 

Thus discussions between banana strikers and UFCO were reopened. 
The strikers' demands were the same as outlined before, providing from 
a 30 to 72 percent wage increase plus different fringe benefits. In all, 
a list of thirty "official" demands were presented to UFCO. More than 
a week passed, and the representatives continued to wrangle over terms. 
No apparent progress was being made. Outside Honduras, other labor 
organizations prepared to offer a hand. Arthur Juaregui flew to Honduras 



I 4 o CENTRAL AMERICA 

as representative of the anti-communist Confederation International de 
Sindicatos Libres and was joined on June 28 by members of the United 
States' American Federation of Labor. The Organization Regional 
Interamericana de Trabajo (ORIT) also sent negotiators, who arrived 
after considerable delay on July 20. All these groups were concerned that 
communist subversion might become serious in the absence of agreement. 

The government announced hopefully several times that an agree- 
ment was at hand. However, the days dragged by without solution. 
On July ii, the banana strike passed its seventy-first day. Anti-yankee 
feeling was finally beginning to build up; speeches denouncing imperial- 
ism became common, even in Tegucigalpa. Insults were tossed back and 
forth freely by the elements involved in the dispute and tempers were 
reaching the breaking point. A few days later, the negotiators suddenly 
came to terms. Strikers won notable concessions from UFCO, although 
not all that was demanded. Wage boosts were only a little lower than 
the percentage increases they had demanded since May. Paid vacations, 
hospital facilities for families, and a moderate program of newly con- 
structed homes were granted. 

Irreparable financial damage resulted from the strike. UFCO and 
Standard Fruit lost nearly fifteen million dollars. Bananas had ripened 
and perished on the stalk, unpicked. And in Honduras there are an 
estimated 14,500,000 stalks of bananas. Both UFCO and Standard Fruit 
through the years have survived various troubles. As long as bananas 
can be picked and exported, they are reasonably happy. In this instance, 
of course, bananas were not picked, and the loss was severe. Workers 
themselves lost over two million dollars in wages. Perhaps the worst 
loser was the Honduran government, one million dollars poorer as a result 
of losses on export-import duties. This was a great part of the annual 
revenue, and the budget was thrown severely out of joint. A hasty 
recalculation of expenditures was forced upon them. Faced by such a 
loss only a few months before the first presidential election in six years, 
the government had reason to be distressed. 

In the long run, the most important result of the strike was the new 
position of Honduran labor. It was inevitable that they would in time 
demand and be permitted some form of organization. Carias had for- 
bidden it for sixteen years, and the enlightened Galvez fell down in this 
respect, also. Of the concessions won by the Honduran workers, proba- 
bly none was as important as the knowledge that together they formed a 



HONDURAS 141 

potent force in national affairs. "Nothing, henceforth, can obliterate that 
knowledge from their minds or prevent them from making new efforts 
at new organization. The question is whether Honduran labor will be 
encouraged to develop a native, anti-Communist leadership or be driven, 
as Guatemalan labor was, into the arms of the Communists." 14 

The government, once the strike was settled, requested the visiting 
foreign labor experts to help formulate effective organizations. In July, 
1954, President Glvez said that his government had asked for help from 
these groups, and was subscribing to the ORIT. "We need central 
scientific advisers from the ORIT to succeed in Honduras . . . [we need] 
elements capable of speaking technically for the Institute de Seguridad 
Social in problems of labor and other social aspects conforming with the 
legislative program that the National Congress will likely issue." 15 The 
afore-mentioned Juaregui, a labor leader from Mexico, worked on future 
union organization. He followed several weeks of study and conferences 
by presenting to the government a series of suggested labor laws. He 
pointed out that the union organization should be neither religious nor 
political. Among other things, a substantial number of workers would be 
sent to labor schools in Puerto Rico and Mexico to undergo instruction 
in the rudiments of labor unionism. After all, he declared, "Honduras is 
fully capable of having union organizations." And after a round of 
discussions and meetings, most of his suggestions were adopted. 

Despite the 1954 near disaster, Honduran labor has been generally 
quiet since that time. Before its new leaders were able to form even 
the basic nucleus of a longterm organization, let alone add flesh to the 
skeleton, Honduras was embroiled in one of the most rancorous political 
situations of recent years. This was the second serious blow for President 
Galvez' attempt to establish basic democratic tenets once and for all. 
Today, more than four years later, the political scene is still unpredictable 
and fluctuating. Where the present political leaders may take the country, 
how seriously they may divide the people and set them against one 
another, is still unknown. 

POLITICAL MUSICAL CHAIRS 

The presidential campaign and elections of 1954 were acrimonious 
and hardf ought. The results were in doubt for some time; once they 
became known, a variety of occurrences prevented any candidate from 
taking office. An untimely heart attack and an obscure vice-president 



142 CENTRAL AMERICA 

became decisive factors. Honduras continued two years after these 
elections without a constitution or a de jure head of state, and was 
governed by decree. These regrettable circumstances can be understood 
by an explanation of the antecedents of the 1954 electoral campaign. 

Early behind-the-scenes maneuvering prepared the way for a bitter, 
angry campaign. By the end of the year Honduras was on the brink of 
revolution. For the first time in the century, more than two political 
parties were to participate significantly, as a result of the National party's 
decision to run for president none other than Tiburcio Carias. After 
six years on the sidelines, the doughty old man chose at the age of 
seventy-eight to move back into the Casa Presidencial. Once the General 
made known his desires, there was no question of his candidacy. His 
years in office had built up a powerful following within the party which 
would never be overcome. And no one forgot that he had been the party 
leader, both in and out of power, since 1919. He was officially nominated 
on February 20 at the Palace Theatre. Gregorio Zclaya Reyes was nomi- 
nated for vice-president. 

Not everyone in the National party was satisfied with the decision, 
however. A small but determined minority had disapproved not only 
of the continuismo of Carias, but felt that the General's day was over and 
the party should turn to younger men. A number of these, ardent ad- 
mirers of President Galvez, waited for some indication of his preference. 
Galvez never made any such choice publicly. Rather, he maintained an 
impartial attitude during the campaign and elections. In retrospect, 
many think he had further presidential ambitions. Be that as it may, he 
could not legally return to the presidency at once and insisted that no 
efforts be made on his behalf. He quickly squelched a movement to 
change the constitution that he might run to succeed himself. 

Motivated by many factors, then dislike of Carias, rejection by 
Galvez, opposition to the National party old guard a number of dis- 
sidents broke away from the party to establish the Partido Reformista. 
Looking ahead to the presidential race, their sights were set on Carias, 
they wanted to block his return to power almost as much as to boost 
their own cause. For a time they considered supporting the yet un- 
announced candidate of the Liberal party. A union with the Liberals, 
they felt, would have almost certain success in defeating the General. 
On March 3, 1954, a leading Liberal presidential hopeful proposed to 
Durato Diaz Medina, the Reformista chief, a pact in which the two 



HONDURAS I43 

parties might agree not to join any other political group >., the Na- 
tionals for the October elections. The Reformistas discussed the pro- 
posal but decided to let it die unanswered. 

The Reformistas were further strengthened after the official nomination 
of Carias. Another group of Nationals, led by Carias' longtime vice- 
president, Abraham Williams, walked out of the National party. This 
completed the break between Williams and Carias which had begun in 
1948 when Carias chose Gdlvez over Williams as his successor. On his 
sixtieth birthday on March 16, in Tegucigalpa's stylish Belair Restaurant, 
Williams made a speech that was a barely veiled threat against National 
party regulars who had attacked his defection bitterly. "If they [party 
loyalists] want blood, they will have blood. I see reunited around me 
the youth of Honduras . . . [who] must be ready when I have to call 
them." 16 The Reformistas, heartened by this further split in National 
ranks, prepared for their own convention. Meeting on Sunday, March 
21, they chose Abraham Williams for presidential candidate and Filiberto 
Diaz Zelaya as his running mate. They advocated constitutional reform 
permitting a presidential incumbent to succeed himself. By this stratagem 
they hoped to attract galvistas who were staying aloof from the campaign. 

Watching from the sidelines, with evident satisfaction, was the Liberal 
party. Relishing the damaging intra-party battle and the emergence 
of the Reformistas, the Liberals were encouraged in their own prospects. 
Early hopes that the Reformistas might support their candidate proved 
groundless; nonetheless, they considered Carias a formidable foe, and he 
seemed to have lost at least a part of his former support. The Liberal 
candidate was not known. Their longtime leader, Angel Zufiiga Huete, 
defeated by Carias in 1932 and an unsuccessful opponent to Gdlvez in 
1949, had recently died. There was no heir apparent. Possibilities in- 
cluded Celeo Davila, Ramon Villeda Morales, and Santiago Mexa Calix. 
Davila appeared the likely choice. Yet, after years of law practice in 
Costa Rica, where the Costa Rican branch of UFCO was among his 
clients, he was somewhat out of touch with necessary political contacts. 

Meeting on Sunday, April 26, the Liberal party happily enjoyed its 
first open, unhampered convention in years, thanks to the non-interference 
of President Glvez. After a day long meeting, Ramon Villeda Morales 
was nominated for the presidency, with Enrique Ortiz the vice-presidential 
candidate. There were and are many Liberals who maintain Villeda 
steamrollered his way to the nomination on the strength of deals and 



144 CENTRAL AMERICA 

suspicious arrangements. These are the same Liberals who criticized 
Villeda for remaining in Tegucigalpa, attending government social fetes, 
and pursuing his medical practice while most prominent Liberals were 
in exile, patiently waiting their return to Honduras. In any event, 
Villeda won the nomination with at least the support of the majority. 
After twenty-one years out of power, the Liberals were not about to throw 
away their chances because of a personal squabble. 

Honduran election laws provided that campaigning be restricted to 
the one-hundred-day period immediately preceding election day. De- 
signed to shorten the period of angry campaigning and name-calling, 
this limitation has never succeeded in reducing friction to other than 
moderate proportions. In 1954, with the government keeping hands off, 
campaigning was unrestrained, and it grew quite rough as election day 
approached. More people than ever before were approached, harangued, 
and appealed to for votes. 

For the Liberals, forty-five-year-old Villeda, in active terms a relative 
newcomer to politics, proved an adept campaigner. Brushing aside 
charges of leftist leanings, he campaigned, traveled, and spoke incessantly. 
His campaign was vigorous and confident; he fully expected to win. His 
first official declaration in July revealed the attitude with which he ap- 
proached elections. 

Opposite our internal and international panorama, Honduras must form 
its soul on the molds of a liberal philosophy. Neither for the right nor the 
left: to the center. . . . 

The Liberal party of Honduras will fight for the international defense of 
democracy as a fundamental concept of American right that determines the 
very existence of the hemispheric community. 

The Liberal party is not a political group in systematic opposition to the 
government of the Republic. . . . The Liberal party has offered its backing to 
the government of Honduras, as a guarantee of democratic institutions and of 
national sovereignty. The Liberal party trusts that President Galvez will 
know how to guarantee the electoral right of a climate of free liberty with 
the exercise of democracy. 17 

Despite Villeda's optimism, many of the Liberals were worried about 
possible government interference. After all, they reasoned, wasn't 
President Gdlvez a National? And wasn't he put in power by Carias? 
Surely the government would intervene from time to time. Such an 
outlook made the Liberals rather touchy. At the slightest provocation 
they magnified the grievance into direct insult or electoral intervention. 



HONDURAS 145 

When the government refused them a train to send supporters to a 
political rally, they reacted indignantly. On August 20, their newspaper, 
El Pueblo, shot back that the government had sabotaged a rally at San 
Pedro Sula by refusing to make available adequate trains. Yet the 
government had taken the same stand a few weeks before when the 
Reformistas requested trains for the same purpose. 

For the Nationals, Carias did a minimum of active campaigning. 
While Villeda concentrated on traveling the countryside to reach outlying 
rural areas, Carias limited his appearances to a few of the population 
centers. Convinced of his forthcoming victory and slowed by age, he 
made no effort to match the campaigns of his two rivals. The National 
party shared his confidence and offered little more than a promise to return 
Honduras to strong, centralized government. There was little reason, 
Nationals felt, not to expect a victory. Many Hondurans still held 
Carias in awe, as before. And under his nominal leadership the party 
had won 76 percent of the total vote in 1952 municipal elections. And in 
1953, despite a strong campaign by the Liberals, they polled 44,334 votes. 
Liberals and Reformistas together polled some 10,000 less. 

The Reformista campaign never really got off the ground. Abraham 
Williams campaigned actively, and attacked his opponents with anger 
and frequent bitterness. Yet he drew small crowds, and rarely did his 
turnouts match those of his opponents. He had served as vice-president 
under Carias, and so was well-known, but the strong man had com- 
pletely dominated political life. Many people felt that Williams would 
follow the same poicies as those of Carias; if this was what they wanted, 
they were more likely to favor him than Williams. 

The political climate became cloudy in August when a crime wave 
gripped the nation for nearly two weeks. Night after night, stores, shops, 
and saloons were broken into. Bands of men, numbering from five to 
forty, roamed darkened streets as vandalism ran rampant. The govern- 
ment ordered a general disarmament, and only a very few citizens in 
special circumstances were permitted to carry weapons until after the 
election. At the same time, political meetings became nearly uncon- 
trollable. A crowd of twenty-five thousand assembled from across the 
countryside in Progreso one Sunday at a rally featuring a speech by 
Villeda. By the time it was finished, the Liberal candidate was hard- 
pressed to restrain the crowd from mob action and a breach of public 
order. Other manifestations disquieted the country. On August 7, re- 



146 CENTRAL AMERICA 

acting to growing uneasiness, the Archbishop of Tegucigalpa instructed 
all parishes to exhort the people to solve political disagreements peaceably. 

The three parties agreed to end their campaigns on September 26, two 
weeks before elections, in order to help insure tranquillity. Perhaps 
indicative of a public trend was the attendance at the closing speeches of 
the candidates. Villeda drew a cheering throng at Puerto Cortes. Carias 
spoke to a modest, less enthusiastic audience in Nuevo Ocotepeque. A 
small but noisy crowd heard Abraham Williams' final appeal for votes at 
Amapala, on the Pacific coast. 

The two weeks preceding election day were not placid. Police an- 
nounced the thwarting of an attempt on the life of Carias. An 
official of the Central Penitentiary was arrested for complicity in the plot. 
Political arguments were frequent, and encounters often ended in brawls, 
especially in the more frequented bars. Reliable sources in El Salvador 
were quoted by the Associated Press as expecting an outbreak of violence 
at any time. Members of the diplomatic corps in Tegucigalpa had at- 
tempted to arrange a non-violence pact among the three candidates. This 
attempt failed when Carias' spokesman refused on the grounds that there 
was no reason to trust the word of his rivals. 

Attention was diverted from the election by a series of floods brought 
on by heavy rains at the end of the wet season. Former capital Coma- 
yagua was nearly inundated. Landslides buried people alive and small 
rivers overflowed their banks at La Lima, Progreso, and Chamelecon. 
Railroad contact with the north coast was snapped. President Galvcz 
flew to San Pedro Sula to direct rescue work. Reformistas organized a 
comite de socorro to help flood victims. General Carias contributed one 
hundred quintales of flour for distribution among the homeless. The 
Direcci6n de Sanidad Publica sent supplies and equipment to hard-hit 
areas, and the Red Cross provided medicine from its Panama head- 
quarters. By October 7, with waters receding and most of the damage 
accounted for, a haggard President Galvez announced grimly that over 
one thousand had perished in the inundations, with another four thousand 
left homeless. A few areas remained isolated pending further recession of 
the flood waters. 

Members of all three parties requested a delay in the October 10 
elections, pleading that disastrous rains had made forthcoming elections 
inappropriate. The government countered with the argument that the 
democratic process should not be interrupted, regardless of circumstances. 



HONDURAS 147 

Elections were not things to be tampered with, and had to be held as 
scheduled. There was also increased danger of violence if elections were 
postponed- As it was, the Minister of War ordered the army to be sure 
that no voter was intimidated, while the Minister of Interior warned 
civil municipal authorities to take whatever measures necessary to guaran- 
tee civil rights. 

On election eve all three parties claimed victory on the morrow. The 
Nationals accepted the victory of Carias as a foregone conclusion. They 
saw no way for him to lose. Liberals, almost as certain, had misgivings 
about government interference. After the long years of inactivity, they 
could scarcely grasp the thought of returning to power. The Reformistas, 
most militant of the three, announced defiantly that they were going to 
be armed in order to insure their ascendency after the inevitable triumph. 

With 411,354 voters eligible, most estimates anticipated a total of 
perhaps 275,000 votes. The constitution made voting compulsory for 
eligible citizens. This was never enforced, however, and no one took it 
seriously. Many people worried about the possibility of a virtual three- 
way split in the voting. Thus no candidate would win an absolute 
majority. Unless one of the parties won close to 150,000 votes, the de- 
cision might well be forced into the National Congress. Under the con- 
stitution, a complicated process might follow. The ninth section of 
Article 101 read that 

In case an absolute majority is not obtained, [Congress is] to elect a presi- 
dent and vice-president from the two citizens who obtained the greatest number 
of popular votes for each office. If the Congress does not make the declaration 
of the election of president and vice-president within 20 days counted from 
their installation, the Supreme Court of Justice shall do so within the 7 days 
preceding the date fixed for taking possession of these offices, said court being 
authorized in this case to receive the oath of office of those elected. . . , 18 

The effect of this clause was to throw elections into Congress, where the 
political complexion might render it unable to make a choice. By the 
time a decision could be handed down by the Supreme Court of Justice, 
peace might have been shattered and revolution broken out. Later events 
were to follow this pattern closely to a point. 

Early election returns gave Villeda a clear lead, but nearly a week 
passed before the final tally was announced. Villeda received 121,213 
votes, far ahead of Carias with 77,041. The General failed to score as 



148 CENTRAL AMERICA 

heavily as expected in the population centers, and Villeda drew a large 
total in rural areas. Abraham Williams ran far behind with 53,041. 
The Liberal party itself appeared to have won a narrow majority in the 
Congress, although several seats were disputed. Villeda, however, lacked 
by 8,869 votes his required majority; the 121,321 count gave him 48 percent 
of the total. In such circumstances, the National Congress was to choose 
the president. The first legislative session was not due until October 29. 
In the meantime politicos began to jostle for position. 

Villeda gave a victory statement followed by an interview with El 
Mundo. A bookish-looking man wearing horn rimmed glasses, Villeda 
again belied his appearance with a number of outspoken comments. 
Declaring himself a man of firm democratic convictions, he exulted that 
"The triumph stamps the battle as that of Honduran Liberation. ... I 
was opposed by communism, official influence . . . and other equally grave 
factors. ... If a small band of willful people try to keep me out of 
office, rivers of blood will flow in Honduras." 19 Claiming an absolute 
majority of congressmen, he expected to be declared president despite 
doubts in other quarters. He said he was aware of rumors that Carias 
and Williams might reconcile their interests to select the former as 
president, but scoffed at the report. 

The preliminary meeting of Congress on October 29 dealt with 
jurisdictional matters and set the date to name the president as December 
5. At first, the Liberals were credited with twenty-six seats in the fifty- 
six-seat chamber. Thus, with a total of three more, they would have the 
necessary majority to choose Villeda as president. There were several dis- 
puted seats, however, and the Liberals challenged them in hopes of win- 
ning the necessary three. The maneuver backfired, and after the re- 
alignment was completed, they had lost three more instead. This left 
the Liberals with twenty-three seats, the Nationals with twenty-two, and 
the Reformistas with eleven. The situation was clearly dangerous. If 
the Nationals won the support of only a few Reformistas, Carias would be 
named president despite Villeda's victory at the polls. If the decision 
were carried to the Court, Carias also had a good chance. The Supreme 
Court magistrates had been appointed to their six-year terms when 
Gilvez took office, and were elected by the pro-Carias Congress of 1949. 
Thus the General was likely to be named if the decision was carried to 
the Supreme Court of Justice. 



HONDURAS 149 

On November 10, Villeda issued an appeal in hopes of being selected 
by Congress when it convened. 

General Carias can look with pride on the final defeat of his political life 
... if he does not interfere in the just and legal solution of the presidential 
succession of 1954. . . . Decidedly the triumph cannot be taken away from 
the Liberals because we have arrived at it by an honest process and what has 
happened cannot be reversed. 

The Honduran who lived [through] the past violent dictatorship has new 
sentiments, new ideas, new purposes, and, in a word, new life. He cannot 
return to terror because he already knows it. He does not withdraw from his 
free condition because it has cost him much to achieve that liberty. 20 

Five days later the vital barrier preventing political chaos was removed 
when President Galvez was stricken by serious illness. Physically ex- 
hausted by his efforts to battle recent floods, overextended by the rancorous 
political events of past weeks, the strain had taken its toll. On November 
16 it was announced that he had suffered a heart attack. It was later 
learned that his illness was a grave internal difficulty made worse by his 
tired condition. Convening the cabinet at once, Galvez requested a 
leave of absence for medical treatment. He was granted permission, and 
Vice-President Lozano assumed executive powers during Glvez' absence. 
The President also gave general orders to all army garrisons to be alert, 
and asked public employees for complete loyalty to his temporary suc- 
cessor. Ironically, the President was stricken while taking part in the 
funeral procession of an old friend. 

Glvez flew to Panama on November 16 and was admitted to Gorgas 
Hospital in the Canal Zone. His own doctors and members of the 
hospital staff examined him at once. After a week, he was again flown 
away, this time to Miami, accompanied by two doctors and a son. He was 
to convalesce in a Miami hospital over a month before returning to 
Honduras, by which time the political situation had taken another un- 
expected turn. Of Gdlvez' heart attack, it must be observed in passing 
that his sudden departure was not, as some suggested, an excuse to shed 
the executive robes at a difficult moment. This is scarcely fair. The 
President sustained a grave physical attack and left the country to receive 
the best possible medical treatment only after doing everything possible 
to assure political tranquility. In the capital, Lozano announced that he 
would try to continue the policies of "my old friend," and the cabinet 
remained intact. There were no upsets, although the country was dis- 



I5 o CENTRAL AMERICA 

mayed at the delicate health of Glvez. No one gave particular attention 
to Lozano, a colorless political workhorse. They assumed he would 
continue, though perhaps weakly, the President's impartiality in the forth- 
coming political procedures, and everyone was intimately involved in the 
continuing machinations of electoral politics. 

Deputies of the Liberal party elected provisional functionaries for the 
new Congress in a preliminary session on December i. In the absence of 
National and Rcformista deputies, the Liberals elected General Santiago 
Meza Calix provisional president and Modesto Rodas Alvarado provisional 
secretary. Liberals were confident that Villeda would be named president, 
for it was increasingly plain that the National and Reformista forces 
would not unite. The personal antagonism of Carias and Williams was 
too strong for that. 

Two days later Liberal hopes plummeted sharply. The regularly 
convened session of Congress found the chamber more than half empty. 
Unable to agree among themselves, National and Reformista deputies 
boycotted the meeting, leaving the Liberals unable to take any action 
whatever since two-thirds of the members were necessary to form a 
quorum. Until Congress was formally convened, no action could be taken 
on the presidency. As a result, the stalemate could last, in accord with 
the constitution, for twenty days; then the Supreme Court of Justice 
would make a choice, within seven days. The Liberals, reluctant to risk 
a Court decision that might well name Carias, pondered their next move. 
A revolution seemed the only alternative since constitutional means ap- 
peared exhausted. Before the possibility developed, Lozano took action. 

Glvez' vice-president had never been an important man politically, 
although gaining moderate prominence as part-time minister and cabinet 
member. A sixty-nine-year-old businessman and one-time bookkeeper, 
he had been overshadowed completely by energetic Juan Gilvez, and was 
quietly closing a twenty-five-year political career. A man of violent 
temper and poor health, Lozano was pushed into the job of maintaining 
order until an election winner was named. It soon became apparent that 
no winner was to be named. No one was altogether sure of the Honduran 
Supreme Court of Justice, consequently no party was willing to risk its 
candidates on the unknown quantities who were to choose a chief execu- 
tive. In the end, no one took the case to the Court, and no decision was 
made. Lozano, faced by this lack of decision and the danger of rcvolu- 



HONDURAS 151 

tion, took the decisive measure. On December 6, 1954, Lozano declared 
himself "chief of state" and assumed complete dictatorial powers. 

Taking command of all three government branches, he declared him- 
self the absolute state authority for an indefinite period. He suggested 
that it would probably last two years. "My government will act like a 
magnificent sun which illuminates everything and burns no one." 21 The 
same day Lozano called on the military authorities to avoid trouble, be 
politically impartial, and work for reconciliation of the Honduran family. 
In a radio message to the nation from the Blue Room of the Presidential 
Palace, he called his steps necessary in view of constitutional imperfections. 
Qualifying his government as de facto and referring to himself again as 
"chief of state," he told Hondurans the government would not be a 
dictatorship for such would be "too much work for one man." A Consejo 
de Estado would be formed to advise and assist him in operating the 
government while a new constitution was prepared by a constituent as- 
sembly. He announced that the membership of the Consejo de Estado 
would be announced the next day. It was nearly two weeks however, 
until the composition was completed. 

Lozano pledged himself to maintain individual rights and freedom 
of the press. He warned, however, against improvident criticism or 
"possible subversive propaganda." Noting that Honduras, with limited 
resources, was passing through a critical economic period, he said that 
his government would guard democratic principles jealously. Questioned 
by newsmen, he assured them that he was fully supported by the National 
party, and was confident that Liberals would also cooperate in his efforts 
to protect Honduras until constitutional order was re-established. 

The next day Chief of State Lozano granted political amnesty to all 
those jailed for political purposes in the past three years. He proclaimed 
it a sign in favor of complete re-establishment of civil rights. By impli- 
cation, he was condemning the policies of his friend and former chief, 
Juan Galvez, suggesting that civil rights had not been properly pro- 
tected. He decreed that the move must bring a return of absolute 
harmony among all Hondurans. In time, references to harmony under 
Lozano were to become farcical. 

THE EXPERIMENT BREAKS DOWN 

Lozano's action was welcomed at first. Villeda expressed relief that 
resort to violence might be avoided. Carias visited Lozano for ninety 



I 5 2 CENTRAL AMERICA 

minutes on December 9 to offer National party support. At the end o 
the conference the two embraced cordially. The fledgling labor move- 
ment greeted the emergency measures with approval. Their spokesman, 
Gustavo Adolfo Zavala, told the press he was organizing syndicates on 
the basis of democratic ideals. The Standard Fruit Company workers 
in Tela had formed a thirty thousand member union. Several others 
were organizing with a membership of at least ten thousand. He said 
that "We hope that the government stabilizes itself and then we will 
demand union agreements that are not unilateral, only for the good of the 
employers, but true agreements reached through bilateral negotiations, and 
we want to have a labor code, written not only by Honduran lawyers but 
edited with the aid of the OIT, CIO, AFL, and of course the Organi- 
zation Regional Interamericana del Trabajo. If we obtain a code written 
only by lawyers of our country, it will have little value." 22 

The year 1955 in Honduras was at first a struggle for Lozano to 
establish some sort of political calm. His most energetic activities were 
dedicated to this goal. On January 15, 1955, he requested the directors 
of the three political parties to close their Tegucigalpa offices for the 
month, opening them only one hour in the morning and another in the 
afternoon. A month later, with considerable behind-the-scenes agitation, 
Lozano issued a call to all parties for abstention from activities en- 
couraging a climate of political unrest. Charging them with a "certain 
atmosphere of obstruction," he expressed disappointment that after two 
months, he still had to issue such reprimands. 

In March, after several weeks of apparent quiet, the police uncovered 
communist plans for intense anti-government maneuvers. A projected 
congress of young Communists in Tegucigalpa was forbidden. News 
that Red-tinged ex-President Ar^valo of Guatemala was encouraging 
the meeting no doubt influenced Lozano's decree. Shortly after, he also 
proclaimed a thirty day ban on political meetings. No reunions or con- 
centrations of a political nature were permitted. Public order would not 
be disturbed while he could prevent it, the chief of state testily repeated. 
Simultaneously he announced an arbitrary price increase in aguardiente, 
a cheap brandy-like liquor. He hoped to cut down national consumption. 
A general tax increase on beer and cigarettes was also decreed. He hoped 
to increase national income nearly 50 percent by these measures to build 
up the financial reserves depleted by the 1954 strike. Tax on income was 
hiked from 15 to 30 percent. 



HONDURAS 153 

By May 20, 1955, Lozano was able to announce that inscription of 
voters would begin in June. The five-month process would try to 
establish the eligibility or non-eligibility of every citizen to vote for a 
national constituent assembly. The chief of state expressed the hope that 
once an assembly was elected, a new constitution could be drawn up, 
and by 1956, new national elections might choose president and congress. 

Lozano's "national conciliation" was beginning to fray at the edges. 
The Liberal party organ, El Pueblo, trumpeted a declaration that Villeda 
was the actual Honduran president despite delays to his assumption. 
Furthermore, electoral liberty was being undemocratically restricted by 
government decree. Lozano, responding to the charge, announced that 

I must declare that to fulfill my promises to the Honduran people of giving 
free elections, it is necessary to proceed to base the matter on a clean electoral 
census, that doesn't permit adulteration of any sort. ... It must be remem- 
bered that this election census will be permanent, and already constitutes a 
public document in which rests the effectiveness of a completely free vote. 
I am intimately interested because the census must also include the greatest 
possible protection for the individual's voting rights, and I will not stop pro- 
viding protection . . . regardless of the number of editorials that the press 
publishes by way of criticism. . . , 28 

In a direct warning to the Liberals, he added that "It seems that the 
moment has come to declare publicly that my spirit of tolerance, of 
broadmindedness with every class of political element ... is being taken 
as a sign of weakness by my Government. I will . . . maintain the 
public order and carry out my purpose of national conciliation ... I will 
use all measures at my disposal through the government, even though 
my government is only de facto. It is essentially democratic." 24 

Lozano's efforts to bring about a new, legally constituted government 
proceeded at a snail's pace. When the five-month inscription period ended 
in October, the task was unfinished. The chief of state granted a two- 
month extension. January and February of 1956 were devoted to re- 
vision, and only by March, 1956, was the electoral count completed. 
Lozano then sent a projected electoral statute to his Consejo de Estado 
for study. Eventually, they approved the project after making minor 
changes, and Lozano issued it as another decree. Approval of the 
electoral statute meant that elections might be held for deputies to the 
national constituent assembly that was to vote a new constitution and, 



154 CENTRAL AMERICA 

subsequently, choose a constitutional president. Elections were tentatively 
scheduled for late June. 

Opposition to Lozano had steadily mounted with the passing months. 
The Liberal party, having assumed a position of primacy nationally, 
became increasingly irritated by his slow progress. Inevitably they began 
to attack him without reservation. On December 12, 1955, just a year after 
he took power, they were charged with trying to destroy the interim 
government. Liberals retorted angrily that even though Villeda was 
the true president, they were planning no uprising. From that time 
forward, the two maintained a running exchange of castigation and 
criticism. Liberal attacks were joined by those of the Nationals, par- 
ticularly Gonzalo Carias, son of the octogenarian ex-dictator. On May 
18, the government Office of Intellectual Cooperation denounced the 
opposition of villedistas and backers of Gonzalo Carias and said they were 
about to "try to promote an armed movement . . . with the goal of over- 
throwing the government." Villeda called the charge absurd and sar- 
castically commented that "It would be totally inane to try to tumble 
from power a government that can fall from power without any help." 25 

By the summer of 1956, twenty months of government by decree had 
left Honduras at sea. Lozano's difficulties continued to increase as political 
attacks grew increasingly sharp. Most of the turmoil came from Liberal 
carping. In turn, he fought back roughly, if not wisely. He also pro- 
ceeded to organize politically, something paradoxical for a person running 
a provisional government. 

Lozano succeeded in creating a group favorable to his retention of 
power. This included government bureaucrats whose jobs lay in his 
hands, as well as important army elements. With this nucleus Lozano 
formed the Partido Union Nacional (PUN), hoping to create personal 
electoral power. Although still a minority group, the PUN became a 
recognized political force when joined by the Reformistas. Finally ad- 
mitting their weakness, the Reformistas chose Lozano rather than the 
other two parties they had opposed so bitterly. Williams, Rcformista 
standard bearer in 1954, agreed to the coalition. Presumably his ambitions 
were superceded by those of Lozano. 

In June, the Liberals gathered in Tegucigalpa for their national con- 
vention. Sincerely fearful that Lozano would insure himself extensive 
tenure by manipulating the Supreme Electoral Tribunal in elections for 



HONDURAS 155 

the constituent assembly, the Liberals prepared for the election, hoping to 
prevent Lozano from winning an assembly majority. Their meeting 
was harrassed by Lozano. National police were instructed to put the 
capital "off-limits" to all non-Tegucigalpa Liberals. Any political demon- 
strations were to be handled forcefully. In an effort to secure his position, 
he finally named the date for elections to the constituent assembly Oc- 
tober 7, 1956. 

Honduras was stunned when, on July 9, Villeda was arrested, taken to 
an airfield, and flown into Guatemalan exile. He was accompanied by 
two other leading Liberals party chairman Francisco Milla Bermtidez 
and El Pueblo editor Oscar Flores. None was given any notice whatever. 
Lozano went on the air almost at once to explain the banishment. 
Speaking over a technically defective national network, he called the move 
unavoidable. He announced that Villeda had tried to organize a general 
strike of banana workers, thus obstructing the work of his government. 
"Honduras simply cannot afford a general strike at this time , . . there 
was no other choice. . . ," 26 Villeda fired back from Guatemala that his 
expulsion was "inexplicable." The action could only be attributed as a 
"sign of insecurity and weakness of the de facto government of Julio 
Lozano." He denied complicity in any plot and characterized his ap- 
prehension as being "in a tumultuous manner, without any means of 
explanation." 

Nothing could have stirred up more trouble in Tegucigalpa. Univer- 
sity students led week long attacks on the police, both verbal and other- 
wise. The new Legislative Palace was stoned by a crowd on one occasion. 
Police broke up several demonstrations with tear gas, and on one occasion 
fired into the crowd to break up a student gathering at a Tegucigalpa 
high school. A half dozen demonstrators were wounded by week's end 
and many others jailed. For the next few days, police stood at inter- 
sections searching passersby for weapons. Business was reduced to a 
minimum, the National University padlocked, and extra police called to 
duty. An uprising was expected at any time. Lozano gave a detailed 
account of the supposed labor strike planned by Villeda. Presumably it 
was first set for June 20 but then postponed until July, by which time 
Villeda had been expelled. Liberals repeated previous denials. 

Trouble was not limited to Tegucigalpa. On July 17, the police shot 
down two brothers in La Ceiba, leaders of the youth branch of the 
Liberal party. Other Liberal journalists, including the editors of La 



156 CENTRAL AMERICA 

Voz Liberal and the weekly Basta, were jailed for subversion. At the 
same time, Lozano, trying to still foreign criticism, rationalized his action 
in a letter to James G. Stahlman of the Inter American Press Association. 
He claimed to possess "extensive documentary background showing links 
of the three expulsees with Communists residing in Mexico and in 
Honduras itself . . . they . . . were in association with recognized Com- 
munist agents infiltrated into Honduras, [and] were trying to persuade 
organized labor on the north coast to enter into a planned uprising." 27 
Most observers felt Lozano, like Castillo in Guatemala, was finding 
"communist" interference in every manifestation of opposition to the 
regime. 

After two weeks, Honduras began to calm down. Villeda had con- 
tinued from Guatemala to Costa Rica. His exile there was unpopular, 
but criticism slackened. Just when the situation appeared under control, 
a barracks revolt tried to overthrow the regime by force. At i :y> A.&L. on 
August i, the San Francisco infantry barracks, commanded by Major 
Santos Sorto Paz, sent troops out through the city to seize strategic points. 
The First Infantry Battalion was called out against the rebels and by 
6:00 A.M. the four hundred rebels had been repulsed and driven back in- 
side the barracks, across a forty yard wide park from the United States 
Embassy in downtown Tegucigalpa. Loyalists brought up machine 
guns, only to find their shots bouncing off the walls of the barracks. 

Four mortars were taken to the nearby Prado Hotel, carried through 
the lobby and up four flights of stairs to the roof. Thus situated on one 
of the highest vantage points in town, government troops began to lob 
round after round on San Francisco. Accuracy was surprisingly good, 
and by 9:10 the rebels ran up a white flag. Loyalists picked up their 
mortars, carried them back downstairs and out the lobby of the Prado, 
nodding to the desk clerks as they left. The battle claimed more than 
one hundred dead or wounded. Again Lozano cracked down and 130 
suspects were rounded up. Extra troops patrolled the city. Liberals 
were predictably blamed. In Costa Rica, Villeda suggested that the 
government would seize on the opportunity to postpose elections. In 
the capital Lozano commented, "I will have to think this over." In the 
meantime, he declared a twenty-day state of emergency in the Francisco 
Morazdn department, prohibiting public meetings and political gatherings. 
Newspapers were censored; outgoing commercial cables were examined 
by the government. Courts-martial were ordered for those involved in 



HONDURAS 157 

the revolt, and suspects were continually picked up on the streets by 
steel-helmeted soldiers. 

On August 2, the day after the uprising, Lozano set up a three-man 
junta to deal with "subversive" elements. It was to coordinate the de- 
fense of Tegucigalpa in case of further disturbances. Alarm was raised on 
the eleventh when Lozano collapsed from overwork and was ordered to 
rest for fifteen days. The junta was assigned the task of maintaining 
public order nationally, and many interpreted this as an indication that 
Lozano had resigned and turned power over to the military. Rumors 
suggested a heart attack. Actually, the unbending Lozano had lost his 
temper during a conference, as he often did, and collapsed in the middle 
of the floor. Mexican cardiologist Ignacio Chavez announced after medi- 
cal examination that Lozano was suffering from fatigue complicated by 
a bad cold. Ordered to bed for two weeks, Lozano empowered the junta 
with peace maintenance. Within a matter of days he was meeting officials 
in his bedroom, and soon lifted the state of emergency and disbanded 
the junta. 

Although seventy-one-year-old Lozano remained in harness, he still 
suffered from arteriosclerosis, overwork, and temper tantrums. On Sep- 
tember 13, he was finally forced to fly to Miami for a short rest. In a re- 
versal of the process followed in 1954, he turned over his position to 
Chief Justice and ex-President Juan G&vez. The latter had recovered 
from his illness and returned to Honduras in early 1955. Although 
nominally supporting Lozano, he had not been active politically. While 
approving Lozano's announced goal of restoring democratic government, 
Gdlvez privately deplored many of his methods. Nonetheless, he resumed 
power temporarily while Lozano recuperated on Florida shores. 

Hondurans welcomed the change. Many openly wished "Don Julio" 
a nice trip, enjoyable vacation, and non-return. The author, staying in 
Tegucigalpa at the time, was told repeatedly that if only Glvez remained 
interim president, elections for the constituent assembly would assuredly 
be free and honest. However, Lozano returned to Honduras three days 
before elections, dourly commenting that elections would be free and 
democratic no matter what measures might be necessary. The police 
were called out in large number. Each corner in downtown Tegucigalpa 
had at least one, and usually two policemen leaning casually on a rifle. 

Most observers predicted a victory at the urns for Lozano and his PUN. 
The Liberal leadership was almost all in exile; Reformistas continued to 



158 CENTRAL AMERICA 

support Lozano as a matter of expediency; and Carias announced that 
when Lozano returned the National party would abstain from the elec- 
tion rather than be a party to inevitable fraud. Abraham Williams pre- 
dicted that the assembly would support the regime, designate Lozano as 
president pending adoption of a new constitution, and choose at least two 
vice-presidents as well. 

Elections of the seventh bore out his predictions. Official results 
released a week later showed the PUN to have won all fifty-six seats. 
Not one anti-government candidate won. Lozano unctuously said that he 
would be pleased to serve the will of the people. Williams scoffed at 
opposition attacks, saying "they are just bad losers. Losers always claim 
fraud in politics everywhere." However, Hondurans remembered elec- 
tion day. At 3:15 P.M. a large group of Liberals in the main square of 
Tegucigalpa were suddenly fired upon pointblank by police, without 
provocation. Before the eyes of foreign newsmen several were wounded, 
including three who died the next day. Things were even nastier in out- 
lying regions. Many cast ballots under gunpoint. Others were sent home 
without voting. Ballot boxes were switched with pre-stuffed ones. The 
opposition fought back at places; four policemen were dragged from their 
car and slain by machetes near Villanueva. In all, over two dozen 
perished. Even ardent Lozano supporters were appalled. Such events 
were outrageous, and sealed Lozano's fall beyond any doubt. Lozano, 
probably well-intentioned when he took power, had gotten a taste of 
executive prerogatives and decided to stay in power at all costs. He kept 
his position only by dictatorial rule founded on fear and suspicion. Initial 
efforts to achieve a new, popularly elected government based upon suf- 
frage and democratic exercise of choice had broken down completely. 

Unexpectedly, and without the anticipated bloodbath, Lozano was 
pushed out of office later the same month. On Saturday, October 20, a 
delegation of officers visited Lozano to request his resignation. He 
agreed in principle but asked for a brief delay. Overnight the officers 
completed their plans. At 8:00 A.M. on the twenty-first, armed forces 
took up positions around Tegucigalpa. Planes swooped over the city, 
nearly scraping rooftops. The military insurgents called on Lozano at 
the Presidential Palace and repeated their demands. He yielded, and in 
mid-afternoon officially turned over power to the junta. In a ceremony 
before the assembled diplomatic corps, the revolutionaries gave their 



HONDURAS 159 

word not to prosecute lozanistas. With this, the sour old chief of state 
retreated to his hilltop residence, soon to leave Honduras. 

It was a group of young, democratically inclined officers who en- 
gineered the coup. As Lozano had increasingly ignored all but the trap- 
pings of democracy, they had decided to make their move at last. The 
three-man junta directing the operations was composed of Colonel 
Hector Caraccioli, thirty-four-year-old Air Force commander, Major 
Roberto Gilvez, thirty-one-year-old son of ex-President Galvez, and Gen- 
eral Roque Rodriguez, commander of the military academy and, at fifty- 
five, the dean of the trio. In a "Proclamation of the Armed Forces of 
Honduras" they guaranteed "a return to the rights of the people, authentic 
constitutionality, and respect for the institutions of the Republic. On our 
military honor we promise to return the government to a civilian element 
that has authentic popular support. We will remain in command only 
during the time democratic criteria and national interest necessitate. We 
intend to govern democratically with the collaboration of all Hondurans 
of good faith." 28 New Yor% Times correspondent Paul Kennedy was told 
that "The decision [to revolt] was made when it became apparent that 
the election of the National Union party was opposed by the great 
majority of the people. The armed forces did not want to be placed in a 
position whereby they had to enforce the laws of a Government that 
did not represent the will of the people." 29 Thus Julio Lozano went the 
way of all would-be dictators. 

RETURN TO CONSTITUTIONALITY 

The junta showed immediate signs of true reformers. The youthful 
leaders Rodriguez merely lent them prestige declared political amnesty, 
opened cell doors to political prisoners, consulted with Villeda, and won 
his support aong with that of the National party. A new cabinet was 
formed representative of different political groupings. Its dominantly 
youthful note was sounded with the membership of several young sup- 
porters of Caraccioli and Galvez. A new Supreme Court was named 
shortly, also including members of the major political parties. As ex- 
pected and hoped, the October 7 election of a constituent assembly was 
annulled, a move that brought enthusiastic national response. 

The junta's problem was the installation of an assembly capable of 
drawing up a constitution upon which a permanent government might be 
based. They were anxious to do away with such procrastination as 



160 CENTRAL AMERICA 

Lozano had followed. The junta insisted on establishing a constitutional 
basis for whatever government followed, and in that direction lay their 
goal. There was temporary confusion early in 1957 when Foreign 
Minister Esteban Mendoza resigned and rumors suggested the departure 
of Major Galvez from the junta. However, the junta proceeded calmly 
to draw up electoral plans, and a timetable was soon set up. It called for 
the proclamation of an election for a constituent assembly on September 
21, with its first meeting convening on October 21, anniversary of Lozano's 
overthrow. 

Further plans were outlined in mid-July, after the dismissal of 
General Rodriguez from the junta. In the final days of June the ministers 
of defense and interior wrote open letters to the newspapers accusing 
Rodriguez of having played politics. He was asked to resign on July 5, 
and when he refused, was dismissed the following day. He called bis 
dismissal a matter of personality, but would not dispute the action 
although accusations were without basis. "The important thing is unity 
of the armed forces and . . . compliance with the promise to hold free 
elections." 

The junta announced the same month that the October meeting of the 
assembly gave it the option to adopt a constitution, elect a new president, 
or provide for general elections. The first elections, those of September, 
would be held for the first time under provisions of proportional repre- 
sentation. Thus all parties would seat deputies in proportion to their 
national strength. All parties concurred, including the Liberals, who 
might have won 80 percent of the seats or more under the traditional 
plurality arrangement. But Liberal leaders, after momentary hesitation, 
apparently felt that under a plurality representation their sweep would 
be so complete as to threaten the assembly before it could convene. 

By September, all parties were campaigning nationally amid an at- 
mosphere of freedom and moderation. The junta was carefully fulfilling 
its promises of an honest election. The Liberals, in particular, campaigned 
vigorously, led by Villeda, who had returned from a brief tour in 
Washington as ambassador to the United States. Often accused of being 
a dangerous left-winger, if not a communist sympathizer, Villeda took 
particular efforts to belie the accusation. He reiterated opposition on all 
terms to communism, as well as his friendship for the U. S. 

When elections were held, over a half million went to the polls. 
Violence was held to a minimum, although four were killed and nine 



HONDURAS 161 

wounded in incidents to the southeast of Tegucigalpa. The Liberals 
piled up a large majority, reflected in their capture of thirty-six of the fifty- 
eight seats in the assembly. Although Villcda had expressed a preference 
for presidential elections, the November meetings of the constituent 
assembly felt otherwise, and Villeda was not reluctant to accept their 
mandate as chief executive. On the sixteenth, after nine hours of ran- 
corous discussion, he was named to begin a six-year term on January i, 
1958. The final vote was thirty-seven to twenty. The provisional junta 
accepted the decision without comment. Villeda was inaugurated as 
scheduled, giving Honduras its first legally elected chief executive in 
nearly four years. 

Ramon Villeda, previous winner in the 1954 election, had never been 
popular with certain elements of his party. "Little Bird," as he is 
sometimes called, had been a shrewd opportunist ready to accept help 
wherever it might be found. However, this propensity does not establish 
a connection with communism. For this reason he is a doubly powerful 
man. Recent events indicate that the responsibilities of office have brought 
to him a new awareness of the problems confronting Honduras. He is a 
powerful man of strong character and not one to be dealt with lightly. 
If he maintains the vigilance over Honduran affairs that has typified his 
political career, there may be a change in the nation's nineteenth-century 
existence. 

In November, 1957, the president-elect studied a report of the Hon- 
duran Economic Council. It was far from comforting. The economy had 
been growing worse for two years. Thanks to the laborers' strike, 1954 
was disastrous, and 1955 agricultural crops were hit by severe floods. 
The Office of Internal Taxes estimated a loss of two million dollars to 
the government. The 1954 budget had reached thirty million dollars, the 
highest in history. Business activities for many months were curtailed 
pending developments of political turmoil. UFCO and Standard Fruit 
tabled plans for extensive programs worth hundreds of thousands of 
dollars to the government, and activities today are only returning to 
normal after the long period of acrimonious politics. 

Villeda learned of the 1957 budgetary deficit of $5,000,000, as well 
as the drop of net reserves from $11,400,000 to $11,000,000 in less than 
one year's time. Banana shipments would be well below the 1956 
level of $7,000,000. Added to these business ills were the labor situation 
and general communist activities. Labor, finally organized after years 



162 CENTRAL AMERICA 

without representation, had proceeded rather slowly. Following the 
1954 strike, UFCO had to lay off thirty-five hundred of its twenty-one 
thousand employees. With so many bananas rotted on the stalk, the 
harvest was smaller. Elsewhere in the economy, organization of labor 
came about more slowly, with the absence of trained leaders creating a 
gap into which the Communists were trying to step. This had been part 
of their formula in Guatemala. As labor leader Gustavo Zavala had 
admitted himself, the communist problem in labor was a genuine one. 

Daniel James wrote in 1954 t ^ iat Honduras was second only to 
Panama on the communist Central American priority list. Until modern 
labor legislation and land reform come to Honduras, the danger remains. 
Political circumstances still seem to preclude the adoption of any such 
laws. On March 21, 1956, Foreign Minister Esteban Mendoza candidly 
admitted as much while addressing the Overseas Press Club in New York 
City: 

The continued infiltration of communism on the north coast of Honduras 
represents a threat to the security of the countries of Central America and the 
Caribbean area. The Communists have never lost hope of recovering power 
in Guatemala. ... In connection with various elements in Honduras, 
extremist followers of Lenin and Stalin have tried several times to start a 
revolt on the north coast of Honduras, which would serve as a springboard for 
an attack on Guatemala. . . . 

Thousands of workers [9,000] are found without work on the plantations 
of UFCO today as a consequence of the extensive strike and destruction of 
banana plantations by the floods occurring in the fall of 1954. 

In spite of the interest and the efforts of the government to solve that 
afflicting situation, which extends over a wide area, the Honduran exchequer is 
not in economic condition to take additional steps. . . . The recent facts of 
infiltration, carried forth by individuals suspected of being communist agents, 
have obliged us to increase our vigilance. 80 

As Villeda's government got under way, he took steps to alleviate 
economic problems. A request was made to the International Monetary 
Fund to increase the Honduran quota from $2,500,000 to $7,500,000 as a 
means of protecting the currency. Money was poured into an agricultural 
development program. Road construction was also pushed. In December, 
1955, the Lozano government had received over four million dollars from 
the World Bank for road construction. In May, 1958, Villeda's adminis- 
tration received an increase from the Bank by signing a $5,500,000 highway 
loan, devoted to the cost of a new paved highway linking Puerto Cortes 



HONDURAS 163 

on the Caribbean with the national highway network and Tegucigalpa. 
The loan was for repayment in twenty years with annual interest of 5% 
percent. While social services were studied, they received less emphasis, 
the attraction of foreign capital for roads and agriculture being con- 
sidered more important. 

After a year in office, Villeda's government showed promise of an 
improved and more enlightened approach to Honduran problems. The 
return of constitutional government was the first step in a long path 
toward more progressively sound government. But the future remained 
rather gloomy. The tragedy stems from the fact that this need not be so. 
A prominent Honduran educator, Jorge Fidel Duron, rector of the 
University of Honduras, said as much a few years ago at the Fifth 
(1954) Conference of the Caribbean in Gainesville, Florida: 

If it were well-governed, Honduras could easily be converted into a model. 
Nevertheless we have chosen to live in continual political agitation in which 
the best intentions are rendered helpless and where a cabal of professional 
politicians have taken advantages of the situation and have prospered. We 
have been prisoners ... of strong political, economic, and commercial forces, 
principally in the hands of better organized neighbors. But Honduras goes 
surging valiantly against all dangers, and according to what I believe, nothing 
will be able to stop it now from reaching our goal of pacific prosperous 
existence based on international cooperation. 81 

His analysis of Honduras' existing situation is acute. But the peroration 
of the last sentence is sadly inaccurate. Honduras has rarely been 
"surging valiantly against all dangers," but instead, plunging blindly into 
every endeavor with a common obedience to the forces of elemental folly 
and immature, irresponsible, political thievery. 



Chapter Five 



NICARAGUA 



LARGEST AND LEAST DENSELY populated of the Central American states is 
Nicaragua, bordered on the north by Honduras and on the south by 
Costa Rica. With two coastlines, each over two hundred miles long, 
Nicaragua is a country of geographic contrast. The mountainous Central 
American cordillera rises to a modest height in the western third of the 
country, running northwest and southeast. In the east, the country 
slopes toward the Caribbean, ending in the once notorious Mosquito 
Coast, an aptly named jungle area that provided refuge for Caribbean 
buccaneers. Nicaragua's 57,143 square miles support a population at the 
low density of 21.0 per square mile. The two largest lakes south of 
Texas Nicaragua and Managua are linked by the Tipitapa River, 
forming part of an undeveloped transport system. 

Nicaragua has been endowed with a moderately varied economic 
heritage superior to that of its neighbors. Eighty percent of the popula- 
tion deals in agriculture, the leading industry. At the same time, agri- 
culture utilizes only 10 percent of the area of this Wisconsin-size republic. 
More than half the country is covered with valuable forests, only a small 
portion of which would be difficult to convert from timber to marketable 
lumber. Soil is fertile and mineral deposits, especially gold ore, are 
potentially significant, though largely undeveloped. Cattle growers raise 
the best beef in Central America, and the broad tropical plains of the 
east are ideal for bananas and sugar cane, which do not thrive on the 
milder climate of the higher elevations. 



NICARAGUA 165 

Until recent years, probably no Central American state was wasting 
its natural potential as shamelessly as Nicaragua. Following its inde- 
pendence from Spain in 1821, nothing happened. Occasional internal 
strife and dissolute government only helped contribute to general stagna- 
tion. The state of affairs was deplorable. Citizens lived uncertainly, and 
only the poorest illiterate peasants escaped political insecurity. They were 
presented, at the same time, with an oppressive and sometimes losing 
battle for minimal subsistence and survival. 

Only in the past two decades has Nicaragua begun to pull itself out of 
the century-old quagmire. These years have been a time of material ac- 
complishment far exceeding any previous efforts. And they have been 
directed by Anastasio Somoza, a dictator in every sense of the word. 
Because Somoza has been master of Nicaragua for years, the country today 
reflects the imprint of his administration. His recent assassination does 
not change this circumstance. All Nicaragua's achievements and short- 
comings as well are attributable to its longtime leader. To understand 
Nicaragua, we must go back more than twenty years to find the first 
strands from which today's pattern has been woven. These reveal the 
fateful events bringing Anastasio Somoza to power. 

THE COMING OF SOMOZA 

For the United States the twentieth century brought many things, 
including a new foreign policy sparked by a man of continual activity, 
Theodore Roosevelt. With the country swept by a fierce passion for 
nationalism, foreign policy became, in less developed areas, that of out- 
right imperialism. This was outlined in the so-called Roosevelt Corollary 
and subsequent commercial interference that is even today attacked by 
critics of the United States as "dollar diplomacy." Several of the smaller 
Caribbean nations were subjected to United States imprudence; among 
these was Nicaragua. 

In the midst of one of its internal eruptions in 1909, Nicaragua executed 
two soldiers of fortune who claimed U. S. citizenship. A naval force 
quickly intervened, and from 1912 to 1925, a body of U. S. marines was 
stationed in Managua, maintaining a modicum of peace in the face of 
bandit raids and smouldering public resentment. Thus plunged into 
Nicaraguan affairs, the United States did not withdraw until the days of 
Franklin Roosevelt and the Good Neighbor Policy. Influence was as- 
serted in energetic terms. As early as 1924 the United States took steps to 



166 CENTRAL AMERICA 

withdraw from Nicaragua, pending results of the 1925 presidential 
elections. Prepared to convert its marine headquarters into a legation 
recognizing Nicaraguan sovereignty, hopes proved premature. Weeks 
after the election was completed the defeated forces rebelled and took 
control of the government. The U. S. again stepped in to restore peace, 
designating an interim government pending new elections. Three years 
of patient negotiation by Henry L. Stimson led to new elections in 1928; 
an open, democratic vote named General Moncada president. With 
U. S. support he took power. 

Hoping to withdraw from Nicaragua permanently, the United States 
went to great lengths to insure continued stable government. The marines 
remained in the country, organizing and training a national constabulary 
as an effective governmental instrument capable of buttressing the legiti- 
mate government. By 1931, the marines reduced their force, and a few 
years more saw the last of the unpopular "gringos" leave the country. 
National pacification was completed, except for the activities of an irre- 
sponsible insurrectionist named Augusto Sandino. Refusing to come to 
terms with the government, this semi-bandit harrassed the peasants by 
small forays into the villages for food, money, loot, and women. As the 
U. S. commanders prepared to depart, they searched for a man capable 
of pursuing the elusive Sandino. The found him in vigorous young 
Anastasio Somoza. This discovery changed the course of Nicaraguan 
history. 

Son of a San Marcos coffee planter, Anastasio Somoza was born in 1896. 
Growing up on the plantation, he was educated first in Managua, later 
at the National Institute in Granada, and briefly in Spain. He traveled to 
the United States to learn bookkeeping and business administration at the 
Pearce School in Philadelphia, also raking a job as bookkeeper for an auto- 
mobile agency where he learned some of the choice four-letter words that 
spiced his English conversation. During his seven years in Philadelphia 
the young Somoza developed an enduring respect for the United States, 
became an ardent follower of the Philadelphia Phillies baseball team, and 
married the daughter of an outstanding Nicaraguan surgeon. 

Returning to his revolt-riddled homeland, Somoza worked variously 
as an accountant, sanitary inspector, sports promoter, and automobile 
agency manager. Combining these activities with that of tax collector of 
Le6n after 1925, Somoza soon was deeply involved in the swirling political 
waters. A firm supporter of President Moncada when the latter was 



NICARAGUA 167 

inaugurated, he was rewarded with the post of Governor of Leon. Soon 
afterward named secretary to the army chief of staff, Somoza was shrewd 
enough to build personal strength. President Moncada, growing ap- 
prehensive of his growing influence, dispatched Him to Costa Rica as 
Nicaraguan minister. Before long, the ebullient Somoza had to be re- 
called and, although barely in his thirties, promoted to foreign minister. 

In the 1932 arrangement withdrawing the last U. S. troops, Somoza 
was named director of the army, in which he had become active, and from 
that day until his death in 1956 he controlled the Nicaraguan military. 
His first job was final pacification of the rebel Sandino, and Somoza 
personally directed the military campaign against him. In 1934, Sandino 
agreed to make peace and came to Managua under a truce preparatory to 
disbanding his guerrillas. Following a banquet at the Presidential 
Palace in his honor, Sandino left with a handful of his assistants and in 
a matter of hours had been cut down by a volley of machine-gun bullets. 

Somoza has been blamed by his opponents for the dastardly killing. 
In response, he later published a short account of the affair absolving 
himself of guilt. The incident was so shrouded in secrecy that to 
this day few people know the truth, and they have never told. Whether 
Somoza was personally responsible cannot be established, although he is 
highly suspect. As commander of the military, he was responsible for 
their participation in any such action, and it was established that Nica- 
raguan soldiers participated. The result was to make a martyr of the 
lawless Sandino. To this day he is referred to with reverence by many 
chafing under the Somoza regime. 

In a short time, Anastasio Somoza was the most powerful man in 
Nicaragua; it but remained for him to enter the next elections to assume 
the presidency in name. Aided by palace intrigue, he was easily elected. 
On January i, 1937, Anastasio Somoza took office as Nicaraguan president. 
Until kte 1956, Nicaragua was his. Some of the many critics of Somoza 
have reached back a quarter of a century to attack U. S. Minister Matthew 
Hanna for promoting Somoza's appointment as army chief in 1932. One 
writer has charged Hanna with falling prey to the colorful vocabulary, 
outgoing personality, and adept dancing of Somoza. This assumption 
contends that a serpentine Somoza seduced gullible United States officials 
by the sheer force of his social graces. But the point of view of Minister 
Hanna is easily appreciated. The future of an independent Nicaragua 
depended in large part upon strong military support for civil government. 



168 CENTRAL AMERICA 

This implied a sound, stable commander of the Guardia National. Few 
of Somoza's critics have impugned his administrative capacity or strength 
of character. To the U. S. officials, the man seemed most likely to hold 
together and strengthen the Guardia Nacional. It was four years after 
the departure of the U. S. forces that Somoza reached the top. His social 
charms and North American naivete were scarcely the decisive factors. 
It was by a combination of historical circumstance, administrative 
ability, inherent shrewdness, and not a small quantity of luck, that 
Somoza moved into the presidency twenty years ago. Nicaragua today is 
a reflection of the Somoza policies and practices. One of these is the 
question of democracy and free government, or the lack of it. Of equal 
importance, however, were the Somoza measures to advance national 
wellbeing. 

INTERNAL DEVELOPMENTS 

Any examination of internal progress must deal in comparative terms, 
contrasting conditions in 1937 with those existing today. This can be 
categorized under finance, agriculture, economic development, transporta- 
tion, and health. Whatever may or may not have been achieved lies at 
the door of Somoza. 

In 1937, Nicaragua was harried by a pressing economic crisis, one 
which had prevailed with varying severity for years. Coffee producers 
were being outstripped by their neighbors. National economy rested up- 
on the unpredictableness of international prices. Known mineral deposits 
were totally undeveloped. Taxes oppressed large segments of the popula- 
tion unable to bear the burden. Fiscal deficits plagued the governments. 
Lack of highways prevented the transporting of rural products to the 
larger commercial centers. President Somoza ordered liberalization of 
foreign investment laws. Anxious to alleviate the tax burden, he planned 
to attract foreign capital as a means of meeting government expenditures 
without drawing upon national sources. As the durability of the Somoza 
government became apparent, foreign businessmen were increasingly 
willing to invest. This was curtailed during World War n, but after the 
Axis powers surrendered investment became greater than ever before. 

A scries of kws provided appropriate safeguards for foreign capital, 
probably the most liberal and rigidly enforced in Central America. On 
February 26, 1955, the present kw was enacted by the National Congress, 
reflecting the substance if not the practice of an earlier code. 



NICARAGUA 169 

Article i. Foreign capital may come into and leave the country without 
restrictions, in accordance with the provisions of this law. By foreign capital 
it will be understood . . . capital existing and originating outside Nicaragua, 
belonging to foreigners or to Nicaraguans who have permanently resided 
abroad. . . . 

Article 9. The foreign capital registered will enjoy the following rights: 

a) Total or partial withdrawal ... at any time; 

b) Unrestricted remittance of net earnings from the capital registered; 
this applies also to interest earned where loans are concerned; 

c) Re-exportation or alienation of machinery or physical equipment 
covered by foreign investments, and free remittance of proceeds from their 
sale 

Article 15. Foreign capital enterprises may contract the services of technical 
administrators, accountants, auditors, and other specialized personnel in ac- 
cordance with the laws on the subject. 1 

This bill granted foreign enterprises equal treatment in Nicaraguan courts. 
Labor laws were not to discriminate against foreign capital, and those 
applicable to Nicaraguans would be equally valid for non-nationals. 

No one was more aware of the importance of this legislation than 
Somoza. Long a friend of the United States, he was emphatic in en- 
couraging U. S. business interests. On April 17, 1955, addressing the Na- 
tional Congress concerning the new Foreign Investments Law, he declared 
that "Readjustment of development plans, expansion of the national 
economy, a climate of peace and security, and the high credit standing 
of the country, all these factors have combined to create extremely favora- 
ble conditions for investment of foreign capital. In order to provide sudi 
investments with adequate safeguards, on February 26, 1955, a law was 
enacted which fundamentally provides for foreign capital to come into 
and go out of Nicaragua with no restrictions whatever." 2 

His regime devoted itself equally to the growth of private enterprise. 
There was no expectation that increased foreign investment alone would 
shore up a sagging fiscal structure. The government established the 
National Bank of Nicaragua to propel the drive for additional national 
enterprise and individual investment. Each year additional credits pro- 
moted such activity. By 1954 the figure had climbed to $104,123,143, 
some $37,000,000 higher than 1953. Continued though less marked ad- 
vance was shown in 1955. Roughly 39 percent of the total bank credits 
were issued by the National Bank of Nicaragua; the loans were channeled 
primarily toward agricultural development with industry receiving a 



170 CENTRAL AMERICA 

much smaller sum. In the absence of later figures owing to deplorable 
slowness in compiling such data 1954 shows: 

Farming and agricultural improvement $25,0359607.73 

Industry 3>359>75<M3 

Commerce (imports) 11,194,545.60 

Miscellaneous . 2,541,361.24 

Total 42,131,265.00 

Of the credits distributed to agricultural improvement alone, they were 
spread over: 

Cotton and cereals . ... $159599,076.57 

Coffee 4,524,428.83 

Cattle 2,535,622.63 

Tractors, farming implements . . . 2,376,479.70 

Total 25,035,607.73 

These renewed administrative efforts to further national economy appear 
more impressive when contrasted to figures of but a few years earlier. 
Again, 1954 data is the most recent: 

1950 1954 

Cotton, cereals . . $3,009,716.72 $i5>599>7 6 -57 

Coffee 2,224,033.15 4,524,428.83 

Cattle 1432,806.23 2,535,622.63 

Tractors, farming implements. . . 991,567.41* 2,376,479.70 

Total $7,658,123.51 $25,035,607.73 

* 1951 figures here; 1950 data unavailable. 

From a financial standpoint, this growth of investment, besides aiding 
economic development, helped the government regain its fiscal integrity. 
Taxes, long the most oppressive of the entire isthmus, were cut drastically 
and collected with a minimum of graft and inefficiency. Income tax, 
while low, was firmly established, with foreign tax experts guiding Nica- 
raguan judgment. The sounder the government finances, the more fa- 
vorable the conditions for investment At the same time the government 
was careful to use its financial health to develop trade, increase imports, 
and promote economic progress. 

Imports rose slowly at first, but since 1950 there has been a sharp in- 
crease. Exports have raced forward at even a greater pace, so much so 
that there is an uncorrected inbalance between the two. Imports in 1954 
were 70 percent greater than in 1949. Exports tripled during the same era. 



NICARAGUA 171 

EXPORTS IMPORTS 

*949 $21,300,000 $25,600,000 

I 95 34,642,000 24,701,000 

J 95 Z 46,184,000 29,967,000 

X 95 2 51,332,000 39,79ooo 

*953 54,506,000 43,550,000 

*954 66,200,000 43,560,000 

Of particular note was the new role played by Europe as a buyer of 
Nicaraguan products. Figures showed that the U. S. continued to be 
the largest buyer of Nicaraguan products. However, Europe increased 
its imports almost fourfold. Nicaraguan exports to Europe in 1949 were 
valued at four million dollars. By 1952 they had risen to fifteen million, 
and by 1953 to seventeen million. The United States continued to spend 
from twenty-four to twenty-eight million dollars annually. Thus Nica- 
ragua retained commercial tics with the United States while expanding 
European trade operations. 

At the same time, the budget granted increased economic and capital 
aid in keeping with its policy of economic development. Expenditures 
have been planned each year with scrupulous regard for estimated 
revenue, and the discrepancy remained small. 

YEAR REVENUES EXPENDITURES 

1950-51 $14,111,000 $14,111,000 

^S 1 ^ 2 19,487,000 19,758,000 

z 95 2 -53 26,440,000 25,320,000 

I 953 - 54 30*515*000 30,323,000 

J 954'55 32,068,000 32,066,000 

The figures above show a sharp upward climb during the past five years. 
This has been due in some part to favorable international prices of 
coffee and cotton. In a 1955 message, President Somoza warned the 
citizens that circumstances could change, swinging quickly away from 
the conditions abetting national prosperity: 

The high prices of coffee and cotton on the international market are 
transitory factors in our present boom. But largely we depend on them to 
get the things we must import. To be able to meet a decline in prices on our 
export commodities we must adopt in the economic field a strategic position 
and be prepared for defense should the occasion arise. To avoid inflation and 
the upsetting of our international balance of payments we must adhere to a 
policy of caution. Government expenditures on public works and imports of 
luxury goods should now be carefully watched. 8 



172 CENTRAL AMERICA 

Choosing his 1950 political platform as his sounding board, President 
Somoza announced his intention of adopting long-term government action 
to further economic development. The following years, just as opponents 
were talking of Somoza reneging on his promises, he requested the Inter- 
national Bank to send to Nicaragua a survey mission, as had already been 
done elsewhere. He asked assistance in forming a complete economic 
plan. In response, a mission from the International Bank studied and 
conferred from July, 1951, to May, 1952. During that time the mission 
traveled an estimated ten thousand miles within the country, covering 
principal agricultural and timber regions as well as the few industrial 
installations. Visiting all departments and most towns of a thousand or 
more, the mission spared few pains in its recommendation. 

According to the agreement, the official mission was threefold: "(a) 
to assist the government in the preparation of an over-all, long range 
development program; (b) to advise the government on current economic 
policies as well as improvements in the existing administrative and fi- 
nancial structure to prepare the groundwork for such a development 
program; (c) to coordinate the work of specialized experts from the 
Bank and other international agencies and to assist the government in 
carrying out their recommendations." 4 Nicaragua gave the examining 
experts full cooperation. The minister of economy chaired the National 
Economic Council, which in Nicaragua includes ministers of finance, 
agriculture, public works, and the manager of the National Bank. United 
States Point Four officials were also consulted by the visitors, particularly 
in matters concerning agriculture, education, and public health. The 
personnel of the mission itself represented the different relevant economic 
fields. Experts came from the Federal Reserve Bank of New York for 
public finance, the United Nations Food and Agriculture Organization 
for agriculture, the International Monetary Fund for banking and credit, 
and the Corporaci6n de Fomento de Chile to plan a development institute. 
Nicaraguan officials, from President Somoza down, were hopeful that 
the mission could lend positive assistance in the formulation of a progres- 
sive economic development program and a broad strengthening of the 
national economic base. 

In May, 1952, the mission announced its findings in "The Economic 
Development of Nicaragua" (see note 4), a report outlining existing 
conditions and suggesting specific objectives. Noting that Nicaragua is 
the largest Central American country and possesses unlimited land for 



NICARAGUA 173 

development, the mission concluded that potentialities were great. The 
country was already progressing; that progress was attributable to both 
permanent and temporary causes. 

Underlying economic changes were such non-transitory causes as the 
maintenance of peace and security, credit policies of the National Bank, 
and coordination of government activity. The two decades of Somoza's 
rule had brought unprecedented political stability. External disputes 
with Costa Rica never did more than jar the peace briefly. As for 
the National Bank, we have already seen its increasing contribution to 
private enterprise, particularly in agriculture, as a means of advancing 
national prosperity. The upward trend of Bank credits also proved a 
psychological encouragement to local businessmen to expand activities and 
extend personal commitments. Coordination of government activities 
came about from a series of measures mostly executive declarations 
eliminating duplication of effort and divided responsibility. While this 
mechanical revision is too detailed to describe here, its core was a number 
of high level committees, such as the National Economic Council. 

In recent years the government has relied increasingly on expert 
technical advice from United Nations agencies, including the International 
Bank, and from the U. S. Point Four program. Loans have also been 
negotiated to back projects the government itself could not finance. 
By April 30, 1953, the International Bank for Reconstruction and De- 
velopment had completed several loans, the original principal totalling 
$5,300,000. In June, 1955, the Bank in Washington granted a new loan 
of $7,500,000 for power expansion. The loan was transacted to help 
finance construction of a thirty thousand kilowatt thermal power plant 
in Managua, the second most powerful in Central America.* Trans- 
mission lines are to be laid to outlying communities as well. Also in 1955 
agreement came from the United States to provide two-thirds of the 
money necessary to complete additional construction and repair work on 
the Inter American Highway. 

Prices on the international market were cited as a transitory reason 
for Nicaraguan development. The boom of the 1950'$ in coffee and 
cotton was particularly large, with Nicaragua a grateful recipient of the 
resulting benefits. President Somoza himself warned that the very 
nature of the international market left no room for complacency. "Prices 
and conditions in the international market are likely to change. We 

* Second to that on the Rio Lempa in 1 Salvador. 



174 



CENTRAL AMERICA 



must strengthen basic parts of our economy in order to be prepared for 
any contingency that might arise in the future." 5 He pursued the same 
theme in his annual message to the National Congress in April, 1955, 
and suggested that the emphasis might even be shifted to expanded food 
crops, in order to avoid inflation and "not run the risk of upsetting the 
international balance of payments." Despite this warning, the fact re- 
mained that the temporary condition of cotton and coffee prices was a 
major factor in economic progress. 

"The Economic Development of Nicaragua" outlined ten specific 
objectives. The only fiscal measure was furtherance and development of 
a long-term credit system and technical assistance for industries and 
agriculture. The other recommendations ranged over the entire national 
economy. Objectives were found in the fields of agriculture, transporta- 
tion, communications, illiteracy, public health, industry, and power. The 
government, before tackling specific tasks described in the report, chose to 
establish an all-embracing plan entirely responsible for national advance- 
ment. The result was the Over-All Development Program, a five-year 
pkn covering the 1952-57 period. Created soon after departure of the 
mission, the program provided for financial allocations of support to 
various phases of economic development for five years. 

The Over-All Development Program channeled funds into six different 
categories: agriculture, transportation and communications, education, 
public health, industries, and power. Foreign exchange and local currency 
costs were totalled, and the goals divided into those of first priority and 
others which would be carried out "to attain a niinimum rate of develop- 
ment for the country." 

MINIMUM DEVELOPMENT PROGRAM 

Agriculture 

Institute for Development . 
Ministry of Agriculture 

Transportation, Communications 

Education (added to existing 

expenditure levels) 850,000 

Public Health (added to exist- 
ing expenditure levels) 2,850,000 

Industries 1,310,000 

Power 3,500,000 

Total Minimum Program $31,345,000 $27,955,000 $59,300,000 



LOCAL COST 
$ 6,675,000 
450,000 
I4,6lO,000 


FOREIGN COST 
$10,325,000 
2,550,000 
7,365,000 


TOTAL 
$17,000,000 

3,000,000 
21,975,000 



2,275,000 

3,950,000 
490,000 

1,000,000 



3,125,000 

6,800,000 
1,800,000 
4,500,000 



NICARAGUA 175 

ADDITIONAL OPTIMUM PROGRAM 

FOREIGN COST LOCAL COST TOTAL 

Agriculture $ 1,000,000 $ 6,000,000 7,000,000 

Transportation, Communications 

Feeder roads 750,000 250,000 1,000,000 

Tele-communications 1,265,000 425,000 1,690,000 

Education 250,000 500,000 750,000 

Public Health 2,125,000 2,125,000 4,250,000 

Industries 1,500,000 500,000 2,000,000 

Total Additional Program... .$ 6,890,000 $ 9,800,000 16,690,000 

Agricultural plans included a 25 percent increase in the number of 
coffee trees, in an effort to match the coffee production of rival countries. 
There was no desire to increase the percentage of exports represented by 
coffee, already the major export commodity. Nicaragua was never as 
reliant on one crop as other American countries. Rarely did coffee 
comprise more than 50 percent of the total exports. By 1953 the figure 
was reduced to 39 percent, and it went even lower in 1954 and 1955. At 
the same time, the number of coffee trees was increased. This was re- 
flected in 1954 when the net value of coffee exportations passed the twenty 
million dollar mark for the first time. Two years earlier, coffee exports 
were valued at $18,456,494. Additional impetus came from non-govern- 
ment sources in 1956 when an association of private Nicaraguan coffee 
growers was organized. Meeting in Managua on March 17, 1956, they 
formed the Federation de Beneficiadores del Pacifico de Nicaragua. 
Limited to west coast growers, the organization included leading bene- 
ficiadores from Managua, Masaya, Las Sierras, Le6n, and Jinotepe, as well 
as outlying regions. Created with capital of one million oSrdobas, the 
organization had two goals: reduction of fluctuations of supply and de- 
mand, and elimination of speculators in coffee. 

In interests of agricultural diversification, the report urged further 
development of cotton, a new crop in Nicaragua. Acreage was increasing, 
and given the additional impetus of the development program, it con- 
tinued to flourish. Of the six Central American countries, only Panama 
and Costa Rica have no cotton production to speak of. Nicaragua has 
far surpassed the others. In 1953, one hundred thousand acreas under 
cultivation yielded nearly that many bales. One year later, with cotton 
acreage nearly doubled, over two hundred thousand bales were produced. 
So profitable was this 1954 crop that planting for 1955 was increased by 
25 percent. Despite warnings from experts that cotton was expanding too 



176 CENTRAL AMERICA 

rapidly and carrying an untoward proportion of the economy with it, 
planters hastened to increase their acreage. In a rush to profit on the sure 
money-maker, planters and exporters alike urged further commitment to 
the cotton crop. It soon passed coffee as Nicaragua's leading export. 

Within a period of months, this upsurge was threatened by a slump in 
production. Nearly 360,000 acres had been planted with cotton for the 
1955 crop. Heavy, unseasonal rains damaged the crop severely and, de- 
spite the increased acreage, 1955 cotton production dropped to 175,000 
bales, almost 30,000 less than in 1954. By the end of 1955, planters were 
concerned about probable international price reductions as a result of 
surplus dumping by the United States in mid-fall The Nicaraguan 
government offset this fear in December by the drastic measure of offering 
to buy cotton at 29 a hundredweight and refund the difference be- 
tween that and the eventual export price. However, the price remained 
near $31 a hundred, three dollars less than the 1954 average price. As a 
result, the economic shock was less than originally feared. At the same 
time, the natural reaction was future caution probably a wise thing under 
the circumstances. The New Yor\ Times reported that of the seventeen 
hundred cotton planters in Nicaragua, nearly 20 percent refrained from 
planting any cotton in 1956. 

Obscured by the meteoric climb of cotton and the continued promi- 
nence of coffee, other products have been developing on a smaller scale, 
with expansion and reorganization coining as a result of the development 
program. Nicaragua now exports both rice and corn, two products which 
it once raised only for domestic consumption. Banana and sugar pro- 
duction is small, but adds to the list of exports. Lumber production 
from Nicaragua's rich forests has been planned, with almost no results 
yet. Timber has dropped in recent years, providing only 8 percent of the 
country's exports. Beef cattle have long provided Nicaragua with high 
grade beef, the best in the region. Nine hundred thousand acres of 
land are devoted to livestock grazing, and for some years President 
Somoza was among the cattle owners who profited by running cattle over 
the Costa Rican border without paying the usual imposts. 

On January 8, 1954, the government took additional steps to advance 
agriculture by opening the newly created Nicaraguan Institute of Na- 
tional Production. President Somoza, after making the main address, pre- 
sented the Institute with a government check for five million c6rdobas. 
The government promised a total of fifty million cordobas by 1961, 



NICARAGUA 177 

stretching the payments over an eight-year period. The Institute was 
designed to complement the development program in agricultural matters, 
and its first efforts were directed toward the coffee industry and growing 
industrial production. 

Highways were virtually non-existent in Nicaragua when Somoza 
was inaugurated. Little was done at first to improve the situation. In 
1943 Nicaragua had thirty kilometers of roads, with ten less than two 
miles paved. Recognizing the necessity of roads i markets were to 
receive rural products, Somoza began to encourage an extended highway 
system. Today, only El Salvador has highways rivaling those of 
Nicaragua. In 1955, the government published figures showing 3,693 
kilometers of highways and roads, or about 2,290 miles. Paved high- 
ways, including the Inter American and Pacific-Atlantic connections, 
totalled 673 miles. Four hundred and ninety-eight miles of all-weather 
roads crossed the countryside, and there were 1,110 miles of dry season 
roads, some of which were passable during the eight-month rainy season. 

Following U. S. Vice-President Richard M. Nixon's 1955 trip through 
Central America, the United States agreed to provide two-thirds of the 
remaining funds needed to complete the Inter American Highway all 
the way to Panama City. This agreement included Nicaragua, and the 
U. S. Congress, in due time, provided adequate appropriations. Nicaragua 
and the United States also signed a bilateral agreement by which the 
U. S. would lend an additional three million dollars in 1956 to complete 
the Pacific-Atlantic highway. President Somoza had signed an executive 
agreement with Franklin D. Roosevelt for an ocean-to-ocean highway 
designed for World War II defense purposes. The 162 mile road was 
begun in 1943, but at war's end construction was far from complete, and 
for some years no work was done. What had been built crumbled into 
disrepair. In April, 1955, the Department of State agreed to the three 
million dollar loan to hurry construction of the highway, which would 
be a major advance in the Nicaraguan road net. Later, the U. S. Bureau 
of Public Roads made a contract for the construction of 19.5 kilometers of 
the highway for $1,281,381. The highway, by the end of 1956, was com- 
pleted past Santo Toms, the midway point. The Nello Teer Company 
of Durham, North Carolina, was paid $2,600,000 to continue some thirty- 
seven miles. By the close of 1958, the highway, popularly called the 



178 CENTRAL AMERICA 

Rama Road, was nearing completion. Then the Pacific side of the 
country will be linked for the first time with Rama, the river port.* 

Data emphasize the increase in highway transportation by a compari- 
son of vehicles registered in 1940 and 1954. In 1940 there was a grand 
total of 234 passenger cars and trucks and six tractors in all Nicaragua. 
Fifteen years later there were eight thousand cars and trucks and some 
twenty-five hundred tractors. In the decade from 1943 to 1953, con- 
sumption of gasoline and diesel fuel rose from five million to twenty 
million gallons, a 300 percent increase. Such has been the progress in 
transportation. The accelerated program in recent years reflects in large 
part the report of the International Bank mission. Among specific ob- 
jectives, it urged "completion of a major highway network linking the 
capital city of Managua with the cities of Granada, Le6n, Chinandega, 
Jinotega, San Juan del Sur, the Tuma Valley, and with the east 
coast. . . ." 6 as well as a "complete network of farm-to-market roads.'* 

In addition to road transportation, the report pointed out the in- 
adequacy of port conditions and inland water transportation, suggesting 
"rehabilitation of the major ocean ports and improvement of lake trans- 
portation." Little was done to further lake transportation which had 
been thriving a century before, patronized by those impatient to get to 
the Pacific coast of the United States to pan for gold. The present-day 
transportation on Lakes Managua and Nicaragua, as well as the connec- 
tive Tipitapa River, is almost non-existent. President Somoza has taken 
measures to "rehabilitate" the ocean ports, however. Tiny Corinto, which 
for years had struggled to bear the brunt of Pacific ocean trade, suddenly 
had its facilities expanded. Loading and unloading machinery was re- 
placed, improved, and modernized. Docking facilities were also increased. 

On December 19, 1955, President Somoza initiated construction of a 
new Pacific seaport, immodestly called Puerto Somoza. Designed to 
alleviate the shortage of adequate port facilities, Puerto Somoza is located 
at the Pacific point closest to Managua, where there was almost nothing 
before. Critics are quick to comment that cattlegrower Somoza owned a 
large livestock ranch nearby, and that steamship operator Somoza needed 
a new port to berth his ships. All this is perfectly true. At the same 
time, a new port on the Pacific was urgently needed, and now it is in 

*The navigable Escondido River winds from the Caribbean port of Bluefields up to 
the river town of Rama, at the end of the Rama Road. 



NICARAGUA 179 

construction, already in partial use. Upon completion it will handle three 
ships loading and unloading simultaneously. 

Two years before this Somoza became principal stockholder in the 
Mamenic steamship line. This private merchant marine, now being built 
in German shipyards, numbers fourteen vessels, all of more than one 
hundred thousand tons. Plans call for an increase within a few years. 
In the meantime, Somoza's Tamarindo ranch, connected to Managua by 
a modern paved highway, continues to send its beef elsewhere pending 
completion of Puerto Somoza. A highway extension is also being con- 
structed to provide good roads from Managua and Masaya to Puerto 
Somoza and the Tamarindo ranch. 

The International Bank report also demanded a campaign to deal 
with illiteracy. There was to be a "reduction in the rate of illiteracy 
and a raise in vocational technical education and training." The Nica- 
raguan literacy rate of 40 percent was only third among the Central 
American states, but this was an improvement over the past. Pupils in 
1938 had numbered 41,267. By 1955, they had tripled to 112,303. This 
is particularly surprising in view of the slow over-all population growth. 
Schools have been built at a rate roughly commensurate with the in- 
creasing attendance of children. In the three years preceding 1955, 552 
new schools were built. As for teachers, enrollment in the educational 
courses of the national university increased, although not nearly enough. 
By 1954, the country published the news that it had more teachers than 
soldiers 4,991 to 4,052 a boast neighboring Costa Rica had been flaunting 
for years. 

The school-building program included a national institute for technical 
and vocational training. A number of small vocational schools were 
established under the guiding hand of United States vocational education 
officials lent through Point Four auspices. At the national institute, 
workshops were equipped with modern machinery and tools. Visitors are 
proudly showed through the installation today. Institute officials point 
out dormitories, a gymnasium, and expansive grounds for athletics. 
They also tell visitors of the extension courses at night for students unable 
to attend regular daytime classes. 

Nicaraguan educational facilities still remain wholly inadequate. Edu- 
cation is both free and obligatory from the age of seven to thirteen, but 
large numbers never attend. Despite the new schools, figures are de- 
ceiving, for many of the older ones are sagging, ramshackle buildings 



i8o CENTRAL AMERICA 

scarcely safe to enter. The author saw two such schools in south Nica- 
ragua, near Rivas, on the Inter American Highway. This is a more 
populous pan of Nicaragua. When such schools are of necessity shut 
down, they must be replaced by new ones. Thus the government con- 
tinues, under the pressure of time and conflicting financial needs, to 
struggle against ignorance and illiteracy. 

Public health is another crucial problem. The International Bank mis- 
sion suggested both expanded hospital and health facilities, and "establish- 
ment of pure water and sanitation facilities in the main towns and many 
of the smaller communities.'* Outpatient clinics, mobile sections, and 
laboratories have been set up under the Ministry of Health to care for 
more than a thousand patients daily. Throughout the country, twenty- 
five health centers have been built to service scattered areas. The 1950-51 
budget provided $412,000 for health facilities; in 1954-55 this had risen 
to $1,153,000. 

Hospitals have been built at a growing rate. In the ten years from 
1943 to 1953, the number grew from sixteen to thirty-seven. All but two 
of the sixteen Nicaraguan departments are serviced by at least one 
hospital. In the capital city, a modern hospital is being erected, the 
largest in Nicaragua. Reaching completion in 1958, its electrical, laundry, 
sterilizing, water, and sewage installations are the best in the country. 
In addition, the General Hospital of Managua continues to service the 
capital and has been reconditioned and expanded to one hundred beds 
at an expenditure of more than one million dollars. 

For Nicaragua, then, the years under President Somoza brought a 
number of notable internal improvements: healthy finance, trade, and 
agriculture; improved transportation, health, and education; in short, 
a general development incomparably superior to conditions before 1937. 
Gross national products grew from $170,000,000 in 1951 to $310,000,000 in 
1956. At the same time, many inadequacies remain. The economy is 
still over-reliant on international prices. Highway construction must go 
forward at a more rapid pace, reaching isolated interior regions. Educa- 
tion should raise the literacy rate to twice the present 40 percent. And 
health facilities are much inferior to those, for example, of Costa Rica 
and El Salvador. 

In evaluating these Somoza measures, it must be remembered that 
many of these advances were very slow in coining. President Somoza 
made a belated start in highway construction, agricultural development, 



NICARAGUA 181 

and public health. A check of the preceding data reveals that the greatest 
progress has come in the 1950*5. Yet Somoza was elected more than a 
dozen years before. The record, then, is deceptive. In many instances the 
administration was clearly lax in developing necessary projects, ignoring 
situations as long as possible. Even so, Nicaragua progressed under 
Somoza's rule, and in this context his works are considerable. What will 
come in the period following his death is another question. 

SOMOZA AND THE WORLD AROUND HIM 

Nicaraguan external relations are much better known than internal 
problems. Intermittent disputes have made hemispheric headlines. 
Somoza always maintained a keen interest in world events, while in the 
Central American sphere he had been dominant for years. Probably no 
other figure was in the forefront of regional relations so often as Somoza, 
and his unusually long period in office, just recently ended, is but one 
reason. For the sake of convenience, Nicaraguan foreign policy can be 
divided into two classifications: Central American politics and U. S. 
relations. 

Relations with neighboring Costa Rica have been particularly acri- 
monious for the past decade, and may continue so despite the death of 
Somoza. Much of the turbulence is direcdy attributable to the deep 
personal enmity of Somoza and Costa Rica's Jose Figueres. In the be- 
ginning, Somoza prompted the friction by illegal activities at the Nica- 
ragua-Costa Rica frontier. Long the leading businessman of his country, 
Somoza had been active in the cattle business ever since taking power. 
During the early years of his presidency he arranged the illegal transporta- 
tion of Nicaraguan cattle into Costa Rica. Herds were driven across the 
border into Guanacaste, the northern Costa Rican province, where the 
high-quality beef commanded a handsome price. Costa Rican beef, in- 
ferior to that of Nicaragua, could not rival the competition. 

Rafael Calderon was elected to the Costa Rican presidency in 1940, 
and he struck up a friendship with Somoza. As the friendship matured, 
the presidents decided to do a little business on the side. Calderon agreed 
to receive Somoza's smuggled cattle and sell it for their mutual profit. 
Documentary evidence of this arrangement has never come to light, but 
it is a widely known fact that no one disputes. Costa Rican opposition 
to President Calder6n seized upon the issue, subjecting the government 
to continual criticism. These men cogently argued that the ailing Costa 



182 CENTRAL AMERICA 

Rican cattle business had no chance while foreign beef of a higher quality 
entered the country illegally. Among the leaders of this opposition, who 
called their group the Civic Betterment Committee, was Jose Figueres. 

In 1944, unable to succeed himself, Calderon named the unreliable 
Teodoro Picado as official candidate, backing his successful campaign. 
With Picado in office, Somoza and Calderon continued their profitable 
enterprise. They hoped to continue following a Calderon re-election in 
1948. However, opposition had built up to the eight-year rule of Calderon 
and Picado, and newspaperman Otilio Ulate defeated Calderon by a 
ten thousand vote margin. After a week of political machinations the 
Picado government succeeded in annulling the election results, but at 
this point a pre-armed band of revolutionaries led by Jos Figueres re- 
belled to the south of the Costa Rican capital. On March 12, 1948, Costa 
Rica was thrown into a state of civil war. 

The story of the revolution is complicated, and is detailed in Chapter 
Six. From the Nicaraguan standpoint, however, it was an illegal uprising 
against the government by a group of dissident young people led by an 
intense, doctrinaire left-winger (Figueres) who could be expected to turn 
his country upside-down with socialist reforms if given half a chance. 
For Somoza, both personal friendship and profitable business were 
threatened. He was quick to aid the beleaguered government forces. 
The exact extent of this help has never been made clear. Somoza was 
always careful of involvements outside Nicaragua. He was prepared to 
withdraw from any adventure if it seemed advisable. Certainly his as- 
sistance in this case was limited to small arms and ammunition. 

Jose Figueres and others in Costa Rica insist to this day that a large 
force of the Nicaraguan National Guard marched across the border to 
fight alongside government forces. The story goes that two hundred 
guardsmen were somehow ambushed by revolutionaries in Guanacaste 
and annihilated. Somoza immediately withdrew other forces rather than 
risk everything on intervention. To Costa Ricans, even enemies of Presi- 
dent Figueres, this is a familiar story, and they speak of it proudly. None- 
theless, there is no evidence that such a massacre did take place. Several 
prominent political figures have told the writer that they honestly do not 
know whether or not the story has any foundation in fact. 

President Somoza admitted having sent aid to Calder6n forces. As 
he put it, the legitimate government was faced with a challenge from 
insurgents, and in the interests of legitimacy and regional peace he felt 



NICARAGUA 183 

obliged to contribute support. Just what proportions this aid took, he 
never said. Somoza did state flatly that he sent several planeloads of 
National Guard troops about four hundred to Villa Quesada in north- 
ern Costa Rica. In Somoza's version, he received a personal message 
from U. S. Secretary of State George C. Marshall, at the rime heading the 
United States delegation to the Inter-American Conference at Bogota. 
Marshall cabled Somoza to withdraw his troops in the interests of peace. 
President Somoza then recounted with pride the speed with which his 
planeloads of men swept back to Nicaraguan soil. 

Elements of this story seem unlikely. In the spring of 1948 General 
Marshall was hardpressed by a multitude of problems, including the 
Berlin blockade and other cold war issues. He was barely able to leave 
Washington long enough to lead the U. S. delegation in Bogota. That he 
could learn of a few hundred Nicaraguan troops in a tiny village in north- 
ern Costa Rica a few hours after their arrival seems dubious. One can 
speculate that Somoza actually did lose a body of troops in Costa Rica 
and quickly withdrew the rest, concocting the story of a telegram from 
Marshall. On the other hand, there may be no connection. Most of the 
actual fighting in Costa Rica was south of San Jose, far from Guanacaste 
or the village of Villeda Quesada. Be this as it may, there is no question 
that Somoza supported Calderon forces both morally and financially. 
He had no qualms about Nicaraguan participation in the Costa Rican 
civil war. This was but the first of a series of Nicaraguan interventions 
in the affairs of Costa Rica. 

Early in December, 1948, while the Costa Rican revolutionary govern- 
ment was trying to get squared away, a counter-movement by Calderon 
was launched from Nicaraguan territory. In Managua he told the press, 
"the revolution was illegitimate and ill-conceived . . . my aim is to restore 
the state of things destroyed by a group of insensate men led by Jose 
Figueres, a legal and spiritual adventurer." 7 Following this statement, 
he left Managua for the border where he awaited word to proceed to 
Liberia, forty miles from the border. In Costa Rica the country quickly 
re-mobilized Figueres' army of liberation, and Figueres announced that 
participation of the Nicaraguan National Guard would mean a "real war" 
with Nicaragua. From Managua came immediate denials of complicity. 
Costa Rica was placed under martial law and press censorship as the gov- 
ernment announced an all out effort to repulse the invaders. Archbishop 



184 CENTRAL AMERICA 

Sanabria, who had been instrumental in arranging a truce during the first 
revolution, also condemned the invasion. 

Early reports were typically contradictory. Estimates of invading 
forces ranged from eight hundred to five thousand. Within a day the 
number was placed at three hundred. Fighting was sporadic and battle 
communiques referred to casualties by name rather than number. Two 
days after the invasion, the forces met at La Cruz, a few kilometers south 
of the frontier. Thirty-eight rebels surrendered, including their leader. 
This man, Ordones, admitted receiving arms from Luis Somoza, son of 
the President and himself president of the Nicaraguan Congress. Two 
days later he was questioned further when Figueres and Otilio Ulate went 
to the front. Ordones reportedly declared that Somoza had promised 
the revolutionaries full support. Once again Somoza issued a denial. 

It was soon apparent that rebel forces were making little progress. 
They had hoped that calderonista elements in San Jose might rise there, 
but these hopes never materialized. As soon as the invasion began, 
Costa Rica had appealed to the Organization of American States. Ac- 
cusing Nicaragua of overt interference, it demanded action under the Rio 
Pact (Inter-American Treaty of Reciprocal Assistance) which had become 
law but nine days before. Article 3 of the Pact declares that "The High 
Contracting Parties agree than an armed attack by any State against 
an American State shall be considered as an attack against all the 
American States . . . and . . . each . . . undertakes to assist in 
meeting the attack in the exercise of the inherent right of individual or 

collective self-defense " After referring to these passages, Costa Rica 

invoked Article 6, which reads, "If the inviolability or the integrity of the 
territory or the sovereignty or political independence of any American 
State should be affected by an aggression which is not an armed attack or 
by an extra-continental or intra-continental conflict . . . the Organ of 
Consultation shall meet immediately in order to agree on the measures 
which must be taken ... to assist the victim . . . [and] for the common 
defense and for the maintenance of the peace and security of the Con- 
tinent." 8 

The Organization ruled that the Costa Rican request was legitimate 
and called for an emergency meeting of the foreign ministers. At tie same 
time a board of inquiry was sent to the area, headed by Dr. Bautista de 
Lavalle of Peru. The five-man commission went first to San Jos6 and then 
to Managua. Arriving on December 14, it was momentarily disrupted 



NICARAGUA 185 

when Dr. de Lavallc suddenly withdrew from the commission on orders 
of his government.* Mexico's Luis Quintanilla was named acting chief of 
the commission. After two days in conference with Costa Rican officials 
in the Casa Amarilla, they continued to Managua on December 20, and 
two days kter returned to Washington. At the airport they issued a short 
statement praising the cooperation of the two governments. 

One day before Christmas, the OAS met to consider the commission 
report, passing a resolution calling upon Nicaragua and Costa Rica to 
refrain from hostile actions. Nicaragua was asked to keep a close rein 
on revolutionary groups forming in its territory. Costa Rica was re- 
quested to remove lingering elements of the Caribbean Legion, the latter 
dedicated to the overthrow of authoritarian regimes in Nicaragua, the 
Dominican Republic, and Honduras. Both nations were to observe the 
principles of non-intervention and solidarity, with the commission con- 
tinuing consultation until assured of this by both governments. The 
report revealed beyond doubt that the invasion was prepared in Nicaragua. 
There was no clear evidence of official connivance, however, and after 
the first day of fighting, Nicaragua was reported to have taken all es- 
sential steps to keep the rebels from getting further supplies or aid from 
Nicaragua. Another five-man commission was assigned the job of ob- 
serving the compliance with the request for the cessation of hostilities. 

As a result of OAS action, Nicaragua and Costa Rica agreed in Feb- 
ruary to reach a peaceful settlement of their dispute. On Feb- 
ruary 21, 1949, Foreign Ministers Sevilla of Nicaragua and Esquivel of 
Costa Rica signed an amity pact. With this, the first phase of Nicaraguan- 
Costa Rican disagreement was effectively closed. Subsequent episodes 
were to dwarf the first in gravity. In Costa Rica, president-elect Otilio 
Ulate took office in late 1949 after an eighteen-month provisional govern- 
ment under Jose Figueres; relations immediately improved. Ulate had 
been highly critical of President Somoza in his newspaper, but during his 
administration was most circumspect in his relations with the Nicaraguan 
executive. In November, 1953, Jose Figueres was returned to office for 
a full term and, in a matter of months, he and Somoza were embroiled 
once more in vituperative exchange. Central America, already upset 
over the tottering Red regime in Guatemala, held its breath in hope that 

* Costa Rica had not extended diplomatic recognition to the month-old revolutionary 
Peruvian government of General Manuel Odria, and so in pique Dr. de Lavallc was with- 
drawn. 



i86 CENTRAL AMERICA 

Somoza and Figuercs would maintain proper relations. In April, how- 
ever, the storm broke. 

On April 5, 1954, the Nicaraguan government announced the discovery 
of a plot to assassinate Somoza. The President announced that the revolu- 
tionaries came from Costa Rica. The border was immediately closed and 
a state of seige decreed in Nicaragua. In the government paper, 
Novedades, Somoza announced that three were already dead from a 
fusillade of shots following the attack. 

The attempt directed against my life was perfectly planned, and the assassins 
had chosen the place [for the attack] shortly after I left the United States 
Embassy Saturday night where I attended a reception by the Ambassador 
[Thomas E. Whekn] for [Brigadier] General [Lesley J.] Whitlock. Never- 
theless, their plan failed, for I had taken the precaution of sending a patrol 
out of the Embassy a few minutes before my departure. On seeing the 
patrol, they fell apart and some fled for Batahola while the rest of the group 
ran in the opposite direction. . . . We are investigating all details relating 
to this criminal attempt, and the Nicaraguan people must be convinced that 
the army and the powers of the state are alert, assuring the peace and the 
tranquility of the republic and its national institutions. 9 

The next day the Nicaraguan minister of foreign relations told news- 
men that the Caribbean Legion was believed responsible. The assassins 
reportedly included Adolfo Baez Bone, Jorge Rivas Montes, and Amado 
Baena, all known members of the Legion. The Nicaraguan ambassador 
in San Jose delivered to the foreign minister a request for compliance with 
the 1949 amity treaty. The next day foreign newsmen in Managua saw 
a large number of troops ringed around the Presidential Palace. Somoza 
reported that 

I am a spectator of what is to come. I am watching for the attitude that 
the Costa Rican government is going to take. I hope that it will proceed 
as it should and with the speed that is vital. . . . When things get so bad 
that an attempt is made on the life of the President of the Republic, things 
have gone far indeed, especially when friendly nations are involved. . . . The 
plot that has threatened the peace of Nicaragua and the lives of its inhabitants 
is supported by Carlos Prio Socorras,* Romulo Betancourt,f and another 
Central American government. ... If the criminal attack had succeeded, 
Nicaragua would have served as a base of operations against Cuba, Venezuela, 
and the Dominican Republic. 10 

* Exiled Cuban ex-president. 

t Exiled Venezuelan ex-president, and confidante and mentor of Figueres. 



NICARAGUA 187 

The following day, April 8, Nicaraguan Foreign Minister Oscar 
Sevilla spoke in a more conciliatory vein, declaring that Nicaragua would 
not take the case to the OAS. At the same time, President Somoza agreed 
that "the good people of Costa Rica are not in accord with bloodshed." 
Nonetheless, the Costa Rican consulate in Managua was shut, and a num- 
ber of Costa Ricans in the country were imprisoned or put under 
temporary arrest. In San Jose, Romulo Betancourt categorically denied 
Somoza J s charges of complicity. 

The National Guard continued to pursue the assassins. The apparent 
chief of the plot, Pablo Leal, had been killed in the first clash between 
conspirators and government forces. Adolfo Baez Bone was also dead. 
Continuing the search, National Guardsmen pointed suspicion at Nica- 
raguan General and ex-President Emiliano Chamorro, a senator and aging 
critic of the Somoza regime. Somoza announced that the Guard had 
uncovered documents implicating Chamorro, and that Costa Ricans were 
also involved. It promised publication of the documents within a few 
days. On April 10, the government accused the owner of Managua's 
anti-Somoza La Flccha, Hernan Robleto. His whereabouts were un- 
known, although the newspaper continued to publish daily editions. On 
April 12, interviewed by NBC's Marshall Bannell and a Time cor- 
respondent, Somoza said that Jose Figueres had clearly been informed of 
the plot beforehand and did nothing to stop it. He gave full authoriza- 
tion to be quoted directly. At the same time he added that some of the 
revolutionaries' captured arms were labelled "Government of Costa Rica," 
and Managua newspapers ran photographs of the weapons. 

The reaction in Costa Rica was unhurried. From President Figueres 
down, government officials disclaimed any complicity in the attempt. 
After several days, Foreign Minister Mario Esquivcl asked Nicaragua for 
an explanation of the grave charges made by Somoza. He demanded 
withdrawal of Nicaraguan troops from the border, requesting that the 
frontier be re-opened. Esquivel told newsmen that Costa Rica would go 
to the OAS again if given no satisfaction. Nicaragua did not answer at 
once. The next day Pan American Day, ironically enough Ambassador 
to the U. S. Guillermo Sevilla (brother of the foreign minister) told the 
press in Washington that his government had most of the arms used by 
the would-be assassins, and that they were clearly Costa Rican. At the 
same time his government had full documentation of any and all charges 
made by President Somoza. Also in Washington, Alberto Marten and 



i88 CENTRAL AMERICA 

Fernando Volio Sanchez, Costa Rican delegates to the OAS, denied all 
accusations. 

Finally, Costa Rica agreed to negotiate directly on April 21. The OAS 
would not be called, except to arrange bilateral talks. Costa Rica's Volio 
Sanchez announced in Washington that Nicaraguan demands for face-to- 
face negotiations were satisfactory. Managuan newspapers immediately 
claimed a diplomatic victory. At the same time, Volio Sanchez had 
several points to clarify. In the first place, Nicaragua had lowered border 
restrictions affecting Costa Rican citizens. Furthermore, troops sur- 
rounded the consulate in Managua and refused to grant safe conduct to 
refugees claiming diplomatic asylum there. Nicaragua refused to bring 
the OAS into the affair directly, and a number of troops were stationed at 
the frontier to enforce its closure. 

By this time, all Central America was in an uproar. The Somoza- 
Figueres feud was already well known, and there had been apprehension 
ever since Figueres returned to office in late 1953. General feeling was 
that Somoza had indeed been unduly provoked. At the same time, it 
was hoped that he might wield his considerable power as a stabilizing 
influence, rather than picking more trouble with Costa Rica. An editorial 
in San Salvador's Diana Latino asked Somoza to step down for the sake 
of avoiding all-out war. It felt he was the spark that might start a fire 
carrying to all other Central American countries. Admitting that the 
assassination attempt was unjustified, Diario Latino insisted that "in a 
gesture of true Central Americanism, Somoza should abandon power." 
On April 22, ex-President of Costa Rica, Otilio Ulate, traveling through 
El Salvador, called the crisis the gravest in regional history. He saw the 
immediate objective to be a lessening of general tension and asked that 
regional peace be restored. 

Despite attempts to arrange bilateral negotiations, efforts seemed 
stymied. Mario Esquivel told newsmen on April 24 that the situation 
remained grave: <r We have called a group of prominent Costa Ricans, 
learned in foreign affairs, to consider the situation . . . and [to elicit] theiir 
opinion and advice on the most certain solution of the dispute with 
Nicaragua." 11 This group included ex-President Julio Acosta, ex-Foreign 
Minister Fernando Lara, future cabinet minister Alberto Cafias, and 
Raul Gurdian. President Figueres delivered a speech declaring his confi- 
dence that normal relations would be re-established. In Nicaragua, re- 
criminations still reverberated, and there was little inclination to lessen 



NICARAGUA 189 

the tension. Novedades published a story that accused Figueres of direct 
aid to the revolutionaries, a charge not levelled before. In short, Somoza 
was outraged over the plot, and in no humor to forget it. He told one 
interviewer angrily that "Hell, it's no crime to overthrow a government 
in a fair fight, but murder is something else." 12 

After a period of inactivity, Anastasio Somoza, Jr., chief of staff of the 
National Guard, stirred up the dust with another blast at Figueres: 
"There is an individual in the south who lives envious of the peace, 
liberty, work, and progress of Nicaragua: Jose Figueres. ... I can say it 
openly. . . . The people who came here were not going to fight a 
battle; they only brought enough munitions to liquidate General Somoza. 
But we will maintain the peace. . . ," 18 The next day, May 6, 1954, 
President Somoza broke several days of silence in another interview. He 
announced that weapons were found on Nicaragua's Pacific coast, in- 
cluding small arms, rifles, grenades, machine-guns, and ammunition. 
If these were communist-delivered arms, he warned ominously, Nicaragua 
would soon become another Korea, and would be for the free world 
equally important. 

Inside Nicaragua, the pursuit still continued to apprehend all the 
conspirators. The government had captured and quickly brought to trial 
Jorge Ribas, supposedly the chief of operations for the revolutionary 
Caribbean Legion. Ribas, a Honduran citizen and career adventurer who 
had a wife in San Jose, smilingly admitted to the assassination of Colonel 
Francisco Arana some years before (see Chapter Two). During his trial, 
he admitted talking in Mexico with Cuba's Prio Socon4s, but he refused 
to testify against Figueres. On the other hand, he issued no denials when 
asked about Figueres' involvement. 

On the diplomatic front, Nicaragua belatedly replied to Costa Rica's 
demand for explanation of its charges against Figueres. On May 14, 
Oscar Sevilla sent a forty-three-page document, with appendices, including 
the trial testimony of Ribas and other assorted bits of information. 
Photostats of relevant documents were presented. Supposedly, all three 
Somozas the President and his two sons, Luis and Anastasio were to be 
killed followed by widespread anarchy, chaos and terror. In San Jose, 
Nicaraguan Ambassador Guerrero delivered the official document along 
with a private note from Sevilla. After delivery of the note, several more 
weeks passed without action. Costa Rica, after acknowledging receipt 
of the document and promising to study it, bad nothing more to say, 



190 CENTRAL AMERICA 

On June 4, the Nicaraguan embassy was forced to deny a story in San 
Jose's Prensa Libre that relations were about to be severed formally. "The 
Government of Nicaragua has not even considered the possibility of such 
a withdrawal, but does hope at a prudent time for the reply of the Costa 
Rican government. . . ."" Two days later Ambassador Guerrero cor- 
rected himself to admit that he was prepared to go home at any moment, 
while the Miami Herald repeated the story. The Herald's Edwin Lahey 
reported that President Somoza considered Costa Rica, like Guatemala, a 
"nest of communist conspirators," and anticipated breaking diplomatic 
connections shortly. Finally, on June 10, 1954, sixty-six days after the 
attempt on Somoza's life, Nicaragua announced the withdrawal of its 
ambassador from Costa Rica. 

The action was still incomplete. Before Guerrero could leave San 
Jose, El Salvador requested Somoza to reverse his decision, to give Costa 
Rica one last chance to reply. Costa Rica had reportedly been surprised 
by Nicaraguan action and asked El Salvador to delay the action if possible. 
Nicaragua announced that relations would be maintained until June 27. 
If no satisfaction had come by then, Guerrero would be recalled once 
again. A day before the deadline, Sub-director of Protocol Arnaldo 
Ortez flew to Managua with a voluminous reply to the Nicaraguan de- 
mands. Oscar Sevilla said only that the note would be studied before 
Nicaragua made any further statement. 

Days passed and June turned to July. Nicaragua was reportedly pre- 
paring another diplomatic paper, but details were unknown. President 
Somoza mentioned offhand one day that he would be willing to meet 
Figuercs at the border if it might contribute to a return of normal rela- 
tions. Figueres quickly fired back that Somoza "wants to meet me at the 
border to have a picture taken with me to show to his people." Actually, 
as Edwin Lahey wrote later, President Somoza had in mind a meeting 
with .45$. As their reply was further delayed, it became known that 
Nicaragua considered the Costa Rican communication wholly inadequate 
and was once again considering the recall of its ambassador. On July 16, 
now more than three months after the attempt that triggered the whole 
dispute, Novedades wrote that the events had inflamed Nicaraguans and 
that war was surely near. President Somoza was quoted to the effect 
that Figueres had no respect for Nicaraguans and was ambitious to get 
up a puppet government. He claimed that two hundred armed Costa 
Ricans had arrived at the border, shouting across to Nicaraguan guards 



NICARAGUA iyi 

that they would soon be eating in the Nicaraguan Presidential Palace. 
Not to be outdone, Jose Figueres told the Associated Press that he feared 
imminent invasion. Airports were watched, and in San Jose all lights 
were extinguished from 2:00 to 5 :oo A.M. for nearly a week. 

Actual fighting broke out on July 25 when a band of calderonistas, 
apparently hoping to help finance a new, Guatemala-type revolution, 
swarmed into the small town of Sarapiqui and robbed a bank. Nearby 
Costa Rican forces rushed to the scene and the following day surrounded 
and captured most of the rebels. The rest headed toward the San Juan 
River and safety in Nicaragua. In the process, a Nicaraguan air force 
plane was fired upon and damaged. Nicaragua promptly sent two more 
notes of protest to San Jose. Foreign Minister Sevilla said that "if President 
Figueres wants war, he will have it. The patience of our government is 
not unlimited." Costa Rica denied the charges, but there was no question 
about their having fired upon the Nicaraguan craft. Its port engine 
electrical control was damaged by rifle shots, although it managed to limp 
back to a Nicaraguan airfield. Whether or not the plane had been 
covering for the retreating calderonista rebels is a moot point. President 
Somoza angrily dispatched a mile-long convoy of tanks and troop-carry- 
ing vehicles to the border "to defend Nicaragua's territory." After re- 
viewing the armored units at the Presidential Palace, he rode at the head 
of the column to the Managua outskirts before sending them to the border. 
With troops thus stationed at the border, it seemed that events were a 
clear prelude to war. 

The United States, a vexed spectator through this series of events, 
rushed six air force planes to Costa Rica on the first of August. The 
planes, 0-47 transports, carried neither passengers nor freight, and stopped 
at San Jose's La Sabana airport for only three days. The gesture was 
quickly understood, however. It was an obvious warning to Somoza and 
dissident Costa Ricans against precipitating more fighting. The planes 
not only provided reassurance to Costa Rica, but suggested to all Central 
America that one serious revolution that in Guatemala two months 
before was quite enough for the time. Nicaraguan forces were soon 
withdrawn from the border and the crisis passed. As Time wrote, 
"Nicaragua's Tacho is the kind of man who understands such gestures." 15 

With the retirement of Nicaraguan troops from the border, the second 
dispute was ended. Unlike the first, Costa Rica was far from blameless. 
The attempted assassination of General Somoza, which quite rightfully 



I 9 2 CENTRAL AMERICA 

enraged him, was clearly engineered from Costa Rica. Elements of the 
Caribbean Legion* had been quartered in a nineteenth-century fortress 
overlooking east San Jose, and some of these men, many of whom were 
Somoza-hating Nicaraguan exiles, had lived, eaten, slept, and trained at 
President Figucres' plantation, Lucha Sin Fin. It was learned later that 
a Mexican bus had been driven across the border into Costa Rica with a 
cargo of arms hidden under a false bottom. Some twenty-five rebels 
took the arms and sneaked into Nicaragua, traveling north on Lake 
Nicaragua and up the Tipitapa River to Lake Managua, where they were 
to meet 175 others. They took weapons to arm these other men. 

For some reason these men never showed up, and the twenty-five rebels 
immediately panicked. A few fled at once. The others hesitantly pro- 
ceeded with their plans. Since they had obtained President Somoza's 
personal schedule of trips and appearances for a period of two weeks, 
they had a good chance of success. And, as one Nicaraguan later related 
to the author, "they came damned near getting the old man." By failing, 
however, they signed their own death warrants, and the National Guard 
rounded up eighteen, lined them against a wall, and summarily executed 
them without trial. 

It is remotely possible that President Figuercs did not know of the 
attempt personally, although this is quite unlikely. There is no question 
that members of his government and many high-ranking figueristas were 
well aware of the plot. Members of the Caribbean Legion themselves 
boasted in San Jose cantinas of plans to kill Somoza. Even today, there 
are figueristas who refuse to deny previous knowledge of the attempt on 
Somoza's life. When asked about it, they smile meaningfully and, after 
appropriate hesitation, change the subject. Perhaps Jos Figueres himself 
did not know of the plot. Certainly members of his government did. 

In Nicaragua, Anastasio Somoza sincerely believed, until the day he 
died, that Figueres was behind the conspiracy, and that others would fol- 
low unless Calder6n was returned to power in Costa Rica. Since the 
attack on him was so treacherous, Somoza felt no qualms about using all 
means at his disposal to topple the Figueres regime. And this idea was 
behind all his actions in the frenetic summer of 1954. Certainly his actions 
cannot be condoned. He clearly meddled in the affairs of a neighboring 
state in hopes of overthrowing its legally elected government. At the 
same time, the conspiracy against him was powerful provocation, and his 

* Pctails of the Legion and Figucres' relation to it will be found in Chapter Six, 



NICARAGUA 193 

actions are understandable. Even in Latin America there are certain 
ethical norms of conduct. Assassination is not one of them. 

The next outburst culminated in the January, 1935, invasion of Costa 
Rica. Agitation had begun the previous November, however, and fires of 
resentment were smouldering. In mid-November President Somoza 
negotiated a deal for twenty-five North American F-5i Mustangs from 
Sweden. The prop-driven Mustangs were among the best warplanes of 
World War II, and by this purchase Tacho quickly obtained the most 
dangerous air force in Central America. On November 27, President 
Figueres announced that Costa Rica faced a grave situation in the coming 
days. A rebel force of Calderon's was preparing to invade Costa Rica. 
Two hundred and fifty soldiers were already at the border, poised for the 
attack. In New York City, Figueres' confidante and ambassador-at-large, 
Daniel Oduber, admitted that the identity of the rebels was undetermined. 
He insisted that they must be supporters of Calder6n. Nicaragua's am- 
bassador in Washington, Guillermo Sevilla, said Figueres showed alarm- 
ing nervousness and lack of serenity. Professing friendship between the 
two countries, he observed that tensions had been reduced during die 
administration of Otilio Ulate. However, "it is serious that Senor 
Figueres now discovers phantom invasions so easily and has not been able 
to discover the invasion that Caribbean Legionnaires in Costa Rica 
launched against Nicaragua at the beginning of this year with the aid of 
his government, developing a sinister plan to assassinate President Somoza 
and start a civil war in Nicaragua. . . ," 16 

Anxious to avoid war, the United States once more took measures 
designed to pacify the belligerents. The Air Force sent six jet fighters 
to the Panama Canal Zone. The obvious idea was to discourage private 
adventurers willing to fly one of Somoza's new planes in support of in- 
vading calderonistas. It was learned that planes would be sent to strafe 
and bomb San Jose. Agitators in the capital would arouse the crowds, in- 
citing a march on the residence of President Figueres and forcing his 
resignation. As long as planes could be kept from the air, invaders would 
have less chance of success. Danger was momentarily allayed and, in the 
first week of December, Figueres announced laconically that "no invasion 
is expected this weekend.'* 

Hie bitterness between Somoza and Figueres soon broke out again* 
On January 9, 1955, Costa Rica appealed to the Organization of American 



I 94 CENTRAL AMERICA 

States that an American government had sent "a fleet of 10 military 
transport planes, fully manned, into Nicaragua . . . [suggesting] that the 
hour for launching an attack has arrived." 17 Unofficially, they claimed 
that Venezuelan planes had been dispatched to Managua. The OAS 
Council was called into extraordinary session at 10:30 A.M., Sunday morn- 
ing, to hear Costa Rican representatives Fernando Fournicr and Antonio 
Facio present the case. They charged that an "army of adventurers" 
was about to launch an attack; Nicaragua was termed a "flagrant and 
repeated disturber of the peace." Guillermo Sevilla rushed back from 
Mexico City where his brother Alberto was seriously ill. The Council, 
after a three-hour debate, ruled that there was no immediate action re- 
quired. They proposed postponement of action until a second emergency 
session the following Wednesday. This would give the twenty-one 
member nations time to consult their governments. 

A few hours after Costa Rica called upon the OAS for help, a band 
of Costa Rican exiles flew into the airport at Villa Quesada and took pos- 
session of the small town. Simultaneously, several hundred others crossed 
the border to the north, while a third group came in small boats from 
the Nicaraguan Pacific shores. Communications at Villa Quesada were 
immediately cut, and only after receiving a telegram from the mayor of 
neighboring Zarcero did the Costa Rican government learn that the town 
was in rebel hands. President Figueres announced that "I consider this a 
Nicaraguan act of aggression." He gave as his interpretation the thought 
that "Somoza had released the mercenaries in his country and sent them 
into action earlier than planned." He added that the invasion was in- 
itiated from Nicaragua and, while rebel trucks were of Costa Rican origin, 
the planes and troops themselves had come from Nicaragua. Somoza's 
claims that the affair was purely internal were efforts "to fool the Organi- 
zation of American States by spreading propaganda." 

Reaction in Managua was quick and typical. Somoza said that 
Figueres' accusation of Nicaraguan and Venezuelan complicity against 
the government was "the worst thing I've ever heard. Nobody ever called 
me what that rnan called me. The least was that I had a family of 
gangsters." Figueres, moreover, was "a damn liar." He refused to 
issue an official reply. "Why should I?" he asked, "1 wouldn't go that 
low." His suggestion which met with snide amusement outside Central 
America was a sincere request that Figueres meet him at the border with 
revolver in hand! "If he has so much personal hate for me, let's put it 



NICARAGUA 195 

on a man-to-man basis. There is no reason for bloodshed between our 
two countries. If he hates me, as was evident when he tried to assassinate 
me, then why not settle it this way?" 18 Informed of the challenge, 
Figueres contributed to the exchange of theatrics by replying, * k he's crazier 
than a goat in the midsummer sun." 19 Perhaps Somoza^ a crack pistol 
shot, was not crazy. He often took pleasure galloping along on a horse 
shooting lizards on one of his ranches. 

The fighting was chaotic, erratically reported, but real. Costa Rica 
rushed forces north at once, and the enemy was engaged at different 
points. The rebels sustained losses at several points, but instead of folding 
up, merely withdrew, regrouped, and returned to the attack elsewhere. 
For several days it seemed possible that insurgents might press forward 
toward the capital, although government forces were generally holding 
their own. The rebels had the advantage of air superiority. The day after 
the invasion began, as an added fillip, they even strafed San Jose from a 
twin-engined fighter, succeeding only in arousing the josefinos and 
chipping several sidewalks. The loyalist "air force" consisted of a com- 
mercial DC-3 transport with machine guns mounted at the open cargo 
door. 

In the meantime, the Organization of American States once more pre- 
pared for action. On Wednesday, January 2, the Council of the OAS 
named a five-man commission to investigate the invasion, including the 
ablest of the OAS delegates. Two days later, while the commission was 
investigating conditions in Costa Rica and interviewing officials in San 
Jose, the Council adopted a resolution condemning the attack of "foreign 
forces," at the same time requesting Nicaragua to stop the flow of equip- 
ment to the rebels. In one of several unprecedented OAS actions, they 
accepted the offer of U. S. observation planes by Latin American affairs 
chief Henry Holland of the Department of State. Navy planes were 
sent from the Canal Zone, and commission members and aides flew over 
the battle scenes and the border in particular, on the lookout for evidence 
of Nicaraguan collusion. They reported that supplies were clearly being 
introduced over the border, although Nicaragua itself could not be 
charged with complicity. 

Details of the fighting and the eventual surrender of the rebels is not 
important in this context. That part of the story will be related elsewhere. 
Our interest for the moment is the Nicaraguan participation and in- 
volvement in the affairs. With the appearance of the OAS on the scene, 



196 CENTRAL AMERICA 

President Somoza was fully cooperative with officials and complied with 
their requests, including temporary establishment of a buffer zone along 
the border. He also interned the remnants of rebel forces when they 
fled across the border in defeat. The final report of the OAS, replying 
not only to Costa Rican charges, also dealt with Nicaraguan accusations 
concerning the earlier attempt on Somoza's life. In an apparent effort 
to ruffle as few feelings as possible, the commission report was only 
mildly critical of the disputants, to the dissatisfaction of both. An 
evaluation of Nicaragua's role, unfortunately, cannot be based on the 
published findings of the commission. 

According to information from the U. S. Embassy in San Jose, the 
original invaders numbered four hundred, of whom perhaps 10 percent, 
at best, were members of the Nicaraguan National Guard, all fighting 
out of uniform. The troops were commanded by Teodoro Picado, Jr., 
son of the former Costa Rican president put in power by Calderon. 
Educated at West Point, young Teodoro was unquestioned field com- 
mander. Calderon, living in Nicaraguan exile, admitted having planned 
the invasion from Nicaragua, although he never implicated Somoza. 
At the same time, it is generally accepted that the troops were trained 
for some weeks before the attack on the spacious lands of different 
Somoza fincas. An additional connection is the fact that ex-President 
Teodoro Picado served as personal secretary to Somoza in Managua, at 
least to the extent of drawing a salary. Certainly, Somoza knew about 
invasion plans, just as Figueres must have known about the 1954 P^ ot 
against Somoza. The hatred between the two was so great that neither 
would stop at anything. Somoza told New Yor% Times correspondent 
Sydney Gruson, in the midst of the fighting, that he was sorely tempted 
to throw the full power of his military forces against Costa Rica and 
held back only because of the "innocent blood" that would be shed. 

A militant anti-communist who used all his influence against the 
Arbenz government of Guatemala when it was in power, Somoza was 
never convinced that Costa Rica's Figueres was not implicated in 
communist designs against him. Although often calling the Figueres 
government "communist coddlers," Somoza admitted that Figueres 
himself was no Red. At the same time, he believed until his death that 
Figueres was in concealed privity with Central American Communists 
for his own ambitious purposes. It is for this reason that Somoza be- 
lieved that the 1954 attempt on his life was planed, or at least abetted, 



NICARAGUA 197 

by communist conspirators. This was but another personal reason for 
his deep hatred for communism. 

"BENEVOLENT DICTATOR" 

For years President Somoza was referred to by outsiders as well as 
some Nicaraguans as a dictator, a despotic strongman in the worst 
tradition of Latin American politics. As a general statement, it was 
probably true. At the same time it implied a number of things not 
necessarily true. Somoza's character was an exceptional blend of per- 
sonality, charm, intelligence, and acumen. 

Somoza was president from 1937 until his death, with the exception 
of a very short time. After nearly a decade in office he placed Leonardo 
Arguello in office in 1946. Arguello surprised all by acting independently, 
soon ordering a change among ranking officers of the National Guard, 
still Somoza's private domain. When Somoza objected, Arguello gave 
him twenty-four hours to gather his effects and leave Nicaragua. Somoza 
asked for three days and his request was granted. Thus, given the time 
to rally his forces, he ousted Arguello and, a few months later, put his 
uncle Victor Rcmon y Reyes in office. When the old man died in 1950, 
Congress returned Somoza to the presidency. He served out the rest of 
the term, and was himself re-elected in 1951 for a six-year term. 

Leader of the National Liberal party, Somoza was ineffectively opposed 
by the Conservatives for many years. He pacified them by an agreement 
with Conservative leader Emiliano Chamorro signed April 3, 1950. A 
new constitution was adopted permitting the minority party a fixed 
proportional representation in the two congressional houses the Senate 
and Chamber of Deputies.* Conservatives thus came to hold a third of 
the legislative seats, as well as a quota of diplomatic missions and Supreme 
Court seats. 

In his sixty-first year, Somoza occasionally spoke to friends wistfully 
about stepping down. Until his sudden departure from the scene in late 
1956, however, there was no heir apparent. His two elder sons were 
slated to take over eventually. However, Anastasio Jr. had spent his 
career in the National Guard while Luis, the politician, did not appear 
to have the requisite popularity or force of character. It was in view of 
these factors that in February, 1956, Somoza agreed to stand for re-election. 
Just a day before he was assassinated, Somoza was officially nominated 

* Nicaragua is the only Central American republic with a bicameral legislature. 



198 CENTRAL AMERICA 

by the National Liberal party convention. The expectation was for his 
re-election and extension of his power through 1963, over twenty-five years 
after first taking power. 

For years, Somoza was the target of continual attacks by the Sociedad 
Interamericana Prcnsa (SIP). They maintained that he was a tyrant 
intent, among other things, upon complete press suppression. Through 
the years this dispute was waged without satisfaction to either party. 
In recent years, the SIP has worked diligently to dissipate what it 
considers press censorship. Ronald Hilton, Director of Stanford Univer- 
sity's Hispanic-American studies, has written that the Nicaraguan press 
has been made aware of Somoza's authority even since 1937. A detailed 
report in 1953 called the existing press law vicious and tyrannical. 
Nicaraguan law condemned articles prejudicial to the good name of the 
republic. This permitted the government to interpret the news and to 
suppress any articles to which it took a dislike. Somoza referred his 
critics to a recent statement in defense of news and public information. 
"Public opinion in my country is constantly kept informed about public 
matters. In 1954 1 delivered three political public messages on Nicaragua's 
economic development, one [exclusively] on the political situation. I 
often hold press conferences with both local newsmen and foreign cor- 
respondents. Reports, bulletins, and magazines are issued from the 
various government agencies. I listen to the people and I am listened 
to by them. We carry on a dialogue." 20 

A disagreement cropped up on May 4, 1956, when President Somoza 
invited the SIP to help him prepare a new press law. He wrote SIP 
president James G. Stahlman of his intention to abolish the present press 
law criticized by the SIP. Promising to advance a new code at the 
next legislative session, he wrote of a desire for the "intervention of a 
technician or specialist designated by your organisation." Somoza 
obviously hoped to placate the SIP and bring to an end the years of 
bickering between the two. President Stahlman promptly declined. He 
maintained that when a constitution guaranteed freedom of expression 
and press as does the 1951 Constitution of Nicaragua no further 
legislation was necessary. He cabled Somoza that "We believe that the 
press ought not to be submitted to any kw that does not apply to the 
general citizenry. . . . Your Excellency will see that we do not look for 
special privileges for journalists or papers, because the press that accepts 
the condition of privilege, renounces a part of its independence." 21 



NICARAGUA 199 

Critics of the Somoza regime have also attacked the United States 
bitterly through the years. Arguments that the United States supports 
military dictatorships in Latin America are understandable, and in many 
cases valid. However, Nicaragua was somewhat different. From the 
U. S. point of view, Somoza was indeed a good friend. He always co- 
operated fully with the United States* before and during World War II, 
then into the cold war years. Ambassador Guillermo Sevilla in Washing- 
ton called home for instructions more than fifty times in recent years 
preceding various international conferences. His instructions always 
read the same: "cooperate fully with the delegation of the United States 
of America." More than once, Nicaraguan persuasion has been instru- 
mental in helping align other Latin nations behind an unpopular policy 
of the United States. The Department of State has rarely made a request 
of the government that was rejected. Until his death Somoza was 
anxious to attract as much foreign and U. S. capital as possible, another 
reason his country enjoys the best credit internationally of all Central 
American republics. 

Yet for such loyal support, Somoza was rewarded poorly. Despite a 
mutual security pact, he was frequently frustrated in attempts to buy arms. 
This was understandable when he wanted to turn them against Costa 
Rica. At other times, his requests were summarily rejected, often 
without official explanation. Somoza once said, "The United States may 
rest assured of the loyalty of Nicaragua's friendship which, as an official 
and as a private citizen, I always have promoted. In the hour of danger 
it will find us alongside the Stars and Stripes." 22 Economic aid has also 
been negligible. Only for the Inter American and Adantic-Pacific High- 
ways has the United States contributed a sizeable amount for improve- 
ment. The U. S. apparently has little realization of the small sums 
necessary to help modernize a country such as Nicaragua. Somoza 
himself summarized the matter succinctly. "What advantage do we 
get from being friendly? You treat us like an old wife. We would 
rather be treated like a young mistress." 23 

As the reader has gathered, Anastasio Somoza was a gregarious, 
affable man of high good humor. An old picture hanging in the 
Nicaraguan consulate in New York City reveals Somoza as a handsome 
youth during his pre-presidency days with the National Guard. By 1956, 
although weighing two hundred pounds and showing progressive bald- 
ness, Somoza was still an impressive man. Few people, even in a short 



200 CENTRAL AMERICA 

interview, failed to enjoy his candor and effusive good humor, regardless 
of their political opinions. To English-speaking visitors he spoke in 
colorful, often unprintable terms. Despite his age, Somoza was still an 
energetic dancer and crack shot. He was always aware of charges of 
being a dictator, and contradicted them with apparent humor. In 1952, 
while visiting Washington, he said, "I resent being called a dictator. 
If I'm a dictator, I wouldn't be able to afford to leave my country." 24 On 
the other hand, in 1948, also traveling in the United States, he told a San 
Francisco consul that there was no danger in leaving Nicaragua. "They're 
all fools. There's no one there who could do it [lead a revolution]." 25 

More than once Nicaragua was referred to waggishly as Somozaland. 
Somoza admitted to owning nearly 10 percent of the arable land in his 
country. His interests included distilleries, sugar mills, cotton gins, 
lumber, catde, cement, soap, textiles, ice-making, and even a barbershop. 
He was principal stockholder of the Mamenic Line for overseas shipping, 
and the Nica Airlines was operated by his son Jose. His personal wealth 
was estimated at sixty million dollars, one of the greatest fortunes in the 
Western hemisphere. Nicaragua's road system almost always seemed to 
lead to or go past one of his ranches or coffee fincas. A new road to his 
Tamarindo Ranch, forty miles from Managua, has almost no houses or 
people along it. There are towns in Nicaragua with the names of 
Puerto Somoza and Somoto. Standing by the National Stadium is a 
large statue of Somoza. Many have considered Nicaragua a large ranch; 
certainly he operated it as one. Almost any serious decision had to go to 
Somoza for resolution. Ministers were glorified clerks. 

There is no disputing the fact that Somoza ruled Nicaragua single- 
handed for many years. At the same time, no one can rationally assert 
that Nicaragua did not progress under his regime. Somoza came to power 
in a chaotic, undisciplined, revolution-haunted, backward little country. 
He brought unprecedented peace to heal many of the fissures which had 
divided Nicaraguans for years. In 1955 Somoza could say, with accuracy, 
"All the progress the country has made during the last eighteen years 
would not have been possible unless peace prevailed. The government 
has successfully tried to maintain peace as a fundamental basis of its 
constructive work." 26 Once peace was achieved, Somoza turned toward 
economic and material problems, and results through the years were 
generally gratifying. Much of the increased Nicaraguan wealth rubbed 
off on Somoza, to be sure. Nonetheless, the economic condition of the 



NICARAGUA 201 

people grew better than ever before. Even in more remote areas, the 
peasants are generally assured of growing enough crops on which to live. 
This seems meager, yet is an improvement over earlier conditions. 

None of this denies the suppression of democratic opposition, prohibi- 
tion of trade unionism, occasional outbursts against freedom of the press, 
and continued undemocratic government. Drew Pearson has written that 
years ago, in a moment of revelation, Somoza told Franklin D. Roosevelt 
that "I want to treat everybody good. Democracy in Central America 
is like a baby and noboby gives a baby everything to eat right away. 
I am giving the people liberty, but in my style. If you give a baby a 
hot tamalc, you will kill him." What Anastasio Somoza accomplished 
in Nicaragua perhaps no one else could have done. Today the "baby" 
is more than twenty years old, and certainly ready for more democracy, 
far more than that afforded by "liberty, but in my style." 

On September 21, 1956, at n :oo P.M., Somoza and his wife were guests 
of honor at a reception in the Workers' House in Leon. One day before, 
he had been nominated by the National Liberty party as their 1957 presi- 
dential candidate. Happy with his renomination, Somoza was in rare 
form, regaling friends with ebullient stories and dancing an energetic 
cha cha cha. Suddenly a young man darted from among the crowd of 
dancers, pulled out a Smith and Wesson .38 revolver, and fired five shots 
pointblank at the President. As he fired the last shot he was pulled down 
from behind by Arnaldo Ramirez Eva, chief of Nicaragua's national 
building program, and a moment kter riddled with bullets by presidential 
bodyguards. He was struck by more than twenty bullets. Somoza, 
wounded four times, sat conscious in his chair awaiting medical aid. Told 
that the assassin was killed on the spot, he said, "he should have been 
captured alive." One bullet had missed the President and wounded a 
woman. 

News reached Managua almost at once, where U. S. Ambassador 
Thomas Whelan, a close personal friend, sent a helicopter to return the 
President to Managua. At the same time he called Washington and, 
without Nicaraguan request, asked for immediate medical aid. President 
Eisenhower ordered a medical team from Gorgas Hospital in the Canal 
Zone to fly to Managua. Two surgeons, a bone specialist, and an 
anesthetist answered the call. A few hours later, informed of the gravity 
of Somoza's condition, Eisenhower ordered Major General Leonard D. 



202 CENTRAL AMERICA 

Heaton, commander of Walter Reed Army Hospital, to join the other 
U. S. doctors in Managua. 

On Sunday, September 23, the decision was made to fly Somoza to 
Gorgas General Hospital in Panama, where facilities were superior to 
those available in Managua. Once in Panama, Somoza was immediately 
operated on to remove the bullets. One had passed through his right 
forearm, breaking the bone. Another lodged in his right shoulder, a 
third in the right thigh, and the fourth, the most serious, had stopped at 
the base of the spine. A four-hour neurosurgical operation succeeded in 
removing all but one bullet which was considered unimportant. Pana- 
manian neurosurgeon Dr. Antonio Gonzalez Revilla removed the missile 
from the base of the spine, severing two or three nerve roots to do so. 
The post-operation statement said that Somoza's lower right leg was 
paralyzed because of the bullet near the spinal column. Otherwise his 
condition was called satisfactory and his chances of recovery good. 

On Monday the President took a sudden turn for the worse. Sur- 
geons opened a hole in his windpipe to aid breathing. At the same time 
he developed paralysis of the entire left side of his body. Removal of 
the bullet at the spine apparently caused the paralysis. Although at the 
same time the right leg paralysis was lessening, the new development 
was called "an unexpected postoperative complication which has not yet 
been fully evaluated." Colonel Charles Bruce, health director for the 
Panama Canal Zone, would not amplify his statement except to note 
that the President's blood pressure and temperature were good, his heart 
action strong. Through the week Somoza began to improve slowly, and 
there was hope for his recovery, although he had never been fully 
conscious since reaching Panama. At 4-40 A.M. Friday morning, Pana- 
manian President Ricardo Arias and Canal Zone Governor William R. 
Potter learned that Somoza's condition was grave. They joined Senora 
Somoza and the President's daughter, Lillian Somoza de Sevilla, at the 
President's bedside. At 5:05 A.M. on September 29, Somoza was dead. 

In Nicaragua, Somoza's sons had moved into complete authority im- 
mediately after the shooting. Luis, thirty-four-year-old president of 
Congress and first in line to the presidency, took charge of the government 
with the support of Tachito, at thirty-two the commander of the National 
Guard. Luis, meeting with the cabinet Friday night, declared a state of 
seige, suspending constitutional guarantees of free speech, free assembly, 
and habeas corpus. A curfew was set in Managua from 10:00 P.M. to 5:00 



NICARAGUA 203 

A.M. There was complete calm in Managua and business opened as usual 
on Saturday. The two Somozas immediately began an investigation. On 
Saturday over two hundred opposition leaders were taken into custody, 
including eighty-four-year-old Emiliano Chamorro and the equally aged 
Enoc Aguado, leader of a group of liberals who had opposed Somoza's 
renomination. Pedro Joaquin Chamorro, publisher of La Prcnsa, was 
also arrested. His newspaper had been opposing Somoza's re-election. 

The assassin had been identified as Rigoberto Lopez Perez, a 
Nicaraguan who had been working for several years as a phonograph 
record salesman in El Salvador. He had only returned to Nicaragua 
recently. In fact, he was first thought to be a Salvadoran, not a Nica- 
raguan citizen. There was no evidence of motive beyond a possible 
dream of martyrdom and apparent hatred for Somoza. In a literary 
contribution to the Leon Cronista a few days before the shooting, he wrote 
that "immortality is the aim of life and of glorious death." He also 
claimed that the "devil is the greatest poet who is not recognized by 
humanity." The Somoza brothers asked Salvador's President Lemus for 
aid in the investigation, since the killer had recently come from El 
Salvador. 

On September 26, Nicaragua dispatched messages to all the Central 
American republics notifying them that Nicaraguan exiles and others 
were planning a revolution. Nicaragua requested that subversive activities 
be curbed, stating that subversives abroad hoped to take advantage of 
the situation. The notes invoked a resolution dealing with subversive 
activities of political exiles, a measure adopted by the meeting of Central 
American foreign ministers in August, 1955. The messages requested 
that "necessary measures be taken to exercise the most effective and 
strict control over the subversive activities of all persons who propose to 
endanger the peace and security of Nicaragua." 

The next day Foreign Minister Sevilla claimed that exiles were form- 
ing a united front. He listed nine exiles as leaders of the group. The 
so-called united front included Nicaraguans in Guatemala, Honduras, 
Cuba, Costa Rica, El Salvador, and the Dominican Republic. Costa Rican 
exiles included Adolf o Diaz, Nicaraguan President in 1911, and his 
nephew, Ernesto Solorzano Thompson. The sole survivor of the 1954 plot 
against Somoza, Manuel Gomez Flores, lived in Mexico. Hernan Robleto, 
publisher of La Flecha, also lived in Mexico. Against all these men, Se- 
villa said, he had asked their countries of asylum to take "preventive 



204 CENTRAL AMERICA 

measures." It was a few days later that Nicaraguan exiles in Mexico, 
celebrating the death of Somoza, predicted the organization of an "army 
of liberation" that would free Nicaragua from the Somoza family. 
Alberto Gdmez Reyes said in Mexico that Somoza's sons would not be 
allowed to continue his tyranny. He optimistically pointed out that there 
were sixty thousand exiles in Costa Rica alone. Actually, there were 
nearly that many Nicaraguans working in Costa Rica, but a relatively 
small number of them were exiles from their land. 

In Managua, the number of persons held for questioning soon reached 
three hundred. In a week's time, however, virtually all were released, 
having revealed nothing new. Opposition newspapers began to republish 
several days before Somoza's death. Senora Margarita Cardenal de Cham- 
orro flew from Chicago to publish La Prensa while her son Pedro was in 
custody. La Noticia and La Flccha also returned to the streets the next 
day. All three, however, were under instructions to limit their political 
reports to government accounts. 

There was no further excitement during Somoza's week-long struggle 
for survival. Somoza, who had received an apostolic benediction from 
Pope Pius XII during the week, lay in state at Sacred Heart Catholic 
Chapel in Panama, where a requiem high mass was held. After the 
mass his body was escorted with an honor guard to the Albrook Field air 
base and flown back to Managua. Tens of thousands of Nicaraguans 
were either at the airport or lining the route from La Merced Airport to 
downtown Managua. In the first of eight days of national mourning, 
the body lay in state in the National Palace. Nicaraguans filed past the 
casket all night long at the rate of fifty a minute, many moved to tears 
of grief. The body had been met by two sonsLuis and Jose at the 
airport. Tachito had not attended, in order not to provide joint targets 
for assassination. After a night in the palace, the casket was moved to the 
Cathedral of Managua for a pontifical funeral mass, then transported 
in turn to city hall, the Presidential Palace, the Army Enlisted Men's Club, 
and back to the National Palace. On October 2, 1956, Anastasio Somoza 
was laid to rest in the Pantheon of Officers of the National Guard Ceme- 
tery. 

Reaction varied widely. Citizens in El Salvador were overjoyed. 
Costa Rican President Figueres, traveling in Europe, hoped that Nicaragua 
would establish a democratic government. The Uruguayan parliament 
passed a resolution honoring the murderer, Rigoberto Lopez Perez. At 



NICARAGUA 205 

the same time Cuba declared a three-day period of national mourning. 
Mexican President Ruiz Cortines sent deep personal sympathy. Panama 
expressed condolences. President Eisenhower stirred up ill feeling in 
many quarters when he expressed his sympathy and called the attack 
"dastardly." 

Editorial comment was also in disagreement. Many dailies lamented 
his death as the passing of one of the great Latin American leaders. Others 
hailed it as a great event in democratic life. El Mundo of Buenos Aires 
attacked President Eisenhower for his telegram to Nicaraguans. "In an 
emphatic document . . . Eisenhower brands as 'a dastardly attack 9 the 
gesture of Rigoberto Lopez Perez and points out the great friendship of 
the defunct dictator toward the United States ... it would seem that the 
passing ... [is as if ] one of the stars which adorn the North American 
flag had been extinguished." 27 One of the few rational and dispassionate 
comments came from the Washington Post and Times Herald on October 
i : "Nicaragua has been freed of dictatorship by assassination and her free 
neighbors in the Americas now will hope that she can leave both institu- 
tions behind her in the next phases of her political life. 

"Anastasio Somoza was personally admirable to those who could 
tolerate his self-serving, anti-democratic regime. Some could not, in- 
cluding his assassin, whose foul deed cannot be excused. Now that his 
bullet has ended President Somoza's life, however, Nicaraguans can seize 
the opportunity to liberalize their political machinery." 28 

A DYNASTY SOMOZA? 

Death set the stage for possible revolution in Nicaragua. The un- 
certainty following the shooting and eventual death of Somoza was great, 
and many expected outbreaks at any moment. No one was sure of 
the sons. However, they were given one final push from their dying 
father. His stubborn fight for life gave them time to consolidate their 
positions. Had the old dictator died at once, all Nicaragua would have 
gone up in anarchy. As it was, the sons had a full week to consolidate 
their position. Opponents, still respectfully fearing the father, refrained 
from open troublemaking in the event he should recover and turn vindic- 
tively on those unloyal to him. 

Luis was sworn in as Acting President on October 3, taking office at 
once. The tightcen-man Nicaraguan cabinet submitted resignations as 
a matter of formality. Luis refused them, and the ministers continued 



206 CENTRAL AMERICA 

in their posts. Five days later he traveled to Leon, site of his father's 
assassination, to receive the nomination of the National Liberal party for 
the 1957-63 presidential term. In accepting the nomination he surprised 
no one by promising to follow his father's policies. Scheduled elections 
took place in February, 1957, with Luis standing for his father's office. 
The old Conservative party chose to abstain from the voting, claiming 
government interference made participation impossible and without value. 
A group of dissident Conservatives, however, formed the Partido Con- 
servador Nicaraguense some three months before the voting. They 
entered fifty-six-year-old Edmundo Amador as their candidate. Amador 
himself admitted the futility of opposing the government. He added 
that "our struggle is not for today but for tomorrow." Referring to the 
refusal by most Conservatives to take part, he added that the withdrawal 
"would not have affected Somoza but the Conservative party itself." 
Although initially pressed to obtain the necessary twenty thousand signa- 
tures to get on the ballot, this conservative splinter group firmly rejected 
all suggestions to leave the race. 

On February 2, Luis Somoza told newsmen that "I enter the elections 
tomorrow absolutely sure of the triumph of the Liberal party, because the 
entire Nicaraguan population has been showing it with manifestations of 
affection. . . .' >29 In an election granting women exercise of the vote 
for the first time, some half million voters were inscribed. Somoza an- 
nounced his hope of winning 85 percent of the vote. That hope was 
realized. Following his election, Luis was expected to continue his father's 
policies without change. Luis had studied nearly ten years in the United 
States, graduating from the University of California as an agricultural 
engineer. Later he studied agriculture at Louisiana State University and 
the University of Maryland. Elected a deputy to Congress in 1951, he 
had served alternate months as president of the Senate and the Chamber 
of Deputies, proving himself conciliatory, self-effacing, soft-spoken. Some 
critics preferred "weak." 

The survival of Luis and his brothers depended initially on economic 
matters. They hoped for and were to see banner 1956-57 crops distracting 
attention while their rule was secured Much of their father's former 
opposition had been among well-to-do merchants and exporters, to whom 
personal prosperity was the overriding criterion. The old dictator had 
worked hard to make their and his cotton production as profitable as 
possible. At the same time, production costs had gone exceedingly high. 



NICARAGUA 207 

There was little real danger to the old man as dissatisfaction among these 
people was more a nuisance than anything else. With his sons, the situa- 
tion was different. 

Cotton production looked optimistic as 1956 drew to a close. The crop 
was estimated to bring in thirty-five to forty million dollars based on a 
harvest of 650,000 quintales of cotton. Sales were to drop well below 
these figures, but not until the brothers had further secured their power. 
In October, 1957, the United States granted a credit of five million dollars 
to help a foreign trade dollar shortage. Earlier in the month, a similar 
measure was negotiated with the International Monetary Fund, by which 
Nicaragua could draw up to $7,500,000. This credit was limited to six 
months. By the close of 1957, however, economic dangers threatened. 
Additional loans brought the total to nearly fourteen million dollars, and 
$1,500,000 in gold was sold to balance 1956 trade deficits. In November* 
the government was forced to freeze all but essential imports, all others 
required an advance deposit in the National Bank of the necessary sum 
before an import permit would be issuedand that only after thirty days. 
New economic demands required an increase from sixty-five to one 
hundred million dollars annually to balance obligations. By mid-1958, 
however, the latter figure was still out of reach. Despite the corner-cutting 
involved in restraining the budget, the administration began a modest, 
low-cost housing project, at the same time borrowing more money to cover 
increased agricultural production. By the close of 1957, the balance of 
trade was adverse. A shift in the final quarter balance pushed imports 
over exports by nearly $1,500,000. With cotton giving way once more to 
coffee as the leading export in dollar value, the export outlook for 1958 
was not good. The 1958 coffee crop brought nearly 15 percent less 
revenue, and coffee also dropped, due to an international price reduction, 
although volume shipments changed very little. 

On the political front, developments strongly suggested an attempted 
change from the way of life under Somoza. Luis announced the initiation 
of a liberalizing approach soon after his inauguration. He praised his 
father's efforts, and insisted he would have liberalized political practices 
had he lived. "You analyze what he did for Nicaragua and you will find 
he brought it distinct advantages. There are times in a country's life 
when only one man can save it and that was the case with my father and 
Nicaragua." 30 Luis announced the "continuation" of press freedom. 
"About 90 percent of our editors are behaving like good newspapermen, 



2o8 CENTRAL AMERICA 

but the remaining 10 percent are too passionate . . . they must . . . give 
all sides of a story." 81 He brought attention, with justifiable pride, to 
the establishment o bi-weekly presidential news conferences at which he 
answered questions about all phases of national affairs. Observers noted 
that newspapers indeed seemed free to criticize the government, although 
they still leaned a bit in the direction of caution. Luis brought others 
into governmental operation by delegating responsibility as his father 
never did. Ministers were instructed to appear before Congress to justify 
their policies, and the first such appearance was a rare and widely heralded 
day in Nicaragua. Luis found himself opposed on different occasions to 
businessmen whose support for his father was almost traditional. Eco- 
nomic troubles could not convince him of the necessity to devalue the cor- 
doba, and by mid-icgS his wisdom was clear. He also pushed a greatly 
expanded social security program in the face of opponents who, on this 
issue, included his brother Anastasio. 

The completely unexpected impetus given liberalization was underlined 
in April, 1958, when Luis sent a new law of presidential succession to 
Congress. He requested the adoption of a constitutional amendment for- 
bidding the president to succeed himself. This would include anyone in 
his family something significant when Anastasio is kept in mind. 
Skeptics at first disbelieved, then concluded that the Somozas would not 
be included in the measure. They were confounded when Congress ap- 
proved the action and did include the Somozas in its provisions. The 
danger of eventual retribution at the hands of his enemies after leaving 
office in 1963 apparently could not sway the President from his course. 

As events moved through 1958 there was great interest and curiosity 
about the success and background of such movements. When the two 
brothers took over the reins of government from the strongman, it was 
felt that their efforts would be even more restrictive, and certainly less 
successful. Neither son has the personal characteristics of the father, who 
in the end ruled by personality as much as anything else. Young An- 
astasio probably has his father's ruthlessenss and native shrewdness, but 
he is a brusque man, quick to anger and slow to forget. He had ex- 
perienced certain unpopularity with old cronies of his father who were 
forced to serve under him in the National Guard. With his father dead, 
he needed much more than the West Point training he had undergone. 
Luis, as has long been known, is not as conservative as his brother but, 
in spite of his first eighteen months in power, has shown limited qualities 



NICARAGUA 209 

of leadership and strength. It is a bit surprising that his disagreements 
with Anastasio have generally indicated the latter's willingness to defer, 
if a bit reluctantly. Between the two of them, Luis and Anastasio still 
do not equal their father, except in the palest fashion. Should either one 
slip, or a provocative possibility turn on the other, Nicaragua is destined 
for another period of turbulence. 

In an interview with Latin American Report published in May, 1958, 
Luis Somoza plumped firmly for closer relations with Honduras and 
Costa Rica as well as for the advance of economic measures leading to a 
federation of Central America. He insisted on the necessity of the 
constitutional reform prohibiting presidential re-election: "I submit . . . 
that the person who has held the Presidency of the Republic in the 
previous term may not be elected President in the following term, nor any 
of his relatives within the fourth degree of consanguinity or affinity. 

". . . I personally believe that although the principle of rotation in 
power restricts in a certain way the free manifestation of popular opinion 
on the person of its preference for President of the Republic, it is healthful 
for the normal exercise of democracy in countries such as ours." 82 

Certainly Nicaragua is ready for and deserving of a more liberal re- 
gime than that of Somoza. Whether or not it can win this in the near 
future, no one can answer. Hope exists, at least. Perhaps Luis will 
succeed in bringing to the country its first free political life. But whatever 
his intentions, execution is the tricky thing. He recently told the New 
Yor^ Times that "I am going ahead with my experiment in democracy in 
Nicaragua and we are making progress." But coupled with these words 
was a sentence that was an ominous reminder of bygone days. "But we 
are still too dose to violence; if my political enemies show violence, 
[then] the Government must counter with violence." 88 



Chapter Six 



COSTA RICA 



"CENTRAL AMERICAN SWITZERLAND," "Land of Eternal Spring," "Heart of 
the Americas" these are some of the expressions frequently and mis- 
leadingly applied to the second smallest country of Central America. 
Costa Rica is a land of paradoxes and contradictions. It has managed 
through the years to create the superficial impression of being singularly 
distinct from its neighbors. But Central America is not homogenous, 
and Costa Rica differs but little from the supposed norm. The idea of 
being totally removed is but one of the widely disseminated contradic- 
tions. 

The republic rests compacdy between Panama and Nicaragua. Sur- 
rounded on the other sides by oceans, Costa Rica is divided in the center 
by the Meseta Central the mountain range extending through Central 
America from Mexico to Panama. Again, terrain gradually falls from 
the Meseta Central to rolling lowlands that in time change to steamy 
coastlands. The mountains include active volcanoes, notably Pods, with 
reputedly the world's largest crater. Situated in the center of the Meseta, 
nearly equidistant from the two oceans, conveniently placed in a natural 
amphitheatre, is the capital and heart of the nation, San Jose. 

To understand Costa Rica more fully is to understand first what it is 
not; in this case a negative approach has advantages. In the first place, 
the climate is not that of "eternal spring," enthusiastic travel blurbs to 
the contrary. Tropical lowlands are hot, and seasonal rains fell eight 
months of each year in the mountains, often reaching a maximum of 160 



COSTA RICA 211 

inches annually. "Heart of the Americas" is a title claimed by several 
Latin American states, none of whom has credentials to support the claim. 
The phrase "Central American Switzerland" is more understandable, 
though nonetheless inaccurate. Costa Rica speaks of its peaceful, demo- 
cratic existence. Yet a major revolution within the last decade was 
bloodier than the colonial battles of earlier centuries. At least three 
times in the last fifteen years the government has been undemocratic and 
unrepresentative to the point of dictatorship. Another contradiction is 
the widely circulated boast that Costa Rica has no army, and fewer 
soldiers than school teachers. While the army was abolished in 1950, there 
is a police force of some 1,250 plus 700 coast guardsmen. Panama also 
has no army, but its police force more than serves the purpose. Nicaragua 
and Honduras can also boast of having more school teachers than soldiers. 
Whether or not their educational systems equal that of Costa Rica is 
entirely beside the point. Contrary to declarations of bucolically peaceful, 
constructive living, marauding bands roamed the northern province of 
Guanacaste at will until very recently. Robberies are still high in the area. 
Only eight years ago a family of foreigners was assaulted, killed, and 
robbed of all their possessions while passing. Only a small child survived. 
Such facts are basic to our understanding, for so many heralded na- 
tional traits are no more than imaginative myths. Costa Rica is in some 
ways more advanced than its neighboring countries, but democracy is 
young and insecure. Elections are only partially honest, and the results 
are not always observed. Educationally, although in need of much ex- 
pansion and modernization, the Costa Rican system is the best on the 
isthmus. Perhaps because of this no recent Costa Rican leader has been 
a military careerist; the military has been uncommonly inactive in 
political affairs a lesson neighboring countries have yet to learn. In 
point of fact, then, Costa Rica is well ahead of its sister republics in many 
fields, notably political maturity and liberty. Nonetheless, it is far from 
the well-seasoned government of democratic practice prevalent among the 
more advanced members of the Western world. Costa Rica today is 
in a position to slip back just as its neighbors show signs of awakening to 
the more advanced precepts of democratic government. Whether or not 
Costa Rica can withstand the retrogressive forces acting against her is the 
critical question. If not, the work of many years will be needlessly 
sacrificed. This is yet another reason to recall Costa Rica in paradoxical 
terms. 



CENTRAL AMERICA 
RECOURSE TO REVOLUTION 

To understand Costa Rica today we must go back a dozen years to 
the revolution of 1948 and the events preceding it Only today are there 
signs that the republic may be turning ever so slightly away from a heavy 
preoccupation with political affairs. It has not been thus for many years. 
In 1940, a prominent San Jose doctor, Rafael Calderon, was elected presi- 
dent with the support of conservative forces. Constitutionally prohibited 
from succeeding himself, Calder6n arranged for the election of the 
brilliant but hesitant lawyer Teodoro Picado, who took office in 1944 after 
defeating ex-president Leon Cortes in what were basically dishonest 
elections. In 1947, the government announced it was supporting Cal- 
deron's intention to return to office in the 1948 elections. By this time, 
however, opposition to calderonismo had assumed imposing proportions; 
the eventual result was Costa Rica's first resort to violence in years. 

After eight years of calderonismo it had lost its appeal for Costa 
Ricans. Policies were increasingly unpopular and conducted with dis- 
regard for public opinion. As opposition began to mount, Costa Rica 
skidded toward revolution. Indications of dissatisfaction came from 
almost daily eruptions, inflammatory editorials, and illegal police action. 
Newspaperman Otilio Ulate, the opposition leader, wrote in February, 
1947, "The country is in a dilemma; either it must abandon the suffrage 
or have a civil war to restore honor and integrity to the public." 1 Incidents 
mounted with a fistfight at the entrance of the Legislative Assembly in 
March and the bombing of military headquarters in San Jose a few weeks 
later. Anti-government feeling burst forth in July with the "Huelga de 
los Brazos Caidos," Strike of the Fallen Anns, 

On Sunday, July 20, 1947, government forces precipitated a clash in 
Cartago, the ancient national capital some fourteen miles outside San 
Jos& As two theatres disgorged their crowds simultaneously from the 
afternoon movie, police launched an attack with tear gas, stones, and 
clubs. Moments later machine guns were fired into the crowd. Two 
were killed and several wounded. The government disclaimed knowl- 
edge of the attack, although high ranking army officers were seen at 
Cartago during the fight. Crowds gathered outside the San Jose offices of 
Diario de Costa Rica, the newspaper of Otilio Ulate. Ulate wrote the 
government that "No code in the world authorizes any government to 
turn machine guns and rifles on an unarmed city because of its political 



COSTA RICA 213 

opinions ... I leave to your own conscience what you must do as chief 
of state. . . ," 2 For several days there were repeated clashes between 
police and citizens. On Wednesday, the twenty-third, opposition leaders 
called a halt to these outbursts and asked for a national strike. An op- 
position bulletin announced that "The Committee of the National Strike 
informs its partisans that this decreed strike has the character of pacific 
resistance and does not authorize any act of violence against persons or 
properties." 3 

Those in sympathy with government brutality were asked to continue 
work. Others were to close shops, stores, theatres. At once, transportation 
and communication were at a standstill. The government was confronted 
with a paralyzed capital. Shops were boarded up; bank doors closed; 
barbershops, grocery stores, dry cleaners, pharmacies, even the bars were 
closed. President Picado nervously announced that the government 
would keep order at all costs. But there were no incidents of violence. 
The public simply remained inactive. The extent of the dissatisfaction is 
clear in view of the great amount of money lost through the shutdown. 
On Thursday, the strike committee circulated a mimeographed bulletin 
announcing that "The Strike continues throughout the territory of the 
Republic ... the most significant fact is that of the presence in the streets 
of San Jose of communist groups armed with carbines and Mausers. . . . 
Pay no attention to rumors. The strike continues to prosper." At the 
bottom of the bulletin were the words, "circulate this leaflet." 

The government blamed three factors for the strike and tried to 
neutralize activities where possible. First, opposition politicians were kept 
under close surveillance and warned against inciting the citizenry. Se- 
condly, bank managers were instructed to reopen their doors. However, 
as they replied, there were no employees to man the offices. In despera- 
tion, the administration named civil authorities to control the banks. In 
a few hours this failed as the strikers ingeniously appeared en masse to 
make large withdrawals. Business was too great to handle; the govern- 
ment gave in. With businesses remaining shut, Picado tried to deal with 
the third factor. Taking to the air, he appealed for a return to normalcy. 
"Of course I cannot tolerate the existence of two governments: one in the 
streets, by the violent imposition of political parties or groups, and another 
in the Presidential House, where the constituted powers of the republic 
reside. Everything will be solved by legal and peaceful means, as the 



2i 4 CEN ? TRAL AMERICA 

majority of Costa Ricans may wish ... [I] will not let violence guide my 
steps." 5 

After a week of failure the government decided to arm a force of 
mariachis* to fight for the government. They were fully armed, as were 
members of the Vanguardia Popular (the front for Costa Rican Com- 
munists), whose leader was a compatriot of Calderon. Mobs of mariachis 
roamed San Jose under orders to force the opening of as many stores 
as possible. Few proprietors were present, so the mobs proceeded to 
break down barricaded doors, smash windows, destroy and loot store 
goods, and create havoc wherever they went. Time and again nearby 
policemen pointedly looked the other way while mobs went about their 
task of destruction. They punctuated the sacking with cries of "Viva 
Calderon," or "Viva Vanguardia Popular." The government represented 
these attacks as desperate efforts of poor starving loyalists to get sub- 
sistence rations. 

Picado hoped to provoke outright revolution. Violence would have 
been easier to deal with than a passive strike. The opposition was far* 
sighted enough to avoid just that danger. Otilio Ulate repeated demands 
that the government disavow the Cartago violence and offer guarantees 
of electoral impartiality in forthcoming elections. Ulate also offered 
free food and provisions to those who might be in need. Then he ad- 
dressed military forces: 

This call is directed to the armed forces of the country, to the soldiers of 
Costa Rica ... to warn them that they must refuse to continue lending their 
services to a Government that orders them to machine gun their compariots 
in cold blood and without provocation. The national movement of civil 
resistance . . . has as its object equal benefits for all honorable Costa Ricans, 
regardless of the political party to which they belong, because it originated on 
the refusal of the Government to grant to the people effective guarantees 
for the free exercise of the right to vote. 6 

On August i, the strike was finally ended by one of the most ex- 
traordinary occurrences in contemporary Costa Rican history. A group of 
feminists in San Jos, Cartago, and Alajuela issued a manifesto railing 
for the end of dissension. They sent a message to President Picado asking 
for the restoration of all liberties. On the morning of the second, some 
eight thousand strong, they marched on the doors of the presidential home 
singing the national hymn and waving white Sags. "We have a guarantee 

* Unemployed lower-class vagrants willing to fight if armed and bribed. 



COSTA RICA 215 

of complete security that our manifestation will not be interfered with. 
To the gentlemen who have insisted on protecting us, we ask them 
vehemently to abstain from doing so, that it may not be said there is any 
political provocation in our movement. We are absolutely sure that there 
will be no Costa Rican capable of disturbing such a parade, respectful 
of mothers and Costa Rican girls who only ask for liberties for our 
people." 7 

President Picado was significandy absent, and the women prepared 
to pass the night in the park next to the presidential home. A number of 
soldiers gathered, hurling choice epithets at the women. At n 30 the park 
was thrown into pitch darkness and soldiers began firing into the air. 
The women scattered, either leaving or taking refuge in nearby homes. 
Although they were dispersed, the government finally conceded the 
impossibility of its task, and agreed to terms of the general strike com- 
mittee. The next day, August 3, 1947, a nine-point agreement was drawn 
up. Key sections stated that the government would 

. . . create a Committee of Investigation formed by three full members and 
three alternates. They will be named by the National Election Tribunal. . . . 

The Executive Power will present to the Constitutional Congress im- 
mediately a projected law granting just and due reparations to all persons 
wounded by the disputes. . . . 

The President of the Republic guarantees all employees that the Executive 
Power will give absolute liberty ... to affiliate with any Political Party with 
which they have sympathy without any reprisals or dismissals for such a 
motive. . . . 

The President of the Republic, the two leading Political Parties, and the 
Deputies of said parties, agree to give all their support and to maintain in 
their posts the present members of the National Election Tribunal . . . [and] 
to recommend to the citizenry that they observe a complete truce in political 
activities for eight days. . . . 8 

An epilogue was signed by the President, the Uni6n Nacional, and the 
Partido Republicano Nacional. In a further guarantee of free and honest 
elections, they would support the decision of the newly established three- 
man electoral board: "The Committee of Investigation will be formed by 
three full members and three alternates. . . . Those selected will be 
persons of recognized independence, of political impartiality, and of 

unquestioned moral rectitude The resolutions of the Committee will 

be taken by a majority of votes. The decision of the members of the 
Committee of Investigation will be obligatory and binding on all Costa 



2i6 CENTRAL AMERICA 

Rican citizens. . . ." 9 The investigation committee was to play an im- 
portant role in the coming presidential elections. 

Campaigning for the February , 1948, elections grew in fervor as the 
time neared. There was no apparent interference in the opposition 
fight, and Otilio Ulate was not prevented from advertising his candidacy, 
despite government preference for Calderon. At the end of January, the 
heavily financed Calderon campaign concluded with a demonstration in 
the capital before an estimated crowd of twelve thousand. At the same 
time, what was to have been the climax of Ulate's campaign was can- 
celled at the last moment for lack of funds. During the one week 
political moratorium before election day, speculation ran high as to the 
outcome. Calderon's chances seemed bright in view of his support by 
government funds and army leaders. The inauguration of several badly 
needed social reforms during his 1940-44 administration was remembered 
by many. However, the fifty-two-year-old Otilio Ulate was widely 
popular. A respected journalist of many years' standing, he was strong 
with the lower classes, among whom he had associated freely. Handi- 
capped by financial limitations, however, his campaigning was curtailed. 
All things considered, a close race seemed in the offing barring govern- 
ment intervention. 

During the week prior to election day, the President's brother Rene, 
minister of government and commander of the military, declared his 
intention of using troops if necessary to keep order. Announcing forma- 
tion of a special mobile unit that would deal with possible disturbances, 
he insisted that there would be no interference in the voting itself. "I am 
determined that no Costa Rican will be able to say that the police or 
army interfered with his free ability to vote. But if anyone disputes the 
result and menaces my forces, the real shooting will start. . . ." 10 There 
were still doubts as to whether President Picado would permit a Calder6n 
defeat. After eight years in power, the Calderon-Picado duo seemed 
unlikely to relinquish control of the profitable business of government. 
Some felt that there would be no armed opposition even in the face 
of obvious ballot-box fraud. Otilio Ulate, questioned on the point, said 
"I am a friend of peace and an enemy of civil war, but I prefer civil war 
to enslavement of the people." 11 

On election day, early returns showed Ulate leading in San Jos and 
the Meseta Central, but trailing the ex-President in the provinces. Ulate's 



COSTA RICA 217 

margin was small. Early on February 10, the lead widened and Calderon 
called a press conference. He issued two conflicting statements. First he 
conceded defeat. In the next breath he charged fraud, an astonishing 
claim in view of government control of the ballot boxes. Official news- 
paper Ultima Hora reiterated the charges. Rene Picado added that 
". . . this has been a crooked election and does not represent the will of 
the people." 12 Ulate answered claims of fraud with the caustic state- 
ment that no one was more adept than his opponent in the matter of 
fraudulent elections. Ulate's headquarters were deserted and he awaited 
developments at a private home. The same day New Yor^ Times cor- 
respondent C. H. Calhoun cabled that several thousand uncounted ballots 
had burned in a fire which completely destroyed a schoolhouse. Although 
the origin of the blaze was unknown, it had gutted the building. Calhoun 
reported the floor covered with the ashes of burned ballots. These had 
been moved to the school for added security after Calderon's charges of 
fraud. All were completely consumed. Even without these votes, Ulate's 
lead was up to ten thousand votes, and victory was assured. In the 
congressional race his Uni6n Nacional won twenty-four seats, Calderon's 
Republican Nacional twenty-three, and the communist Vanguardia seven. 

Final computations gave Ulate 54,931 votes; Calderon trailed with 
44,438. The special three-man election jury, formed after the strike-ending 
agreement the previous August, adjourned to a room in the Hotel Costa 
Rica to examine the results and decide the outcome. The three-member 
jury was considered honorable and fully qualified for the delicate task. 
After extended hours of consultation the men emerged with the announce- 
ment on February 28, 1949, that Otilio Ulate had indeed won the election. 
Accusations of fraud were not borne out by the facts, it was decided. 
Only two of the three signed the statement however. Koberg did not 
agree with the findings and refused to concur. 

Reaction was mixed. Ulatistas were elated; to them the final step in 
the certification of victory was complete. However, Koberg's refusal to 
sign the document led government forces to reject the decision. Tribuna 
editorialized that the final decision would come from Congress. President 
Picado said that without Koberg's vote the decision of the committee of 
investigation was invalid. The legislature would have to decide the 
winner. The Legislative Assembly was packed with calderonistas, who 
certainly would not certify an Ulate victory. The situation was further 
aggravated when Rene Picado refused to turn over control of the military 



2 i8 CENTRAL AMERICA 

to the president-elect within twenty-four hours of the announcement by 
the committee as was demanded by law. 

On March i, 1948, the Assembly met in special session. After an acri- 
monious meeting in which debate was long and stormy, the Assembly 
voted twenty-seven to nineteen to annul the results. Rejecting Ulate, they 
declared that new elections would have to be conducted in April, if the 
atmosphere were "appropriate." Cries of outrage rose in chorus. The 
decision was such a gross violation of the law that even some calderonistas 
were shocked. The agreement signed by all major political parties, in- 
cluding that of Calder6n, had sworn to accept the decision of the com- 
mittee. A key clause, already quoted (see page 215) said that ". . . resolu- 
tions of the Committee will be taken by a majority of votes. The decision 
of the members of the Committee of Investigation will be obligatory and 
binding on all Costa Rican citizens. . . ." This was the sworn agreement 
the government proposed to flaunt in contradiction of a dear expression 
of public opinion. 

Hoping to check possible excesses, the government decided to place 
Ulate under arrest. Before jailing him, unidentified uniformed men 
fired into a house in the suburbs where Ulate was staying. The president- 
elect was unharmed, but his host was mortally wounded. It later de- 
veloped that the attack was a half-hearted attempt by minor officials to 
assassinate Ulate. He was arrested in the presence of an amazed diplo- 
matic corps, attesting to an offer of safe conduct from the regime. 
Ulatistas immediately appealed to the diplomats for intercession; Rene 
Picado left the country after escorting Ulate to the penitentiary, an- 
nouncing his work completed; the city was quiet, but businesses closed 
and Pan-American Airways cancelled incoming flights. 

Once again the population was outraged, and one day after being 
jailed, Ulate was freed by a fearful government. He announced that "my 
message to my people is, 'have faith in our victory.' " Amid rumors that 
a military force was forming south of the capital, the Archbishop of San 
Jose interposed to win a truce. Ulate promised to delay by twelve hours 
a radio broadcast calling for another general strike. All radio stations 
agreed to make no political comment during that time. On March 7, 
the Archbishop negotiated a forty-eight hour truce during which time 
the disputants might discuss the situation. Business interests represented 
by the bankers pleaded desperately for some settlement. One of their 
spokesmen said that "Only a peaceful settlement of the political dispute 



COSTA RICA 219 

can save the nation's economy. Banks are now closed, for the Govern- 
ment could not stop a run on them." 13 The truce held, but Archbishop 
Sanabria was unable to bring about even a temporary agreement. He 
finally withdrew his offer of mediation. The country was apprehensive, 
and no one seemed to know what would come next. On March 12, the 
answer came from the mountains south of San Jose. 

THE FIGHT FOR DEMOCRACY 

Fighting broke out some forty-five miles from the capital between 
tiny units of a rebel force and official troops stationed in small towns 
nearby. After initial confusion, it was apparent that fighting was led 
by the insurgent Jose Figueres, a young agriculturist who was the political 
action chief of the Ulate forces. A mobile unit of government forces 
drove to Figueres' plantation, Lucha Sin Fin, but found his finca a small 
fortress and withdrew after two were killed and four wounded. Figueres, 
one of the younger political figures and a relative newcomer to the 
political scene, had not been particularly close to Ulate. However, his 
efforts against the regime had been unstinting. Shortly before the elec- 
tion he had begun gathering and training a modey band of revolutionaries 
on his plantation. Figueres claims today that he formed the rebel band 
to prevent annulment of elections. However, since purchase of arms 
started before the campaign closed, this is not entirely true. What he 
would have done had Ulate legitimately lost or not been denied his right- 
ful office, no one can say. In any event, he had a small force armed with 
a variety of old, obsolete, and even rusty weapons. With these he op- 
posed the army of some two thousand well-equipped men. President 
Picado, ordering a thirty day period of martial law, expected to quell die 
rebels easily. 

In the first few days, there was very litde fighting. The government 
was slow in dispatching troops to the area, and there were only infrequent 
contacts. Part of Figueres' strategy was to continue his revolution long 
enough for the citizenry in San Jose to rise up against the government 
there or, at the very least, to pressure the government into negotiation. 
As a result, he was in no hurry to force the fighting, outnumbered and 
outgunned as he was. The terrain in the area of fighting is among die 
most mountainous in all Central America, rising to ten thousand feet in 
places. With only one acceptable highway and a few small side roads, 



220 CENTRAL AMERICA 

transportation was also poor, making warfare more difficult, particularly 
for attacking government troops. 

For nearly two weeks fighting was spasmodic. Figueres conducted a 
defensive battle. Using guerrilla tactics, his forces struck at small isolated 
garrisons or important bridges and buildings, accomplished their ob- 
jective and withdrew to the mountains before casualties were sustained. 
Fighting near the southern extension of the Inter American Highway, 
they were able to swarm down on small convoys or groups of govern- 
ment troops, wreaking havoc on the unsuspecting foe and escaping pro- 
longed battle, in which they were bound to be at a disadvantage. 

As Figueres anticipated, the situation in San Jose grew chaotic. Presi- 
dent Picado in effect turned over complete control of the fighting to 
brother Rene; he was President in name only. Calder6n himself was 
relatively inactive, other than trying to persuade his good friend Somoza 
of Nicaragua to send forces in support of Picado. More important than 
the others was Manuel Mora, chief of the Vanguardia Popular, the 
Costa Rican communist party. Mora had in different ways been polit- 
ically related to Calderon. In the uncertain days of 1946, and 1947 
especially, the government had come to rely heavily upon Mora. As op- 
position mounted, the regime was willing to sell its soul to the devil in 
exchange for support. Hoping to buttress its position, the regime was 
increasingly friendly with the Communists. Subsequent political analysts 
have charged Calderon and Picado with being potential Communists 
themselves. This is not so. However, they had no great reluctance in 
associating with Manuel Mora in order to retain power. When the 
government position began to crumble after the February elections, the 
well organized Mora supporters were increasingly important and soon 
became the real pillar of support. 

Mora's followers, armed and uniformed, contributed to the military 
forces in the capital. These included not only communist party faithful, 
but "irregulars," mariachis who were offered the chance to earn drinking 
money and act important at the same time. Encouraged by the confident 
participation of the Vanguardia, President Picado took heart. On March 
23, he announced that the rebellion was contained and would soon be 
totally extinguished. On the same day, hundreds of leaflets were cir- 
culated in the Meseta Central. Tided "Liberacion Nacional: Primera 
Proclama," they were addressed to non-combatants. 



COSTA RICA 221 

Costa Ricans, are you doing what you can for the triumph of liberty? 

The army of national liberation is fighting brilliantly in the theatre of 
war. You can help the patriotic effort greatly by blocking roads with wood 
and rocks, cutting telegraph and telephone lines ... in trying by all means to 
disorganize and dismember the usurping government. 

Are you doing what you can? . . . 

Do what you can, be it little or much, to support the army now, and be 
ready and prepared for our triumphal entrance into all the towns of the 
country. We will come; soon, very soon, we will arrive. 

Help us from afar and repeat this promise that must be passed from breast 
to breast like a divine conflagration: 

WE WILL FOUND THE SECOND REPUBLIC! 14 

The proclamation was signed, "Jose Figueres, Commander in Chief of the 
Army of National Liberation." 

Leading an attack o several hundred men, Figueres soon won out- 
right control of San Isidro del General, the last town on the Inter Ameri- 
can Highway. In the meantime, small landings at the tiny Pacific ports 
of Dominical and Potrero Grande harrassed loyalist troops, although 
not in themselves a serious threat. Warfare in the San Isidro valley 
spread throughout neighboring sectors. To the south, several hundred 
people left their homes and went to the Panamanian border, rather than 
continue to live in fear of raids by one side or the other. Toward the 
Pacific, the United Fruit Company evacuated several of its smaller in- 
stallations in anticipation of possible fighting there. A temporary truce 
finally halted the fighting at the end of March, in observance of Holy 
Week. Except for this respite, fighting continued on an increasing scale 
as the rebels built up confidence by occasional victories and apparent 
lasting power. 

The boldest stroke of Figueres' campaign came on the last day of 
March when San Jose was attacked from the air for the first time in 
history. One of three TACA Airline transports, seized on the first 
day of revolution, flew over the capital at a dangerously low altitude and 
dropped a bomb on the presidential residence. It fell to the courtyard 
below and only slightly damaged the building. The psychological effect 
was great, however. The government was shaken by the attack, while the 
citizenry was impressed by the daring, as well as the scrupulous care 
taken in attacking only the government building rather than launching 
indiscriminate city bombing. 

With the coming of April, Liberaci6n Nacional began to take the 



222 CENTRAL AMERICA 

offensive for the first rime. Troops slowly advanced toward the capital, 
seizing the village of Tajar, near the important city of Cartago, after a 
pitched battle. Small parties also landed on both coasts, tying down 
scattered government troops and distracting frustrated officers from 
organizing a serious plan of action. Appeals to the people were stepped 
up, and the tone was one of increasing confidence. Figueres went on the 
clandestine radio repeatedly. Introduced by the introductory strains of 
Beethoven's Fifth Symphony, he explained again and again that only a 
"second republic" could free Costa Rica from impoverishment at the hands 
of special interests and the privileged government class. At the same 
time, despite censorship, propaganda sheets were circulated. On April i, 
1949, the second proclamation from the army of liberation was published. 
It promised to restore order and good government and to end poverty 
and was signed by Figueres. 

In many of the smaller villages, terrorism was rampant. In some of 
the Pacific coast settlements, in particular, armed bands looted and killed. 
Order was maintained only with difficulty in some of the more populous 
areas, and only the largest cities were free of opportunistic vandalism. 
By April 12, the rebels had succeeded in establishing a base at San Ram6n, 
forty-five miles northwest of San Jose. With this position secured, they 
were able to ring the capital geographically and advance from all sides. 

The next day at five o'clock, a ceasefire was called. Settlement was in 
the air. A meeting was held along the Inter American Highway at which 
both the government and Figueres were represented. Members of the 
diplomatic corps lent their presence in hopes of hurrying a final agreement. 
Father Benjamin Nunez presented Figueres' demands at the meeting. 
Following an armistice, the government was to be turned over quickly 
to the Liberacion Nacional, which was prepared to operate on an emergen- 
cy basis until the constitutionally elected authorities could take charge. 

Government representatives did not receive the proposals with 
enthusiasm. President Picado was willing, but his influence by this time 
was negligible. Armed forces in San Jose were in control of the capital, 
and they were under the thumb of Manuel Mora. Determined to keep 
Figueres out of the city, Mora still entertained hopes of hanging on until 
aid might come from Nicaragua. Negotiations continued. On April 16, 
President Picado agreed to Figueres' terms and signed the final agree- 
ment. Manuel Mora stubbornly refused. With personal control of San 
Jose barracks, weapons, and manpower, he forbade Picado or Calder6n to 



COSTA RICA 223 

leave the country, announcing simultaneously that he would continue the 
loyalist fight as long as necessary. At this point the negotiated truce 
seemed meaningless. On April 17, hostilities reopened. Jose Figucres 
warned that "if the Communists keep blocking the settlement, we will 
march on San Jose . . . willing to make concessions ... we will not accept 
any international commitments, and above all nothing that would conflict 
with the policies of the United States against communism." 15 While 
Figueres' forces girded themselves for one final assault, communist irregu- 
lars surged through the streets of the capital looting, stealing, and burning 
indiscriminately. Wholesale arrests were made of many protesting, in- 
nocent citizens. The diplomatic corps continued to urge Mora to sur- 
render. U. S. Ambassador Davis, in particular, directed pleas to the 
Communist to give up what was obviously a losing struggle. On April 
19, he finally relented, faced with no alternative to a street fight ending in 
annihilation. 

The longest and bloodiest civil war in Costa Rican history was con- 
cluded. A poorly trained, loosely organized band of revolutionaries, 
outnumbered two to one and armed with inferior weapons, had defeated 
the government in the six-week uprising. It had fought with determina- 
tion, courage, and intelligence that belied its lack of military experience. 
After weeks of slashing guerrilla raids, it came out into the open and con- 
tinued with a succession of victories. When the army of national libera- 
tion paraded down San Jose's Avenida Central on April 24, it was indeed 
a glorious moment. None of this had been necessary. President Picado 
and Calder6n apparently had never considered the probability of serious 
revolution when they directed the annulment of elections. Knowing 
that their military advantage was seemingly unchallengeable, they were 
completely unprepared for the resulting armed opposition. With the 
army inexplicably undisciplined and unready, the government replied 
only feebly to the revolutionaries. Small cliques took orders only from 
Calderon, President Picado, Rene Picado, or Manuel Mora. Only the 
supporters of Mora gave a respectable military account of themselves. 
The army itself was from the beginning uninterested in the struggle, and 
this was the important factor in its humiliating string of setbacks. 

Figueres 9 army of national liberation occupied the military barracks 
as government armed forces surrendered en masse. There were oc- 
casional clashes with some of Mora's men, but these soon ended. Teodoro 
Picado fled to Nicaragua, Rafael Calderon to Mexico, and Manuel Mora 



224 CENTRAL AMERICA 

to Cuba. When doubts about the new government were expressed, 
Figueres explained that his troops were supporting the provisional govern- 
ment of Herrera which would in turn be replaced on May 8 by a junta.* 
"The same organization that gained victory will shordy assume the total 
direction of the country and will guarantee rapid reorganization and the 

restoration of normal conditions Then we shall begin to execute the 

grand constructive plans of the second republic." 16 As the new govern- 
ment was received with enthusiasm. President-elect Ulate added his 
approval: "The country must feel intensely proud of Senor Figueres and 
his brave boys." 

With the provisional government under Herrera, a tremendous task of 
reorganization and accumulated work was faced. In the last weeks of 
the Picado regime, office work had collapsed, and widespread chaos faced 
the revolutionists when they took office. Figueres, refusing to set up a 
military dictatorship, pleaded for patience on the part of the people: 
"We must establish order throughout the country in the shortest possible 
time before taking measures of a civil and political character." 17 In the 
short time before the junta took power on May 8, the provisional govern- 
ment groped for an answer to its problems. Costa Rica was not only 
politically disorganized but nearly bankrupt. The revolutionists had 
expended every possible source of money in launching and conducting 
their battle and could do nothing personally. In the meantime, a less 
temporary government had to be formed to take office on the eighth. 

Searching for someone other than himself to head the junta, Figueres 
asked Ulate to become junta president. However, while agreeing that 
a period of emergency government should precede his own constitutional 
term, Ulate refused to participate actively in the temporary organization. 
He believed that as emergency chief he would be forced to rule with an 
especially firm hand, at least occasionally taking action for which, as 
president-elect, he could not be responsible. Figueres finally decided to 
take the presidency himself. He announced that he would call a con- 
stituent assembly on the eighth when the new government took power. 
It would draw up a new constitution after which congressional elections 
would be held. Three months would be allotted to form the constituent 
assembly, with three more to debate and draft a new constitution. Once 
elections constituted a new assembly, the Ulate administration would 

* A San Jos6 businessman, Jorge Herrera, was chosen to head the provisional government 
during its first weeks. He retired from politics soon thereafter. 



COSTA RICA 225 

take office, with the junta resigning all emergency powers. At the same 
time, its maximum duration would be eighteen months. On May 8, 1948, 
the final phase of the revolution opened when the junta government under 
Jose Figucres took power. 

The first task of the junta was to ferret out all elements that might 
stage a counterrevolution. On May 30 the new government arrested 220 
alleged Communists, seizing at the same time a large cache of submachine 
guns. Apparently the group was awaiting a propitious moment for 
their counter-coup. The government uncovered their whereabouts before 
the movement began. Slightly unnerved by the magnitude of this threat, 
the government doubled its guard on the northern border, and patrols 
scouted the San Juan River looking for revolutionaries who might sneak 
across the frontier from Nicaragua. The atmosphere began to relax when 
once again danger flickered. On June 19, Figueres announced that a 
major military attack had been planned for the twenty-eighth. As forces 
invaded from Nicaragua, San Jose and the two major ports, Puntareuas 
and Puerto Limon, would be put under aerial attack. At the same time 
communist and pro-Calderon elements would rise up in the capital and 
smash the new government. The elaborate plans included the assassina- 
tion of Figueres and Ulate. The government response was a thirty day 
suspension of civil rights and the arrest of thirty-five suspected Com- 
munists. On July 17, full constitutional guarantees and civil rights were 
restored. Continuing its war against subversion, the government banned 
the communist Vanguardia Popular on July 18. It also outlawed secret 
political parties and the use of violence for political purposes. 

Satisfied that its regime was in safer waters, the junta turned to 
financial and economic problems, intent on shoring up the nation's de- 
teriorated financial state. Several different means were employed. One 
was that of outright loan. First the government negotiated for a twenty 
million dollar loan from the Export-Import Bank to pay outstanding ac- 
counts and finance a large public works program. Then it went to the 
International Monetary Fund for additional financing that might pay for 
the machinery and clothing imports Costa Rica needed. At the same time, 
a few months' business activity and government operation reduced the 
gravity of the situation. On September 25, the economic council refused 
a five million dollar loan from the National City Bank of New York, 
citing the "inconvenience" of using gold reserves of the Bank of Costa 



226 CENTRAL AMERICA 

Rica deposited in the United States. The loan had been offered at 3 
percent, with yearly payments of one million dollars on the principal 
after the sixth year. 

Internal measures to increase revenue were more unusual. Tax facili- 
ties were speedily reorganized to render the collection of income tax less 
ineffective. It had been traditionally avoided in one way or another. 
In the face of the Latin heritage of non-payment of taxes, the government's 
position was surprising. Even more startling was the proclamation of a 
10 percent capital levy, something unprecedented in Central American 
political history. Designed to pay off debts of former governments and 
help finance a reconstruction and development program, the levy was 
directed to the wealthiest sector of the population. For less prosperous 
citizens or small businessmen with a yearly income of less than ten 
thousand dollars, the levy meant nothing. The wealthy were hit hard by 
the law, however, for the 10 percent levy took a sizeable chunk from even 
the most affluent businessmen. The tax went into effect in November, 
1948. A month before another junta decree had announced drastic import 
restrictions. "Private" importations were forbidden, with future imports 
to be made through junta control. A 50 percent tax was declared on the 
c i. value of luxury merchandise, and 30 percent on semi-luxury goods. 
Near panic broke loose in business circles. Importers were dazed and 
said that the importation of luxury and semi-luxury articles was pro- 
hibitive. In reply, government spokesmen explained that it was necessary 
to reduce imports, since they more than doubled the value of exports. 
Thus capital might be introduced into official channels from the private 
market, helping alleviate government financial worries. 

While re-establishing order and shoring up the treasury, the junta was 
dealing simultaneously with a third problem national political reorgani- 
zation. The first stage was the election of representatives to the con- 
stituent assembly. The three-month period for registration and recogni- 
tion of parties had to be extended in September since only Ulate's Uni6n 
Nacional had complied in time. By October, seven different parties had 
presented a slate of candidates for the forty-five-member constituent as- 
sembly. The major parties were the Uni6n Nacional, the extreme right- 
wing Partido Constitucional, and Figueres' Partido Democrdtica Socialist. 

A general holiday was declared for the December 8 voting, and elec- 
tion officials urged neutrality away from the ballot box. Two days after 
the voting, results showed that Ulate had won an overwhelming victory, 



COSTA RICA 227 

his Union Nacional having won nearly 80 percent of the total vote and, 
with it, thirty-three of the forty-five seats. The constitucionalistas captured 
six, and Figueres' belated effort to organize his own supporters brought 
him only four scats. The following month the constituent assembly met 
for the first time and began to frame a constitution under which Ulate 
would finally become president. Three days after the election, however, 
a calderonista counterrevolution was launched with an invasion from 
Nicaragua. Many of the details have already been accounted in Chapter 
Five. However, at the risk of some repetition, certain aspects must be 
mentioned here. The invasion was formed by calderonistas determined 
to overthrow the junta, exile Ulate, and take the presidency for Calderon. 
The ex-President was aided substantially by Nicaraguan dictator Somoza. 
Many of his supporters had fled to Nicaragua after Figueres' victory, and 
under Calder6n's leadership and Somoza's eye had passed the intervening 
months planning their return. 

The thrust was first planned for early 1949, but Costa Rican internal 
affairs caused a last minute change of plans. On December i, Figueres 
had disbanded the army of liberation, calling for a return to the tradition 
of schoolteachers, not soldiers. Minister of War Cardona warned that 
this was not to be taken as a sign of weakness. Costa Rica would fight 
if necessary. At the same time he announced that the national police 
force would be maintained at one thousand men and the coast guard at 
seven hundred. To Calderon this seemed the time to strike. He allowed 
a few days to pass in order for the army of liberation to be effectively 
dispersed. Then, with elections on December 8, he reasoned that there 
might be at least a little excitement and perhaps irregular activity which 
would aid his attack. The ace in the hole, if he had one, was the hope 
that josefinos would rise up in the capital to overthrow the junta. There 
were still substantial numbers of communist supporters willing to help, 
and Calder6n was not totally unpopular in San Jose. It was with such 
thoughts in mind that he ordered the attack for December 12, 1948. In 
Managua he called a press conference, that there might be no doubt of 
the counterrevolutionary leader. "The revolution was illegitimate and ill- 
conceived . . . my aim is to restore the state of things destroyed by a group 
of insensate men led by Jos Figueres, a legal and spiritual adventurer." 18 
At the border there were conflicting reports. After initial disagreement, it 
became apparent that the invaders numbered no more than three hundred. 
The first pitched battle was December 14, two days after the first attack. 



228 CENTRAL AMERICA 

At La Cruz, a few kilometers south of the frontier, a band of rebels was 
surrounded and thirty-eight men captured. Elsewhere fighting was light 
and inconclusive. On one occasion several Costa Rican loyalists were 
wounded as two groups of government forces fired upon one another, 
failing to establish identity. 

The junta government had reacted immediately in San Jose, mobilizing 
the army of liberation and re-establishing its former organization and 
command. The country was placed under martial law and press censor- 
ship. A national effort was decreed to repulse the invaders. In the midst 
of the confusion, Figueres took time to accuse the Nicaraguan National 
Guard of participation. This, he said ominously, could mean nothing 
but outright war. Somoza denied the accusation sharply. He wheeled to 
the counterattack with a statement that "the forces he led [the army of 
liberation] were made up almost entirely of foreigners in the Caribbean 
Legion , . . this ... is Nicaragua's enemy and has openly threatened us 
with the overthrow of our Government some day. . . ," 19 

Fighting slackened in the next few days, and the invaders were 
obviously making little progress. The Costa Rican people were standing 
firmly behind the junta, belying its short existence; there was no sign of 
trouble in the capital. The government turned to the Organization of 
American States for assistance, appealing for intervention on the grounds 
that Nicaragua was impinging upon sovereign rights. The Costa Rican 
delegate in Washington officially invoked Article 6, which says in part 
that "If the inviolability or the integrity of the territory or the sovereignty 
or political independence of any American State should be so affected by 
an aggression which is not an armed attack . . . the Organ of Consultation 
shall meet immediately in order to agree on the measures which must be 
taken ... to assist the victim. . . ." 20 A board of inquiry was sent to the 
area. The five-man commission spent nearly a week in San Jos, then 
continued to Managua. They encountered official cordiality in both cities. 
Returning to Washington one day before Christmas > the commission pre- 
sented its report to the council of the OAS, which in turn approved a 
resolution calling upon both countries to refrain from hostile actions. 
Nicaragua was held guilty for permitting the formation of a revolutionary 
group on its soil. Costa Rica was enjoined to remove the presence of the 
Caribbean Legion and offer no further encouragement to its members. 
Both parties to the dispute were to observe the principles of non-interven- 
tion and solidarity. The commission report stated unequivocally that the 



COSTA RICA 229 

invasion came from Nicaraguan territory. However, there was no evi- 
dence of direct Nicaraguan collusion. It had, in fact, prevented the rebels 
from getting supplies across the border after the first day of fighting. The 
counterrevolution was broken, and the junta returned to the task of 
reconstituting a representative Costa Rican government. 

RETURN TO CONSTITUTIONAL GOVERNMENT 

Following the December turmoil, the junta returned to the preparations 
for the delivery of office to Ulate. Most of the events of the next months 
were dedicated to the consummation of this goal. The constituent as- 
sembly opened on January 14, 1949, approving on the following day the 
election of Otilio Ulate from the preceding March. It was agreed that he 
would take the presidency after elections for the regular Legislative 
Assembly. Originally it was understood that the junta would relinquish 
power after eighteen months, on November 8, 1949. However, in early 
1949 the Figueres government proposed that its tenure be extended six 
months, in order to assure completion of the national tranquilization that 
was to precede Ulate's inauguration. The president-to-be agreed to the 
proposal, stating that problems left by the Picado government were grave 
enough to warrant six months' extension of the junta's life. The con- 
stituent assembly concurred in the decision by a vote of 26-19. Thus the 
junta was to be prolonged until May 8, 1950. There were those who 
thought this was but a step in Figueres' establishment of a military dic- 
tatorship. They were convinced that Ulate had been persuaded or bribed 
to go along with the provisional government that its power might be 
more firmly established. As it developed, the junta later decided there 
was no need to extend its tenure, and Ulate was able to take the presi- 
dency in November as originally planned. 

The last open threat to Ulate's inauguration came on April 2, when 
Colonel Edgar Cardona, minister of public security, tried to engineer a 
coup against the provisional government to which he belonged. With a 
small group of followers he seized the Artillery barracks and the Bellavista 
barracks, the latter on a hill overlooking the San Jose business district. 
Colonel Cardona had little support; his hope was to draw support from 
other military elements, particularly dissatisfied members of the liberation 
army who opposed the impending disbanding of that force. If the military 
came to his side, Cardona reasoned, there would be little to stop him. 
He soon learned that even hotheaded young army irregulars had had 



23 o CENTRAL AMERICA 

their fill of revolution, however, and no one joined him. The Artillery 
barracks surrendered early the next morning, and Colonel Cardona was 
taken prisoner. On the other side of town, Belkvista barracks, under 
Fernando Figueroa, refused to yield. After a full scale two-hour bombard- 
ment, he changed his mind. The following day Cardona's chief co- 
conspirator, Claudio Cort&, brother of former president Leon Cortes, 
was also jailed. Total casualties on both sides were seven killed and 
twenty wounded. Although crowds shouted "death to Cardona," the 
junta chose to be lenient. Today he lives in Costa Rica a free man, al- 
though not active in politics or the military. 

Figueres' popularity increased after refusing to prosecute Cardona 
harshly. Cardona, apparently angered by Figueres' refusal to appoint a 
man of his choice as director of the police, had little standing as a national 
political figure, and his defeat merely boosted government prestige. 
Figueres declared that "the disloyal . . . elements have been defeated. The 
dark legend that force is able to rule ... has perished today." 21 The 
people cheered enthusiastically. Two days later the army was once again 
disbanded, the second time in five months. It only remained for the 
constitution to be completed and a new Congress to be elected, and the 
junta's task would be complete. In mid-August, the new document was 
finished and approved, giving the country another measure of stability. 
It was, of course, different from its predecessors, but there was little in it 
to change the operating procedures of previous governments. The 
executive powers had been slightly restricted, but the president still was 
in fact the dominant force. Roman Apostolic Catholicism was endorsed 
as the state religion, although Title VI also was careful to state that die 
religion would not "impede the free exercise in the Republic of other 
religions not opposed to universal morality nor proper customs." 22 

On October 2, elections were conducted for deputies of the Legislative 
Assembly as well as for municipal officers. Again, as in earlier elections 
for the constituent assembly, there were only three parties with more 
than negligible support: Uni6n Nacional, Partido Constitucional, and 
Dem6cratas Socialistas. The government, intensely concerned in bring- 
ing out all voters, cashiered a fleet of cars to comb the roads and byways, 
offering to drive voters to the polls that they not fail to cast ballots. 
When returns were complete, Uni6n Nacional had polled fifty-one 
thousand of the seventy-two thousand votes cast, winning thirty-three of 
the forty-five Assembly seats. Both of the two vice-presidents, who under 



COSTA RICA 231 

the constitution had become elective officials, were ulatistas. It was a 
smashing affirmation of Ulate's great popularity. The Social Democrats 
and Constitutionalists were left far in arrears. 

Just as the final step seemed complete, Ulate's accession was jeopar- 
dized by precipitate action on the part of Figueres. After several months 
of rather rough going, Figueres and the entire cabinet resigned on 
October 26, barely two weeks before the scheduled inauguration. Figueres' 
political troubles began shortly after his July announcement that he was 
willing to accept nomination as vice-presidential candidate. He would be 
"honored to collaborate with the next Government." Thus he showed 
himself willing to pky a role secondary to that of Ulate. At the same 
time, he blocked efforts of followers to drive a wedge between him and the 
president-elect. Figueres planned to resign from the junta, head a 
national party in the congressional contest, and campaign nationally. 
The relationship to Ulate's party would be one of "cooperative opposition." 
One month after his initial statement, Figueres withdrew his candidacy. 
Speaking over the radio, he expressed his approval of Ulate's vice-presi- 
dential choices. He preferred to continue his work as head of the junta, 
he announced. This statement killed off his party for the present. Its 
list of Assembly delegates was withdrawn. It was October 26 when 
Figueres and the provisional government resigned. The constituent as- 
sembly passed a bill putting the jobs of all ten thousand government 
employees on a temporary basis. The measure permitted the discharge of 
all civil servants, regardless of grade, without warning or compensation. 
This meant a complete sweep of all government officials was possible. 
Low grade workers receiving under six hundred colones a month could 
be fired without notice and without receiving any terminal pay. 

Figueres was seething. Pointing out the injustice of the law, he re- 
fused to continue in power, and the cabinet backed Him fully. He wrote 
Ulatc to be ready to take charge of the government within twenty-four 
hours. He was determined not to continue as junta leader. Ulate was 
equally insistent that, after the various difficulties in re-establishing consti- 
tutional government, it was foolish to permit a break, particularly with the 
inauguration only two weeks away, Figuercs angrily asserted that the 
bill must be revoked, but this would have been exceedingly difficult. 
Ulate finally promised not to exercise the power of dismissal he had been 
voted. With this assurance, Figueres stayed on for the remaining two 
weeks. Otilio Ulate was duly sworn in as President of the Republic on 



232 CENTRAL AMERICA 

November 8, 1949, exactly nineteen months, twenty-eight days, and three 
presidents after having won election. With the inauguration of Ulate, 
the nation was hopeful of an administration of peace and progress. 
Prospects suggested a "new day" in Costa Rica. Ulate, immensely popular 
when he took office, had started years before as a newsboy in Alajuela. 
Moving to San Jose as a youth, he became a reporter and, by the age of 
twenty-six, publisher of Diario de Costa Rica, one of the better news- 
papers. A widely traveled journalist, he was always independent, and his 
paper followed the same path. His only previous political office had been 
that of national congressman, to which he was elected in 1916 at the age 
of twenty-one. After a month he was jailed for opposing the regime, and 
a budding political career was apparently cut short. 

A large, ugly, but not unimpressive man, Ulate was and is today 
respected for his lack of pretense and sincere concern with the problems 
of even the lowly street begger. Combining his popularity with a new 
constitution, a new Legislative Assembly, and only weak minority op- 
position, it was entirely reasonable to anticipate an administration of peace 
and progress certainly that was what strife-ridden Costa Rica needed 
while the wounds of the revolution healed. The first two years of his 
administration were devoted to the stabilization of shaky finances, im- 
provement of foreign credit, and a less sickly internal loan situation. 
There was a dollar shortage to be dealt with, and the fluctuating exchange 
rate of the colon also demanded stabilization. While Ulate was interested 
in development of agricultural and industrial potental, he realized the only 
basis for an effective program would be a sturdy financial structure. This 
was lacking, and he was forced to work for the alleviation of such fiscal 
and economic ills. The development program was postponed. 

When Ulate took office, Costa Rica's unredeemed overseas trade 
commitment was $20,500,000. By June, 1951, this was completely liqui- 
dated and the Central Bank had a $6,500,000 reserve for letters of credit. 
In 1950, the Central Bank, Costa Rica's currency-controlling and money- 
issuing authority, began to release a sum in excess of three million dollars 
to liquidate the overseas debt as quickly as possible. Debts of previous 
administrations were soon wiped out, and the credits incurred by Figueres 
and early Ulatc commitments were gradually cancelled. In place of the 
1949 disparity of 3.5 between the official dollar rate and that obtained on 
the open market, the money changers soon were paying less for dollars 



COSTA RICA 233 

than the government. The public external debt remained in default, but 
shrank in two years from $58,500,000 to $30,000,000. 

Aside from a generally sound financial policy, the administration bene- 
fited from marked business improvement and foreign trade expansion. 
A coffee export tax was introduced, charging three dollars on each 
hundred pounds of coffee. Two private banks were established to rein- 
force the nationalized banking system. Revised civil service regulations 
cut expenses and eliminated duplication. Figucres' pet scheme, the 10 
percent capital levy, was ignored. Trade with the United States in- 
creased. Exports for 1950 were 34,700,000, and the next year rose to 
$38,000,000. Imports also grew, increasing over a million dollars after 
Ulate's second year. The coffee and banana harvests were also larger 
than in other years. UFCO expanded both its banana trade and its 
African palm oil plantation in 1951. With all this, President Ulate could 
claim after two years in office, "No small part of my Government's 
strength is due to the spirit in which all the ministers have carried out 
their duties. . . . We can now turn ... to material reconstruction." 23 

President Ulate announced on November i, 1951, a two year develop- 
ment program. Satisfied that national finances were on a sounder basis, 
he proposed to increase agricultural and industrial production while de- 
veloping the republic's undeveloped latent resources. Pivot of the switch 
to material reconstruction was a four million dollar loan from the Inter- 
national Bank for Reconstruction and Development. Much of the loan 
was to be channelled into construction of a large international airport, 
El Coco, a few miles outside the capital. More was directed to a 
hydroelectric project and the purchase of industrial and agricultural 
equipment, largely from the United States. Financing the hydroelectric 
project was delayed, but in October, 1952, Foreign Minister Alfredo 
Hernandez Volio flew to Washington seeking further financing of this 
program by the International Bank. Plans had been made involving a 
dam and power plant on the Raventazon River on the Caribbean, a plant 
which would have a 75,000 kilowatt potential. Expense was calculated 
at some thirteen million dollars. 

During this same visit to the U. S., the foreign minister negotiated 
one of the major fiscal accomplishments of the Ulate years by arranging 
a settlement of the remaining foreign debt. He concluded a deal with 
the United States Foreign Bondholders* Council to liquidate an ac- 



2 34 CENTRAL AMERICA 

cumulated United States interest of some five million dollars. He also 
arranged to clear up a default in the U. S.-owned Pacific Electric Railway. 
This general settlement was probably the most important part of the 
administration efforts to rehabilitate national finances. On October 31, 
1952, the Foreign Bondholders' Council said it had reached an under- 
standing with Volio regarding assumption of service of Costa Rica's 
defaulted dollar bonds on an adjusted basis. Volio appeared before the 
Assembly on his return to explain the previously unannounced terms of 
the agreement. As he enumerated individual phases of the agreement, 
the government would float a new twenty year bond issue in New York 
City with i l / 2 percent interest increasing gradually to 3^2 percent by 
1956. The bonds would be exchanged at a nominal value for issues in de- 
fault in 1952. The 7 percent Costa Rican bonds and j l / 2 percent Pacific 
Railway bonds had each increased in principal from a thousand to eleven 
hundred dollars in consideration of the fact that national interest payment 
was in arrears. The two issues of 5 percent refunding bonds were to be 
exchangeable for new bonds at par. All new bonds were extended twenty 
years. He added by way of footnote, that 75 percent of the bonds were 
owned in the U. S., 20 percent in Great Britain, and the remainder in 
France and Germany. 

The 1952 business expansion continued into Ulate's final year in 
office, despite the excitement of presidential elections in early 1953. In 
his final state of the nation speech, President Ulate summarized the 
accomplishments. An unpaid commercial debt of $20,500,000 had been 
converted to a dollar reserve of similar quantity in the Central Bank. An 
international airport was being financed and constructed near the capital, 
replacing the inadequate La Sabana airfield. The Inter American High- 
ivay was nearly completed through northern Costa Rica to the Nicaraguan 
x>rder. Almost all of the twenty-year-old foreign debt of $26,500,000 
was liquidated, largely due to the agreement with the U. S. Foreign Bond- 
holders' Council. Thirty-five percent of the total foreign debt would be 
paid when Ulate left office in November, 1953. The internal debt, while 
still sizeable ($27,000,000), was reduced by $1,250,000. A budgetary 
surplus of one million dollars was left over from 1952, and supplementary 
appropriations in 1953 of three million dollars were available for public 
works and educational expansion. 

Agricultural improvement was equally heartening. Production was 
more diversified that in any other Central American nation. All the basic 



COSTA RICA 235 

food stuffs were raised in Costa Rica, in quantities generally sufficient to 
make their importation unnecessary. Only wheat and lard had to be 
imported. The exportation of coffee continued to climb, with the 1952 
crop valued at twenty-nine million dollars. Ten years before, a crop of 
the same volume had brought only eight million dollars. Bananas con- 
tinued to bring in revenue second only to coffee. The 1952 harvest was 
valued at fifteen million dollars, breaking all previous records with 
10,500,000 stems, an increase of a million over 1951. Once-abandoned 
plantations on the Caribbean, susceptible to Panama disease, were taken 
over by the Standard Fruit Company. They proceeded to develop a 
different type banana, somewhat less marketable but still in demand and, 
more important, not susceptible to Panama disease. Exports skyrocketed 
more than ten million dollars to sixty million in 1952, and imports rose 
five million to $55,700,000. 

For Costa Rica, much of the credit for the expanding and diversifica- 
tion of agriculture was due the Point Four mission from the United 
States. It got a jump on missions elsewhere in the region, finding the 
task easier because of the sizeable number of small landowning farmers. 
The main base of U. S. assistance through Central America was set up in 
Turrialba some thirty miles east of San Jose. At this center, new plant 
species were developed, odier seeds were improved and studied, hybridiza- 
tion experiments were conducted, and select young men were trained in 
scientific methods, these to be taken back to their native lands. The 
institute, today a powerful force in Central American agricultural de- 
velopment, devoted its early efforts, in particular, to Costa Rican prob- 
lems, much to the advantage of the republic. A new extension service 
was established in 1952, operated exclusively by trained Costa Ricans. 

For all these reasons, then, the administration of Otilio Ulate was 
notably successful. Probably no Costa Rican president in recent years 
has made such a valuable contribution. Ulate's procedure was the 
operation of an honest, disinterested government adhering to conservative 
fiscal policies at a time when the country was tottering on the brink of 
financial disaster. Through a combination of hard-headed policy making 
and sturdy monetary economics, the administration led the country back 
to its favored position among Central American economies. 

Otilio Ulatc faced communist activity during the first years of his 
administration and conscientiously fought them at every turn. Shortly 



236 CENTRAL AMERICA 

after his inauguration, a large communist meeting was raided in a San 
Jose suburb, resulting in the arrest of seven Red leaders and the eventual 
exile of several. The communist Vanguardia Popular, although oudawed 
by the junta, still conducted meetings under a different guise, and only 
by police activity could they be curbed. In April, 1950, another gathering, 
billed as a student meeting, was visited by members of the Civil Guard, 
who found over two hundred Communists, fellow travelers and interested 
observers reading documents attacking "yankee imperialism." Twelve 
Reds were sentenced to prison terms of varying duration. Thus under 
government attack, the Reds tried to form a successor to the illegal 
Confederation de Trabajadores Costarricenses (CTC), which had once 
been influential in the labor movement. Communists filed the documents 
necessary for legal recognition of the San Jose Federation de Trabajadores 
in opposition to the Roman Catholic Rerum Novarum. This was 
squelched when President Ulate warned on November 13, 1950, that the 
government considered it illegal and would withhold the protection of 
the law. Pointing out that many of its leaders and affiliations were similar 
to those of the CTC, he refused legal recognition. The group soon 
faded away. 

Revolutionary plots were of a minor nature during the Ulate years. 
In early spring of 1951 a series of bomb explosions in San Jose ruffled 
public order temporarily. Beginning in mid-March, bombings occurred 
sporadically throughout the capital, including the market place and one 
of the larger movie houses. Eight separate explosions were carried out be- 
fore the government brought them to an end. On April 4, a large cache 
of bombs, automatic rifles, and other explosives were discovered in private 
homes, apparently in readiness for a possible coup. Damning lists of 
names were found, headed by the uncle of ex-President Calderon, 
Prospero Guardia. Communist elements were also involved in the 
terrorist plans. Presumably Calderon was directing the movement from 
Mexican exile. Forty-eight were arrested by the Civil Guard, completely 
breaking the back of the abortive plot. 

Less violent but more startling was the one serious political crisis under 
Ulate, one precipitated by his own peculiar actions. In September, 1952, 
with campaigning already underway for presidential elections the follow- 
ing J^y? Deputy Ramon Arroyo brought up in the Assembly a charge 
presented by the Union Civica Revolucionaria, a party styling itself the 
champion of civil rights. Two members of the party had allegedly been 



COSTA RICA 237 

attacked and beaten on order of police commandants. Congressman 
Arroyo demanded investigations. The protest was legally a matter for 
the military, and the Assembly had no obligation to investigate. However, 
by a vote of twenty-three to twenty it was decided to appoint a special 
committee of inquiry. Five of the six top-ranking police officers im- 
mediately resigned, calling the verdict a deprivation of their authority. 
Parenthetically, they also demanded satisfaction by challenging Arroyo to 
meet them on "personal terms." Colonel Manuel Ventura did not 
resign and was pressed to reorganize the security forces in the highest 
echelons. At this point President Ulate grew angry, declared that the 
congressional vote amounted to a show of no confidence, resigned the 
presidency, and angrily stalked out of the capital to his finca. First 
Vice-President Alberto Oreamuno Flores assumed the presidential duties. 

Ulate's action was indeed extraordinary. Certainly the vote in the 
Assembly was unwise in view of military legal jurisdiction. However, 
it was scarcely sufficient provocation for Ulate to resign. As it was, a 
serious situation became instead a critical one. Despite the continuation 
of the administration under Oreamuno, there was the genuine possibility 
of a military golpe. Ulate certainly need not have retired to his country 
home. However, having let his pride override his judgment, there was 
nothing left to do but await the findings of the committee of inquiry. 
After the initial shock, Costa Ricans responded in a wave of sympathy 
for Ulate. He was pictured as a martyr to his office and the "street corner 
agitators" who signed the declaration of the Civic Union. The President 
stirred the people by blaming the crisis on political enemies. He never 
made any admission and, indeed, probably never recognized the fact that 
his resignation itself was the major cause of the crisis he blamed OIL 
political opponents. Fortunately, Ulate was able to return to office after 
sixteen days when the investigators gave his administration and the in- 
sulted police officials a clean bill of health. On October 13, 1952, the 
President returned to his post from self-imposed exile, and the ad- 
ministration settled down to the routine of government business once 
more. 

Ulate's successor was to be chosen in July of 1953; in Costa Rica this 
meant that campaigning necessarily would begin many months earlier. 
There was never any serious doubt that Jose Figueres would declare 
himself, and in time he did. A new group called the Partido Liberation 
National (PLN) began campaigning in the fall of 1952, although the 



238 CENTRAL AMERICA 

convention did not officially nominate Figueres until April. Raul Blanco 
Cervantes and Fernando Esquivel Bonilla were named as vice-presi- 
dential candidates, and a full slate of congressional candidates was also 
selected. Working in favor of Liberation Nacional was the apparent 
popularity of its candidate. Figueres was naturally remembered for his 
leadership of the 1948 revolution, and his popularity had been increased 
by his handing over the government to Ulate just as opponents were 
accusing him of perpetuating military rule by decree. A man of forty-six, 
Figueres drew the fervent adherence of many young Costa Ricans, 
especially a group of self-styled "young intellectuals" who, despite fatuous 
pretensions, had a certain influence. 

Figueres was first opposed by two men: Mario Echandi and Fernando 
Castro. Both men faced disadvantages in running. Echandi, a former 
member of the Ulate cabinet, was a brilliant and somewhat impetuous 
young politician distrusted in urban circles. He had generated con- 
siderable enthusiasm in the countryside, however. He was rumored to be 
President Ulate's preferred successor, although this was repeatedly denied 
by different members of the government, as well as by Echandi himself. 
Only after considerable maneuvering did Echandi win nomination by the 
Union Nacional. The other candidate, sixty-eight-year-old Castro, was 
a millionaire coffee planter who had not been active in political affairs. 
Running as the candidate of the Partido Democratic, Castro was not 
particularly effective as a campaigner, due in some part to his age. 
However, he was known and respected by conservative business and 
agricultural interests, obviously a "safe" man for the continuation of 
previous traditions in short, a true conservative. 

As the campaign gained momentum in early 1953, all three candidates 
devoted themselves to the accumulation of "adhesions." In Costa Rica, 
a chief means of political propaganda is this system of recording support. 
Throughout the country representatives of the various candidates travel 
with posters and buckets of glue. They stop at house after house asking 
permission to put a poster on the most conspicuous wall. At the same 
time, all townspeople are asked to sign a document declaring their ad- 
herence to the candidacy of a particular candidate. There is nothing 
binding in this through either law or practice. At the same time, it is 
generally hoped that most people will vote for the candidate to whom 
they "adhered." Full-page newspaper advertisements, for example, would 
show Figueres or Castro delivering an address in some town. Then would 



COSTA RICA 239 

follow a list of "adherers," running well into the hundreds. This form 
of campaigning continues almost until election night 

The 1953 Costa Rican contest soon became a two man race when 
Mario Echandi withdrew for various reasons, some of them obscure. 
Among these reasons were different political pressures and negotiations. 
His withdrawal after many had committed themselves to his candidacy 
made it difficult for these supporters to work actively for another candidate 
and undermined some of the support for Castro, who had competed 
directly with Echandi for the support of many of the same political 
figures. The entire campaign was completely dominated by Jose Figueres. 
He went tirelessly from town to town, making hundreds of appearances 
and talks in different parts of the country. In general his activity was 
not unlike that of United States candidates during the grueling rigors 
of primaries. Figueres appeared often in the major cities, but his appeal 
was clearly pitched to the ears of the lower classes. Figuerismo became 
a popular byword of the poorer classes, although many were baffled by 
some of his promises. He spoke of socialism adapted to the "reality of 
the present Costa Rican needs and possibilities," meaning a program of 
social and economic reform. 

Figueres had long advocated a series of measures to shore up agri- 
culture and make the national economy less dependent upon variations 
of international prices and buyer demand in foreign lands. These economic 
ideas, discussed at length in subsequent sections, were enthusiastically 
received by the less prosperous. To them, Figueres' plans were not fully 
understandable. However, he claimed to be interested in raising the 
standard of living, and that was something they wanted fiercely. The 
warnings of businessmen and economists that Figueres* plans might not 
work went unheeded. Another facet of Figueres' campaign was his 
reiterated determination to do everything possible to strengthen de- 
mocracy in Latin America and oppose the regimes of Somoza in Nica- 
ragua, Trujillo in the Dominican Republic, Perez Jimenez in Venezuela, 
and others he accused of being despotic and undemocratic. He declared 
again and again that Latin America had passed the point at which 
democratic government was not only a desire but a crying necessity. He 
was pledged to exercise official influence in pursuit of this belief. 

Liberaci6n Nacional even presented a formal program, something rare 
in Latin politics. This "ideological program," appropriately enough, had 
something for almost everyone. In fact, there was very little it didn't 



240 CENTRAL AMERICA 

promise. To attack it would be like slurring God, the Costa Rican flag, 
futbol* or the weekly lottery. For Castro there was no such program. 
Until the final weeks of the campaign, the Democratic candidate offered 
very little except a promise to continue the "traditions" of Costa Rica. 
In his later speeches he spoke of agricultural development. Himself a 
cattle breeder as well as coffee grower, he made a point of his experience 
with agriculture and the necessity of a level head in the presidency. This 
appeal, belated as it was, aroused litde enthusiasm. It was left to Figueres 
to fire the popular imagination. 

Determined to avoid the divisive rancor of such as the 1948 election, 
President Ulate took active measures to ensure a proper and free election. 
To avoid any show of violence, he prohibited the carrying of firearms. 
Anyone caught with a weapon would be imprisoned from six to twenty- 
four months. Expressing his determination to suppress disorders firmly, 
he warned members of the armed forces and government employees as 
well against any expression of favoritism. They did so at the risk of 
instantaneous dismissal. Further precautions included the appointment of 
a delegate to each of the seven national provinces with plenary powers to 
suppress any intimidation or violence. Delegates were members of the 
Civil Guard, holding complete authority in electoral violence. 

As election day dawned the outcome was in doubt. Despite Figueres' 
domination of the campaign, the question was whether or not all the 
people crowding to his rallies had been captured to the extent of voting for 
him. As Sydney Gruson wrote in the Nc w Yorl^ Times, the vote was for 
or against figurismo. Castro himself had reminded listeners more than 
once that they might avoid figurismo by voting for him. Business interests 
were almost entirely behind Castro. They feared Figueres would launch 
a "soak the rich" program to finance his development plans, and his 
avowed interest in socialist doctrine was another source of concern. As- 
sured that Castro would not be likely to rock the boat, they supported him 
instead. How many others might also fear figuerismo was the major 
imponderable confounding the experts. 

Both candidates were predictably optimistic about their chances. Fig- 
ueres declared expectantly that he hoped for 70 percent of the vote, the 
largest plurality in history. While many of his backers were willing to 
settle for the narrowest of victories, he was not, "A close vote, even in 
my favor, would be a great disappointment. It is unimportant whether 

* Latin jutbol is the same as North American soccer. 



COSTA RICA 241 

or not I gain the presidency. The important thing is whether the ma- 
jority of Costa Ricans have realized that the time has come for great 
changes in the country." 24 On July 26, 1953, the decision was reached. 
Figueres led from the start. Only four hours after the counting began, 
his daily La Republica claimed a two to one victory. At the same time 
the official count was low, and Castro said it was ridiculous to form con- 
clusions so early. Final tabulations verified Repiiblica's early claim, how- 
ever. Figueres received n 1,553 votes to 60,379 for Castro, a little short 
of 70 percent, but certainly a smashing affirmation of Figueres' campaign 
efforts. Four months later Jose Figueres was inaugurated as President 
of the Republic. On that day, 8 November 1953, the stormiest and most 
controversial figure in contemporary Central American politics assumed 
power. 

FIGUERES: DEMOCRAT OR DEMAGOGUE? 

In a region notable for its striking political figures, few are more ex- 
traordinary than Jose Figueres, one of the more unfathomable men of 
our times. Admirers have called him "the leading hope of the liberals 
in Latin America" (Arthur M. Schlesinger, Jr., Harvard historian), "the 
outstanding democratic leader of Spanish America" (Romulo Betancourt, 
ex-president of Venezuela), and "the leader of a new political movement 
and meaning in his part of the world" (United Nations World, November, 
1953). To others Figueres is a "communist sympathizer" (Rafael Cal- 
deron), "a man trafficking in political intrigue and unease" (Excelsior, 

outstanding Mexico City newspaper), and even "a gutless without 

the brains of a scarecrow" (Anastasio Somoza). Somewhere between 
these two extremes lies the enigma of Jose Figueres. Born of Catalan 
parents near San Jose in 1909, Figueres went to the United States in his 
youth, studying there several years. Returning to Costa Rica, he bought 
a coffee finca in the rugged mountains south of the capital and became 
an agriculturist at Lucha Sin Fin, as he called it. Like other coffee 
planters he had to import high-priced coffee bags, and after several years 
diverted acreage to fibrous sisal, from which coffee bags and hemp could 
be made. In a period of fifteen years he became a well-to-do planter, 
owning two farms as well as the bag manufacturing factory. In the 
operation of his finca Figueres applied ideas which were later to be 
reflected in his political activities. Interested in socialism, he established 
a small state of his own. Sharecroppers over five hundred of them 



242 CENTRAL AMERICA 

could sell products to him at average market prices or elsewhere if they 
could get a better offer. He helped build sanitary homes, set up a com- 
munal vegetable farm and a dairy to provide free milk for the children. 
Medical and recreational needs were also met. 

Figueres was inactive politically until the 1940*5 when he became a 
member of the Civic Betterment Committee, a group of young men dis- 
satisfied with the right-wing government of Rafael Calder6n. By 1942 
Figueres was completely wrapped up in politics, and he was soon 
exiled as a result. On July 4, 1942, a Nazi submarine sailed into the 
Caribbean port of Limon and calmly torpedoed a UFCO ship anchored 
at the dock. The ship sank and the U-boat slipped away. In San Jose 
feeling ran high as shops owned by Germans were attacked and looted. 
The government did little to suppress the violence, which eventually ran 
its course and subsided. Four days later Figueres made a radio broadcast 
in which he scored the government for laxness in permitting its defenses 
to admit a German submarine into the main harbor unmolested. Before 
the broadcast was finished, listeners heard scuffling, then a musical 
interlude. Police had been dispatched to the studio where they took 
Figueres into custody, cutting off the broadcast, then spirited him to a 
plane and out of the country. Such was his first brush with the 
authorities, but it was not the last. By the time of his return in late 1944, 
Figueres had decided to participate wholeheartedly in national politics. 

Within a few years Figueres was reasonably well known in political 
circles. When trouble stirred in 1947 he was with Ukte in opposition to 
Calder6n and Picado. We have already seen his leadership of the six- 
week revolution bringing a military junta to power. After handing 
power to Ulate, Figueres began to travel extensively in the hemisphere. 
Speaking at university forums and hispanic conferences, he voiced 
again and again his ideas on Latin American affairs and U. S.-Latin 
policy. With eyes on the 1953 campaign, bolstered by the prestige of 
leading a democratic revolution, he reiterated his ideas repeatedly. From 
these speeches he first gained prominence outside Central America. For 
our purposes, his statements are well worth examination. At the As- 
sembly of the Americas in Miami, Figueres spoke, in January, 1952, on 
"Crusade of Moral Rearmament: The Just Man." As in most of his 
speeches, the emphasis was largely economic. 

The notion that all business is "private" is an illusion. In practice we 
accept every kind of social regulation, from the moment at which a company 



COSTA RICA 243 

is founded and organized, passing then to control of quality and characteristics 
of their products, until the moment at which the benefits are distributed. 
Then comes the direct tax to ring the final bell of social responsibility to free 
enterprise. 

If we could educate ourselves and accept the principle of the social function 
of productive property and of economic activity, the majority of our problems 
would become simplified. . . . 

The beneficial collaboration of the state, that we now tolerate unwillingly 
as "government interference in business," and that we condemn to a partial 
failure by our lack of vision, must be accepted more complacently. ... All 
life in society implies the renunciation of certain liberties in exchange for 
certain guarantees. 

Figueres' second main point, also economic, dealt with the relation of 
Latin economic systems to those of the United States and of other 
dominating economies: "We are going to admit that our economic system 
has promoted exploitation and colonialism, engendering greed. But we 
ask you to realize that our business concepts are only a part of our 
philosophy of life that is based on respect for human dignity and elevation 
of the individual. . . . Then you will discover that our civilization has 
much to offer outside the field of economy, and that your world will 
derive inestimable benefits from contact with us. . . ," 25 

Figueres was even more explicit on economic matters in an address at 
Grinnell College of Iowa. There his announced subject was "A Latin 
American Looks at Point Four." He first said, "Three things we do not 
want. . . . First of all, we do not want a new wave of colonialism, such 
as foreign ownership has sometimes implied in the past. ... In the 
second place, we are not interested in private investment in public 
utilities. We hold that the public should own the installations. ... As a 
third objection, we resent the presence of speculators who assert that 
their motive in investing money abroad is to foster the development of 
our countries." After stating these resentments, he proceeded to the 
positive side of the picture. There were, after all, certain things which 
would encourage Latin economic development. 

We believe that the soundest way of strengthening, from the outset, the 
economy of the Latin American countries, consists in paying a fair price for 
our products. ... It may not be untimely to repeat that during World War n 
the coffee market was fixed by the Office of Price Administration at a level 
that turned out to be one half of the market price when controls were released. 
This meant that coffee producing countries contributed to the war effort, during 
three or four years, fifty percent of the gross value of their majp crop. We do 



r>44 CENTRAL AMERICA 

not complain. . . . But we think the North American people should know 
about these things, especially since they are so frequently told of the inequities 
imposed upon them by the expense of their foreign aid programs. . . . The 
healthiest source of income for any nation, as for any man, is the fair 
compensation for its own efforts. 

He concluded this section of the speech by outlining the needs of Latin 
countries, admitting he had Costa Rica particularly in mind. National 
income had to be increased by negotiation for fair prices on export 
products and by improving production efficiency. Pooling of resources 
and markets with other nations might also help. Productivity had to be 
encouraged by the accumulation of local capital, both in private hands and 
public. Finally, the state would welcome and respect foreign business. 
At the same time, it would grant no privileges. This would "attract the 
type of businessman who likes to work in an atmosphere of honesty and 
lawfulness, and will discourage the speculator who is after juicy contracts 
and venal concessions." 

Figueres devoted the latter half of this speech to the last of his three 
favorite topics economic development, economic relations with foreign 
nations, and democracy in Latin America. For Figueres, economic de- 
velopment was too often given precedence over the fundamental issue 
the moral issue. 

Many of our countries are afflicted with dictatorship, militarism, and dis- 
honesty. Yet they are all theoretically organized under democratic constitu- 
tions, and they are all pledged to the charter of the Organization of American 
States, which is based on the principles of freedom, human dignity, and repre- 
sentative government. This dualism between the law of the land and the life 
of the people has a moral effect which is in some aspects worse than no law 
at all 

Businessmen are too eager to ask the government of the United States to 
protect their interests abroad. "A favorable climate" should be created for 
North American investments, they say. What about North American princi- 
ples? What about representative government, honest administration, the reign 
of law, the dignity of man? Does the United States stand for these ideas or 
not? Is it in the name of these principles that we are fighting wars, or 
what? 

The Soviets stand behind communism; the rightist totalitarians stand be- 
hind militarism; why should not the democracies stand behind the principles 
of honest administration and representative government? Surely if the 
United States would frown on illegitimate government and corruption in the 
same manner in which some companies expect this country to frown at any 



COSTA RICA 245 

threats to their investments, the history of the small American republics would 
take a different course. . . . 

As a Latin American looking at the Point Four Program, let me conclude 
that we welcome, and appreciate, technical assistance; but we question the 
beneficent effects of capital investments, unless they are accompanied by 
corresponding amounts of moral investments. In these moral investments, we 
ourselves, the Latin Americans, must subscribe a large proportion of the stock. 26 

These were Figueres' three major ideals. Economically, Costa Rica 
had to expand by means of increased productivity, foreign assistance, 
efficient production methodology, and expanded acreage. National income 
had to be raised that funds might be channelled into development pro- 
grams. At the same time, prices of coffee and bananas had to be main- 
tained at a high level internationally. Secondly, foreign investment was 
welcomed, and would receive equal treatment with national enterprise. 
However, no privileged status would be granted. Treatment to all firms, 
foreign or otherwise, would be equal. Finally, the United States should 
help the erratic progress of democracy in Latin America by ending 
assistance to and encouragement of dictatorial regimes, whether or not 
they might be the legally constituted governments. 

Jose Figueres is a spare, small man of great energy. Intense, restless, 
almost humorless, he is not a person capable of generating the affectionate 
esteem enjoyed by Otilio Ulate. However, Figueres in the years pre- 
ceding his election had drawn the impassioned support of many Costa 
Rican youths. Those who had traveled abroad and seen disparities be- 
tween Costa Rican life and that of the United States and Europe were 
searching for a way toward national progress. This is the force that 
put the Communists in power in Guatemala. In Costa Rica the same 
sort of force supported Figueres. It was a powerful one. At the same 
time, Figueres had gained a measure of popularity with the common man. 
He had pitched his campaign toward the "have nots," and they well 
knew it. As a result, they were genuinely hopeful that he might improve 
their status. They called him "tacones," or "heels," referring to the 
elevator heels worn by the self-consciously short Figueres (5 ft. 4 in.). 
Yet it was more a nickname of intimacy than derision. So it was that 
on November 8, 1953, Jose* Figueres was inaugurated amid general 
popularity and optimism. His campaign had left the impression that he 
and the members of the Liberacion Nacional had mapped out their 



246 CENTRAL AMERICA 

plans fully. Once in office, they would immediately begin to implement 
their campaign promises. Here was a party with a program, and the 
plan would be put into effect at once. Figueres reinforced this hope in 
his inaugural address. 

There come again to the government of Costa Rica the group of men and 
the set of ideas that inspired the War of National Liberation in 1948, 
reorganized the administration under the Founding Junta of the Second 
Republic, and made the popular suffrage respected by depositing power in 
the constitutional term that ends today. 

During the provisional government that we exercised for 18 months we 
endeavoured to fulfill two fundamental missions: first, to re-establish the civic 
virtues of the past: administrative honesty and effective suffrage; second, to 
give a new impulse to our national economy; to foster the production, with 
the work of all, of sufficient wealth for all to feed their bodies and to embellish 
their souls. ... In accordance with these principles, and in accordance 
with those governmental concepts, we must now govern. We are further 
compelled, because during the electoral campaign we presented to the 
citizenry a program inspired by those same ideas, asking them to vote not 
only for men but for principles, for norms of government. 

His address was divided into internal and international policy, of 
which the former was the more lengthy and of more interest to Costa 
Ricans. "Our economic planning is based on a combination of public 
institutions and private enterprises. We must increase the number of 
proprietors, not only for economic and social reasons but also to make 
democracy effective. The right of ownership confers authority over 
things and persons, and it is desirable that such authority be exercised by 
the greatest possible number of citizens." 27 He continued by an- 
nouncing the formation of several autonomous state organs, including a 
national board of tourism, an urban housing commission, and a rural farm 
board. Furthermore, the state would provide for those indigent persons 
without normal income because of physical or mental disability. Also, the 
government would try to meet the problem of "the poor child who walks 
our streets as a beggar, exposed to all vices, constituting an intolerable 
spectacle in a civilized society." Indeed, Figueres was ready to attack 
pressing government problems at once. 

One of Figueres 1 first actions was to renegotiate the government con- 
tract with UFCO. He had campaigned for new financial arrange- 
ments, and in April, 1954, formal negotiations with UFCO officials 
began. In the meantime he tried to reassure North Americans of his 



COSTA RICA 247 

intentions. He was confident, he told one interviewer, "that relations with 
the company can be turned into an example of cooperation between U. S. 
capital and underdeveloped countries." He had no desire to make their 
operations unprofitable or drive out further investment. Three discrimi- 
natory practices demanded revision. To begin with, UFCO paid no 
customs duties on any of its imports, a privileged status not shared by 
other companies. This, the President maintained, should be changed. 
The nation deserved the added revenue, and it was only fair that UFCO 
pay the import duties required of other enterprises. Furthermore, im- 
portation of company merchandise should be conducted at the same rate 
of exchange as national importers. This again would pay more money 
to the government and at the same time end discrimination against other 
businesses. Finally, there should be tax changes or some other revision by 
which UFCO would pay the government a larger stipend for its con- 
cession. The existing contract called for a flat 15 percent of the profits 
to be paid the government in income tax. This, he claimed, should be 
hiked to a fifty-fifty split. UFCO officials privately shuddered but made 
no comment. The expectation was that Figueres would lower his de- 
mands once confronted at a bargaining table. In his inaugural address 
the President had said, 

We have proposed that the banana business be considered in the same light 
as the oil business; that it should leave in our country half the profits here 
obtained. We ask, furthermore, that the Company abandon all discrimina- 
tions. . . . 

We have offered to assume the social services that the Company is render- 
ing, such as schools, authorities, hospitals, airports. There may have been a 
justification in the past for the intervention of the Company in the public 
services; but Costa Rica has now adequate institutions to assume such re- 
sponsibilities and should no longer leave them in the hands of a private 
entity. 28 

After several weeks of negotiation, preceded by extensive propa- 
gandizing, a new UFCO contract was signed in San Jose on June 4, 1954. 
The most important change, financially, was UFCO's agreement to more 
than double its income tax contribution. Instead of 15 percent, Costa 
Rica would be paid 35 percent of its net earnings. Together with other 
minor taxes, including land imposts, UFCO's contribution to the national 
treasury reached 42 percent of its profits. Another provision bound 
UFCO to pay customs duties on roughly half its imported material. The 



248 CENTRAL AMERICA 

government conceded its right to import materials for railways, harbors, 
irrigation projects, drainage and disease control, and similar beneficial 
public works, free of duty. The company also accepted recent minimum 
wage decrees which it had been fighting. The terms of the decrees had 
based the difference in wages between the coastal area (where UFCO 
holdings were largest) and the Meseta Central on the relative cost of 
living in the two areas. The government was to determine the precise 
formula. Finally, the company agreed to turn over to the government, 
free of charge, its social services, including schools, hospitals, dispensaries, 
and recreational facilities. This affected 68 schools, 3653 students, 130 
teachers, 3 hospitals, 45 dispensaries, and 157 doctors. 

Signed by President Figueres and Costa Rican UFCO manager 
Walter Hamer, the contract was valid for thirty-four years. From Boston, 
UFCO president Kenneth H. Redmond wrote his approval. "I think 
it is significant that we are able to announce this agreement as an ex- 
pression of our implicit faith in the stability and progress of Latin 
America at a time when American [i.e., U. S.] enterprise is under heavy 
attack by elements of international communism in some sections of the 
hemisphere." He added that modification of existing contracts in other 
countries was expected through negotiations on the Costa Rican pattern. 
President Figueres, not to be outdone, commented that the "historic agree- 
ment" once again placed Costa Rica among the pioneers of Latin Ameri- 
can economic development. He was pleased that his government was 
the first to consummate such an agreement. The contract was un- 
questionably an important step in the history of U. S.-Latin economic 
relations. UFCO, at various times in recent years a villain in the drama 
of "yankee imperialism," had shown willingness to renegotiate what was 
unquestionably a beneficial agreement with a sovereign country. Its 
general amity and friendship while discussing and settling the final 
document was added testimony to its cooperative spirit. And for both 
parties there were positive benefits. 

Costa Rica's financial gain was obvious. National revenue from bananas 
would increase to forty million colones, over seven million dollars in 
U. S. currency. National pride had been salved by interested cooperation 
in reaching final agreement Its demands had been met within reason, 
and Costa Rican prestige rose as a result. For UFCO, its intentions of 
good will seemed obvious. Turning over the company services was no 
unhappy task, for financing and administering these services now fell 



COSTA RICA 249 

to the government. And the additional tax rates themselves, while in- 
creased, were partially offset by compensatory tax regulations of the 
United States, whereby much of the additional money paid Costa Rica 
could be deducted from UFCO tax obligations to the U. S. government. 

Contract renegotiation, then, was a positive accomplishment of the 
Figueres government. Unhappily, it was one of the few. Otherwise, 
Figueres economic policies have brought Costa Rica rising prices, scarcity 
of goods, increased cost of living, and almost motionless wage rates. 
President Figueres long before his election called for better prices from 
the United States on raw products. This was rationalized on the moral 
grounds that the rich should aid the poor. He disagreed with the 
actions of the U. S. Department of Justice against UFCO for alleged 
monopoly of the banana trade. To Figueres, UFCO did more good than 
harm by its very bigness. For coffee, he urged the formation of a single 
company comprising the major planters of all coffee exporting nations 
in the region. This corporation would presumably operate as a control 
on supply and demand, while stabilizing the international price of 
coffee. In general, Costa Rica hoped for increased importation of goods 
from the United States, but at low prices. 

At the same time, Figueres raised tariffs in early 1954. He explained 
that this was necessary to protect and encourage small light industries in 
Costa Rica. However, 1950 data shows that only fifteen thousand workers 
in Costa Rica could be classified as industrial. While the figures are 
somewhat dated, they show that only a small part of the population of 
932,000 is engaged in industry. Yet to protect this fractional group, the 
entire population must pay the higher prices resulting from high import 
duties. The possibility of a large increase in industry seems unlikely. 
Certainly there is neither a skilled labor force nor significant mineral 
deposits. And while Figueres has urged the development of light 
industry in Costa Rica, no one has announced specifically what industries 
might be developed for general economic betterment. Nonetheless, 
exponents of the idea insist upon its practicality in the near future. To 
some, the best plan would be to import raw materials, process them in 
Costa Rica, and then export for sale in competition with countries 
possessing so-called natural industries. Even the most amateurish econo- 
mist can see the preposterous nature of such a policy. The result would 
be continuous financial loss. Nothing could be more inevitable. 

While industrial development remained dormant, consistently high 



250 CENTRAL AMERICA 

tariffs forced up consumer prices. As a result, Costa Ricans were forced 
to buy relatively cheap but much inferior locally produced clothing, food, 
and even textiles. In the summer of 1956 the government levied an 
automatic one hundred colon tax on every pair of imported shoes. This 
raised the prices of foreign shoes the same hundred colones, some fifteen 
dollars. The purpose was to protect the small shoe industry in Costa 
Rica, which employed at best a few thousand part-time workers. The 
leading shoe factory, perhaps coincidentally, belonged to Figueres' heir 
apparent in the Liberacion Nacional, his good friend Francisco Orlich. 
This process sent prices rising, and indexes pointed out an unhealthy 
increase in prices during the years of Figueres' administration. Tariffs 
remained high, importers charged higher prices; foreign companies be- 
came reluctant to ship goods in any great volume. As a result, foreign 
products grew scarce and invariably high priced, and were undercut by in- 
ferior local products. Prices rose, wage rates held the same, and the 
people suffered. This unfortunate pattern was created solely by the gov- 
ernment tariff policy which Figueres never altered. 

While his economic record was bleak, Figueres' political activities were 
even worse. Early murmurs of government graft or dishonesty gradually 
swelled to serious proportions, and by 1958 the figueristas were beset by 
scandal after scandal, aided by angry opposition forces who took full 
advantage of Costa Rican freedom of the press, freedom often bordering 
on outright license. 

Scandal broke out in March 1956 in what has been called "L* Affaire 
Berger." On the eleventh, with no warning, it was revealed that a minor 
official at the French Embassy, Paul Berger, had been expelled from Costa 
Rica for "insulting the honesty of the Figueres government." Govern- 
ment spokesmen, including Figueres' own La Rep&blica, painted a black 
picture of Berger's vocal criticism and disrespect for the government. 
However, M. Berger had undiplomatically mailed an explanatory letter 
to Ulate's Diario de Costa Rica. Anxious to continue its attack on the 
government, Diario eagerly printed the letter the following day. Among 
the "villains" were several government officials, including Minister of 
Agriculture Bruce Masis. Masis, whose business holdings included the 
San Jose franchise for Renault taxis, was being pressed financially. In 
need of further business and perhaps of financial aid through a new 
contract, Masis was anxious to enter business relations with Inasa, the 



COSTA RICA 251 

French company involved in the sale of Renaults in Costa Rica. An 
Inasa representative, Mario Gutierrez, went to Berger at the French 
Embassy seeking a recommendation from the business attache. Asked of 
his confidence in Masis' representative Daniel Ratton, Berger explained 
his acquaintance through various negotiations and described Ratton as a 
poor administrator. This naturally discouraged Gutierrez and appeared to 
jeopardize Masis' chances of winning financial help. 

The following morning the acting French ambassador, M. Lecuyer, 
called Berger into his office to discuss the matter personally. Berger 
found himself confronted by the Minister of Agriculture himself. The 
Frenchman repeated his evaluation of Ratton, despite Masis' suggestions 
that he could be mistaken. Finally, a few nights later at 11:30 P.M., 
Berger was approached outside the pension at which he was living by 
Daniel Ratton and Edmond Woodbridge, the latter a member of the 
Consejo de Administracion. When Berger again refused entreaties to 
deliver a more favorable opinion, Woodbridge pulled out a gun and 
threatened him. The French diplomat hesitated momentarily and then 
broke away, running toward the corner shouting for help. Police ap- 
peared almost immediately and took the three men for questioning. In 
a matter of hours Berger was on a plane leaving Costa Rica. 

When the scandal first broke, the government replied with an an- 
nouncement from Foreign Minister Mario Esquivcl. Berger was charged 
with trying to interfere in matters involving high members of the govern- 
ment. He supposedly had threatened government officials, and to 
Esquivel, such a threat was unacceptable. He was also criticized for 
stirring up trouble with his note to Dittrio, although the existence of the 
note was totally unknown to the government when he was expelled. 
No comment was made by the French embassy. On March 13, Edrnond 
Woodbridge, accused of threatening Berger at gunpoint, wrote a letter 
of explanation which Diario de Costa Rica published in full. It was 
totally unsatisfactory. He went to great lengths to establish the fact that 
he had not attacked or beaten Berger. He quoted the reports of the 
police stating that Berger had been untouched, and no physical harm was 
apparent. This was a complete diversion. Berger never charged Wood- 
bridge with beating him, but rather with threatening him with a pistol. 
Police reports naturally agreed that Berger had not been physically 
harmed, and there was never any such suggestion in Berger's note. 
Woodbridge also referred repeatedly to Berger as "not a high functionary." 



252 CENTRAL AMERICA 

This was quite true but totally irrelevant. Regardless of Berger's rank, 
he had been grossly mistreated. And even if the exile were appropriate, it 
did not explain the Berger charges of government interference in public 
business, nor attempted bribery. There was no mention nor denial of 
the accusation. Some weeks later, after the furor had quieted, the new 
French ambassador gained permission for Berger to return to the country. 
Foreign Minister Esquivel admitted hasty action, although never men- 
tioning the Berger charges of bribery and interference. This was the 
most persuasive argument testifying to the truth of Berger's story. 

Less scandalous but equally damning was a speech by ex-President 
Ulate dealing with public works. For several weeks the government 
placed a series of large advertisements in the newspapers. Two sets of 
figures were given for schools and public buildings constructed during 
the Figueres and Ulatc governments. These showed the Figueres govern- 
ment had erected more new buildings in less than three years than 
had the Ulate administration in four. After several weeks, Ulate spoke 
over a radio network to refute the charges. The government had listed 
eighty-five public buildings constructed under its Minister of Public 
Works, Francisco Orlich. Ulate had built only seventy-three. However, 
these figures were soon disproved. Ulate's speech numbered thirty-eight 
of the Orlich buildings as prefabricated construction, which his govern- 
ment did not use. Of the remaining forty-seven, seventeen were begun 
and partially completed during the Ulate administration. The present 
regime took full credit for this construction. At the time, Ulate provided 
the names of some sixty-five additional public buildings constructed 
during his own administration, all conveniently overlooked by the govern- 
ment newspaper advertisement. As Ulate explained, he had spent ninety 
million colones in four years on public works. Figueres in less than 
three years had consumed 120,000,000 colones. This would have been 
fine had the result been increased construction. However, the govern- 
ment had less to show for its money than the Ulate administration. Ulate 
demanded that Figueres reject or deny his information if incorrect. The 
President said nothing. 

Speaking on station "La Voz del Tr6pico," the former president also 
cited figures of government expenditure by way of further comparison. 
Under Ulate the total debt was reduced by 100,304,454 colones. Ulate thus 
reduced the public debt accumulated from 1871-1949 by 25 percent of the 
total. The trend was reversed by President Figueres. Ulate claimed, 



COSTA RICA 253 

fully supported by the facts, to have followed a policy of order and 
economy. Agricultural production was stimulated, quotas were met for 
the Inter American Highway, and the Instituto Costarricense de Elec- 
tricidad was supported. Under President Figueres, however, the debt 
had mounted once again, despite higher tariffs, UFCO renegotiation, high 
rents, and a bond issue. 

The opposition of Ulate, who had at one time been friendly with his 
successor, was stated in part by the editorial of "Justus" printed in Diario 
in a page wide, four-column editorial: 

The governmental team of the Partido Liberaci6n National is a vast 
mercantile enterprise [which] administers the state without any interest in 
serving the Republic. . . . 

The Figueristas which is the same as saying government officials, because 
independent citizens have already abandoned the official posts have attacked 
the opposition as negative because it follows the course of attacking government 
action without presenting constructive plans. All this would come in good 
time. First the people must learn of the iniquities of the government. 80 

Two months later, in May, 1956, a small scandal broke out in the 
national radio network. Although not affecting the populace greatly, it 
was indicative of increasing government disregard for private rights. 
The radio dial in San Jose is crowded with more than two dozen stations. 
Although regulation requires a minimum gap between frequencies, this is 
not complied with. Without warning, the government radio authority 
ordered the withdrawal from the air of one station due to improper 
frequency jamming. The Camara Nacional de Radio carried out the 
action, somewhat surprised by the move. The next day the station was 
placed under the direction of Daniel Oduber, onetime roving ambassador 
to Europe, acting secretary-general of the Liberation Nacional, and a 
close personal friend of President Figueres. The other radio stations 
immediately rose up in arms. All broadcast a minute of silence in 
observance of the "death" of the station and its immediate rebroadcasting 
under virtual government management. Continual announcements in- 
terrupted all programs. Over the stirring strains of Finlandia came the 
melodramatic statement that "freedom of expression is in danger," and 
it continued in that vein. In the end, however, the protest was unsuccess- 
ful. The station continued operation under Daniel Oduber. 

Of all the unsavory government affairs, however, the most fraudulent 
was uncovered in the Comptroller's office in mid-May. This dispute raged 



254 CENTRAL AMERICA 

nearly two months before finally losing news value. On May 6, 1956, 
Diaria de Costa Rica broke the story. The Comptroller's office had re- 
ported bribery of election officials by Figueres' Liberacion Nacional in 
the 1953 elections. Only after more than two years had the fraud come 
to light. Under Costa Rican law, most of the election expenses, such as 
the printing of ballots, are incurred by the participating parties. During 
election time the political organizations contract a debt to the government 
for this amount, which is later to be paid back. Investigators of the 
Comptroller's office, compiling and itemizing the Liberacion expenditure 
for the 1953 campaign, listed the total as 1,516,081.05 colones. This was 
higher by far than the total for Castro's Democrats. However, the im- 
portant fact was the itemization of the expenditures, all government 
funds. The director of the Civil Registry, who supervises the registration 
of all eligible voters, was paid for "extraordinary work with detail." 
Pay had also been sent to the leaders of the labor organization, Rerum 
Novarum, which according to the Constitution was apolitical. PLN 
money had been sent to the federation without explanation. Other items 
included "corsages and flowers for social affairs, propaganda expenses in 
U. S. papers," and whisky, clothing, records, ice, and lunches for members 
of the Civil Guard serving as Figueres' bodyguards during the campaign. 
Figueres also rented a house for the campaign in addition to his finca. 
Comptroller-General Amadeo Quiros Blanco signed the report, which 
was duly presented before the Legislative Assembly. 

On May 22, 1956, the Tribunal Supremo de Elecciones dismissed three 
officials as a result of the revelations: the chief official of the electoral 
registry, Mario Herrera Barrantes, the chief of resolutions of the registry, 
Victor Manuel Arias, and the chief of cedular department, Luis Rafael 
Mainieri. The vote of the tribunal was unanimous. The government 
was unable to answer the court decision of official collusion in the electoral 
processes. Just what difference the bribed officials made in the elections 
is speculative. It is obvious that the PLN paid them to help ensure its 
overwhelming victory. The election was certainly not completely free. 
In fact, a jeep wrecked on the road to Puntarenas a few days before the 
elections. Spilled in the crash was an already sealed ballot box containing 
five thousand ballots, almost all for Figueres. Such shenanigans indicate 
that the election was far from honest and above board. At the same time, 
so great was Figueres' margin that there seems little question he would 
have won the race in any event. What does remain in doubt is the size 



COSTA RICA 255 

of his winning margin, which in 1953 was so triumphantly declared to be 
66 percent. 

In foreign affairs, the Figueres record, superficially superior, stands up 
very poorly under careful scrutiny. His long simmering feud with 
Nicaraguan President Somoza has been detailed in Chapter Five. In 
December, 1948, July, 1954, and January, 1955, there were invasions or 
threatened attacks from Nicaraguan soil. These were made largely by 
calderonistas intent on wresting power from the hands of Figueres. At 
the same time Nicaragua's Somoza was involved. There were no such 
incidents when Figueres was out of power. 

After his successful 1948 uprising, Figueres maintained and trained 
members of the Caribbean Legion, a small group of idealist and pro- 
fessional adventurers dedicated to the overthrow of what it considered 
the dictatorial governments of the Caribbean. Members openly bragged 
in San Jose of their plans to overthrow the Honduran, Nicaraguan, and 
Venezuelan governments to install more democratic governments. In 
supporting and aiding this group, Figueres violated international law and 
the rights of sovereignty, refusing personally to recognize duly constituted 
authorities in these countries. It was a negation of his obligations to the 
Costa Rican people to become personally embroiled, especially in the 
series of intrigues against Nicaragua's Somoza. 

Figueres was beholden to the Legion for help during the revolution of 
1948 and found it hard to break loose if indeed he ever tried. He had 
fought largely with Cuban arms sent through President Arevalo of 
Guatemala to Costa Rica, Figueres' long association with the Legion was 
established with convincing proof for the first time in early 1955. Ulate 
conducted a series of seven talks dealing with various phases of the 
Figueres government he had come to oppose so bitterly. Most of the 
charges were supported by legitimate photostatic documents, which were 
published in newspaper form. Later they appeared in entirety in a folder 
titled "Where Does Sr. Figueres Take Costa Rica?" The document was 
never available in bookstores and was difficult to come by except through 
well-placed friends, although it contained only statements already printed 
in the newspapers. 

Ulate first revealed the connection between Figueres and Red-tinged 
Juan Jose Arevalo of Guatemala. The former president quoted the text 



256 CENTRAL AMERICA 

of a U. S. congressional subcommittee investigation on Central American 
communism: 

In January of 1954, the men who were identified with the conspiracy to 
assassinate Somoza left Guatemala toward Costa Rica where president Jos 
Figueres was accused of being a friend of the Arbenz communist government 
and openly hostile to Somoza. . . . 

If the plot to assassinate President Somoza had succeeded, observers be- 
lieve that a communist or pro-communist government would have blossomed 
in Nicaragua. In that case, a blow or revolution would have been tried in 
Honduras. This could have given the communists control of three of the 
Central American republics, and it would have been easy to apply strong 
pressure on El Salvador and Costa Rica, which at that time was showing its 
friendship toward Guatemala openly. 

In December, 1947, three months before the Costa Rican revolution began, 
a secret agreement known as the Pact of Guatemala was signed between 
"representative groups of the Dominican, Costa Rican, and Nicaraguan 
Republics, to overthrow the dictatorships in their countries. . . ." This 
pact of alliance was suggested and supported by President Arevalo of 
Guatemala, and Figueres signed for Costa Rica. 

Continuing his attack, Ulate charged that Figueres received arms in 
1948 through Guatemala, a fact generally accepted by the public for some 
years. Here Ulate lacked positive documentation, although there is little 
real doubt of the veracity of the charge. At the same time, the charge 
was less authoritative than other parts of the report. In a passage sub- 
tided "Heavenly Dreams and Implacable Realities," Ulate quoted freely 
from several different sources critical of the Figueres regime. One of 
these was Dr. Manuel Romero Hernandez, Salvadoran ex-deputy and 
ex-delegate to the United Nations, who wrote, in January, 1955, m San 
Salvador's Diario Latino: 

The presence of Figueres is characterized by an addition from the Civil 
Guard, for the President of Costa Rica does not walk alone, but as any other 
Latin dictator does, with bodyguards; and the worst thinghe violates the 
principle of non-intervention in the politics of fellow sovereign states. ... I 
ask: do Figueres' acts respond to the traditional Costa Rican policy of peace 
and friendship? 

Let the people of Nicaragua as those of Costa Rica deliver to the Presidency 
persons who know how to respect the principle that the sovereignty of a 
country is not the attribute of one person, but of a government . . . never using 
it to satisfy caprices and personal enmities or to commit deeds before the eyes 
of the world that show they are no more than crazy. . . . 



COSTA RICA 257 

Ulate also had documented statements from former Caribbean Legion 
members praising the support and aid given by Figueres. After the 1948 
decision of the OAS, he was forced to turn the Legionnaires away from 
their training grounds in Costa Rica. However, he never stopped in- 
triguing with them against other governments. Ulate concluded his long 
critique with a final and telling declaration: "All the Presidents of Costa 
Rica procured and obtained pacific solutions of their difficulties with 
Nicaragua, which are frequent between the two. It is reserved for Presi- 
dent Figueres the sad destiny of carrying the discord to the point of the 
spilling of blood of the Costa Rican people. ... I am not the oracle of 
Delphos, but what I predicted ten months ago has happened . . . Sr. 
Figueres continues to pursue his obsession with international meddling." 31 

In all fairness, it must be granted that Figueres has been attacked by 
his enemies as have few men in Costa Rican history. To those who have 
not or are not now following his banner, no insult is too far-fetched. He 
is often called a foreigner due to the migration of his parents to Costa 
Rica two months before his birth. Many call him a coward because of 
the omnipresent bodyguards and his reluctance to stroll the streets of the 
capital as did his predecessor. Yet the writer has personally seen Figueres 
at least a dozen times when any one of a number of people might have 
assassinated him. Indeed, only complete seclusion can prevent the death 
of any president by violence, should his assassin be willing to trade his 
own life in the bargain. Figueres personally felt he ought not to spend 
time gladhanding his way through crowds of citizens, and so did not 
often make informal appearances. The President also was criticized for 
his two marriages with North American women, the first ending in 
divorce in 1953. People bitterly muttered about his apparent unwilling- 
ness to marry a Costa Rican. 

Among Figueres' governmental policies was the creation of a number 
of autonomous state organs, which have been enumerated before. Some 
of these were little more than jobs manufactured for unemployed figuer- 
jstas a n excellent example being the Institute Nacional de Turismo, 
which may soon be shut down under Figueres' successor. The most 
ambitious of all these, the Institute Nacional de Viviendas Urbanas 
(INVU), met with very limited success. INVU was the largest single 
effort of Figueres' government, hailed by its spokesmen as certain to 
develop the economy and public welfare. It was initially granted a 350 
million colon budget, and subsequently received seventeen million coloncs 



258 CENTRAL AMERICA 

annually. The result was the construction of a large number of small, 
low cost, low interest houses available to the less moneyed classes. In 
I 955> 4 21 were built and 829 in 1956. However, the majority were erected 
with brick-like blocks, composed of 97 percent earth and 3 percent 
cement! If this withstands years of eight-month rains, the cost will be 
reduced considerably. However, it is yet not known whether such a 
high content of earth will stand up in heavy rains. If so, the INVU pro- 
gram will be literally washed away in a few years. 

Figueres' record also shows a number of minor incidents, unimportant 
individually, but which combine to form an indictment of him. For 
example, shortly before the 1948 revolution, Figueres put up his finca 
for sale. A San Jose buyer refused to pay eight hundred thousand colones. 
A few months later, while head of the victorious provisional junta, 
Figueres claimed reparations of two million colones for damage to his 
finca incurred during the revolution more than twice its value a few 
months previously. Another incident tarnishes the record. It has been 
claimed that during his first visit to the U. S., Figueres enrolled at the 
Massachusetts Institute of Technology and received a degree in electrical 
engineering. There is definite proof that he was in the U. S. longer than 
the four necessary years. When first interviewing Figueres during the 
revolution of 1948, foreign newsmen wrote approvingly of his love for 
the U. S., his study there, and the M.I.T. degree. Figueristas often spoke 
of his intellectual prowess and cited the degree as testimony. Refutation 
of this comes from a letter to the author from the M.I.T. Office of the 
Registrar in April, 1956. It reads in part that ". . . continuing our in- 
vestigation for the records of Mr. Jose Maria Figueres [Ferrer], we are 
still unable to find that anyone by that name was ever enrolled in the 
regular sessions of the Massachusetts Institute of Technology." As a 
previous letter from the author assured that there was no misunder- 
standing over the last name as used by Latin Americans, the only possible 
conclusion is that here again is a falsehood perpetrated on all those who 
would listen. It is, of course, possible that Figueres attended night classes 
or sat in on special sessions, of which M.I.T. keeps no record. However, 
he never received a degree from the institution. 

One final circumstance shows the depths to which his administration 
would stoop. Severe floods and high winds struck Costa Rica in 1955, 
damaging many crops, including not only export products but food for 
home consumption as well. There was a temporary food scarcity of 



COSTA RICA 259 

critical proportions. In response to the need the American Red Cross 
sent several loads of food free, of course to alleviate the distress. Only 
a part of the shipment was ever distributed. Instead, a few months later, 
non-perishables were being sold in the San Jose market with the govern- 
ment pocketing the money. In some cases there was no effort to conceal 
the sale. Some of the crates were still tagged "Red Cross, USA." The 
government had diverted a portion of the free food shipment from the 
needy, selling it months later for 100 percent profit. It can hardly be 
argued that food could not be given away, yet people would buy it on the 
open market. The incident itself might have been unknown to Figueres, 
but was perpetrated by his administration. And as he received credit for 
its accomplishments, thus must he be responsible for its faults. 

A PROMISE OF BETTER THINGS 

As Figueres' term drew to a close, members of Liberacion Nacional 
began to consider a candidate for 1957. From the early days of Figueres, 
his party had spoken of its plans for twenty years' progress, inferring the 
continuation in national office of its candidates. Minister of Public Works 
Francisco Orlich, an old associate and personal friend of Figueres, was 
the president's unannounced choice, and Orlich gradually took command 
of the party apparatus to the extent a campaign might demand. At the 
same time, many figueristas distrusted him, preferring First Vice-President 
Raul Blanco Cervantes, a more conservative member of the party. Near 
the end of 1956, ex-Minister of the Treasury Jorge Rossi rejected the 
candidacy of Orlich and announced his own availability. He soon 
gathered his own supporters in a Partido Independiente and opened pre- 
election activities. By March, 1957, the monolithic front of the figueristas 
cracked open with the joint resignations of four cabinet members, the 
ministers of foreign affairs, public security, finance, and agriculture. 

Opposition in the meantime had been mobilizing, and its strength 
seemed secure in the absence of factional disputes. In June, 1956, the 
Movimiento Democratico Oposicionista (MDO) was inscribed with the 
election registry. Organized primarily by followers of Otilio Ulate, who 
was ineligible to run again until 1962, it succeeded in winning the ad- 
herence of other elements backers of the hopeful Mario Echandi, re- 
maining calderonistas, and the handful of supporters for the aging Castro. 
Barring a disagreement, their party seemed to have the advantage over 
the strife-ridden government party. In February of 1957 the MDO 



260 CENTRAL AMERICA 

held its convention in the San Jose jfabol stadium. Four men had an- 
nounced their candidacy: Mario Echandi, Alberto Oreamuno, Fernando 
Lara, and Manuel Escalante. Echandi had led the fight against Figueres 
in the Assembly, and his supporters were vocal and determined. Orea- 
muno, the former vice-president of Otilio Ulate, was his mentor's obvious 
choice. Escalante, a moderate calderonista, was well thought of but lacked 
political organization. Lara, one-time foreign minister, had no prospects 
for success. Ulate's support for Oreamuno made the doctor a slight 
favorite. A few days before the convention, however, the exiled Calderon 
announced his support of Oreamuno. His switch from Escalante sent 
some of the calderonistas into open revolt. At the same time, a number 
of anti-Calder6n delegates dropped their support of Oreamuno, who 
consequently was seriously hurt by the move. Perhaps Calderon wanted 
to put his money on the winning horse, as it were. The results were 
quite different. 

Echandi came within fifty-eight votes of the required majority out 
of forty-six hundred ballots cast on the first ballot. He received twenty- 
two hundred votes, Oreamuno sixteen hundred, the other two men far 
in arrears. Escalante immediately announced his support of Echandi, 
Lara followed, and Echandi won on the second ballot. Escalante and Lara 
had both been ideologically closer to Oreamuno, and Escalante had voiced 
his distrust of Echandi both in public and private. However, Lara and 
Escalante could not have swung the vote to Oreamuno without holding 
every one of their delegates, and their control was not that strong. There 
was also a danger of Echandi's splitting off and running independently, 
should he lose a very close vote. These were all factors that must have 
influenced Escalante. There is no evidence whatever of a deal between 
the men. 

So it was that Mario Echandi won nomination. In the moment of 
triumph, his words were surprisingly moderate. "I feel proud of being a 
Costa Rican to see the brilliant page of civic spirit written this morning. 
I share with the other candidates responsibility for the campaign. We 
need the ability of all, to form a government of Costa Ricans." 82 Orea- 
muno was magnanimous despite his loss. "The fact that I have lost . . . 
is an unimportant fact; men are transitory, ideals are eternal. Liberty, 
justice and lack of privileges ... are the ideals consecrated in the grand 
Party of National Opposition. . . .'* 8 He urged all Costa Ricans to work 
and campaign for Echandi. 



COSTA RICA 261 

With Mario Echandi set against Orlich and Rossi, the battle was joined. 
It raged for eight months. President Figueres, shaken by the MDO show 
of unity, angrily defended his record. The budgetary deficit of twelve 
million dollars? "A matter of little importance." He had promised a 
balanced budget six months earlier. Charges of intervention? "We have 
had a long fight to preserve our institutions, and we mean to keep on 
preserving them." This despite his complicity in region-wide intrigue. 
Socialistic government? "We work for the people, whatever they say.*' 
Apparently the people did not appreciate the efforts. 

Liberation's Orlich found support in the outlying regions, but was 
received with universal coldness in population centers. Pledged to pursue 
the Figueres policies, Orlich promised further development of public 
health, transportation, and electric power. He drew on the support of 
Figueres, who urged his re-election although not campaigning publicly, 
as many had expected. In short, Orlich was reiterating the promises of 
Liberation issued in 1953. And despite successful campaign techniques, 
he suffered from the many broken pacts of the Figueres administration. 
Jorge Rossi was running an uphill battle from the beginning. In his 
early thirties, he bore the mark of youth before an electorate that wanted 
to follow a more mature man. And his organizational power was 
negligible. As a campaigner he proved a fair speaker, but crowds often 
took his appearances much less than seriously. The backing of four 
former Figueres cabinet ministers was not likely to bring much help at 
the polls. His position generally supported the party and program of 
Figueres, with the promised intention of reviewing budgetary policy and 
slowing the nation's headlong plunge into debt a debt he refused, as 
former finance miniver, to recognize openly. 

Echandi ran probably the smoothest campaign of the three. He had 
formed with defeated opposition leaders a reasonably cooperative team. 
Escalante was the party treasurer, Oreamuno presided over the con- 
sultative committee, and Lara was party secretary-general. Echandi him- 
self served as political action chief. There was surprisingly little acrimony 
among the recent rivals. They were united on a vigorous and deeply felt 
mistrust and personal dislike for President Figueres. Ulate stood in the 
background with his great prestige behind Echandi. Echandi opened a 
frontal attack on the government, calling for a complete reversal of its 
major trends. While foreigners characterized his position as conservative, 



262 CENTRAL AMERICA 

it was less that than a responsible return from the extravagant excursions 
of Jose Figueres into fiscal insolvency and political adventurism. 

Elections came in February, 1958, with UN observers invited by 
President Figueres to oversee the election as insurance of honest results. 
Forty percent of the vote was necessary for the victory; a strong Rossi 
showing would insure a two-man run-off in April. Rossi ran very poorly, 
however. The combination of youth and poor organizational support 
cost him dearly. Orlich ran reasonably well, but in urban areas he showed 
very poorly, and the victory was Echandi's. Final results gave Echandi 
some 102,000 votes, with Orlich 10,000 behind. Jorge Rossi limped in 
with only 25,000 votes. Echandi's percentage was forty-seven; Liberacion 
Nacional had been repudiated. 

One electoral surprise was the strength of calderonista candidates for 
the legislature. After many had called his movement dead, the long- 
absent Calderon still was a name to be reckoned with. Liberacion led in 
legislative seats, with supporters of Echandi and Calderon following. 
Three rossistas also squeezed into the Assembly. There was a momentary 
respite following the election at a major social gathering in the capital, 
where all three candidates, President Figueres, and the newly elected 
Guatemalan president, Ydigoras, shared a convivial evening. But, the 
tacit truce was too unnatural to survive, and supporters of Orlich planned 
to control the legislature, while elected calderonistas agreed to support the 
president when they decided to do so. 

The election of Echandi brought a new outlook to the country's govern- 
ment. Echandi was born in San Jose forty-two years earlier, and his 
father had served as president years before. In 1947 he was secretary- 
general of Ulatc's Uni6n Nacional, and he had served as foreign minister 
before his abortive candidacy for president in 1953 took him eventually to 
the Legislative Assembly. A large man more than six feet tall, Echandi 
had always been a political storm center. As a kind of maverick he had 
never been admired by the upper classes, and his final ascension to the 
presidency was primarily a triumph of his persuasive way with the middle 
and lower classes. A vigorous enemy of every government but that of 
Ulate, he was even indicted for treason in 1955 for sympathizing with 
the attempted Calderon revolution. The charge was later dropped. 

Echandi tried hard to calm the nation, something needed badly. He 
named to his cabinet a widely representative group of men, including 
members of all factions, and he called for an end to destructive political 



COSTA RICA 263 

irresponsibility. In pre-election trips to Washington and through Central 
America he established personal contacts with other heads of government, 
and everywhere reiterated his hope of uniting the Costa Rican family 
while maintaining smooth relations with its neighbors. The promise of 
further respite from politics was smashed abruptly in May, 1958, at the 
opening session of the legislature. The Liberation delegates ignored the 
sizeable number of non-party deputies by nominating and forcing through 
a slate of officials and chairmen representing only their group. At the 
same time, packed galleries had to be cleared after jeers and epithets 
drowned out the first words of Jose* Figueres as he made his last official 
address. Echandi called for "the advance of the working class ... [to 
give] stability to the democracy of Costa Rica and tranquillity to my 
spirit." But his hopes were dim. As the period of reckless political 
squabbling headed forward undeterred by a reasoned judgment of the 
republic's needs, there was only the prospect of executive and legislative 
organs responding to the call of bitterly antagonistic enemies. La Kacion 
unhappily editorialized that "The hopes for the future are clouded still, 
by the probability of non-cooperation between elements of the govern- 
ment. Without some form of civic cooperation for the national well- 
being, Costa Rica faces continued trials in seeking mature and ordered 
political life." 84 



Chapter Seven 



PANAMA 



CONNECTING THE Central American isthmus and the gigantic land mass 
that is South America, bounded on north and south* by two oceans, is 
Panama. Crossroad of world trade, geographic center of the Western 
hemisphere, this small republic is a strange contrast between old and new. 
Modern office buildings in Panama City are but minutes away from 
century-old tourist attractions illustrative of the unique local folklore. An 
intensely tropical land only nine degrees north of the equator, Panama has 
for years been thought of as something synonymous with the Panama 
Canal. Others may knowingly observe that there is a Republic of Panama, 
but that in reality it is only a small backward colony where U. S. citizens 
live while keeping the Canal open. 

There are some 910,000 people in Panama to dispute such a claim. 
Panamanians are proud of their independence, aware of their friendship 
and unavoidable intimacy with the United States, and anxious to protect 
possible encroachments upon national sovereignty. At the same time, 
towering over Panama's past and future is the Panama Canal, linking two 
great bodies of water while bisecting the Republic of Panama. It was 
because of the United States that Panama was able to establish and main- 
tain its independence from Colombia in 1903. Income from lease of the 
Canal has in large part supported the national economy for years. One 
third of all Panamanian revenue derives from the Zone, through wages 

* Contrary to popular concept, Panama lies east and west, the Canal running north 
and south. 



PANAMA 265 

paid Zone employees or expenditures by temporary U. S. personnel as- 
signed to the Zone. 

Internal politics have also revolved about the Canal. Impassioned 
nationalists have harangued, attacked, argued, rioted, and more than once 
revolted as a result of policies concerning the Zone and the U. S. citizens 
living there. Communists have manipulated nationalistic zeal for their 
own lurid purposes, continually agitating the political waters. Alternating 
waves of nationalism and communism have swept the country periodically., 
leaving behind the debris of political chaos, turbulent passions, and rotting 
political institutions. The swift succession of presidents was best char- 
acterized a few years ago when the incumbent told a visiting journalist, 
"I am, in a way, just a guest in this presidential palace for a little while." 
Through all this, the Canal Zone has remained an omnipresent component 
of Panamanian national life 

There are those, including some Panamanians, who object to a geo- 
graphic classification of Panama with the other Central American states. 
To them, Panama is the joining of North and South, with the best 
cultural and economic characteristics of both. The historic development 
of Panama as part of Colombia permanently aligned them with South 
American principles. Panama won its independence some eighty years 
after the Central American states. Nonetheless, in the compelling facts 
of life of contemporary Panama lie strong contradictions. In broad out- 
line, the economic life of Panama is strikingly similar to that of its 
Central American neighbors. Essentially a one-crop country, with a 
population 65 percent mestizo and rural, it faces problems of illiteracy, 
poverty, lack of housing, insufficient electric power, and unstable political 
institutions. The overwhelming balance of trade is with the United States. 
The country is quite small in area with resources somewhat limited. The 
Indian element is as lacking in influence as in its neighbors, barring only 
Guatemala. And, as is true of the others, its best chance for significant 
and fully legitimate nationality seems to lie in regional unity. 

The past decade in Panama has been one of crisis and chaos. Political 
instability, revolutionary outbursts, and bloody riots have been common. 
Petty political jealousies and personal squabbles have plagued a turbulently 
unpredictable decade. Nowhere are politics more graft-ridden, more 
corrupt, than in Panama. Periods of apparent peace and maturity have 
alternated with the vicissitudes of dictatorship, both strong and efficient. 
Even in the strife-filled Central American republics to the northwest, no 



266 CENTRAL AMERICA 

country has followed a more violent postwar course than Panama. The 
people themselves have not suffered the personal violence such as struck 
so many innocent bystanders in Guatemala. But the leadership of the 
republic has been beset with a chain of incendiary political outbursts un- 
equalled in this period of flux and transition. Recent events have been 
so chaotic that true leadership has long since abdicated. Not one of the 
last six presidents served a full term in office. The tale of contemporary 
Panama, then, is necessarily couched almost entirely in terms of political 
upheaval and the overshadowing Canal Zone. 

FROM REVOLUTION TO REMON 

At the close of World War II, Panama was in a position to enjoy an 
unprecedented economic boom. Stringent wartime regulations were 
lifted. International trade, resuscitated and invigorated by the return to 
peacetime commerce, began pouring through the Canal. Tourism grew 
more profitable than ever before and business rose accordingly. The larger 
cities took a deep breath and expanded to service the growing hordes of 
sailors and merchantmen visiting the country for a night or a weekend 
before their ship continued. The United States loaned technical and 
agricultural experts for economic diversification. The government of 
Enrique A. Jimenez, firmly anti-Axis during the war, pursued its 
democratic course with inefficiency but sincerity, and the people were less 
politically unaware than before. A quick shuffling of presidents in 1948, 
first to Domingo Arosemena and then, in 1949, to Daniel Chiari, aroused 
little public disturbance. However, in 1949, former president (1940-41) 
Arnulfo Arias, who had shrugged aside the existence of German espionage 
and undercover maneuvering in the early war period, staged a comeback 
that returned him to the presidency on November 24, 1949. With limited 
public support, he rebuilt his power and immediately reverted to his 
former policies. Democratically inclined Panamanians, dismayed at his 
reappearance, remembered his first presidency too well. 

A graduate of Harvard Medical School, Arias was an intelligent but 
unprincipled man, a spellbinding public orator. Having somewhere 
acquired fascist ideology, he pursued it with a keen shrewdness. Winning 
election fradulently in 1940, he had not only condoned Axis sabotage and 
espionage but developed an active anti-Negro policy. He deprived 
naturalized Jamaicans of their Panamanian citizenship and made second 
class citizens of them. An ardent supporter of white supremacy, Arias ex- 



PANAMA 267 

tended the presidential term to six years by changing the constitution, 
and he apparently hoped to wipe out representative government entirely. 
In 1949, after seven years in political limbo, the surgeon was ready to 
perpetuate the same warped policies on the populace. The flamboyant 
doctor, estranged even from his brother, Harmodio Arias, famous inter- 
national lawyer and ex-president himself, was in a position to feed his 
lust for power. 

Arias overthrew his predecessor with the support and planning of 
Chief of Police Jose Antonio Remon, the outstanding figure active in 
politics. Remon, who had personally led the police crackdown that 
effectively curbed Axis activity during the war, found himself in a posi- 
tion of considerable power. As head of the two thousand-man National 
Guard, he controlled the only military organization in Panama. The 
alliance of Arias and Rem6n was a strange one. Remon was not in 
agreement with the admitted beliefs of Arias, and he might just as easily 
have led a revolution himself. Especially in view of subsequent political 
actions, Remon seems to have been a most extraordinary bedfellow for 
Arias. 

Once in power, Arias instituted the expected measures. He shut down 
El Pats after the paper ran a strong attack in its columns. A series of 
protest meetings brought no result. Even the combined statements of six 
ex-presidents left him unmoved. In another action, his minister of labor 
refused to grant labor unions legal status, despite their rights under 
statutory law. He practiced nepotism to the extent of installing four 
relatives in the cabinet. Opposition was repressed. Public employees had 
to make "voluntary" contributions to the administration. Arias also set 
up his own secret police, being unsure of Remon's continuing support. 
Nearly seventeen months of government followed the same pattern. 
Popular resentment became overwhelming. During his last weeks as 
president, Arias granted an interview to Victoria Bertrand for the UN 
World. Miss Bertrand, quickly charmed by the genial Arias, described 
in warm phrases the welcome she received, and the obvious culture and 
charm radiated by the President He was quoted as telling her that 
"Panama is a democracy, that you can see readily. Once I was called a 
dictator ... It was the fashion then. Now no one denies that I am giving 
full liberty and the opposition takes plenty of advantage of it. ... Yes, 
Panama is a full-fledged democracy. . . , Ml 



2 68 CENTRAL AMERICA 

A few weeks later he attempted to strangle remaining democratic 
practices by dissolving the National Assembly, suspending the Supreme 
Court, and setting aside the constitution, revising it unilaterally by decree. 
On May 8, 1951, a general protest strike was called. Nearly fifteen 
thousand men and women congregated before the police headquarters 
demanding to see Remon. Rioting broke out. Other crowds gathered to 
demonstrate before the President's official residence. A small coterie of 
Arias troops fired on the crowd, and Chief of Police Remon turned in 
disgust against him. The beseiged President refused to wilt under 
pressure, however, and prepared to fight. Barricading himself in his 
study, he defied his attackers. Only after a prolonged effort did two 
officers of the National Guard break into the room. In the confusion that 
followed, both were shot, one apparently by Arias himself. When he 
finally surrendered, the scene showed the office a shambles, two men dead 
on the floor, and blood spattered on Arias' white linen suit. The Presi- 
dent was led from the room and placed in jail under heavy guard. Two 
weeks later, after a quick trial before the National Assembly he had so 
rccendy disbanded, the ex-chief of state was condemned as having abro- 
gated constitutional rights of the people and also deprived of the right 
to hold public office or participate in any way in political affairs. He 
also began an abbreviated prison term lasting nine months and twenty- 
seven days. Final accounting after his overthrow tallied fourteen dead and 
192 wounded. With Arias thus ousted, Supreme Court Chief Alcibiades 
Arosemena assumed the provisional presidency, with elections scheduled 
for May, 1952. All Panama expected Rem6n to declare for the presidency, 
and before 1951 was out his candidacy was official. Arias cried that the 
Colonel would soon seize power by military golpe. Others felt that the 
elections would be rigged, that the apparatus would guarantee a Remon 
victory. But there was much ahead before a new president was named. 

Both then and now, the Panamanian political spectrum is composed 
of small personalized parties of every tint and hue. Few retain any degree 
of permanency, and most are centered on an individual or particular issue. 
In a matter of weeks, there were several groups adhering to the Rem6n 
candidacy. He was supported by the Coalicion Patriotica Nacional 
(CPN), composed of five separate organizations. These were the Partido 
Revolucionaria, Partido Liberal, Partido Renavador, Uni6n Popular, and 
Partido Nacional Revolucionaria. The early unification of these groups 
behind Colond Remon and the coordinated campaign and financial ar- 



PANAMA 269 

rangcments gave him unusually cohesive support, despite friction and oc- 
casional disagreement. 

While Remon began campaigning, others weighed the decision to run. 
One of the undecided was Rodolfo Herbruger, ex-ambassador to the 
United States. On January 19, 1952, he admitted to reporters the possi- 
bility of campaigning for the Partido Panamenista, promising to announce 
definite plans shortly. Two days later he told the press he would 
campaign for the office. Herbruger was at the time a political exile, 
having fled in May, 1951, after the overthrow of Arias, for whom he had 
been minister of the treasury. Questioned about his status, Herbruger 
said he would in time return to Panama. He insisted there was great 
support for his efforts. As to the Arias fall from power, he explained 
that the entire cabinet was involved in emergency measures solely to 
alleviate a financial crisis when the revolution occurred; Arias had been 
laboring purely for the welfare of all Panama, despite repeated inter- 
ferences by Remon. Herbruger necessarily did not attack the opposition 
candidate Remon, perhaps in hopes of returning home legally. Asked of 
the May 10 revolution, he dodged the issue of constitutionality. "I 
couldn't say if it was done unconstitutionally : he [Remon] took emergency 
measures because he felt obliged to do so. ... The emergency measures 
that he took were to convoke a plebiscite, at the same time declaring the 
Constitution of 1941, in effect, subject to the plebiscite." He also discussed 
the worsening financial system, blaming it on the maladministration of 
the Banco Fiduciario de Panama. He said the bank made too many in- 
vestments, ignoring the ceilings indicated by law. As a result, it had 
suspended operations and created a mild panic. "Thousands of small 
depositors ran the risk of losing their savings, and the economic structure 
of the country became gravely menaced." 2 

Two weeks later, following notices in Panama threatening him with 
detention upon his return, Herbruger hedged on his plans, delaying the 
trip indefinitely. Three members of the Partido Panamenista, supporters 
of Arias, espoused his candidacy and agitated for Arias' release from 
prison. Panamenistas worked actively as elections neared. In late 
January they held up traffic on the main street of Panama City for a full 
hour. Some forty sympathizers lay down in the street, protesting for an 
hour the jailing of their leader. Police coolly rerouted traffic, and the 
demonstrators left just as mounted police arrived to enforce movement. 
A week kter an official directive circulated through government offices 



270 CENTRAL AMERICA 

asking Arias' release. His backers charged Minister of Justice Erasmo de 
la Guardia of giving no sign of action. A prompt reply was urged. None 
was ever issued. Finally, on February 6, 1952, an extraordinary committee 
of the National Assembly announced the adoption of an amnesty law. 
Arias and other Panamenistas imprisoned after the revolution were to be 
freed; all exiles could return without reprisal. The next day, Arias was 
released. After nearly ten months in prison he appeared pale and thin. 
Set free at 5:00 P.M. from the Carcel Modelo, he rode through the center 
of Panama City in an open car. Followers joined the vehicle to form a 
miniature parade. Sra. Arias and Assembly Deputy Norberto Zurita 
shared the ride with Arias. 

A few months before, such an amnesty would have appeared out of 
the question. Many Panamanians, however, disapproved of the jailing of 
the ex-president and his cohorts, regardless of past crimes. As feeling 
mounted, Arias gained a modicum of popularity. It seemed possible that 
other parties, opposed to Remon, would unite on the issue to force elec- 
tion of someone other than Rem6n. Passage of the amnesty and prompt 
signature by provisional president Arosemena set free Arias and other 
members of his regime. Two days later, Rodolfo Herbruger made one last 
announcement from Washington. Declaring his departure imminent, he 
said that "The passing of the amnesty law by the National Assembly last 
Wednesday confirms my faith in the moral reserves of the Panamanian 
people. . . . With the amnesty closed a painful chapter in Panamaniam 
history . . . this confirms the absolute necessity that the next election 
in Panama be an expression of principles inspired by democratic practice 
and the highest sentiments of the country." 3 His chances of election, he 
announced, looked bright Two weeks later the same Herbruger was 
discussing the possibility of withdrawal in support of another anti-Remon 
candidate. On February 20, 1952, he announced his willingness to swing 
his support to a national unification candidate to oppose Remon, Ap- 
parently realizing the strong feeling running against all Arias cabinet 
ministers, he referred to recognition of the "abyss opening at my feet." 
"Thinking of the future of the Republic and of each Panamanian, I ac- 
cept without hesitation the proposal of the Partido Panamenista that all 
the candidates to the presidency of the republic withdraw their candi- 
dacies, opening the way for a national candidate to whom we all can turn 
to support, for the good of Panama." 4 



PANAMA 271 

In the meantime Roberto F. Chiari of the Partido Alianza Civilis- 
ta (PAG) had also entered the race for his party. A prominent 
Panamanian politician, Chiari had actually been president for five days 
in late 1949 during a period of extreme unrest. Like Remon, his 
backing came from a coalition of small political organizations, which 
in sum comprised the Alianza. These four were the Partido Nacional 
Liberal, Frente Patriotica, Revolution Independiente, and the Partido 
Socialista. He presumably was also supported by Herbruger, who 
finally withdrew, ending his querulous quest for office. A Panama 
City lawyer named Moreno Correa was also entered in the race; but the 
contest was clearly between Jose Remon and Roberto Chiari. 

While the two opponents canvassed the inhabited five-eighths of 
Panama, the temporary government of Arosemena labored at the impos- 
sible task of preventing riots, demonstrations, and disorders of any sort. 
Almost every day a new outburst confronted the government. The police 
force, well-trained through postwar years by Remon, nonetheless was 
compelled to restrict disturbances to the minimum. They themselves 
came in for criticism on the issue of partisanship. Chiari and his sup- 
porters charged the National Guard with favoritism, alleging police 
prejudice in favor of Remon. Events suggest that the police admittedly 
were not disinterested bystanders. However, they apparently did try to 
curtail erupting political passions. 

On January 9, 1952, the government expedited an order to jail a radio 
broadcaster for commenting that the fall of provisional president Arose- 
mena was imminent. Italo Zappi was accused of "propagating false in- 
formation" and attempting to create lack of confidence in the temporary 
government. The order to Remon's successor, Bolivar Vallarino, was 
issued by the Minister of Government. Zappi was in charge of all radio 
broadcasting for the Partido Revolucionario Independiente, a member of 
Chiari's four-party coalition. Student activity disrupted the usual course 
of affairs the next day, in the first of a series of student political actions 
that harrassed the government. Police announced having blocked the 
advance of a small group of striking students in downtown Panama City, 
capturing two before the movement was broken up. The band of youths 
had tried to enter Liceo de Senoritas, a government school, to interrupt 
classes. One of those captured was a known communist youth leader. 

Following days brought almost daily meetings of different sorts, 
although there was rarely any display of physical force. A prolonged two- 



272 CENTRAL AMERICA 

month strike by University of Panama students protested government 
partiality in favor of Remon. Only in mid-January did the strike end, 
when the Union de Maestros ordered them back to class after lengthy 
conferences with Minister of Education Ruben C. Carlos. Shortly after, 
with the calendar date indicating the approach of term-ending examina- 
tions, an executive decree refused to extend the period to compensate for 
lost time. Angered, the students initiated another strike in hopes of im- 
proving upon their status. Marching on the Presidential Palace on 
January 30, they insisted on presenting a formal complaint to the chief of 
state. A presidential secretary informed them that President Arosemena 
was receiving visitors in a small house. With this news some of the stu- 
dents were discouraged and drifted away. The hundred remaining, 
however, caused difficulties by refusing police orders to disband. They 
insisted on waiting in the street until Arosemena could speak to them. 
After a twenty-minute stalemate the police attacked, sabres and night- 
sticks in hand. Mounted police soon arrived to join the pitched battle. 
Students retaliated by raining rocks on the police, many of whom picked 
up the stones and threw them back. Shops in the area closed at once, 
boarding their windows where possible. Most remained shut the rest 
of the day. The worst of the violence lasted an hour, and it was a full 
two and a half hours before complete calm was restored. A few of the 
students were jailed; most were driven away or forced to quit the fight. 

The government also had to deal with other problems. On the last 
day of January, Minister of Government Miguel Angel Ordonez said that 
the wave of disorders was part of a "preconceived plan." He refused to 
elaborate, but issued a warning to the opposition that the students must 
abstain from initiating further outbursts. At the same time, the toll of 
the previous day's battle was announced as eighteen students wounded or 
requiring medical aid, with twenty-four taken into custody for question- 
ing. An opposition deputy in the National Assembly, Jorge Illueca, 
noted in a January 31 radio address the rumors of a forthcoming suspen- 
sion of individual guarantees until after the election. Cautioning against 
such measures, he announced that any suppression or government im- 
position of a state of seige would be a sign of tyranny that would be 
opposed. He declared that the police would have to oppose all pro- 
Rcm6n attempts to terrorize the opposition, whether or not by force. 

Professor Raul de Ronx succeeded Ordonez as Minister of Government 
in mid-February when the latter resigned to run for the mayoralty of 



PANAMA 273 

Panama City. The government position was not altered. Wednesday, 
February 20, the police announced the arrest of three men reputedly in- 
volved in a plot to assassinate Remon. La Naci6n, a pro-Rem6n paper, 
announced the news in its morning edition, with an exclusive interview 
with the police chief verifying the story. The previous weekend, the 
conspirators had intended to strike down Remon as he left a meeting of 
his political backers in the suburb of Rio Abajo. Unexpectedly Rernon 
had left early and the assassins were unable to strike. They had been 
armed with small weapons and carried sticks of dynamite as well. No 
official connection was established with any of the various political organi- 
zations involved in the campaign. 

Most Panamanians welcomed the elections of May n, held just a year 
after Arnulfo Arias had been unseated. The government prohibited 
political demonstrations after midnight of May 6, refusing requests from 
both coalitions for kst minute rallies. Each presidential candidate was 
permitted a final radio appeal for votes. And so on May n, 1952, 
Panamanian voters went to the polls to elect their next president, two vice- 
presidents, and fifty-three deputies. Last minute pre-election estimates 
anticipated a turnout of some 180,000 to 190,000 voters. The Coalici6n 
Patriotica Nacional calculated that their candidate was sure of eighty- 
five thousand votes. This, supplemented by a majority of the forty 
thousand independent voters, would leave the opposition with perhaps 
sixty thousand votes at best. On the other hand, Chiari's managers 
predicted ninety-five thousand sure votes, increased, in turn, by half 
the independent vote. Both parties thus claimed victory by a large 
margin. 

Many Panamanians believed that the winner would be the one to con- 
trol the government and the Junta Nacional de Elecciones. Both, it 
seemed, were controlled by Rem6n. His years of association with the 
Guardia Nacional would be an assurance of election. Attacking Chiari 
as the captive of the old, landed Panamanian oligarchy. Rem6n sug- 
gested that a Chiari victory would impoverish the country financially and 
encourage pro-leftist organizations a remarkably curious combination. 
Roberto Chiari, at fifty a vigorous campaigner, charged government in- 
tervention and electoral fraud. However, he appropriately claimed con- 
fidence at winning popular approval. A suave, cultured speaker, he was 
convinced that even the uneducated Indians of the interior would follow 
his banner. Deposed president Arias, attacking Rem6n at all times, 



274 CENTRAL AMERICA 

announced that "force and fraud will triumph" over Chiari. Election 
returns straggled in Monday morning. Provincial counting was held in 
the capitals of the nine provinces, and tabulations were sent to Panama 
City and recounted. In the meantime, uncounted ballot boxes were 
locked up and guarded in the National Bank. Only by late Monday was 
Remon clearly winning in Colon, the Caribbean port and second most 
populous city. Chiari forces conceded the loss while hinting at foul play 
in Colon's Reserva India de San Bias, where a backward indigenous popu- 
lation was controlled by pro-government parties. But Chiari claimed 
victory in Panama, Chiriqui, Veraguas, and Code, all provinces. 

By Friday May 15, claims and counter claims filled the air. Both 
candidates demanded concession by the defeated foe. Chiari, backed by 
anti-Remon dailies La Hora and Prensa Libre, charged fraud in San Bias, 
Panama, and Code. But official returns showed Remon in the lead by a 
four to three margin. On May 19, Chiari announced the dispatch of a 
petition to the Junta Nacional de Elecciones demanding annulment of 
the results. At a press conference he voiced lack of confidence in the 
Junta itself, explaining that his supporters were there outnumbered by 
seven to six. Cynical journalists scoffed at the charge. Chiari retorted 
that "it is absolutely certain I have won," yet the tally continued against 
him. By this time Remon led by 59,988 to 30,582. The result was clear. 
Chiari breathed continued defiance. "We need true peace in which to 
work and unfortunately we don't have it, because the country is ready to 
fight to impede the attempt to establish that worst type of dictatorship, a 
military dictatorship ... we civilistas must save our country from dic- 
tatorship, from moral decomposition, frustration, and the extremes of 
chaos." 5 Three days later Remon replied. Ridiculing Chiari's statement 
in Estrella de Panamd, he declared himself ready to "oppose violence with 
violence, if necessary." He noted that the count had passed the halfway 
mark. Of the 699 districts 365 had been tallied, giving him an insur- 
mountable lead of 82,615 to 45>64- "I am the President-elect of the 
Republic by the free and supreme will of the great majority of citizens. 
I will govern without hate or rancor toward any person." Contradicting 
Chiari's claims he explained the basis of his victory: "the popular desire 
for peace, order, and administrative activity [was a major factor]. ... I 
trust that Chiari and his advisors will decide to accept the facts calmly . . . 
it would be very painful if the advice of the irresponsible prevailed, 
initiating violence to try to annul the result of the election. If that hap- 



PANAMA 275 

pens, violence would be met with violence, and in that way public order 
would be re-established immediately." 6 The protest to the Junta Nacional 
de Elecciones was disallowed, and final results gave Remon an emphatic 
margin of victory, 133,208 to 78,094. In mid-June, confident that there was 
no revolutionary threat, Remon embarked on a good will tour of Central 
America prior to his scheduled inauguration in October. 

REMON: STRONGMAN AND DEMOCRAT 

Jos Antonio Rem6n was no newcomer to Panamanian politics. Born 
in 1908, he studied as a cavalry officer at the Military College from 
1928 to 1931, returning to Panama with a commission as captain in the 
National Guard. Rising in rank through the years interrupted by at- 
tendance at the Fort Riley, Kansas, cavalry school he became in- 
fluential during the war years and was largely instrumental in curbing 
sabotage and subversive Axis activity during World War II. Promoted 
to Commanding Chief of the Guard on February 14, 1947, he soon 
emerged as the most powerful political figure in Panama. Involved at 
least indirectly in the selection of four different presidents, he was almost 
literally a king-maker. Remon showed great organizational ability in 
the Guard. Obtaining the top post when police morale and efficiency 
were low, he patiently reorganized it while improving its technical 
capabilities. Improving discipline and security, he fought for better pay 
and modernized equipment. Only after five years of turmoil did he de- 
cide to enter politics openly. 

Remon was immensely popular. Aided by his dynamic wife Cecilia, 
soon a political figure in her own right, he assumed the presidency on a 
wave of popularity and affection. Despite such sentiment, few Pana- 
manians had illusions about him. His election, most believed, would be 
the start of a military regime. After five years behind the throne, he 
seemed sure to be a strong man. No one knew much of his plans, but 
Panamanians were content to accept the badly needed tranquillity his 
administration promised, hopeful that his policies would not interrupt the 
normal conduct of business. They were willing for the moment to accept 
a strong man if political turbulence was curbed. 

Vague throughout the campaign about his policies, Rem6n was 
more explicit in his pre-inaugural swing through Central America. 
In San Jose he told Costa Rican newsmen that "My plan of govern- 
ment is simple, as it consists of obtaining the greatest possible well 



276 CENTRAL AMERICA 

being for my countrymen. . . . Not only is my desire [in interna- 
tional relations] to maintain good relations between the Republic 
of Panama and all the civilized countries of the world, but I will 
try to tighten the bonds of fraternity that have always existed among 
the peoples of our continent." In education, he said that "One of the 
objectives that my Government will pursue will be to diversify public 
education in such a way that it will be effectively within the reach of all 
citizens. ... In my opinion, the education and instruction of a people 
constitutes its best defense and is the most solid base to perpetuate liberties 
across the centuries." Public health was also vital to him. "The health 
of the people is a matter that has worried me deeply all my life. I will 
try within our economic means to continue and to augment the campaign 
of health and social aid . . . preventive medicine must become widely 
used ... as it is preferable to prevent illnesses rather than cure them." 
And in agriculture, he promised that "My Government will aid agri- 
cultural development on two fundamental points: the first, to distribute 
to the farm worker lands to till. Second, to create permanent and re- 
munerative markets for agricultural production." 7 His hopes for Central 
America were summarized best in a press conference held in San Salvador 
later in his tour. "I will have an 'open-door' government. ... I desire 
with all my heart that Panama take part in the organization of the 

Central American states, and I will make suggestions to accompany it 

My government will try democratically to advance regional principles. 
Only by means of consolidation of the entire isthmus can we continue to 
advance the economic and social progress of Central America." 8 

On October 30, 1952, before assembled members of the Supreme 
Court of Justice, the National Assembly, thirty-six foreign ministers, and 
twenty thousand Panamanians, forty-four-year-old Colonel Jose Antonio 
Remon took the oath as President of the Panamanian Republic. In the 
first outdoor presidential ceremonies in twelve years, he received the 
presidential sash in the Olympic Stadium. His brother Alejandro, a 
newly elected deputy in the Assembly and already selected as president 
of the Assembly, was first sworn in, then administered the oath of office 
to his brother. In his inaugural address Remon mentioned many of 
the ideas he had been expanding during his regional trip. Panama would 
scrupulously adhere to all its international treaties, he announced, but 
hoped to modify some of them. One was the Canal contract with the 
United States: "Owing to the geographic situation, the relations of our 



PANAMA 277 

country with the United States of America are extraordinary. We are 
united to a great country by means of unbreakable bonds. The joint 
responsibility of defending the interoccanic canal imposes upon our two 
countries reciprocal rights and obligations." 9 In economic matters, he 
intended full guarantees for investment of capital to strengthen economic 
life. The sickly situation was to be made healthy. The deficit in the 
national treasury, up to a staggering $40,907,211, had to be reduced. 
Agriculture was also important, and he planned to support and promote 
it, assisted by U. S. aid through the Point Four program. After the 
ceremonies, Remon went to the Presidential Palace, held a final interview 
with provisional president Alcibiades Arosemena, and prompdy granted 
his first press conference as president. Most of his points were outlined 
above. He also spoke out on the occasion against communism. No one 
had questioned his anti-communism before, but he underlined the point. 
Among immediate needs, none was more compelling than the ailing 
financial situation. Economic depression was severe. The World Bank 
had recently refused the government a loan. Panama needed to stabilize 
the economic front which had been so adversely affected by a decade of 
political convulsions. The treasury was deep in the red. Years of ad- 
ministrative dishonesty, with bureaucrats siphoning off their "percentage" 
and falsifying the books, had left a deficit of forty million dollars. 
Statistics showed no crisis except in terms of inefficiency, graft, and 
fiscal disorganization in the government. On December 27, 1952, President 
Remon announced the 1953 budget, calling for an expenditure of 
$40,533,064. It was prompdy delivered to the National Assembly, ac- 
companied by a strongly worded message urging quick adoption. The 
1952 budget, submitted a year before, had not been approved until 
August of 1952. This time, proceedings were less retarded. The govern- 
ment wanted to settle the floating internal debt, which had reached eleven 
million dollars. There were two possible methods. First was to issue 
bonds worth five million dollars with interest, thus helping to cancel 
pressing government obligations. The United Fruit Company granted 
an advance on future taxes to help bring debt payments current. The 
Banco de Seguridad Social applied for an advance of two million dollars 
from the Chase National Bank of New York. This was expected to re- 
duce the six million dollar debt accumulated by government payment of 
pensions, accounts, and social services. 



278 CENTRAL AMERICA 

Hoping to stabilize finances, Remon introduced tax revisions. He 
sent to the Assembly a request for higher income taxes. In the upper 
brackets they were boosted as much as 50 percent. Inheritance taxes were 
also elevated, and a new tariff on travel tickets was initiated by executive 
decree. The combined revenue was estimated at $2,625,000. Tax revisions 
encountered exceptional opposition in the Assembly on the part of local 
capitalists and their representatives. The government, fighting stubbornly 
for the measures, explained that finances had to be stabilized before 
foreign capital in large quantities could be attracted. Local capital would 
also be unavailable for domestic investment until national finances were 
sound. With the moneyed interests still objecting bitterly, the government 
presented the exact figures. Actual banking deposits were increasing, and 
in 1952 reached $73,575,801, but domestic deposits were steadily diminish- 
ing. Panama's annual deficits in its balance of international payments 
grew worse annually. Since 1946 these deficits had fluctuated from four 
to thirteen million dollars a year. In the past three years, domestic 
deposits had declined $1,641,073. In the end, the National Assembly 
agreed to revise tax laws, partly because they expected evasion of the laws 
to reduce its effect. As in sister republics, tax collection had been little 
more than a joke. President Remon issued instructions to all government 
agencies to conduct no business with people unable to present a tax 
receipt certifying payment. Enforcing and supervising the tax revision 
was the incorruptible Fernando Alegre as chief of the Internal Revenue 
Department. Panamanian businessmen were first shocked, then unbe- 
lieving, later angered, but in the end they were guardedly proud of hav- 
ing met tax requirements, and Rem6n's tax measures were, on the whole, 
only mildly unpopular. Even his worst enemies never denied that his 
government was more honestly administered than any other in Pana- 
manian history. 

In November, 1953 President Remon established the Institute de 
Fomento Econ6mico (IFE) to give an impetus to economic development. 
Concerned with stimulating production by price supports and protective 
tariffs, the Institute received a broad mandate that included agricultural 
and industrial credit. It eliminated activities of the middleman, who in 
Panama traditionally dumped imports on the market whenever the local 
crop was harvested. Through the World Bank the Institute received a 
loan for farm machinery and storage facilities. Institute activities also 
embraced the construction of processing plants for agricultural and 



PANAMA 279 

industrial products and granted credit to public and private housing. 
The largest single enterprise in Panama, the Chiriqui Land Company 
(a subsidiary of UFCO) increased its productive efforts, also pumping 
more money into the economy. Of its twelve million dollar annual ex- 
penditures in Panama, two million goes directly to the government in 
taxes, eight million to Panamanians in wages and salaries, and two million 
for the purchase of national products. UFCO activities in cacao and abaca 
fibers also were stepped up during this period. 

One of the Panamanian economic policies not revised by Remon is the 
strong protectionist system. Businessmen remain fearful of their very 
existence unless receiving government support. In cement, wine, liquors, 
soft drinks, soap, and sugar, local products receive the advantage of a high 
tariff wall against such foreign goods. National industries backed by local 
capital have had a monopoly for years, and there is little indication of a 
forthcoming revision. Today, Panamanian businessmen do not want 
more and cheaper goods, but less turnover and higher prices. Until the 
philosophy of mass consumption is substituted for small volume business, 
protectionism will continue supreme. 

Political tranquillity was another Rem6n objective. While his efforts 
gradually became more successful, there were exceptions at first. On 
August 5, 1953, ex-President Arnulfo Arias returned to the news when the 
police stopped a car for using its siren illegally on a highway. Upon 
investigation they discovered that it belonged to Arias and carried pro- 
Arias propaganda and short motion picture films. They were all con- 
fiscated and the two men riding in the car were jailed overnight. Any 
threat from Arnulfo Arias was slight, however, for he had forfeited by 
his two interrupted terms as president whatever popularity he had once 
had. The real threat to public order was activity by the international 
communist movement. There is no question that Panama, thanks to its 
geographic position, has top priority on Soviet blueprints for the sub- 
version of Central America. This was the long-term goal of Guatemalan 
Communists, who hoped to gain control of the country, spread their 
influence over the isthmus of Central America, and in time subvert U. S. 
control of the Canal. At the same time, they devoted arduous labor to 
the possibility of furthering communism in Panama itself. Daniel James 
states that Panamanian politics are particularly emphasized to Red stu- 
dents at the Institute for the Study of Latin American Relations, in 
Prague, Czechoslovakia. 



280 CENTRAL AMERICA 

In August, 1952, the government admitted the existence of a nest of 
Reds in the national university. La Nation spread the story over eight 
columns in all possible detail. Secret police commander Hector Valdes 
Jr. was quoted to the effect that two communist professors, Cesar de Leon 
and Hugo Victor, instructed night class students in communist subversive 
techniques. The two had distributed communist propaganda pamphlets 
to classes, as well as pictures of Mexican marxist Lombardo Toledano. 
The professors were known members of the Partido del Pueblo. The 
next day Valdes said, "The communist movement in Panama is the 
most perfect and efficient organization in our country, extending its 
tentacles to different activities of national life." 10 He also attacked the 
fledgling workers union as a communist organization directed by com- 
munist Juan Espiazziano, who had recently been expelled. "The ad- 
vance of communism," he concluded, "is taking on alarming character- 
istics." This revelation astonished the nation, and the Communists 
immediately curtailed activities, withdrawing underground to lick their 
wounds and prepare future plans. The people gradually forgot the 
problem, until new secret police chief Jorge Luis Alfaro reminded them 
of the Communists in the fall of 1953. He disclosed that agents had 
uncovered communist plans to expand activities throughout Latin Ameri- 
ca. Documents captured during a two month investigation showed "the 
efforts of international communist agents together with the Partido del 
Pueblo to cause trouble. ... I want these international agents to know 
that Panama will not be a fertile ground for planting communist seeds." 
Several of the damaging documents had been seized from two communist 
agents, Isaac Argentine Vainikoff, an Argentine, and Ruben Dario Souza, 
a Panamanian. The two had been captured after Vainikoff arrived from 
Mexico. After two days' questioning Vainikoff was released and de- 
ported. Souza was sentenced to twenty days for his "disrespectful atti- 
tude" during questioning. Chief Alfaro declared that documents further 
substantiated how Red organizers were "astutely capitalizing on the fact 
that Panama is at present engaged in negotiations with the United 
States of America on revision of their relations." 12 

No one man had opposed communism more actively than Rem6n 
during his years as police commander. After becoming president, he 
continued to keep an eye on communist activities, while leaving the 
spadework to the secret police and U. S. intelligence agents. In December, 
1953, he asked the National Assembly to declare communism illegal. 



PANAMA 281 

The preamble to the law admitted that "there are ... in the republic, 
political groups of a totalitarian ideology, particularly Communists, which 
are disturbing the normal and orderly functioning of democratic insti- 
tutions." 13 The projected law would also apply to totalitarian groups, 
other than Communists, "whose evident purpose is to destroy the demo- 
cratic form of government." Government officials asked that all "totali- 
tarian, falangist, and fascist organizations" be outlawed. After a week's 
discussion and debate, the Assembly unanimously passed the law, worded 
almost exactly as the administration had suggested, declaring communism 
illegal, as well as other undemocratic organizations classified above. 
Communists were prohibited from employment in the government, and 
no Red was permitted to transact any business with government agencies. 
Remon promptly signed the bill into law. The continuing government 
campaign led to the resignation of two professors from the Institute 
Nacional. Five Reds were arrested in mid-December when police raided 
a communist "peace meeting." Three of the captives were sentenced to 
forty days in jail for disorderly conduct, and one received a six hundred 
dollar fine for illegal possession of arms. The determined police probe 
also produced two mysterious lists of Panamanian names, one revealing 
twenty hard core Communists. 

A covert school for spies also operated in Panama for some time, with 
key Latin American Communists directing recruiting and courses of 
instruction. Different Panamanians visited the Soviet Union to receive 
special training. The outlawed Partido del Pueblo, whose members 
continued to operate clandestinely, provided funds to finance Moscow trips 
for outstanding young Communists who could not finance the trip other- 
wise. The government investigation also uncovered subversive literature, 
some of it discovered by customs inspections of incoming visitors. Officials 
of the administration showed U. S. newsmen copies of textbooks dated 
1953 and published by the Institute of Foreign Languages in Moscow. 
Subjects included were infiltration, subversion, cell organization, sabotage, 
and recruiting. 

Reporter Ralph Skinner cabled the Christian Science Monitor on 
February 19, 1954, that 

The role of the local Partido del Pueblo in the international Communist 
conspiracy directed from Moscow was clearly disclosed when its secretary- 
general conferred in this capital with a key Communist agent. This man of 



282 CENTRAL AMERICA 

a dozen names previously had met with Communist agitators in several other 
neighboring countries before reaching Panama. 

Arrested in Panama by the Panama Secret Police, this agent possessed 
documents containing a list of Communist spies scattered throughout Latin 
America. Also discovered were his plans for espionage in both the Republic 
of Panama and the Canal Zone. 14 

Col. Remon was equally firm against external, regional communism. 
In 1954, after communist Guatemala had received a widely publicized 
arms shipment from East Germany, he announced on May 19 that 

The attitude of Panama toward international communist activities was 
clearly defined at the Tenth [Inter-American] Conference held in Caracas, 
and in the ... [constitution which] puts Communism outside the law. . . . 
In reference to continental solidarity before any danger of aggression, the 
Republic of Panama is inspired by die unquenchable determination that the 
Americas must maintain themselves free from communist penetration and 
from any form of domination of political influence that might seem contrary 
to the norms of a democratic system of government. . . . 

With respect to present events transpiring in Central America, it will have 
to be accepted that the nations most directly affected by these events that are 
occurring . . . must meet for conversations with the object of finding solutions 
in agreement with the tradition and principles of the American nations. 15 

"Bic DITCH" FINANCES 

Of all Remon's policies, however, none was more significant or 
more historic than the liberalization of the Canal Zone treaties with the 
United States. Negotiations were long, complicated, and difficult to 
consummate. The approach to this problem and its eventual conclusion 
forms a towering landmark in contemporary Panamanian affairs. 

Since 1903, the United States has exercised authority over a ten mile 
wide strip of territory extending from the Caribbean Sea south* to the 
Pacific. This land, forty-eight miles in length, surrounds the locks, lakes, 
and installations of the Panama Canal. The relationship of Panama and 
the United States has always been delicate, although generally friendly. 
The unique relationship was set forth in the Hay-Bunau-Varilla Treaty 
of 1903, following the U. S.-supported revolution of Panama against 
Colombia. The United States leased the Zone for ninety-nine years, pay- 
ing ten million dollars down and a rental of $250,000 annually. The 
agreement gave the United States "in perpetuity the use, occupation, and 

* The Caribbean entrance at Cristobal is actually 27 miles west of that at the Pacific side. 



PANAMA 283 

control" of the territory. It would be granted, in effect, the "rights, power, 
and authority" which it "would possess and exercise if it were the 
sovereign." 

Through the years, many developments changed the situation in the 
Zone. However, almost no contractual changes were made. The Canal 
itself was opened officially in 1914 and began to handle increasingly heavy 
interoceanic traffic. All racial elements came to the Zone. Jamaicans were 
imported in large numbers to build the Canal. At a time when working 
and living conditions in the inland Panamanian tropics were extremely 
unhealthy, Negro labor was almost the only available resource. Orientals 
were also introduced as canal-building kbor, but to a lesser extent. Dis- 
criminatory practices quickly evolved, and we shall see how these con- 
tinued into the 1950*5. Financially, there was but one revision in the 
contract, in 1936 when the United States went off the gold standard. The 
annual rent was raised to $430,000 by the Alfaro-Hull Agreement. 

Through the years the Canal has been of inestimable value to the 
United States. It saves 7,873 nautical miles from New York to San 
Francisco. Traffic, roughly half that of the Suez Canal in normal times, 
had 8,475 transits in 1955, netting $37,450,000 in tolls for the fiscal year 
1955. Always neutral to ships of every possible flag, the waterway was 
maintained without any form of international treaty other than the 
second Hay-Pauncefote Treaty of 1902 and the Hay-Bunau-Varilla Treaty, 
which dealt in the first case with the British government and in the second 
with a French opportunist in the new Republic of Panama in 1903. 

From 1914 to 1951 the Zone was operated by an independent govern- 
ment agency under the U. S. President, with the Secretary of the Army 
in direct charge. He was responsible for the Panama Railroad Company 
and its connecting rail line, hotels, steamship lines, and commissaries. 
This was altered in 1951 and replaced by the Panama Canal Company, a 
U. S. government corporation managed by a thirteen-member board of 
directors serving without pay. They are named by the Secretary of the 
Army. Most are either prominent businessmen or high government 
officials. The company, established under federal charter, completely runs 
the Canal, auxiliary enterprises, and the self-supporting, non-profit busi- 
ness corporations within the limits of the Zone. The Canal Zone govern- 
ment is an independent U. S. agency responsible for governmental and 
administrative affairs. The Governor serves in the dual role as president 
of the Panama Canal Company and Governor of the Canal Zone. In 



284 CENTRAL AMERICA 

recent years it has become self-supporting, charged with the task of 
repaying the U. S. Treasury for the net costs of the civil government as 
well as paying the annuity to Panama. 

Since 1914, then, the United States has shared sovereignty over a strip 
of land cutting Panama in two. While the U. S. has used the Canal for 
economic purposes and for bases in rime of peril, Panama has depended 
on it for revenue and IL S. defense. The situation is basically unhealthy 
and can scarcely be otherwise. The enormous discrepancy in size and 
strength between the United States and Panama is but one of many 
inevitable factors. Social problems have arisen as a result of the bureauc- 
racy entrenched in the Zone. Caste differences put U. S. citizens in 
superior positions from the beginning. The Panamanians were treated 
poorly, discriminated against in various ways, and allowed to realize 
they were considered secondary people. Even more prejudicial was the 
treatment given Negroes, descendants of the Jamaicans whose labor had 
dug the Canal. In early years the U. S. employees were even paid in 
gold, hence the "gold rate," while others were paid in silver. The term 
"silver rate" meant inferiority for many years. Social services were also 
a basis for discrimination against non-U. S. citizens or non-whites. Po- 
litically, the issue of United States imperialism and mistreatment of others 
in the Zone was an inflammatory issue. Ardent nationalists, unscrupulous 
politicians, and subversive elements could always rely upon the issue to 
stir up high feeling. This cropped up in various incidents, none more 
foolish, unnecessary, and basically stupid than the bases issue of 1947. 

The Bases Treaty was signed on May 18, 1942. Under it the United 
States was to occupy old or construct new air bases for wartime defense. 
According to Clause Five, the U. S. was to evacuate the bases within a 
year of the time a positive peace treaty was signed. Under the agree- 
ment the U. S. occupied 134 bases, the great majority small radar stations. 
The largest was the Rio Hato bomber base, a nineteen thousand acre plot 
of land. There was little thought given to the arrangement during the 
year following the Japanese capitulation of 1945. The United States 
blandly assumed the bases would be maintained without change. In 
November, 1945, Panamanian Foreign Minister Ricardo Alfaro told the 
Assembly that all bases should be turned over by September i, 1946, a 
year after the surrender in Tokyo Bay. The Department of State paid 
little attention to the announcement. 



PANAMA 285 

Only a few months before U. S. evacuation was demanded did the 
State Department realize the Panamanians were serious. By that time 
vociferous students were crying about Panamanian sovereign rights and 
demanding return of the bases still retained by the North Americans. 
On September 12, 1946, the Department announced its willingness to 
work out the question through consultation. It also added that the treaty 
with Japan was not a definitive peace treaty, simply a surrender document. 
At first the Department asked for a ninety-nine, then a fifty, and finally 
a fifteen year lease, with an option for fifteen more. The U. S. particularly 
hoped for a long-term agreement for the Rio Hato bomber base. Through 
U. S. intransigence, Panamanian oversensitivity, and general misunder- 
standing on both sides, the Panamanian populace was enraged. Most 
didn't even want to discuss the matter. 

Despite communist rabble-rousing and journalistic sensationalism, the 
two nations were near agreement at the end of 1947. The U. S. had 
accepted five year leases for every air base but Rio Hato, which it insisted 
had to be at least a ten year agreement with an option for ten more. The 
Department of State would not yield. Foreign Minister Alfaro was 
equally adamant. He said the demand was unfair and indicative of U. S. 
lack of faith in Panamanian good will. During a brief trip by Alfaro to 
the United Nations, the Department went behind his back to President 
Jimenez, who accepted U. S. terms. Alfaro immediately resigned in 
justifiable outrage. Acting minister Francisco Filos signed the treaty. 
The United States was to retain thirteen bases for an annual rental of 
$180,500. President Jimenez commented, "In view of the previous 
considerations . . . and in the defense of the republic itself, and recogniz- 
ing, moreover, its geographic function and its position in the fold of 
the American nations, Panama has agreed to the conditions of renewal 
proposed. . . ," 16 Aroused Panamanian students seized upon the Rio 
Hato clause for one final protest. Meeting in Santa Ana Park, they began 
a march on the Assembly, then debating the bill. Mounted police attacked 
without restraint, and a sixteen-year-old was shot in the neck trying to 
gain shelter in a cathedral. This incident brought the public ire down 
upon the government, and all fifty-one deputies bent before the pressure 
to reject die treaty. They quickly remembered that they were up for 
re-election the next May. Consequently, U. S. armed forces left the bases 
at once, Panamanian business suffered the loss of customers, and U. S. 
citizens angrily blamed either the State Department or Ambassador Hiiies. 



286 CENTRAL AMERICA 

Sumner Welles summarized informed opinion by commenting that the 
U. S. "should not for one moment have allowed the impression to be 
created that it was . . . trying to assert the sole right of what should or 
should not be done with the territory of the Panamanian people." 17 

By 1953 feeling had calmed considerably, despite continuing resent- 
ment on both sides. Remon had three complaints, each of which he hoped 
to remedy by negotiation with the United States. The first of these 
consisted of the annual rent, which he felt should be considerably higher. 
On January 22, 1953, he said that he hoped for "more adequate compensa- 
tions" in exchange for the "sacrifices and obligations" imposed on 
Panama by the Canal. He expressed "full confidence in democratic, 
just, and equitable proposals" on the part of the new U. S. administration. 
Based on the volume of traffic, $430,000 a year seemed a miserly sum to 
pay for rent. Annual tolls were over thirty-seven million dollars; Rem6n 
hoped to obtain either a percentage of the tolls or else a flat sum in ex- 
cess of a million dollars annually. The President made clear that forth- 
coming negotiations with the United States were not planned in hopes of 
winning a free handout. As he repeatedly declared, he wanted not 
charity but justice for Panama. 

The second Panamanian grievance concerned Zone business activities 
in direct competition with Panamanian commerce. Commissaries, 
operated for U. S. employees in the Zone, consistently undersold Pana- 
manian merchants. Workers in the Zone could buy almost every neces- 
sary item, food stuffs, luxury articles, and services from Zone facilities, 
at lower prices than from Panamanian businesses. The Zone also main- 
tained plants for bottling soft drinks, baking bread, and canning. The 
main railway, as already mentioned, passed the forty-seven miles from 
Colon to Panama City on Zone territory. It competed directly with local 
Panamanian railroads, underselling and therefore competing unfairly 
with national transportation. Hotels in the Zone, operated by U. S. 
citizens, also undercut the national economy by offering lodging at 
generally cheaper prices than Panamanian proprietors could charge. 

All this, according to Panamanians, had made the Zone a state within 
a state, a social, economic, political entity. This was precisely what 
Theodore Roosevelt had guaranteed would not be permitted when the 
1903 treaty was enacted. Such an entity was injurious to national rights, 
putting Panama in some respects at the mercy of the Zone. The existence 



PANAMA 287 

of these business enterprises promised to strangle Panamanian mercantile 
interests, and contractual changes were necessary. Officials in the Zone 
claimed their activities were justified by a clause permitting anything 
"necessary or convenient for maintenance, operation, sanitation, and 
protection of the Canal." They pointed out that construction of the 
Canal initially would have been impossible without commissaries and the 
other services made available to workers and laborers. Panamanians 
responded that this may have been true in the early years of the 
century, under primitive conditions existing when the Canal was con- 
structed. But a half century later, in 1953, Panama could supply all needs, 
and perpetuation of "favored-economy enterprises" in the Zone was 
thus unjustified and unfair. 

Thirdly, President Remon objected to the U. S. treatment of Pana- 
manian labor. At a time when the segregation issue was making head- 
lines in the United States, little attention was given to a similar situation 
in the Zone. Color discrimination was actively practiced by Zone officials. 
Pay differed according to color. The five thousand white employees were 
paid at the "U. S. rate," while an estimated nineteen thousand Negro 
Panamanians and mulattoes received the "local rate," which was dis- 
criminatorily lower than wages paid whites. From the earliest days of 
the Zone, the U. S. had instituted the color line and adhered to it without 
exception. Discrimination extended to various other economic and 
social situations. U. S. rate workers received better housing, schooling, 
and recreational facilities. Local rate employees were segregated in 
inferior schools, cheaper housing, crowded living conditions, and often 
secondary and inadequate recreational facilities. U. S. Negroes sent their 
children to colored schools also, although legally not subject to the Canal 
Zone government. In 1914, Panamanian Negroes, many imported from 
the West Indies, were the major source of physical labor. Once their 
work was finished they were categorized as inferior beings unworthy of 
equal treatment. 

In March, 1954, while lengthy negotiations between Panama and the 
United States continued, Sefiora Cecilia de Remon, the wife of the 
President, introduced the charge of racial discrimination at Caracas, 
Venezuela. Attending the Tenth Inter-American Conference of Foreign 
Ministers, Sra. de Remon, a member of the Panamanian delegation, intro- 
duced a resolution opposing racial discrimination. While not naming 
names, Sra. de Remon was obviously referring to the U. S. when she 



288 CENTRAL AMERICA 

charged discriminatory practices, especially on the part of those "who in 
principle oppose" racial inequalities. The resolution was passed unani- 
mously, nineteen to nothing. Only communist Guatemala abstained, 
objecting to a phrase citing racial discrimination as a promoter of "a 
favorable climate for communism." 

Such were the major points of irritation when Remon undertook 
discussions with the United States. The answers could be extremely 
crucial to future Panamanian development. President Remon, despite tax 
reforms and financial measures, was staking his prestige and perhaps the 
life of his government on the outcome of the negotiations. Under the 
circumstances, Netustvee}^ could say, as did many, that there were dangers 
if the United States adopted an intransigent position. Unfavorable 
results could easily "turn the present reasonableness of the Panamanians 
into the violent anti-Americanism which is always latent. . . . Nothing, of 
course, could be more satisfactory to Moscow, or more damaging to the 
security of the Canal." 18 

Groundwork for the negotiations was laid in the early months of 
1953. On April 7, Foreign Minister and First Vice-President Jose Ramon 
Guizado sent a memorandum to the State Department as an initial basis 
for the forthcoming discussions. Stated in general terms, it was the 
result of a personal conference with John Foster Dulles a few days before. 
Dulles had requested a memorandum covering their discussion. Guizado 
said he had received a favorable preliminary reaction on the part of high 
U. S. officials. On April 19, it was officially revealed that in September, 
Panama and the United States would open discussions leading to a new 
treaty. For the U. S., Assistant Secretary of State for Inter-American 
Affairs John Moors Cabot was to lead the negotiators, with John Muccio, 
an ex-councillor with the U. S. ministry in Panama, as his chief assistant 
Panamanian delegates, led by Foreign Minister Guizado, were to include 
ex-President Harmodio Arias and Ricardo Alfaro, both recent enemies 
of Remon. Others included Octavio Fabrega, Carlos Sucre and Roberto 
Huertematte, the ambassador in Washington. 

At the same time, representatives in Washington let it be known 
that Rem6n hoped to visit the United States after negotiations were under- 
way. Presumably he hoped to add impetus to the talks by a personal 
appearance. Washington quickly accepted the hint to announce in mid- 
August the invitation of Remon. "The visit is another demonstration of 
the cordial relations and historic friendship that exists between the United 



PANAMA 289 

States and the Republic of Panama, which this year celebrates its fiftieth 
year of independence." 19 Notified of the invitation, Remon replied that 
he was "immensely gratified" and personally anxious to meet President 
Eisenhower. He was careful to say that the meeting had particular 
importance in view of the U. S.-Panamanian negotiations. 

The official Panamanian mission, headed by Guizado, reached New 
York City on Thursday, September 3, to begin negotiations. The group 
was met by Ambassador Huertematte and the Panamanian delegates to 
the United Nations, as well as State Department representatives. Guizado 
told the small gathering that "The good will and desire to cooperate exists 
on both sides and I do not foresee any formidable difficulties in the 
negotiations." 20 He was hopeful that preliminary talks would soon clear 
the way for concrete accomplishments. Referring to his talks with Dulles 
several months before, he was "very much impressed with the cordiality 
and cooperation extended to me at that time." On the ninth, Guizado said 
his country desired "to be a strong and prosperous neighbor of the United 

States and of all the other countries of the Western Hemisphere The 

Panamanians are considered partners of the United States in the operation 
of the Canal Zone." 21 Official sessions began the same day. 

Negotiations continued through the remainder of September. Early 
meetings were devoted to the discussion of general issues and conversa- 
tions of an exploratory nature. On September 30, following the sixth 
regular session, Panamanian delegates were unofficially saying that a joint 
declaration was in the offing, restating U. S.-Panamanian relations in 
general terms. The spotlight shifted from the discussions, however, with 
the arrival of President Remon. On September 28, 1953, President and 
Senora de Remon stepped down from a plane at the Washington airport 
and were greeted by Vice-President Richard M. Nixon. They were 
quickly driven to the White House where President and Mrs. Eisenhower 
welcomed them. Eisenhower was an official host for three days, during 
which time voluble, English-speaking Remon advanced his country's 
position at great length. He also took time to place a floral wreath on the 
tomb of Franklin Roosevelt, award Mrs. Roosevelt the Order of Nunez 
de Balboa, and watch a World Series game in New York. 

Before returning to Panama, Remon and Eisenhower issued a joint 
declaration. President Eisenhower had 

. . . assured the President of the Republic of Panama that what the representa- 
tives of Panama wish to deal with will be considered amicably in the light of 



290 CENTRAL AMERICA 

the exceptionally close relations that exist between the two. Taking into ac- 
count the nature of the special ties that unite the two countries, he has ex- 
pressed, on the part of the United States, continuing cooperation in the develop- 
ment of the national economy of Panama. It is believed that this meeting has 
effectively served to promote mutual understanding and confidence in the 
common interest of the two nations and of the free world characterizing the 
bonds that unite them. 22 

Returning from Washington, Rem6n was received enthusiastically in 
Panama City. Some twenty onlookers were injured, two gravely, when 
caught in the crush of the jubilant mob. 

However, negotiators were scarcely beginning their work. On October 
14, Assistant Secretary Cabot announced that "The actual negotiations 
between the United States and Panama are exceptionally compli- 
cated. . . .' s28 After five weeks of official silence, this was followed by a 
joint announcement on November 25. Progress was termed "satisfactory," 
but much remained to be done. The official bulletin published by the 
Department of State said: 

The representatives of the governments of the Republic of Panama and 
the United States of America . . . announce that the work begun on 10 Septem- 
ber 1953 will continue progressing satisfactorily within the elevated spirit of 
friendship and comprehension that particularly characterize the special relations 
between the two countries. On the sixth of October the Panamanian nego- 
tiators completed presentation of their proposals. The government of the 
United States is studying these questions with the greatest possible recep- 
tivity. . . , 24 

In following months, official silence was broken only infrequently. 
Panama declared in its own official communique that the first U. S. replies 
to their suggestions were only partially adequate. The United States had 
given a flat no to different requests. A slight pall fell over proceedings, 
although representatives continued to meet regularly. On August 9, 
1954, after weeks of total silence, "unofficial sources" told Washington 
newspapers that negotiations were proceeding smoothly, and the U. S. 
was proving more tractable. The great interest of Assistant Secretary of 
State Henry Holland, who had succeeded John Moors Cabot, was credited 
with advancing the talks substantially. Under his prodding, delegates 
became increasingly candid with one another. 

Ten days later, President Rem6n agreed that progress was continuing, 
announcing that the U. S. was proposing much better terms than at first. 



PANAMA 291 

There was much hard labor still ahead, however. Remon abstained 
from revealing concrete details, in keeping with the joint agreement to 
leak no information to the press until a final contractual revision was 
arrived at. On August 20 Panamanian delegates returned home to report 
to the President and conduct a round of conferences with other officials. 
Dr. Octavio Fabrega, delegation chief for the first few months, said that 
he and his companions would make certain recomendations to the govern- 
ment before returning to Washington at the end of August. He, Huerte- 
matte, and Carlos Sucre continued to do the bulk of the negotiating. 
In early November, paying a courtesy call at the State Department, 
Business Attache Juan Manuel Mendez declared that "the problem is now 
merely one of phraseology." The end looked near, at last. 

Just as talks drew to a close, Panama was rocked with the news of 
President Remon's assassination, and a few days later, the news that high 
administration officials were implicated. However, the shocking news 
only delayed the final consummation of the new contract. On January 
23, 1955, the Republic of Panama and the United States of America signed 
a treaty of friendship and cooperation in an hour long ceremony in the 
Yellow Room of the Panamanian Presidential Palace. Dr. Fabrega signed 
the historic agreement for Panama and Ambassador Seldin Chapin for 
the United States. Both English and Spanish copies were signed, as well 
as an attached memorandum. Thus closed sixteen months of difficult, 
prolonged, critical, and yet generally amicable discussions. New Presi- 
dent Ricardo Arias immediately signed the order submitting papers to 
the National Assembly for approval. The occasion was dominated by 
the memory of Rem6n, the driving force behind the sixteen-month 
endeavor. President Arias appropriately repeated his phrase we want 
neither millions nor charity, we want justice. Ambassador Chapin called 
it "a monument of lasting fame" to the assassin's victim, and nothing 
could have been more true. 

The new terms were probably equal to Rem6n's reasonable aspirations. 
The United States agreed to pay an annual rent of $1,930,000, compared 
to the 1936 sum of $436,000. Panama, in return, made available twenty 
thousand acres -of the national territory for training and military ma- 
neuvers, largely around Rio Hato. The U. S. received this land rent free 
with a fifteen year lease. In answer to anticipated protests, the United 
States had already promised not to use these lands actively except after 
first consulting Panama. Unwritten was the tacit sentiment that the 



292 CENTRAL AMERICA 

U. S. was not likely to exercise its privilege except in extraordinary circum- 
stances. The treaty also met criticism of the Zone as a separate economic 
entity by restricting importation privileges. Articles available at dis- 
criminatorily low prices were drastically reduced. The U. S. also began 
to discontinue certain manufacturing and processing enterprises, where 
the same products were available in the republic. Formerly favored enter- 
prises in the Zone thus were to be limited in the items they might import, 
placing them on a closer level of competition with Panamanian firms 
outside the Zone. 

At the same time, the United States agreed to hand over operation of 
the Panama City sanitation control to local officials. Non-U. S. citizens 
living outside the Zone would lose commissary and duty free import 
privileges after December i, 1956. The U. S. abrogated its roadbuilding 
monopoly, at the same time accepting the task of building a twenty-seven 
million dollar suspension bridge over the canal at Balboa. For the first 
time, the United States accepted "one basic wage scale for all the United 
States and Panamanian employees of the Government of the United 
States in the 'Canal Zone." The U. S. pledged itself to seek legislation 
establishing a single basic wage scale. Panamanians were also to be 
brought under the U. S. Civil Service Retirement Act. The first day of 
1957 was scheduled as the date for change from the hated double standard 
to the single wage scale. 

This is not to suggest that the United States acceded to all Panamanian 
demands, however. As President Arias announced, the U. S. refused a 
request to limit the Canal concession to nintey-nine years, rather than 
hold the .territory in perpetuity. It also refused to create mixed Pana- 
manian-United States tribunals to sit in judgment of Panamanians in 
the Zone charged with a crime. Also, Republic of Panama stamps were 
not to be used for Zone mail. There was no further clarification of 
authority and control in the Zone by the U. S., although Panama claimed 
the situation should be more clearly defined. And the U. S. also was 
unwilling to recognize Spanish as a second official language in the Zone. 

Altogether, there were eighteen separate and positive advantages ac- 
cruing to Panama, declared President Arias in addressing the National 
Assembly and pressing for adoption of the contract. When negotiations 
began, relatively few Panamanians hoped to receive much more than 
they already had. The Panamanian legislature agreed with this position 
and quickly by its standards approved the treaty. In a night meeting 



PANAMA 293 

on March 9, 1955, d 16 document was ratified by a vote of forty-six to one. 
A group of communist-inspired students gathered in Santa Ana square 
in the capital to protest the document, but the Assembly paid no attention. 
Only a ten hour speech against the treaty by Juan Arias, who cast the 
negative vote, slowed ultimate adoption of the contract. On March 16, 
I 955^ President Ricardo Arias signed the treaty into law. Later in the 
year, the U. S. Congress approved the document and sent it to President 
Eisenhower who, by signing it, completed the lengthy process of revising 
the Canal Zone contract. 

Celebrations throughout Panama hailed the final consummation of 
the historic agreement. Feeling between Panama and the United States 
was warmer than it had been for years; U. S. tourists passing through 
Panama were clapped on the back and often offered a free drink at the 
nearest bar. While different elements of the population were for one 
reason or another dissatisfied with the agreement, most realized that the 
advantages accruing to Panama were an admirable advance over the 
earlier arrangements. Over the rejoicing lingered the memory of the 
beefy, genial R6non, whose labors were primarily responsible for promul- 
gation of the treaty. Regardless of his other accomplishments or failures, 
Remon will always bring to mind one of the brighter moments in con- 
temporary Central American dealings with the giant to the north. 

DEATH, SCANDAL, AND TREASON 

Jose Antonio Rem6n was an ardent sportsman. He was a frequent 
spectator at prize fights, and baseball greatly interested him. But he 
was more than anything else a horse lover. One of the familiar Sunday 
afternoon sights was Remon sitting in his box by the finish line of 
Panama City's Juan Franco race track. Only critical government business 
prevented him from being in attendance. On afternoons when an entry 
of his stables won, the President would remain to celebrate with friends. 
Sunday, January 2, 1955, was no different at first. 

A Remon horse won the tenth race of the afternoon, and the chief 
executive stayed in his box while other spectators jostled their way 
through the exits. Darkness came quickly, as it does in tropical climes, 
and the brilliantly lit enclosure stood out as night fell. At 7:20 a cluster 
of firecrackers exploded nearby. Remon's bodyguards interrupted a game 
of dominoes, but then returned to it, realizing the source of the reports. 



294 CENTRAL AMERICA 

Two minutes ktcr a sharp burst of machine gun bullets interrupted the 
casual conversation. Remon and two other men slumped heavily to the 
floor. The President allegedly muttered "some firecracker" before losing 
consciousness. Pinned down by continued fire from the surrounding 
darkness, a few minutes passed before the bodyguards could get up and 
rush Remon to the Santo Tomas Hospital. While international news 
services flashed the announcement that the President of Panama was 
wounded and in "bad" condition, Remon died on the operating table, 
the first of Panama's twenty-eight presidents to die of assassination. 

With the death of Remon began one of the most extraordinary episodes 
in the annals of intrigue-laden Central America. Suspicion immediately 
centered on the President's longtime enemy, Arnulfo Arias, and the ex- 
president was quickly arrested. While there was no immediate proof of 
his implication, he had intrigued in national politics for years. "Unlike 
his more placid half-brother Harmodio, Arnulfo kept Panama in 
constant turmoil during his flings at the presidency. He flirted with the 
Nazis on the eve of Pearl Harbor, he ... demonstrated on many oc- 
casions a contempt for democratic procedure. In addition he presumably 
carried a grudge against Rem6n because of the latter's part in deposing 
him in i95i." 25 Two women were also seized with Arias at his coffee 
plantation near Boquetle, west of Panama City. A U. S. citizen, Martin 
Lipstein, was jailed after being seen at the scene of the crime and at- 
tempting to leave Panama the next day. 

By January 4, over fifty others had been taken into custody for 
questioning, and the National Assembly had declared a ten day state of 
seige, a modified form of martial law. Constitutional guarantees were 
waived. Colonel Saturnino Flores, deputy commander of the National 
Guard, unhappily admitted that there were no clues to identify the as- 
sassins. He named Arias as the main suspect, adding that there was 
nothing to indicate the assassins were connected with an attempt to seize 
the government. If so, he remarked, the plot had been squelched, for 
the National Guard was in firm control, and there had been no outbursts 
of violence. The only public reaction was stunned disbelief. Thousands 
had already filed past the assassinated president' body in the Capilla 
Ardiente, a chapel in the Metropolitan Cathedral. 

Early Monday the National Asembly swore in First Vice-Presidcnt 
and Foreign Minister Jose Ram6n Guizado as the country's twenty-ninth 
president. Under his administration, Colonel Flores was given per- 



PANAMA 295 

mission to direct official investigation with a minimum of regard for 
normal civil liberties. The borders and ports were closely guarded to 
prevent the possible escape of the killers. Neighboring Costa Rica re- 
ported that scheduled airliners from Panama were arriving with only a 
crew and no passengers. In mid-afternoon Monday, the government 
announced the loan by the Cuban government of the chief of the criminal 
section of the Cuban Bureau of Investigation, Dr. Israel Castellanos. 
Cuban president Fulgencio Batista sent him to Panama only a few hours 
after he was solicited. Still suspicious of Arnulfo Arias, the Panamanians 
also took into custody Juan de Dois Poveda, chief of the secret police 
during Arias' regime. 

The capital city soon returned to normality of a sort, although dazed 
by the tragedy. Government offices and private shops reopened. Inter- 
national air traffic resumed at Tocumen Airport. Schools reopened, and 
tourists were circulating the streets. At the same time, there was an air 
of uneasiness about. Citizens were apprehensive, and the Christian 
Science Monitor reported that they were sober and suppressed. Police were 
stopping all cars nearing the airport, and many other vehicles were periodi- 
cally halted in Panama City and Col6n. Guards at the Presidential Palace, 
prepared for possible revolt, wore battle dress and carried carbines, not 
clubs. The state of seige prohibited the congregation of crowds, and 
saloons were closed in the early evening. With a large number of known 
agitators imprisoned or under surveillance, there were few in a position to 
begin demonstrations. Even the ever-vocal university students, highly 
critical of Remon in the past, made no attempt to disturb the guarded 
quiet. 

As the investigations continued, there was still no indication of the 
killers' identities. Despite the strong suspicion of Arias, nothing could be 
proved against him. Press and radio played up his arrest in the first days 
following the shooting. Some spoke, perhaps wishfully, of communist 
interference. Yet the possibility was remote. Rem6n's anti-communist 
campaign had temporarily, at least, reduced its organization in Panama to 
a very small bend of conspirators. Time commented that "If the Com- 
munists had engineered it, the job must have been carefully organized 
from outside; Panama's local Reds were not up to such a slick, profes- 
sional gang-style killing." 26 The Panamanian man in the street tended 
to feel that a foreigner had committed the crime. <c No Panamanian could 
have done it. It must have been a foreigner." 



296 CENTRAL AMERICA 

Colonel Flores continued to head the search. As deputy commander he 
was in charge o the National Guard, the titular head, Bolivar Vallarino, 
remaining inactive. Several sources, both reliable and otherwise, suggested 
that the Guard had full intentions of seizing power, rather than protecting 
it for newly sworn in President Guizado. They allegedly refrained from 
it only because of the importance of the Canal contract which was about 
to be consummated. Only a constitutional president could sign the agree- 
ment into law, and Guard leaders by-passed the golpe when they realized 
they would otherwise be jeopardizing the future of Zone renegotiations. 
This well circulated rumor has never been documented, yet it persists. 
The author tried repeatedly during different visits in 1956 to learn more. 
Yet there was and is no concrete fact to indicate a Guard conspiracy of 
any sort. In any case, there is no doubt that the Guard was fiercely loyal 
to Colonel Remon and had nothing to do with his death, whatever their 
plans later. 

Minister of Government Catalino Arrocha Gaell resigned on January 
7 to relinquish his post to Congressman Alejandro Rem6n, younger 
brother of the dead president. Alejandro was to be named minister in 
order to direct the search for his brother's assassins. He had returned 
from a business trip to California upon receiving word of the President's 
slaying and demanded that he be allowed to personally participate in the 
investigation. While Arrocha resigned on the seventh, young Rem6n's 
appointment was not forthcoming. The Associated Press dispatched the 
news that there was apparent friction within the Coalition Patri6tica 
National over the procedure. At a late evening meeting of the party's 
directorate on January 9, a heated debate developed over the issue. Presi- 
dent Guizado acted as the titular head while the ex-president's widow, as 
vice-president, argued at length in favor of her brother-in-law's appoint- 
ment. No immediate decision was reached. In the meantime, a group 
favorable to Alejandro met at National Guard headquarters to discuss the 
situation. 

Alejandro Remon was finally named minister of government, and the 
investigation continued under his direction. By the end of the following 
week, however, there was still no hint of the killers' identity. Besides 
Cuban criminologist Castellano, detectives from Venezuela, Costa Rica, 
and New York City had been imported, including Costa Rican chief of 
detectives Colonel Guillermo Salazar. On January 13 the National As- 



PANAMA 297 

sembly extended the state of seige for a second ten day period, and internal 
tension continued. 

Developments took a startling turn on January 14 when fifty-five-year- 
old President Jose Guizado was placed under house arrest under suspicion 
of complicity in the murder. Colonel Flores announced that Guizado was 
clearly involved. When the accusations were revealed, the cabinet was 
immediately notified, and they went to Guizado's suburban residence at 
La Cresta to inform the President of the charges. Arriving at 10:00 P.M. 
the night of the fourteenth, they announced that his twelve-day-old ad- 
ministration was at least temporarily ended, and that he would be detained 
by the National Guard. Five helmeted police stood guard around the 
house. In a special session of the National Assembly convened at 3:30 
A.M. on January 15, the Assembly questioned Ruben Mir6, a well known 
lawyer, at length. Miro repeated his confession that he had carried out 
the assassination of President Rem6n two weeks before. Miro claimed 
that his action had been with the full knowledge of Guizado, and that 
Guizado's son and two others, Rodolfo de Saint Malo and Tomas Nieves 
Perez, were also involved. He had admitted to District Attorney Fran- 
cisco Alavarado a few hours before that he was offered the ministry of 
government as reward for the slaying. 

Miro took half an hour reading his confession to the Assembly, in 
which he claimed to have carried out the murder unassisted with a $150 
machine gun. The self-confessd killer said the assassination was planned 
for December 4, and then delayed at Guizado's request until negotiations 
with the United States passed the critical stage. Scion of a prominent 
Panamanian family, forty-three-year-old Miro insisted that the killing 
was his doing alone; neither Guizado nor Saint Malo knew the details. 
They did know, however, that the attempt was to be made, he charged. 
"Things began to smell bad," he added, when Guizado's promise of a 
cabinet post went unfulfilled. The other men involved had "turned their 
backs on me" as soon as possible. The murder weapon had been obtained 
from a former cadet at the Guatemalan military school, Edgardo Tejado. 

Saint Malo and Tejado also appeared during the four-hour Assembly 
session. The alleged partner in the crime confronted Miro before the 
legislators and denied the accusations completely. Had he known of such 
a plot, he said, he would have notified the authorities immediately. 
Reading a prepared statement, he admitted several meetings with Mir6 
during which the possibility of a military golfe was discussed. He re- 



298 CENTRAL AMERICA 

fused to concede any prior knowledge of the murder, however. Young 
Edgardo Tejardo also had a statement to read. He admitted smuggling 
the machine gun into Panama and selling it to Miro in late September for 
$150. Early in December the assassin told him of the prospective killing. 
He had not informed police because he lacked proof of Miro's plans, while 
Miro had evidence that he had smuggled the weapon into the country. He 
sustained a deliberately self-inflicted knife wound on the hand shortly 
before the assassination in order not to participate. 

Before taking official action the Assembly also considered a hastily 
written message from President Guizado calling the charges "senseless." 
Guizado requested a leave of absence from office pending investigation 
of the matter, offering to leave the country until the case was settled. The 
Assembly had the alternative of accepting his "temporary" resignation or 
impeaching him from office. In a matter of minutes the Assembly voted 
his impeachment from the presidency, ordered him officially arrested and 
brought up for trial on charges of plotting the death of his predecessor. 
The Assembly had acted with unprecedented speed in the impeachment 
proceedings, so deeply outraged was it by the dramatic confession of 
Mir6. The Washington Post and Times Herald editorialized that the 
Assembly "must have considered the evidence . . . altogether convincing to 
take this extraordinary action without affording Guizado an opportunity 
to defend himself. A trial will be held . . . but if Miro's statement is 
truthful, he and Guizado are guilty of one of the blackest crimes in Latin- 
American political history." 27 

At midnight, before the extraordinary legislative session began, Second 
Vice-President Ricardo Arias was paged by nationwide broadcasts on all 
radio stations, asking him to report to the legislative chamber. Being next 
in line to the presidency, he was wanted in case Guizado was turned out 
of office. Following the impeachment and indictment of Guizado, Arias 
was sworn in as president at 7:16 A.M. Thus Panama had its third 
president in thirteen days and the seventh in six years! 

Dickie Arias, as he was popularly known, was the son of cattleman 
Francisco Arias, a prominent political leader in his day and one of the 
founders of the Partido Renovador, of which his son was a leader during 
the Rem6n administration. Dickie had studied in the United States at 
Shenandoah Valley Academy and then Georgetown University in Wash- 
ington. He was later enrolled at Catholic University in Santiago, Chile. 



PANAMA 299 

Promptly reorganizing the cabinet after his swearing-in, he certified 
Alejandro Rem6n's post as minister of government and justice and made 
Dr. Octavio Fabrega, an important member of the negotiating team with 
the United States, foreign minister. The other Guizado cabinet members 
retained their posts. 

Revelation of Guizado's apparent complicity failed to arouse demonstra- 
tions. Most Panamanians had sat up the night of the fourteenth listening 
to radio broadcasts of proceedings in the National Assembly. They were 
only a litde less shocked than when, weeks before, they learned of the 
assassination. Guizado had never enjoyed much popularity; at the same 
time, his career had been no discredit to him, and the millionaire con- 
tractor, long a friend of the United States, had not been considered capable 
of such scandalous skullduggery. Some were openly skeptical of Guizado's 
guilt, but nowhere was there a Panamanian, regardless of politics, who 
had the slightest stomach for disturbing public order. All suspects 
rounded up during the early days of investigation were released. Ex- 
President Arnulfo Arias (not related to Ricardo Arias), complaining that 
he was illegally arrested and inhumanely treated while imprisoned, was 
released from the jail at City David. He insisted, despite government 
denials, that he had been held incommunicado. Panamanians laughed 
when he grumbled that he had lived in a cell reserved for "official 
prostitutes." When further questioned, he snapped that he "didn't have 
the energy to clear up just what was meant by 'official.' " 

Shortly after being sworn in, President Ricardo Arias spoke to the 
nation, promising to continue Rem6n's policies. Cecilia Remon also 
addressed the people, asking their support of the new President. But 
before he could continue his predecessor's policies or attack other 
problems, Arias and his government had to deal with Guizado and his 
alleged conspirators. All Panama awaited the outcome. 

The National Assembly appointed a five-man investigating board to 
prepare the case for trial by die Assembly itself. Jose Maria Vasquez 
Diaz, chief of the Supreme Court of Justice, was placed in charge of the 
investigation commission. Public feeling began to grow against Guizado 
with the conviction that the impeached president was guilty as charged. 
One newspaper ran a picture of Guizado comforting President Remon's 
widow at the airport on her return from Florida where she had been an 
official guest of Governor Leroy Collins. The caption acidly commented 



3 oo CENTRAL AMERICA 

that he appeared truly sorry, despite being personally responsible for the 
crime. Guizado was to be judged by the National Assembly, but his 
lawyers tried to transfer the trial to the Supreme Court of Justice itself. 
Expecting less fair-minded treatment from the pro-Remon Assembly, 
the lawyers requested the Court to decide the case. Under the Constitu- 
tion, accused presidents could be tried by the legislative as well as the 
judicial body. Guizado's lawyers argued that the supposed crime was 
committed while Guizado was First Vice-President, thus should be tried 
in the Supreme Court. However, the Court rejected the request, ruling 
that the charge against Guizado was made after he became president, 
and thus Assembly jurisdiction was verified. Miro and the others involved 
were to be judged in the courts, since none held official status. 

There remained the possibility that the investigating commission might 
recommend the case be tried in the national courts instead of the Assembly. 
Unable to influence this decision, Guizado and his lawyers prepared his 
defense while the investigators continued their work. A concerted search 
failed to turn up the murder weapon. Miro had said that he disposed of 
the machine gun in Panama Bay, on the south side of the republic. Yet 
two weeks of continual diving and dragging, frequently directed by the 
confessed killer himself, failed to turn up the gun. Finally, on February 
4, the weapon was discovered hidden in the home of Dr. Gregorio Miro, 
father of the accused. The lawyer refused to say whether he had been 
lying when claiming the gun was on the bottom of Panama Bay. Young 
Tejado, the smuggler of the gun, promptly identified it. Three clips, 
two empty and one loaded, were also found. Tejado had earlier testified 
that he had included three clips of ammunition with sale of the weapon. 
A neighbor of the Miro family had found the gun and told Judith Miro, 
mother of the alleged killer. She notified the National Guard. 

Three weeks after the impeachment of Guizado the investigation 
commission completed its work. Appearing before the Assembly, the 
commission chief asked criminal action against Guizado, recommending 
the Assembly itself conduct proceedings. Presenting a thirty-thrce-page 
brief of its findings, it drew three conclusions. First, there was no 
reasonable doubt that Ruben Miro killed Remon. Second, Rodolfo de 
Saint Malo had admitted a partial knowledge of the conspiracy and was 
possibly more deeply implicated. Finally, Jose Guizado was implicated 
in the affair by the testimony of several others, including that of his son. 



PANAMA 301 

Later the same day, February 10, 1955, the National Assembly of Panama 
voted to conduct the legal proceedings against Guizado before an ex- 
traordinary legislative session. Under legislative by-laws, an eight day 
delay was required before the trial could proceed. 

President Ricardo Arias, addressing the nation the night before the 
trial opened, called for full and complete punishment of the assassins as 
a measure necessary to bolster Panama's international position as a law- 
abiding, civilized country. "Justice must be an expression of the truth 
and of impartiality and must not have the character of vengeance or of 
being ruled by passion, prejudice, or even less for personal interest." 28 
At 3:00 P.M. Friday, March 18, the Assembly met for the last time before 
the trial began. It had convened to consider the motion of the defense 
to postpone the trial. Felipe Juan Escobar, chief counsel for the defendant, 
had petitioned two days before for more time to collect information. 
Government prosecutor Jose Lasso de la Vega, also representing Senora 
de Remon, appeared to request immediate trial of the accused. The 
Assembly quickly voted to reject the petition, and the following Monday, 
March 21, 1955, the trial of ex-President Jose Guizado began. 

Preliminaries occupied the first hours of the opening session. Official 
secretary Gavino Sierra Gutierrez read information concerning the ac- 
cused, outlining the charges and the government case. Acting assembly 
president Ernesto Estenoz called Guizado from his chair. The former 
president rose slowly and walked to the center of the chamber, directly 
before the assembly president. "Do you declare yourself civilly and 
criminally guilty of the accusation contained in the resolution of the 
Assembly dated 16 February?" Replying without a microphone, Guizado 
raised his voice that he might be heard clearly: "I declare myself innocent." 
The reading of declarations by witnesses began. 

Declarations the next day named Guizado as an accomplice in the 
slaying, charging him with homicide. De la Vega, the attorney for the 
prosecution, coldly pointed out that while the maximum sentence for 
homicide was twenty years, this sentence applied not only to actual killers 
but to accomplices and accessories as well. In his opening remarks, De 
la Vega said of Guizado that "without him, the crime could not have 
been committed . . . nothing could be clearer . . . than the guilt of this 
man." 29 Calling upon a twenty-two-year-old Cuban sailor, Victor Calvo, 
De la Vega questioned the youth at length. Calvo testified that Guizado 
had offered him from four to ten thousand dollars to assist Miro "with a 



3 02 CENTRAL AMERICA 

little job," as he phrased it. Calvo had recanted several days after first 
telling the police this story, and he claimed to have lied the first time. 
Now he again reversed his story, accusing Guizado of the offer. De la 
Vega said the first change of stories was due to fear that his Panamanian 
sweetheart had been threatened. 

De la Vega pointed out Guizado's motive the next day, referring to 
different commercial propositions he had made Remon while serving as 
first vice-president. Assembly legislators leaned forward in their seats at 
the first hint of Guizado's motives, other than a possible thirst for power. 
In the first instance, according to the prosecutor, Guizado presented a 
building plan worth two million dollars, proposing to support it by 
government issued bonds. Rem6n refused. Then the Vice-President tried 
to give a casino concession to either local or foreign capitalists, presumably 
to increase national revenues. Again Rem6n rejected the idea. The 
third incident occurred when Guizado as foreign minister was visiting the 
United States in 1953, preparing for Rem6n's trip and starting negotiations 
on the Zone. He had contacted Washington lawyer Milton Diamond 
and retired General Julius Klein, who offered to arrange a fifty million 
dollar loan to Panama, for a 2 percent commission. Rem6n, trying to 
pull Panama out of debt abroad, vetoed the measure, which Guizado had 
initiated without authorization. Finally, during the same visit to the 
U. S., Guizado asked the National City Bank of New York about the 
possibility of a loan to Panama supported by the expected increase in an- 
nual Canal rent paid by the U. S. The Bank wrote on November 24 
that Panama could arrange a loan of $34,670,000. One copy of the letter 
was sent to Remon's bank in Panama, and he soon learned of the matter. 
He immediately sent Comptroller-General Enrique Obarrio to New York 
City to stop negotiations, explaining the situation to bank officials. He 
also called Guizado into his office and gave him a stiff dressing-down. 

De la Vega followed these explanations by adding dramatically that 
"the day that Rem6n clearly told Guizado that he did not support his 
efforts, he signed his death sentence. A latent idea took definite form. 
The elimination of President Remon became a necessity on the part of 
Guizado." 80 Guizado, after becoming president, the prosecutor con- 
tinued, had objected to the naming of Alejandro Remon as minister of 
government and justice to apprehend the killer. Only the insistence of 
the Coalition Patri6tica Nacional and Sefiora de Rem6n forced his hand, 
and he did his best to impede the investigation. At the same time he 



PANAMA 303 

ordered the introduction of legislative measures which, if approved, 
would empower him to name new directors for the three principal 
Panamanian financial institutions, thus gaining personal control of na- 
tional finances. And he had admittedly complained to the press office, 
two days before his arrest, of the quantity of publicity Remon and the 
investigation were receiving. Rem6n, lacking confidence both in the 
intelligence and discretion of Guizado, had bypassed him whenever 
possible and had ordered negotiation of the treaty with the United States 
without his consultation. Panamanian representatives at the meetings had 
been instructed to report directly to him, not to Vice-President and Foreign 
Minister Guizado. 

Defense lawyer Escobar, considered perhaps the outstanding criminal 
lawyer in Panama, charged that the entire case was built on a tenuous 
structure fabricated by the word of a liar and an epileptic. The liar, he 
angrily claimed, was Mir6, who had insisted the murder weapon was in 
Panama Bay. He attacked as well the confessed killer's meandering ac- 
count of Guizado's part as being a pure fabrication designed to implicate 
the one-time minister of President Remon. The epileptic was the Cuban 
sailor, Calvo, who had told of Guizado's proffered payment in exchange 
for Rem6n's death. "How can we believe the word of an epileptic young 
boy," he stormed, "especially when he has twice reversed his story?" 

In the end, prosecutor De la Vega demanded a thirty-five-year sentence, 
twenty for the murder, and fifteen more in accordance with a clause in the 
penal code concerning the murder of a president. Admitting that 
evidence was circumstantial, De la Vega said that in such a case, 
circumstantial evidence was perfectly acceptable in proving a man's 
innocence or guilt. On the other hand, defense attorney Escobar, reiterat- 
ing charges of unsubstantiated testimony, appealed to the Assembly mem- 
bers eight of whom were lawyers that the prosecution was but the 
culmination of some diabolical machination against Guizado; the fabric 
of lies had proved no complicity. According to the law, the Assembly had 
to render a verdict within ten days, or Guizado would automatically be 
set free. A two-thirds verdict of the Assembly (thirty-six of fifty-three 
votes) was necessary to convict the impeached president. In the dying 
days of March, after the arguments were finished, the National Assembly 
overwhelmingly judged Jose Guizado guilty of complicity in the assassina- 
tion of Rem6n. He was sentenced to six years and eight months in 
prison. He angrily cried his innocence as he was taken from the hall. 



3 o 4 CENTRAL AMERICA 

With the conviction of Jose Guizado, one of the more sordid chapters 
in Central American politics was closed, although only temporarily. 
There have been periodic declarations questioning the decision. In 
early 1956 Guizado announced from his cell a series of "revelations" 
intended to prove his innocence. After much publicity, they proved 
disappointing. However, there are many who believe him when he 
reiterates his innocence. Whether his trial was entirely impartial is a 
moot point. Where Remon was very popular, Guizado never had been, 
and it was easy for Assembly members to be swept away in the tide of 
unreasoning sorrow and shock after Rem6n's death. It was imperative 
that Remon's assassination be solved, and this was apparently done. Had 
Guizado been cleared of charges, the case would have been left under a 
darker pall of doubt than it is today. 

Evidence against the former president was decidedly incriminating; 
of this there can be little doubt. It is equally certain that the evidence 
was based on testimony of unstable, basically unreliable witnesses. Many 
Panamanians feel that Guizado personally lacked the courage to authorize 
such a diabolical plan. Others say he was highly ambitious, self-centered, 
and much more concerned with Jose Guizado than Panama. They 
picture him as being just the man to learn of a possible assassination, 
encourage it, and then step calmly into the shoes of his victim. Unless 
further evidence is revealed, the world will never know for a certainty 
whether or not Guizado was a weak and unwilling victim of unhappy 
circumstance or, instead, the apprehended mastermind of the con- 
spiratorial killing. In either event, the killing and its repercussions left 
a residue of shame, disbelief, and political immaturity of the grossest sort. 

ARIAS AND ELECTIONS 

Ricardo Arias stepped into the shoes of a man difficult to follow. 
Remon, for all his errors and undemocratic tendencies, had been probably 
the best Panamanian president within living memory. Most evaluations, 
partisan or otherwise, agree on Remon's positive accomplishments. Pana- 
manian diplomat Pino spoke of Panama under Remon as following the 
path of justice. 

As a governmental norm and as a guarantee of harmonic operation of the 
administration, order, peace, and public tranquillity are fully guaranteed. . . . 
Today, in Panama, is found full protection of life, personal integrity, property, 
and individual and social rights consecrated by the Constitution and laws. 



PANAMA 305 

Contrary to the opinion of his political enemies, Colonel Jose Antonio 
Rem6n had sufficient tact to lead his country on the path of justice, stability, 
and peace, making as the principle object of his government the strengthening 
of honesty in all public departments, especially in the fiscal affairs of state. 81 

A less prejudiced observer, Costa Rican President Figueres, had no axe 
to grind against Remon, nor any reason to praise him unduly. Figueres 
said: 

I have seen in the present administration of Senor Rem6n conduct that has 
surpassed the hopes of both friends and enemies. Panama is one of the 
youngest democracies of America and is in the process of consolidating its 
institutions. Senor Rem6n has fulfilled his duty with great patriotism. I do 
not have the slightest doubt that the present administration of our neighbor to 
the south will buttress and continue the enjoyment of full institutional 
democracy based on norms of conduct and respect for the rights of the 
citizens. 82 

In sum, Remon reasserted the authority and dignity of the presidency, 
developed national confidence, united the badly divided country for the 
first time in years, dealt with economic difficulties, and generally put the 
Panamanian house in order. This was the man young President Arias 
had to replace. 

By March, 1955, Arias was already charting his own course in pursuing 
the aims of Remon. He undertook a series of public works, including 
low-cost suburban housing costing several million balboas. He was also 
actively backing rapid construction, rerouting, and repair of the Inter 
American Highway, hoping it would soon be open from Costa Rica to 
Panama, thus drawing flocks of motorists from the United States on 
vacation trips. Thanks to Vice-President Richard Nixon and his goodwill 
tour of Central America, the United States had agreed to speed up as- 
sistance in completing the highway. Congress loaned eighteen million 
dollars to Panama which, supplemented with six million from the 
Panamanian treasury, would finance the completion of the roadway. 
President Arias also was instrumental in calming the nation in the days 
following the revelation of Guizado's alleged implication in the assassina- 
tion and the trial that followed. He continually urged national unity, 
peace, and stability, and a return to normal life. On March 15, he led a 
silent parade of six thousand past Rem6n's tomb in Amador cemetery in 
celebration of the third anniversary of the formation of the political coali- 
tion that had carried him to the presidency. 



3 o6 CENTRAL AMERICA 

A government crisis threatened to disturb the country on April 6, when 
the Arias cabinet resigned collectively. A joint message said the "motive 
for this resignation is the fact that die office of the President of the Re- 
public, with which you were invested this January 15, has already acquired 
a definitive character, a circumstance that places you in a different situa- 
tion than existed when you took power, and honored us with the posts 
that we turn over today." 88 While the announcement was well inten- 
tioned, it had temporary bad effects. Hoping to give Arias free reign in 
naming his own ministers, since his administration was to last nearly two 
more years, the resignations gave instead the initial impression of disap- 
proval of the government. Such was the interpretation of the average 
Panamanian. President Arias quickly refused the resignations of the 
eight ministers. "On choosing you to constitute my cabinet I was moved 
not only by the pressing circumstances in which we lived, but with the 
sureness that with your collaboration I could develop a governmental 
plan with positive benefits for the country. Today I have in you the same 
confidence as then, and I know no reason that justifies the acceptance of 
your resignation." 84 

In a further effort to speed economic development, Arias' Comptroller- 
General, Roberto Huertematte, was sent to Washington to arrange a loan 
from the World Bank. A vast program of highway construction was 
planned to bring the products of small peasant villages to the larger 
markets. The Comptroller-General conferred daily with Bank officials. 
He explained in detail how new highways were needed to further the 
Panamanian agricultural program. Without the roads, he argued, eco- 
nomic development would be stalled. On July 18, after more than two 
months of discussions, the World Bank announced a loan of $5,900,000 
to help pay for an extensive highway program. In Panama, the govern- 
ment, from President Arias down, was delighted. As one of their 
economic experts observed, farmers would no longer have trouble trans- 
porting undamaged and unspoiled produce to the markets because of bad 
roads or paths. 

Regionally, Arias drew Panama closer to its Central American neigh- 
bors by two actions. The Republic continued to send observers to meetings 
of the ODECA committees, and on two occasions representatives of the 
Central American nations met in Panama City itself to confer on regional 
matters. In June, 1956, as his term was running out, Arias astounded the 
hemisphere by inviting the presidents of the twenty-one American 



PANAMA 307 

republics to meet in Panama City in celebration of the one hundred and 
thirtieth anniversary of the original Bolivarian Congress of Panama in 
1826. Many of the chief executives declined, lacking the courage to risk 
revolt by leaving their respective capitals. However, the prestige of meet- 
ing with the United States president eventually drew almost all the chiefs 
of state. Among Arias' guests were Ibarra of Ecuador, Kubitschck of 
Brazil, Siles of Bolivia, Aramburu of Argentina, Figueres of Costa 
Rica, Lemus of El Salvador, Castillo of Guatemala, Zubiria of Uruguay, 
and Batista of Cuba. Arias was also scrupulous in avoiding fraternal 
friction in regional affairs, unlike some other chief executives. On June 
30, 1955, meeting with Figueres, he refused to form a bloc with him 
against Somoza of Nicaragua. Rejecting any such conspiratorial agree- 
ments, he managed to stay on amicable terms with Figueres at the same 
time. 

Dr. Arnulfo Arias managed to stir up a minor dispute late in 1955, 
but the limited concern was perhaps an indication of his fading promi- 
nence. Saddened by the death of his wife after a long illness, Dr. Arias 
appealed for the second time to the National Assembly for the return 
of his full rights of citizenship, which had been altered after he was 
deposed in 1951. A resolution by Romero Velasquez said that returning 
all his rights would contribute to political stability and peace, in view of 
the thousands of partisans he still had. The Assembly promptly voted 
down the resolution, thirty-eight to two. 

Nearly a year after taking power, Ricardo Arias summarized Panama's 
most recent accomplishments in an interview with a visiting Egyptian 
journalist. Arias told the interviewer that Panama had developed its 
agriculture and sustained the prices of essential products such as rice, 
coffee, and corn, by means of the expanding Institute de Fomento 
Economico. The government, by giving credit to agriculturists for 
machines to sow rice and other products on a large scale, had improved 
farm efficiency. Point Four experts had contributed their skills in the 
development of cotton, which was gradually expanding. At the same 
time, die government was interested in developing national industries by 
passing laws to offer greater opportunities to investors. In recent years 
Panama had opened up new industries. The past decade had shown 
"vigorous economic development" as government credit institutions 
registered a growing increase in activities. The foreign credit of Panama 
was good, and international agreements were complied with religiously. 



308 CENTRAL AMERICA 

Growing tourist trade was also boosting the national economy by bringing 
more money into circulation than before. Fine beaches, excellent fishing, 
and such tourist spots as the internationally famous Hotel El Panama 
were luring more paying customers into the Republic. 

The events of early 1955 obscured the fact that elections were but a 
little over a year away. Even all the excitement could not change the 
date of the May 12, 1956, presidential race. Although most Panamanians 
had had their fill of politics after the assassination and concomitant in- 
trigue, politicians launched the campaign a year in advance, as usual. On 
May 7, 1955, the junta directiva of the CPN named Ernesto de la Guardia 
Jr. as its official candidate. A generally respected fifty-one-year-old busi- 
nessman, he was serving as director of the national brewery, although 
maintaining other commercial interests as well. De la Guardia was 
nominated along with Temistocles Diaz and Heraclio Barletta as first 
and second vice-presidents at the meeting presided over by President 
Arias. In July, a full party convention verified the choices, and he im- 
mediately opened his official campaign. 

Of the parties who had united to oppose Rem6n in 1952, only the 
Liberal party had much interest in opposing the official candidate. Prob- 
ably the strongest of the anti-government groups, the Liberals met in 
December, choosing lawyer Victor Florencio Goyria as their candidate. 
His mnning mates were Francisco Morales and Luis Alfaro. Smaller 
parties were forbidden to enter the contest as the result of a kw passed 
under Remon's aegis on November 4, 1953. The National Assembly had 
decided after a rancorous fourteen hour session to reduce the number of 
political parties by requiring forty-five thousand registered members. 
This meant a party would need the allegiance of approximately 20 percent 
of the eligible voters to participate in an election. At the time, Remon 
insisted it would add to political stability by eliminating small nuisance 
groups which were more likely to stir up excitement than win meaningful 
support. His enemies attacked it as a fascist measure leading the 
country toward eventual establishment of a one-party state. The 
government maintained that small splinter groups might combine forces 
in order to acquire a forty-five thousand member registration, thus solidify- 
ing national political alignments. 

Small opposition groups attacked the measure sharply in 1955 and in 
1956, as the election neared. The Partido Revolucionario Independiente, 



PANAMA 309 

the Renovaci6n Autentico, and the new Frente Patriotico de Juventud 
protested the law. Only the Liberals and the CPN coalition had obtained 
enough signatures to participate in the 1956 campaign. Norberto Navarro, 
spokesman of these groups, demanded of the Arias government three 
concessions. First, formation of a new cabinet with all parties and groups 
represented; the promulgation of a new electoral law; postponement of 
the forthcoming elections. First the new kw should be adopted and 
other parties given time to organize for a campaign. He threatened that 
if Arias did not give an answer shortly, the opposition groups would 
"consider themselves free to take any means in order to gain power." 
President Arias politely refused the demands, saying that absolutely 
nothing could delay the elections, and to do so would be an open invita- 
tion to chaos. The opposition groups gave up in disappointment. While 
they were able to unite in protest of a law, they apparently couldn't 
consider the thought of forming a coalition to gain the membership 
necessary for participation in the election. 

Campaigning, by local standards, was relatively quiet and free from 
the usual bribes of money, liquor, and imaginary government posts. 
Time reported that De la Guardia apparently avoided dishonest tactics if 
for no other reason than that he seemed the sure winner. For the Liberals 
and Victor Goytia, chances of victory seemed so slim that no amount of 
bribery or dishonesty could equalize the strength of the candidates. 

Ernesto de la Guardia campaigned on three planks. He hoped to 
diminish freight charges on shipping between the United States and 
Panama^ reducing the cost of living thereby. He also planned to establish 
a national petroleum refinery in Colon, where unemployment was 
particularly high. And finally, he advocated increased electricity, promis- 
ing to install a nuclear plant in the Panamanian interior. His slogan of 
"Pan y Libertad" bread and liberty foiled to capture the popular imagi- 
nation. The night before elections, he announced by radio that "I turned 
my back on the traditional system of buying votes from the people by 
means of promising imaginary jobs, and of bruising their spirit and 
conscience through the use of liquor as the prime element of political 
propaganda." 85 

Elections were held Sunday, May 12, 1956, amid almost unprecedented 
political calm. The fifty-three Assembly deputies, 106 alternates, and of 
course the president and two vice-presidents were to be chosen by 380,000 
eligible voters. Observers* agreeing on an easy victory for De la Guardia, 



3IO CENTRAL AMERICA 

anticipated 70 percent of the eligible voters would turn out for the 
balloting. Returns were not expected to show any positive results before 
the middle of the week, in keeping with the slow vote tabulation. 
Complete calm followed the election. By Wednesday, there were still 
only unofficial reports of the balloting, which showed a trend to De la 
Guardia. Victor Goytia warned the government that it would be 
responsible for the consequences of any action taken to impede opposition 
demonstrations. Goytia, whose campaign had not been noted for its 
vigor, was to become much more energetic in post election weeks arguing 
against the fraud perpetrated by the government. This was one of his 
earliest forays. When Minister of Government Alejandro Remon 
warned him that demonstrations would not be permitted, he retorted that 
he was winning the election and had every right to demonstrate. This 
victory claim was contradicted by returns from 235 of 829 polling places, 
which showed De la Guardia winning by 57,229 to 27,455. Goytia con- 
tinued his defiant stand, however. "Mr. Minister : The Panamanian public 
and I are in the street and we will stay in the street. Our presence can 
have interrupted on occasions local traffic, but never would it arouse 
fears of grave disruptions of public order. . . ." S6 Goytia was sincere in 
his announcement of continued street gatherings. On May 18, one week 
after election day, a political meeting was broken up by government 
troops using tear gas. This was enforcement of a decree prohibiting dem- 
onstrations during the electoral period. Only after May 24 could demon- 
strations be legally held. At the same time, official returns showed De la 
Guardia's lead holding up at better than two to one. Goytia insisted 
he was having the election stolen by fraud. 

Two weeks after election day, on May 26, 1956, the national elections 
board, with eight of its nine members government supporters, announced 
the victory of Ernesto de la Guardia Jr. The final tally was 177,633 to 
81,737. The official candidate was formally proclaimed victor. Few 
people gave much attention to Goytia's charges of electoral deceit. They 
were to hear the same statements from Goytia in coming months. 

One further domestic problem was to precede De la Guardia's in- 
auguration in October. A national transport strike was declared on 
September 4. For more than a week it threatened to disrupt all national 
life. In Panama, bus drivers rent their vehicles on a daily basis from the 
owners, supplying their own gasoline. A tax of sixteen and a half cents 
on each gallon of fuel had aroused increasing opposition, and the bus 



PANAMA 311 

drivers finally decided to strike for a price reduction. The tax had 
boosted retail gasoline prices to almost forty cents per gallon, a nearly 
prohibitive price for most drivers and bus operators. The strikers de- 
manded a thirteen cent per gallon decrease, and sixteen hundred operators 
of some eight hundred and fifty buses stopped work. On following days, 
hundreds of workers had long walks to work, and most taxi drivers also 
joined the strike, swelling the number of strikers to two thousand. The 
Tribunales de Trabajo called the work stoppage illegal, and president- 
elect De la Guardia termed it an effort to block his forthcoming in- 
auguration. Strikers were not discouraged and set up operational head- 
quarters at the National University with the cooperation of the Pana- 
manian student union. On September 7, the national Syndicate of Typog- 
raphers gave the drivers a vote of solidarity, and fifteen hundred typog- 
raphers quit work for twenty-four hours in sympathy. 

As soon as the strike was declared, the government named a mediation 
commission headed by De la Guardia. Two days' efforts led to a proposal 
that the Archbishop of Panama, Monsenor Francisco Beekman, be named 
arbiter for the dispute. On September 7, De la Guardia agreed with 
formation of the group, which included two representatives of the 
strikers, two more of the government, with Beekman presiding. Second 
vice-president-elect Heraclio Barletta and Minister of Labor Angel L6pez 
Casis represented the government. An eventual compromise plan was 
offered by the Archbishop and accepted by the negotiators on September 
12. The next day, acting on the recommendation of the government 
negotiators, President Arias effected the change. An executive decree 
reduced duties from sixteen and a half to eleven and a half cents per 
gallon, thus a five cent per gallon decrease. Government losses in revenue 
were estimated at $1,152,000 annually. However, it was indeed a com- 
promise with the original thirteen cent revision demanded by the strikers. 
Retail prices for gasoline were correspondingly reduced to thirty-four 
cents per gallon. Only fourteen days later, on October i, Ernesto de la 
Guardia Jr. was sworn in at 11:47 A.M. at the Legislative Palace as the 
thirty-first President of the Republic of Panama. 

AGAIN THE CANAL 

On July 26, 1956, shouting his defiance of the Western world, Gamal 
Abdel Nasser seized the Suez Canal, throwing international politics into 
confusion. Repercussions were strong in Panama, and when the United 



312 



CENTRAL AMERICA 



States made a succession of diplomatic blunders, all Panama turned on 
its northern neighbor. Less than two years after the signing of the 
supposedly definitive Canal Zone contract, Panamanian nationalism was 
re-aroused; the Canal was again a center of argument and controversy. 

In the first days after the Suez seizure there was little disturbance in 
Panama. The Panamanian ambassador in Washington, J. J. Vallarino, 
said there was no chance of Panama nationalizing the Canal. He added 
that the existing agreement left his government and people only partially 
satisfied. However, Panama could be relied upon to enforce the treaty. 
W. M. Whitman, secretary of the Panama Canal Company, agreed that 
"the situations are entirely different." The U. S. soon learned nonethe- 
less, that the situation could become a source of serious friction. On 
August 13, Australian Prime Minister Robert G. Menzies issued a warn- 
ing from London: "If President Gamal Abdel Nasser can validly termi- 
nate, twelve years beforehand, a concession given to the international Suez 
Canal Company, because he claims the right of 'nationalization' as part 
of Egyptian sovereignty, it means that Panama, equally sovereign, would 
validly be able to terminate, if it wanted to abandon its own line of 
traditional conduct, its contract of perpetual rental with the United States, 
taking control of the Panama Canal and reclaiming the rights of pas- 
sage.'* 87 

In its anxiety over the situation, the United States, concerned solely 
with the Suez crisis, prevailed upon Great Britain not to extend an 
invitation to Panama for the twenty-two-nation conference in London. 
Secretary of State Dulles chose to exclude Panama, again failing to grasp 
the Latin mentality. To Dulles it apparently seemed the most convenient 
way to keep the Panamanians from nourishing any ideas damaging to 
the United States. Thus Panamanian participation was summarily swept 
away without a suggestion of courtesy or consideration. Ricardo Arias 
immediately bridled at the action; the result was a communique out- 
spokenly critical of such mistreatment. "This republic will not consider 
herself obliged to respect any of the decisions or recommendations adopted 
by the conference," it read. Citing the Panamanian shipping fleet, sixth 
largest in the world, as well as certain similarities between Panama and 
Suez, the statement angrily denounced the exclusion of Panama from the 
conference. Panama proceeded to adhere with ten other nations to a plan 
opposed to that of "international control" such as defined at the London 
Conference. When the Department of State reacted incredulously, Pana- 



PANAMA 313 

manians were even more angered. One of the few U. S. periodicals 
appreciative of the Panamanian position was the Washington Post and 
Times-Herald. On September 20 it editorialized: 

The resolution of Panama to adhere with ten communist and neutral 
nations ... to look for a solution to the Suez crisis, should not surprise us. 
It would be a great deal to hope that Panama would not take advantage of 
this opportunity to outline its position with respect to the Panama Canal, in 
spite of the many differences between the two. . . . 

Panama should have been invited to London originally ... the United 
States should show greater interest and sensibility with respect to our relations 
with Panama. Taking into account what is now happening in the world, 
this country would do well to increase its generosity ... in improvement of 
relations." 38 

The lack of an invitation to the London conference, however, stirred 
up much less rancor and bitterness than a statement by Dulles concerning 
sovereignty over the Zone. Article III of the contract had made an in- 
timate friendship reasonably clear. "The Republic of Panama grants to 
the United States all the rights, power, and authority within the Zone 
and ... all auxiliary lands and waters . . . which the U. S. would possess 
and exercise if it were the sovereign of the territory within which said 
lands and waters are located to the entire exclusion of the exercise by 
the Republic of Panama of any such sovereign rights, power, or au- 
thority." 39 This stated, then, that rights exercised by the U. S., while 
similar to those of sovereignty, were not to be so construed. Indeed, all 
these rights were granted the U. S. by the Republic of Panama. Few 
international lawyers, among whom Secretary Dulles had once been 
outstanding, disagreed on this interpretation. Panama retained its 
sovereignty, conceding to the United States rights of jurisdiction by treaty. 
With Panamanian feeling high and U. S. rights generally conceded to be 
only jurisdictional, John Foster Dulles told a press conference on Septem- 
ber 28 that the United States "has rights of sovereignty over the Panama 
Canal." Not satisfied with this, he continued that these rights were 
enjoyed by the U. S. "to the entire exclusion of the exercise by the 
Republic of Panama of any such sovereign rights, power, or authority." 
Panama was stunned. Dulles had first claimed U. S. sovereignty over the 
strip of land, then turned around to deny Panama its sovereign rights. 

Dulles committed the blunder in a news conference while discussing 
the Panama Canal in the light of the Suez seizure. He denied any 



3I4 CENTRAL AMERICA 

similarity, comparing the U. S. sovereignty in Panama with the 1888 
international Treaty of Constantinople over the Suez. His second dis- 
tinction involved the fear of many independent nations that their Suez 
route might be severed. This fear, he added, could not extend to the 
Panama Canal. A few hours after Dulles' double error both in tactless- 
ness and misinformation Alberto Boyd, Panamanian foreign minister, 
released his reply. He contradicted Dulles' statements and declared the 
Panamanian position once more. Boyd repeated all the valid arguments 
that clearly leave sovereignty over the Zone with Panama and concluded 
by pointing out that international provisions on freedom of transit in the 
Constantinople Treaty also applied to the Panama Canal, hence it also 
fell under international jurisdiction. This final point was subject to de- 
bate. However, none could deny his exposition of Panamanian sovereignty 
and U. S. jurisdictional rights. 

One of the most lucid statements was made by The Americas Daily 
on August 30, 1956. 

According to Public Treaties . . . Panama has sovereignty over that strip 
of land, having granted only, for determined purposes, which are duly specifie'd 
in the provisions of the Treaty, certain jurisdictional rights to the United 
States. In other words, the exercise of those jurisdictional rights, which are not 
at all those corresponding to a sovereign power, is limited to determined ends 
related with the interoceanic waterway. Should these ends cease to exist, as 
would be the case if the waterway was abandoned for any reason, Panama 
would automatically recover . . . the exercise of all the rights which the United 
States has been permitted to exercise in the Canal Zone in accordance with 
the treaties in force. 

The fact has been clearly established that the Canal is built in Panamanian 
territory, under Panamanian sovereignty, that the United States has never 
claimed to have sovereignty over that strip of land ten miles wide. . . . 

Therefore, it should not be assumed that the United States owns the terri- 
tory where the Panama Canal is located, not that it has all the rights adherent 
to sovereignty, nor that it is the sole owner of the Canal itself. The country 
exercises some jurisdictional rights and is co-owner, together with Panama, of 
the Canal, by virtue of wdl-known international treaties. 40 

On top of the dispute over sovereignty came disagreement over the 
application of the non-discrimination clause of the 1955 agreement, in 
Panamanian eyes an inadequate application. Discontent was provoked 
on August 18 when U. S. Assistant Secretary of the Army George Rode- 
rick said that "neither the treaty nor the plan for its implementation 
provide for a general over-all wage increase, nor ... for paying U. S. 



PANAMA 315 

rates for all jobs." 41 This spurred Panamanian officials to criticize the 
U. S. government for adopting an attitude equivalent to non-compliance 
with what was agreed on. A few days later Governor W. E. Potter of 
the Canal Zone told newsmen that the new single wage plan was going 
into effect, as provided by treaty. He underlined the fact that anyone 
brought from the United States would have a U. S.-classified job. Locals 
would be paid the U. S. rate, but without the 25 percent differential. 
By so doing, Potter was saying that discrimination of wages would not 
exist except for a 25 percent differential which employees brought from 
the U. S. would be paid. 

Once again the Foreign Ministry drafted a reply and sped it into print. 
Their statement read: 

The principle of "equal pay for equal work" should mean that the only 
difference in pay must be that resulting from the difference in quality or type 
of work performed; that is to say, the skill and experience required of the 
worker. The principle of "the area of recruitment" does not appear to 
conform to the aforementioned principle, inasmuch as it bears no relation 
to the type and quality of work. It leads to a classification based on "locality," 
which from a practical standpoint, would be as discriminatory as that which 
up to now has been based on nationality or color. . . . 

As Governor Potter well expressed it, the interpretation which has been 
applied to this provision of the Memorandum of Understandings Reached, 
insofar as wages are concerned, is nothing else than the continuation of a 
policy which has been applied for more than fifteen years and it was precisely 
because of it that the new treaty provided for the equality of basic wages for 
Panamanians and North Americans in order to put an end to all sorts of 
discrimination. 42 

And so the two nations were at loggerheads once more over the Canal 
Zone. As 1956 drew to a close, a series of meetings endeavored to smooth 
over differences. Nonetheless, the Canal remained omnipresent in Pana- 
manian politics. 

In the midst of this new Canal dispute, Ernesto de la Guardia Jr. was 
inaugurated on the first day of October, 1956. The successor to Ricardo 
Arias was a prominent businessman. A small man of five feet, six inches, 
he had spent nearly two decades as managing director of the Panamanian 
national brewery. A member of one of the ruling Panamanian families, a 
one-time national golf champion, De la Guardia had attended the Tuck 
School of Business Administration at Dartmouth College and gone on to 



316 CENTRAL AMERICA 

a career which only occasionally touched on politics. A quiet, unassuming 
individual, his campaign had been one of the calmest and most rational 
in national history, although there were some who feared his lack of 
color and fire, something usually required of Panamanian politicians. 
Nonetheless, he was expected to provide a competent administration. 

Outgoing President Arias made clear his disappointment over the 
implementation of the Panama-U.S. contract of 1955. In his final official 
message, Arias voiced many of his country's complaints. He frankly 
criticized the U. S. Congress for failure to enact legislation necessary to 
help effect certain phases of the 1955 treaty. While he had found coopera- 
tion in the highest echelons, "difficulties and resistance" met Panamanians 
in the Canal Zone itself. Arias referred to the proposed classification of 
jobs on the basis of area of recruitment as discriminatory and contrary 
to the spirit of the treaty. "The painful truth seems to be that it is 
harder for Panama to watch for the compliance with the pacts than it is 
to obtain agreement on them." 48 Arias sat down amid enthusiastic ap- 
plause, to be followed by the incoming executive. In a seventy-seven 
minute address, De la Guardia gave one of the least optimistic inaugural 
messages in recent memory. He said at the outset that in his opinion 
"We Panamanians have never faced as serious difficulties since the birth 
of the republic as we do today. I would say that all of them . . . can be 
summarized as follows: Is the Panamanian nation ... in a position to 
provide his vital needs for each individual Panamanian? . . . We are at 
the end of a way and a manner of life which are inadequate to meet the 

most pressing needs of the country " In such circumstances, a recovery 

program was in order. This should extend to housing, economic de- 
velopment, fiscal wellbeing, public administration, and public health. 
New housing would require the construction of eleven thousand units 
annually at a cost of over fifteen million dollars per year. Economic de- 
velopment had to be assisted continually. The fiscal problem was indi- 
cated by the forty-four million dollar debt which had accumulated, much 
of it very recently. 

Public administration, while recently improved, still left much to be 
done. "It would be unfair not to acknowledge that the state has taken 
upon itself new obligations toward the community, which require an 
increase in the public administration personnel, . . . There is an appreci- 
able number of cases in which one person holds two or more government 
jobs. . . . And in these times of economic hardship that is an unforgiv- 



PANAMA 317 

able injustice towards many persons. . . ." Public health was another 
serious problem. 

Lack of pure water and of sewers and latrines, mosquito breeding 
places . . . inadequate housing and schools, precarious economic conditions 
all this, together with inefficient sanitary and social assistance on the part of the 
state, is responsible for the delicate state of health in the rural areas. ... Of 
every 100 persons who die in the interior, 85 get no medical attention. Of 
240 doctors in the country, 180 operate in the cities of Panama and Colon, 
with a population of 220,000 inhabitants, so that to meet the needs of the rest 
of the population we have only 60 doctors, or one for every 10,000 people. 

Ending his gloomy statement, De la Guardia called on his people to help 
in the problems of reconstruction and modernization. 

I have described the situation of the country, without embellishment or 
half-truths, as I see it. ... Let no one expect from me miracles that I am in 
no position to promise. . . . 

We cannot close our eyes to the grave and alarming fact that the Pana- 
manian people have been losing, in the last few years, faith and confidence in, 
and respect for their guardian institutions. . . . The need for rekindling those 
sentiments in the spirit of the people impresses upon us the duty of devoting 
ourselves unselfishly and loyally to the task of a true national recovery, 44 

Despite the President's call to his countrymen, his early efforts were 
to be thwarted consistently. He announced sweeping reform of the 
social security system, but by June, 1957, he found the nation generally 
unresponsive. Despite basing his electoral campaign on social and 
economic advance, he ran into trouble once in office. On June 27 he an- 
nounced a temporary withdrawal of his plans. At a press conference he 
agreed to modify his program, launching, in the meantime, an intensive 
educational campaign. Financing for his plans had been based primarily 
upon an increased contribution by most citizens to the tax collectors. 
The tax levy of 4 percent had been planned for revision to 12 percent by 
1958 and 14 percent by 1961, ultimately reaching 17 percent by 1975. 
Employer and employee alike rebelled at the suggestion. It was admittedly 
a large chunk out of any man's income, especially in an underdeveloped 
economy. A widespread feeling that the entire social security program 
was already mismanaged and corrupt, and unsubstantiated mutterings 
about rampant socialism combined to block the President's program. So 
he was forced to delay his improvement program for the time. "I do not 
wish to impose my will for something not wanted," 



3l8 CENTRAL AMERICA 

While the quiet De la Guardia's personal popularity had held up 
rather well, he was beset by the usual political troubles, emanating from 
his own Coalicion Patriotica Nacional. The more conservative element 
of the party splintered temporarily on the issue of two foreign-financed oil 
refineries to be erected in Col6n, a center of unemployment Haggling 
over contractual arrangements between rival factions finally caused the 
project to be dropped. And First Vice-president Temistocles Diaz resigned 
from the administration party to set up his own Movimiento Liberaci6n 
Nacional against the President. While remaining nominally a member 
of the government from which he could not resign constitutionally 
Diaz created a center of hostility toward De la Guardia that was a 
distraction from more important matters. Well into the summer of 
1958, De la Guardia found that a general public lethargy continued to 
prohibit the installation of the sweeping reforms in taxation, rural develop- 
ment, health, and social security that Panama needs so badly. The 
President had labored long and doggedly in the face of this lethargy, and 
he slowly made progress in fields where the changes called for less than 
revolutionary measures. Otherwise, he found himself trying in vain to 
pull with him a populace that applauded his efforts generously but seemed 
uninterested in the basic conditions demanding remedy. 

The tumultuous postwar decade in Panama had shown, above all else, 
that it was politically the most unpredictable republic of all Central 
America. The years had brought a parade of eight presidents, none of 
whom served a full four year term. Despite this, an historic accord 
was signed with the United States bringing many advantages to the 
nation. Otherwise, economic problems were as grave as ever. And while 
the De la Guardia administration brought a certain amount of political 
stability, it was not a precursor to economic reform but rather the 
continuation of the outmoded practices and customs of past decades. 
The list of needs is yet staggering. It includes agricultural diversification, 
electrification, increased tourist facilities, expanded education, improved 
housing and public health, light industrialization, additional road con- 
struction, and social enlightenment. It will be years before any one of 
these problems can be coped with satisfactorily. Yet none of the goals 
are likely to materialize without continued and increased political stability 
and civil order. Despite surface indications, Panama still carries a heavy 



PANAMA 319 

moral burden as a result of the Remon assassination and the disputed 
skullduggery involved. The future of Panama can be one of progress, but 
only if the republic comes to regain its inner confidence, learning to ap- 
preciate and practice the principles of responsible democracy. In the light 
of recent years, few observers dare predict with any confidence what may 
follow for this bizarre and unique little nation. 



Chapter Eight 



CHALLENGE TO THE UNITED STATES 



In the last few years . . . our blindness to the power of people and ideas to 
topple governments and to sway whole continents, had led us into setback after 
setback. ... If we persist in it we may ultimately face new debacles. . . . 

Chester Bowles 

RECENT YEARS HAVE drawn a world picture of surging nationalism, anti- 
colonialism, and the accompanying passions of historic xenophobia. 
Events in oppressed or backward areas have inevitably revolved around 
these basic sentiments. From Indonesia to the Gold Coast, from 
Cambodia to Tunis, millions have been awakened by the call of national 
independence, economic freedom, and the ever virile democratic principles 
of the American Revolution of 1776. Some six hundred million have 
become enfranchised by the passage of their lands from colonial to inde- 
pendent status. This historic development, no mere momentary impulse, 
was only too often considered by U. S. officials as anarchic and ir- 
responsible. Many tended to disbelieve the expressions of deep faith in 
the U. S. revolutionary ideals as studied and expounded by Nehru, 
Nkrumah, Bourguiba, and others. The critical nature of such areas in 
the present world drama has been underlined by the headline-catching 
batde between the free world and communism. At the same time, the 
Western hemisphere has also been captured by similar emotions. South 
of the United States our friends are passing through a period of extraordi- 
nary flux, of transition toward something new. In that the transition 
is a developing process, the burgeoning future is somewhat formless. 



CHALLENGE TO THE UNITED STATES 321 

With a few exceptions, Latin America has been politically independent 
for some years. At the same time, many of the ills of those republics, 
imagined or otherwise, have been kid at the doorstep of the United States. 
There is only too prevalent in the United States today an ignorance of 
and lack of concern about Latin America in the face of more pressing 
problems elsewhere. This was the official outlook toward China a few 
years ago, it might be remembered. The Latin American states have 
been a major source of recent criticism of the United States. A three 
month trip by the author that included every South American nation 
convinced him beyond any doubt. U. S. policy was considered in the 
light of the Guatemalan communist debacle, United Fruit Company 
activities in Honduras and Costa Rica, the treatment of Panama and the 
Canal Zone, and the continued support of military regimes such as that of 
Somoza in Nicaragua. Latin Americans, unfortunately, are often eager 
to criticize the United States for the sake of slaying the giant. They may 
be much more concerned about U. S. insults to Panamanian national 
pride, for example, than about problems of survival for backward Pana- 
manian farmers. 

The mere existence of the United States in its present position of 
international prominence creates inevitable ill will. Only in recent years 
has the U. S. encountered such resentment and outright hatred except on 
scattered occasions. Such are the burdens of international power. Many 
other nations have learned the same thing during their periods of ascend- 
ancy. The English, Spanish, French, and many ancient empires learned 
to live in such an environment. Until the past decade, however, the 
United States had never been confronted by the same development. It 
has not rested easily under the burden. Both individually and nationally, 
an endemic United States characteristic is that of open, candid friendship, 
a belief in the inherent goodness of one's fellow, his intentions, philoso- 
phies, and actions. Rude awakenings have come, often resulting from 
the effects of North American "bigness." In the absence of complete in- 
ternational maturity, this has engendered feelings of hurt and be- 
trayal on the parts of trusted friends. The United States and its citizens 
individually consider many minor incidents as rebuffs, if not indeed 
personal affronts. There exists as yet only a partial awareness that big- 
ness, material prosperity, and global leadership are necessarily ac- 
companied by abuse and criticism. 



322 CENTRAL AMERICA 

In this light, Latin criticisms are more understandable. If the United 
States scerns a dangerous but sleeping giant to far removed continents, its 
appearance to neighboring states can well be imagined. The six Central 
American republics have a combined population less than that of half 
the U. S. states individually. The largest city in the region is smaller 
than dozens of U. S. cities. There are only six population centers ap- 
proaching one hundred thousand inhabitants. In so many ways, it is 
almost impossible for the U. S. to appreciate or grasp how sensitive a 
Salvadoran or Honduran is toward the United States. Yet this sensitivity 
exists and is one of the overriding factors in U. S.-Central American 
relations. 

For the United States, the problem is not an easy one. The nation 
has many friends as well as critics in the region. In some ways it is 
greatly admired. And at the same time, it would be specious to assume 
that all criticism was a result of U. S. geopolitical preponderance. Central 
Americans have many just grievances, which must be understood. Con- 
versely, U. S. policies sometimes take into account expected criticisms, 
despite a failure to adjust. There is a growing awareness that relations 
between the Central American republics and the United States are based 
upon complexities which reflect the ever-modulating sharps and flats of 
regional and national politics. 

ECONOMICS AND IMPERIALISM 

Political understanding is reaching an unequalled regional low. Only 
in a few instances have there been deviations from a noticeable lack of 
rapport. The principles moving millions in other backward regions are 
also expressing themselves powerfully in the Central Americas. At the 
same time, economic grievances have become a center of dispute. 
Thousands of Central Americans are passionately convinced that their 
economic situation is endangered because of U. S. policies. Indeed, much 
political ill will is predicated upon exaggerated or distorted economic 
disagreements. To any resident of Central America the cry of yankee 
imperialism is a familiar one. Few refrains have been more overworked. 
Yankee imperialism is discussed, criticized, and supposedly proved on 
both political and economic grounds. Usually the discussion centers on 
economic matters. The argument commonly begins with the assumption 
that all foreign enterprise not just that of the U. S. is inherendy and 
wickedly avaricious, an evil the world would be better without. Foreign 



CHALLENGE TO THE UNITED STATES 323 

enterprise comes to a small nation, impresses its methodology and interests 
upon the country, causes economic displacement, and squeezes out 
struggling local enterprise by shady business tactics and unlimited financial 
resources. Such enterprises supposedly contribute nothing toward positive 
national progress, pay a minimal national tax, if that, and stoop to meddle 
in local politics when advantageous. Such are the more common mal- 
practices of foreign enterprise, in the popular Latin view. 

There are admittedly instances of unfair practices by which a small 
Central American nation falls prey to an uncommonly prominent foreign 
firm. Such cases are highly regrettable, and reflect discredit on the 
perpetrators. At the same time, there are positive contributions which 
can be and often are made. In the first place, the income from the activi- 
ties of a large firm will inevitably funnel back in part to the host nation. 
The amount depends upon the local situation. Even in the worst circum- 
stances, a certain amount is unavoidably contributed to the government in 
power. The nature of the government determines whether this will be 
converted into public works or official graft. In addition, revenue paid 
by services and salaries to national employees is a further source of 
income. One of the strongest arguments in favor of such enterprises is 
the development ability created by large amounts of capital. Particularly 
in Central America, individual governments have little hope of financing 
oil exploitation, to take one instance. Demands of the populace and 
national financial limitations check the efforts of these small governments 
to develop natural resources of invaluable worth to the people. Only by 
the entrance of foreign enterprise backed by unbounded capital can 
major development proceed. Otherwise, natural endowments are denied 
the people of the area and those living thousands of miles away, as well. 

More perceptive observers realize these favorable sides to the problem 
of foreign investment. They have seen the great good resulting from 
foreign capital properly used. Panama and Nicaragua have been prime 
examples. Yet most interested viewers are imbued. with a spirit of 
rebellion that sadly sees everything in a jaundiced light. And when 
presented with arguments or examples which favor private capital from 
abroad, the usual cry is that of "Yunei," or UFCO. In all of Central 
America, there is no more controversial subject. Latin Americans will 
claim that everything from dictatorship to diabetes is caused by UFCO 
imperialism. Outsiders counter with praise of UFCO for conquering 
the jungle, educating countless backward Indians, and putting a banana in 



324 CENTRAL AMERICA 

the mouth of every starving babe-in-arms. The truth lies somewhere be- 
tween, of course. In any consideration of the United States in Central 
America, UFCO deserves attention. 

UFCO is one of the largest North American corporations involved 
in foreign operations. It has assets listed at $580,000,000. Most of the 
world's marketable bananas are grown, processed, shipped, and dis- 
tributed by UFCO. Roughly 85 percent goes to the United States, the 
remainder to Great Britain and Canada. In addition to bananas, UFCO 
products include cacao, sugar, palm oil, and abac, the latter a fiber used 
for manila hemp. UFCO operates over fifteen hundred miles of railroad, 
owning 90 percent outright. Its fleet includes over seventy ships, fifty 
fully refrigerated. Additional subsidiary properties range from a brewery 
in Honduras to the Tropical Radio Telegraph Company, one of the 
major hemispheric wireless companies. It owns over 374,000 acres in 
Central America. 

Incorporated in 1899, UFCO through the years purchased the proper- 
ties of rival fruit and steamship lines in the Caribbean. Since 1930, its 
closest rival has been Standard Fruit Company, with an estimated twenty 
million dollars in assets. Everywhere UFCO has come there is un- 
mistakable evidence. Acreage covered by jungle or swamps has been 
cleared, cared for, fertilized, developed, sown, and harvested. Railroads 
and highways have given access to plantations, sometimes supplemented 
by a small air strip. Housing has been erected, workers brought in from 
elsewhere, hospital and recreational facilities established, schools erected 
and teachers imported, commissaries made available, and other social 
services created to meet variable local needs. Some ninety thousand 
company employees use these facilities continuously. In many ways 
UFCO is bigger than any of the governments with which it deals. 

In the so-called old days, UFCO was much less paternalistic than it 
would have one believe today. Workers' facilities were inferior and 
generally inadequate. Governments virtually came and went at its whim. 
There were many government officials illicitly on the company payroll; 
national policies changed with UFCO needs. Labor relations were good; 
they scarcely could be otherwise. Unions were prohibited and workers 
received what little the company chose to give. Contracts were all long- 
term agreements as this proved more convenient for company operations. 
Such is the past UFCO would rather forget Aligned against this are 
the improvements instituted in recent years. The facilities mentioned 



CHALLENGE TO THE UNITED STATES 325 

above are generally superior to those available elsewhere in the republics, 
and laborers are universally paid more than men employed by local 
planters or businessmen. Their health, recreation, sanitation and educa- 
tion are superior to those of compatriots not working for UFCO. Various 
other efforts have been made to improve the countries in which UFCO 
operates. The Agricultural School in Honduras was established a few 
years ago to train Latins in agricultural methods and experimentation. 
Over five million dollars have been paid to the school, and UFCO is 
continuing its support of the institution. 

There is a great tendency by UFCO critics to hang upon past events. 
They often ignore more recent developments. Few are aware of the 
Costa Rican contract negotiated in 1954, a landmark in UFCO relations. 
Some 42 percent of the profits are paid annually to the Costa Rican govern- 
ment. Social services were handed over completely to the government in 
accord with the wishes of President Figueres. Practices in Panama, never 
as unpopular as elsewhere, have liberalized in recent years. Guatemala 
enjoys new contractual arrangements today. Yankee imperialism in 
Guatemala is a cry heard throughout Latin America. This has been 
dealt with at length in the Guatemalan passages, which discussed the 
various points at which UFCO was at fault. At the same time, they 
indicated eventual UFCO willingness to grant concessions similar to 
those won by Costa Rica. Guatemalan Communists, involved in illicit 
intrigue and finding profit in nationalistic attacks on UFCO, rejected 
all offers. New contracts with the Castillo government are now similar 
to those in Costa Rica. Even the strongest critics of the late President 
Castillo conceded his reasonable treatment at the hands of UFCO. 
Honduras points out, on the other hand, the apparent reluctance of the 
company to grant favorable conditions except under strong pressure. 
The 1954 strike, we recall, revolved about demands for free medical treat- 
ment, paid vacations, and social benefits long enjoyed by UFCO employees 
elsewhere. However, the lack of pressure by Hondurans had permitted 
the company to proceed blithely without making such agreements. Only 
after the crippling and unnecessary strike of 1954 did UFCO concede to 
Hondurans what it had earlier given elsewhere in the region. 

What we see, then, is an irregular mosaic which varies from country 
to country. UFCO has in long-past years committed serious errors. These 
are indeed inexcusable. At the same time, no possible good comes from 
incessant haranguing. UFCO, for all its shady past and present re- 



326 CENTRAL AMERICA 

luctance, is generally operating to the advantage of the countries with 
which it deals. They receive a large share of the profits, the company 
getting fewer tangible benefits not accruing to other foreign enterprises. 
Its workers are healthier, better fed, better housed, and better paid than 
others doing comparable work. Where inequities exist, they call for 
fewer Latin exhortations and less United States posturing. Constructive 
discussion and contractual arrangement is the order of the day. UFCO's 
worst critics cannot deny that the company uprooted the wilderness and 
converted worthless land into productive, profitable enterprise bringing 
advantage to thousands, both inside and outside the country of operation. 
No Central American government could maintain these activities, even on 
a limited basis. The social services and physical facilities alone, operated 
by the Costa Rican government in that republic for some four years, are 
already deteriorating rapidly. This would never have occurred under 
UFCO management. In the future, constructive cooperation must lay 
forth the road on which either the dissatisfied governments or UFCO 
might approach their problems. No good comes from continual recrimi- 
nation. Latin Americans generally fail to recognize the harmful results 
of their well-intentioned cries of outrage. Equally pointless is the 
official UFCO disdain. 

U. S. POLICY: PALATABLE OF OTHERWISE? 

Economic criticism often borders on the political, and it is in the 
political field that the United States government is more directly involved. 
It is also on a political basis that even the best friends of the United States 
have great difficulty in understanding its policies. Many seem contra- 
dictory, others an affront to the national aspirations of underdeveloped 
states. Since the inception of the Good Neighbor Policy by Franklin D. 
Roosevelt, the United States has theoretically based Latin American 
diplomacy on the foundation of the high principles of the United States 
fight for independence. Liberty, democracy, freedom of worship, as- 
sembly, speech and press, free elections, constitutional government, and 
non-interference in the internal affairs of others all these have been 
announced bases of U. S. policy. To Latin Americans these principles are 
equally palatable. Indeed, the leaders worship at the feet of Rousseau, 
Jefferson, Montesquieu, and other political thinkers of the late eighteenth 
century. At the same time, they feel the United States is hypocritically 
pursuing policies directly contrary to its announced intentions. This 



CHALLENGE TO THE UNITED STATES 327 

belief has in the past decade lowered U. S. prestige inestimably throughout 
Central America. 

United States recognition of unrepresentative or dictatorial regimes 
is one of the grievances. To nationals, there is no reason for the U. S. to 
maintain relations with a regime such as that of Somoza in Nicaragua or 
Carias in Honduras. This is to them a direct contradiction of the U. S. 
belief in democratic principles and representative government The de- 
gree of criticism varies according to the individual. Some ask that the 
government of the United States simply withhold diplomatic recognition 
from the undemocratic regime. Others suggest economic pressure against 
the government. Some even support a policy of outright intervention in 
favor of a representative, freely-elected administration. These arguments 
run almost directly counter to another criticism, that of U. S. interference. 
Political intervention was commonly practiced in the early twentieth 
century throughout the Caribbean, and the memory is still reasonably 
fresh in many minds. While the United States has bypassed unilateral 
action as a general policy, it has committed itself to continuance of the 
policy where the situation is believed grave and beyond other remedy. 
This draws understandable fire from Latin Americans. 

The question of diplomatic recognition has been widely misused in 
Latin hands. It should obviously be necessary to maintain relations with 
a government in clear control of its people, whether by legal means or 
otherwise. The task of the diplomatic corps of all independent nations 
is to represent its government and policies abroad, at the same time 
giving counsel and assistance to nationals living outside the borders of 
their homeland, reporting developments back to its government. Such 
has been the accepted custom for centuries. Modern international law 
upholds this practice. Every sovereign power has the right and indeed 
the duty to be represented before the governments of other independent 
nations. There may well be a question about a government's control over 
its people, and this must be considered when recognition is being studied. 
However, there is no doubt of any government's need for foreign repre- 
sentation. A government must continue these relations in the absence of 
reasonable doubt about the nature of the neighbor government. This 
leads to the problem of de jure and de facto recognition. When a 
government shows its control of a populace, regardless of the means 
employed, recognition is extended. Barring a diplomatic affront or in- 
ternational crisis, recognition will continue indefinitely. Whether the 



328 CENTRAL AMERICA 

government be formed by democratic elections or repressive militarism, 
it is accorded the same recognition. It would have been highly impractical 
to have refused relations with Guatemala for the thirteen years of the 
Ubico regime, with Nicaragua for the twenty years under Somoza, or with 
Honduras for the sixteen years of the Carias dictatorship. 

The degree of diplomatic cordiality is a different problem. It seems 
a valid question to pose, to ask why warm and obviously friendly rela- 
tions with dictatorial governments are maintained by the United States. 
Nicaragua is a case in point. The U. S. certainly could not have with- 
held diplomatic recognition of the Somoza regime for nearly a quarter of 
a century. At the same time, it did not have to establish intimately 
friendly relations with the dictator. U. S. diplomats could have reported 
that Somoza had accomplished fine things in Nicaragua by way of 
progress. This is partially true, as the chapter on Nicaragua illustrated. 
Nonetheless, a succession of United States ambassadors did not need to 
reach a first name basis with the strong man. Nor did the U. S. need 
to negotiate and sign a military pact with Nicaragua. Such agreements 
are of little positive value there. They merely strengthen the hand of 
the government in question, which may one day turn the arms and 
U. S.-trained army on the people to put down rebellion. 

Military aid is another of the sore points of hemispheric policy. The 
prospect of war between these small nations is relatively small. The 
instrumentality of the Organization of American States is such that 
United States military treaty assistance seems fatuous. The closest 
outbreak to war in recent years was the Costa Rican-Nicaraguan dispute 
which was fanned anew several times by the personal enmity of Jos6 
Figueres and Anastasio Somoza. In each case, international action pre- 
vented an all-out war of aggression. A pattern for the future seems to 
have been molded along these lines. In Central America, the military 
is generally an arch-conservative force out of harmony with the political 
and social structure. Members of the armed forces are considered as lower 
forms of social life. Prostitution is often classified on only a slightly less 
honorable level. The military forces throughout the isthmus are at the 
call of a small handful of officers who in turn form a significant bulwark 
of the government in power. The ultimate survival of the regime de- 
pends upon the military. Somoza and Carias, military men themselves, 
ruled their countries for years with military support Osorio followed 
the same procedure in El Salvador for eight years. The National Guard 



CHALLENGE TO THE UNITED STATES 329 

in Panama made and broke a good half dozen presidents before installing 
its own commandant, Jose Rem6n. And Ubico, and later Arbenz in 
Guatemala were both overthrown when the army turned upon them. 

In such circumstances the military can be considered a retrogressive 
influence. In more democratic Central American governments, there is 
always a danger that the military will become dissatisfied with the state 
of things and install a government more consonant with its wishes. In 
the dictatorial governments, the military maintains a strong man in 
power. He, in turn, repays the armed forces by wage increases, modern 
housing facilities, luxurious officers' clubs, trips abroad, and innumerable 
fringe benefits denied the ordinary citizen. Of course, there will be 
modern arms from abroad usually the U. S. as well as foreign experts 
usually U. S. military representatives to train the soldiers in modern 
warfare. Indeed, the U. S. can easily be criticized for its maintenance 
of military agreements in Central America. Official justifications and 
rationalizations are universally unsatisfactory. Until the United States 
discontinues wholesale, indiscriminate military cooperation with the 
republics of Central America, it will hear much criticism of this practice, 
a thoroughly justified criticism. The United States is continuing an 
ill-considered policy both in establishing warm relations with dictatorial 
regimes and in supporting them through military agreements. It con- 
tinues to be attacked even for recognition of these regimes and is called 
upon to sever all formal contacts. In this instance the U. S. position is 
firm and clearly justifiable. Unfortunately, few Central Americans see 
it that way. 

In theory, at least, the U. S. pursues a policy of non-intervention in 
Central America. Latins praise the principle, but point out that the 
U. S. fails to practice it and refer to different instances of U. S. interven- 
tion. At the same time, they call on the United States to exert moral in- 
fluence against undemocratic regimes. Some even call for more direct 
action. Costa Rican ex-president Figueres, admired as a democratic leader 
by some, has called upon the United States to use almost any means at 
its disposal to do away with undemocratic regimes. Those less sanguine 
than Figueres advocate the withholding of military recognition, economic 
aid, and similar steps to pull down authoritarianism in the region. Yet 
this itself is blatant intervention, exactly what the U. S. is pilloried for. 

Alongside its tiny neighbors, the United States is indeed a giant. 
Everything that happens has an effect on its southern neighbors. If 



330 CENTRAL AMERICA 

there is a nasty outbreak of race relations, Costa Ricans will sneer at 
U. S. intolerance, forgetting that Negroes were not allowed by law on 
the meseta central or in the capital city of San Jose until 1941. Salva- 
dorans will deride U. S. insincerity when the government deals with 
undemocratic regimes, forgetting its energetic support of imperialistic 
Japan in the years preceding Pearl Harbor. Guatemalans will attack 
U. S. materialism and lack of culture, then fight for seats when the 
New Orleans Symphony Orchestra plays one concert in Guatemala City, 
although refusing to support the local symphony. Young Honduran 
government officials attack U. S. selfishness after receiving a college 
education under a U. S. government scholarship grant at a university of 
their choosing. No matter what position the United States does or does 
not take, it exerts influence. This gives added weight to U. S. actions in 
praising the government of a strongman or in denouncing a government 
for unilateral expropriation. This makes the ill-considered generalization 
of a senator debating on Capitol Hill much more important. It gives 
significance to the Cuban Negro ballplayer who returns home to tell of 
segregation in Southern hotels. In short, the U. S. position carries 
weighty implications, even when the government deliberately tries to 
avoid the mildest hint of gently suggestive coercion. With all influence 
a form of moderate intervention, the United States lives with the problem 
from day to day. Some form of intervention is inevitable, albeit on a 
small scale. 

When citizens of Central America demand that the U. S. neither 
recognize nor cooperate with an unrepresentative government, they 
are requesting a flagrant violation of the non-intervention principle they 
hold so dear. The very act of non-recognition, of withholding diplomatic 
or business relations, of economic or social aid, is intervention. Even 
more improper is the previous decision upon which this intervention is 
based. Who is to decide when a government is or is not undemocratic? 
Who is to choose between two potential revolutionary leaders and nomi- 
nate one as worthy of support? On a concrete basis, one might say that 
the problem is exaggerated. Everyone knew Anastasio Somoza was a 
dictator. Why not take measures to end his regime? But many Nica- 
raguans held Somoza in great affection, even while admitting the undemo- 
cratic nature of his administration. Thousands would have fought to 
the death for the old strong man. El Salvador? It had a military 
dictatorship for eight years and now has followed it with a handpicked 



CHALLENGE TO THE UNITED STATES 331 

successor who won election without opposition. Shouldn't this govern- 
ment be overthrown? Yet it is popular, opposition is weak and generally 
without support. Salvadorans are enjoying unprecedented economic 
prosperity. Who will make the decision to establish a more democratic 
government? What choice would have been made for Costa Rica before 
the Echandi government took office? Outside the country, the U. S. 
and Latin America alike admired the highly democratic government of 
Jose Figueres. Yet Costa Ricans themselves turned almost totally against 
Figueres. His policies left Costa Rica weaker internally and more divided 
socially than it had been in years. Should Figueres have been overthrown 
in favor of a popular and effective government? Latins would say no. 
They fail to explain just where the line should be drawn, and how. 

In short, the very decision of the intrinsic worth of a government, 
its contribution to the national wellbeing, and its representative nature, 
are questions that are always difficult to answer. In many instances it 
would be impossible to get a fair judgment from the most detached of 
observers if they could be located. And even assuming the judgment to 
be one of black and white, without controvertible shadings of grey, the 
decision would have to be made by a person or group of persons. Who? 
Latins would certainly not trust a U. S. secretary of state to decide which 
administration served representatively, or which was ripe for intervention. 
None would advocate a vote a sort of popularity contest to determine 
whether President A of the Republic of X was a "good guy or a bad 
guy." Such speculation passes the fringe of lunacy. For the United 
States, then, it is patently impossible to exercise any form of open di- 
plomacy against an undemocratic government. The very question of 
unrepresentativeness itself is often intangible, certainly not easily answered. 
The decision would necessarily be a unilateral one, thus unacceptable to 
the United States as well as the peoples of Central America. Latin 
American demands for action on such a basis are impractical, a gross 
violation of those principles they themselves criticize the United States for 
trampling so often. 

This does not wash all responsibility from U. S. hands. Favorable 
changes can be made. Only the official and impersonal matters of diplo- 
matic protocol should be engaged in with clearly unrepresentative govern- 
ments. Frigidly correct relations should be maintained, and nothing 
more. Military agreements must be shunned. There is no convincing 
argument that gives this policy merit as an important function of U. S. 



332 CENTRAL AMERICA 

foreign policy in this area. No advantages from it accrue to the United 
States in the isthmus. Whatever aid is delivered should be extended in 
the form of economic assistance, as discussed elsewhere. Only on the 
skeleton of such a policy can new plans revitalize U. S. relations with 
Central America. 

ISSUES IN POINT 

There are innumerable examples of the issues outlined above. Some 
illuminate the absence of understanding on both sides of the fence. These 
include the assassination of Anastasio Somoza, the Panama Conference 
of 1956, the affront to Panama during the Suez crisis, and the overthrow 
of the Arbenz regime in Guatemala. The attack upon and the subsequent 
death of Somoza in September, 1956, brought out the typically myopic 
U. S. view of the Latin mentality and environment. Several blunders 
were committed. The first followed the shooting when U. S. Ambassador 
Thomas Whelchel called upon Washington to send direct medical aid. 
Without any request from Nicaraguans he promptly asked the govern- 
ment to send outstanding specialists in an effort to save the life of 
Somoza. 

To Whelchel, and then to President Eisenhower, this seemed like the 
charitable and humanitarian act of a good neighbor. Political assassina- 
tion is a nasty business, whatever the circumstances. They hoped to 
rescue Somoza from death. However, the result was to create a wave 
of anger against the United States for apparent interference. To almost 
all Latin Americans outside Nicaragua, Somoza was a tyrannical despot 
who should have been deposed years ago. When asked about the 
humanitarian aspect, they would retort that the Somoza dictatorship had 
been notably antihumanitarian for two decades. Many admitted that 
the United States would have been in a difficult position to refuse aid 
had the Nicaraguans requested it. However, the emergency trip of 
Eisenhower's personal doctors, plus other medical specialists, all without 
Nicaraguan action, was considered another sign of U. S. hypocrisy first 
declaring democratic principles and then trying to save an authoritarian 
ruler from the grip of death. Had Somoza survived, as seemed likely for 
several days, this action would have drawn even more indignation. 

Shortly after Somoza died, a week following the attack, President 
Eisenhower sent a message of condolence. Rather than the customary 
official regret, he tdegrammed an expression of deep personal loss. 



CHALLENGE TO THE UNITED STATES 333 

nation and I personally regret the death of President Somoza of Nicaragua 
as a result of the cowardly attack made upon him several days ago by an 
assassin. President Somoza constantly emphasized, both publicly and 
privately, his friendship for the United States a friendship that persisted 
until the moment of his death." 1 To make the sentiment absolutely clear, 
Secretary of State Dulles also sent condolences to the dead dictator's 
widow, concluding that "His constantly demonstrated friendship for the 
United States will never be forgotten." 2 

Thus the United States deftly turned hemispheric opinion against it 
once more. The expressed sentiment was anathema to Central Americans. 
A message of sympathy was of course in order. But there was no cause 
for mentioning Somoza's long friendship with the U. S. No one outside 
Nicaragua needed a reminder, while Nicaraguans were not appreciably 
interested. When the telegram from Dulles again reiterated the sentiment, 
the United States began to appear slightly ludicrous. As one Buenos Aires 
newspaper commented acidly, it was as if one of the forty-eight stars had 
unexpectedly slipped out of the flag. Eisenhower's condemnation of the 
"cowardly" attack also rankled. In the first place, many hailed the dead 
Rigobcrto Lopez P6rez as a liberator of the Nicaraguan people. He was 
cheered in the streets of San Salvador. In Uruguay the national legisla- 
ture even passed a resolution praising the patriotism and self-sacrifice of 
Lopez. This attitude prevailed throughout Central and South America. 
With representatives throughout the Americas, there was no conceivable 
reason for Washington to be unaware of such sentiment. No person 
could conceivably have attacked the well-guarded Somoza without signing 
his death warrant. There was no cowardice in Lopez' attack. He may be 
condemned on many grounds, but not that of fear. The man well knew 
his fate. Thirty seconds after firing at Somoza he lay dead, his body 
pierced by bullets in twenty-one places. 

Another instance of total U. S. miscalculation was the July, 1956, 
Panama Conference, at which virtually all the American chiefs of state 
were present. This was cheered enthusiastically in the United States both 
before it began and after. Washington even today considers this a 
diplomatic triumph, at the very least a bold and telling stroke in its 
hemispheric policy. Yet these evaluations are based upon reports issued 
by the different governments. The sad fact that many of them were 
not representative was never considered. The wide rapport and friendly 



334 CENTRAL AMERICA 

exchange of ideas in individual interviews between presidents was in 
itself most cordial. This was not, however, a reflection of the people. 
In many cases their voices were muted by tyranny. The purpose of the 
conference was presumably to unite the people of the hemisphere by 
closer bonds of friendship and cooperation. As there were no agreements 
entered into by the United States, no action taken that was not more 
appropriate to diplomatic channels in individual countries, the hope of 
furthering relations of the peoples of America was the guiding thought. 

But to the peoples, one fact stood out. The President of the United 
States was shaking hands, exchanging mementos, conversing in a friendly 
fashion, and giving every evidence of approval to some of the most un- 
democratic and unrepresentative chiefs of state in contemporary interna- 
tional affairs. His affability was extended equally to democrat and 
demagague, to constitutionalist and authoritarian. He either did not 
know or did not care about the nature of these presidents. To most 
Latins the latter conclusion seemed more valid. Even moderate critics 
of the U. S. were disheartened. Maintaining diplomatic relations with 
a strong man is one thing, but dealing with him personally at a conference 
presumably symbolic of hemispheric principles of democracy and repre- 
sentative government is an insult to the people. For the dictators, they 
could obtain photographs of a friendly handshake or a discussion with the 
U. S. President, which would then run in the official press. The result 
of all this was further disillusionment with U. S. foreign policy. It was 
again characterized as hypocritical and two-faced. The expression of 
democratic principles, adhered to in apparent seriousness by many of 
the most undemocratic chiefs of state, was cited as the newest instance 
of U. S. official insincerity. 

The previous chapter dealt in some detail with the Panamanian reac- 
tion to the crisis of the Suez. There is no point in reviewing the incident 
at great length. In its anxiety over the middle east crisis, the State 
Department chose to omit Panama from the twenty-two-nation London 
Conference or more accurately, it requested Great Britain, as host, to 
extend no invitation to Panama. They suggested Panama be kept out 
of the meeting entirely. Official though probably went like this: "They're 
not directly involved, aren't really very responsible about this sort of 
thing, and might get bad ideas if they attended. Better keep them out 
of things. It's safer that way." Despite such thoughts, it proved much 
less "safe" to exclude the Panamanians. Their president noted that 



CHALLENGE TO THE UNITED STATES 335 

similarities between the two canals and Panama's large merchant fleet 
provided more than adequate reason for invitation. This was followed 
shortly afterwards by indications of hedging by the U. S. in certain phases 
of the recent Canal Zone negotiation. Then Secretary of State Dulles 
hastily told reporters to discount fears of the Panama Canal being national- 
ized. It was really sovereign territory of the United States, hence beyond 
Panamanian control. The enormity of his blunder was discussed earlier. 
Suffice it to repeat that Dulles never should have made such a statement 
even if it had been true and it was sheer fiction. On the heels of a few 
more such comments, Panamanian nationalization of the Canal would 
become less unlikely than it seems today. 

The most unpopular and most discussed facet of U. S. policy on the 
isthmus is the notorious Guatemalan affair, detailed in Chapter Two. 
From the beginning of the Castillo revolution opinion was wholeheartedly 
against the United States. It began with protests from all corners of the 
hemisphere, both official and otherwise. In Chile, not notably anti-U. S. 
at the time, the U. S. flag was burned and President Eisenhower hung in 
effigy. Expressions of disapproval elsewhere were nearly as violent. The 
Department of State to this day vigorously denies official intervention. 
Yet there is no serious question that it did indeed intervene in favor of 
Castillo. This intervention was limited to somewhat inadequate arms. 
Had the army remained loyal to Arbenz, his government would not have 
fallen. That it turned against him was a sign of the disillusionment 
with the preceding months of official torture and inquisition. The de- 
cision was reached in Washington that intervention would be required, 
regardless of repercussions, in order to uproot the communist regime in 
Guatemala. The tentacles of communism were increasingly threatening 
the rest of the isthmus. Communist propagandists had scoffed at the 
thought that tiny Guatemala might endanger the United States. They 
conveniently ignored the real cause of U. S. concern that communist 
underground activities were increasing throughout the region, taking 
advantage of the natural political instability. The direct goal was not the 
United States, but rather the Panama Canal itseE 

Latin Americans almost universally reject the thesis that the govern- 
ment of Arbenz was communist. Only Guatemalans and a small handful 
of others recognize the fact. To Guatemalans who lived under the 
regime, denials of its communism are as ridiculous as they seem to the 
United States. Many critics of the U. S. would be somewhat more 



336 CENTRAL AMERICA 

sympathetic if they believed that communism precipitated the U. S. 
intervention. However, they have succeeded in convincing themselves of 
the truth of the communist charge that protection of UFCO interests 
motivated the action. Many sincerely believe Secretary Dulles to have 
been in the pay of UFCO, absurd as this may seem in the U. S. They 
recall their pet name for him John Foster Dollars. They are convinced 
that U. S. concern with communism was but a screen behind which the 
vultures of yankee imperialism might swoop down and pick the bones of 
Guatemalans. 

Few Latins are ever likely to appreciate the deep concern of the 
U. S. government legislative as well as executive with the growth of 
communism in the very backyard of the nation. The danger to Central 
America and to the Panama Canal was considered so grave that action 
had to be taken, as it soon was. As for UFCO, its lands had been 
expropriated more than a year before the U. S. action. Had the U. S. 
truly fomented a revolution in protection of UFCO lands, it would never 
have dallied so long. Critics should remember the telling comment of 
one U. S. diplomat stationed in Guatemala: the decoration of every 
United Fruit official with the Order of the Quetzal would never make the 
government of Arbenz less communist, less dangerous to the sub-continent 
and to the Guatemalan people themselves. Communism was the issue, 
not banana expropriation. 

MEETING THE CHALLENGE 

At the heart of United States relations with the republics of Central 
America lies a maze of misunderstandings that blur mutual recognition. 
Through a series of errors, miscalculations, and inadequate explanations 
of policies, both sides have come to misjudge the other with undue 
severity. Increasing irritations have widened the gap between the re- 
publics of the isthmus and the giant of the north, reducing awareness 
of the common bonds and interests shared through recent history. Too 
many official spokesmen have ignored disputes and bypassed serious 
isues with idealistic, stratospheric flights of fancy invoking the ideals of 
Bolivar and Jefferson as the living images before all peoples of the Ameri- 
cas. Yet there is a common ground of security, geography, ideology, and 
history, which must not be forgotten in the midst of controversy. 

Latin American understandings are weakened by an unfortunate 
propensity to find fault whatever the cost. This is among the penalties 



CHALLENGE TO THE UNITED STATES 337 

of international ascendancy. The very fact makes it no less palatable, of 
course. Many Latins, while priding themselves on objectivity and complete 
command of all the circumstances, are decidedly one-sided in their con- 
siderations. The unavoidable Guatemalan occurrence is exemplary. 
Convinced of U. S. intervention, as well they should be, they reject at the 
same time the communism of the Guatemalan regime. They read with 
almost naive credence the outrageously inaccurate books of ex-President 
Ar^valo and ex-Foreign Minister Toriello, accepting them almost adoring- 
ly despite the men's deep personal involvement. This strengthens their 
belief in hated yankee imperialism. At the same time they scoff at books 
on the subject by Daniel James and this author, as well as a recent publica- 
tion by a Guatemalan, each of which recognized grievances on both sides 
of the dispute. The propagandists Arevalo and Toriello polemics became 
the measured scholarship of disinterested bystanders. This propensity 
is one of the more distressing aspects of the picture. Relations with the 
U. S. will at times be tense even if all the facts be known. For those who 
choose to ignore one side of the picture, the result is a highly partisan, 
personal bias. This leads to the impassioned and impotent public gather- 
ings or denunciatory meetings which stir up ill will and contribute nothing 
toward hemispheric harmony. International relations are among the 
several areas where destructive attacks can have no worthwhile value. 
What is needed, and certainly what the United States requires, is not 
subservience or slavish worship. What it does desire is a reasonable 
understanding of the questions involved. The United States hopes that 
the problems and issues may be considered and attacked in a positive, 
constructive manner, such that all the peoples of the Americas will bene- 
fit Foreign relations are as complex here as in other regions of the 
world, and they must be viewed in this light. There are shadings between 
right and wrong, between transgressor and transgressed. Men of good 
will and sincerity of purpose must pursue improved relations by measured, 
well-informed judgment. Unchecked nationalism, fiery denunciations of 
imperialistic powers, and ill-considered speeches are not the paths by 
which an enlightened tomorrow will be approached. United States 
policy, on the other hand, is equally guilty of deteriorating its prestige in 
the past decade. The Good Neighbor Policy is dead. All the chanting 
invocations of the finest statesmen and diplomats will never again breathe 
life into it. Until responsible U. S. policy-makers accept this fact, rela- 
tions on the isthmus must be strained, drawn nervously taut. Thus 



33 8 CENTRAL AMERICA 

will the crisis of Central America today be met, and therein lies the 
challenge. 

Official evaluation of the Latin temperament in recent years has been 
equivocal. The blame lies in part on the attitude common to U. S. career 
diplomats that Central America is the Siberia of the foreign service. 
Further explanation lies in the present world situation, which has pushed 
other underdeveloped areas to the forefront at the expense of Latin Ameri- 
ca. An overriding concern with the battle against international com- 
munism has drawn official attention to other parts of the globe. Focus 
has been almost continually away from this hemisphere. These and 
other factors do not excuse the rash of errors committed since the close of 
World War II. The situation has cried out increasingly for new thought 
and new policy. None has been forthcoming from either Democratic 
or Republican administrations. New impetus must be given to a basic 
re-evaluation of Latin American policy. A choice has to be made between 
expediency and principle, the principle of democracy and representative 
government. The United States dares not continue waving this banner 
in Latin areas while pursuing policies inconsistent with announced ideals. 
Whether intentional or not, this sort of hypocrisy, of saying one thing 
and then smugly doing another, is nurturing a growing disenchantment 
even among the most friendly and enlightened political figures in the 
region. 

The United States must learn to limit its relations with clearly un- 
representative governments to the elements of strictest protocol. Diplo- 
matic business must be maintained, but not extended into the realm of 
military aid, of personal friendship and tacit moral approval of the re- 
gimes, such as has been done time and time again in the past ten years. 
Non-intervention must be restored in deed as well as word. The United 
States must remain true to this principle regardless of the provocation- 
Otherwise it forfeits all right to friendship or cooperation in the area. 
Even in the extreme case of communist Guatemala in 1954 this holds true. 
There, events suggest the eventual fall of the regime without any U. S. 
interference. 

The United States must also increasingly extend its relations with the 
peoples of these nations. There is a tendency for U. S. diplomats and 
government workers to establish their own communities when away from 
die United States. Official reference is repeatedly made to the "U. S. 
colony in Guatemala," the "U. S. colony in Honduras," and so forth. This 



CHALLENGE TO THE UNITED STATES 339 

suggests a habit which is the very antithesis of the idea of stationing 
representatives abroad to understand and learn about the nation in which 
they work. Few diplomats learn the different aspects of a situation by 
limiting their contacts to representatives of the government in power 
and other foreign diplomats, who in turn restrict their sources of infor- 
mation to an equally narrow group. The Department of State must ap- 
preciate fully the great divergence in many instances between what a na- 
tion really is and what it is made to appear by its government. Policy- 
makers in Washington need much more information than what a ruling 
regime wants it to know. 

There are many smaller facets of U. S. hemispheric policy which call 
for re-evaluation. These include the information service program, added 
economic aid, administration of that aid, long-term trade agreements, 
and equalization of a variety of divergent standards. These all call 
for one common denominator a serious and extended consideration of 
all problems in the light of present circumstances. The United States has 
not changed its policy significantly since the institution of the Good 
Neighbor Policy twenty-five years ago. Too long has the U. S. been 
satisfied to let its southern relations slide, accepting individual problems 
as they arrive and treating them separately rather than as part of a com- 
plex entity. The slow erosion of the U. S. position has not been impeded 
in recent years. In many cases it has not even been recognized. The 
time may pass when the United States can halt the disintegration of its 
relations with Latin America. The only firm footing for a lasting future 
consists of renewed, revitalized relations based upon the recognition of 
equality and complete fulfillment of the democratic ideals of the philoso- 
phers of the American Revolution. 

This demands a concomitant realignment of United States policy. 
The process should not be a painful but rather a happy one. The task 
is admittedly difficult. At the same time, the Latin people are crying for 
an appeal to the imagination, predicated upon a thorough and sympathetic 
appreciation of their life, environment, and problems. This challenge 
lies before the United States today. Some have suggested that the nation 
has passed the historic point at which it produces new, original policy. 
I prefer to believe that the United States is just approaching the threshold 
of bold, provocative, imaginative thinking. The challenge awaits, and 
we dare not ignore it. The future of much more than Central America 
itself is at stake. 



340 CENTRAL AMERICA 

John Moors Cabot, a State Department veteran of long service in Latin 
America, has written: "Let us highly resolve that history in our Americas 
shall record that here man learned to cooperate, to progress in peace and 
understanding, to contribute our American share to the advancement of 
our western civilization and our Christian religion. We owe that to the 
splendor of our Pan American ideals." 8 And we owe as much to the 
highest principles upon which the United States has grown to interna- 
tional stature. 



Notes 



CHAPTER ONE 

i. German Arciniegas, The State of Latin America, trans. Harriet de Onis (New York, 
1952), p. 21. 

CHAPTER Two 

1 . German Arciniegas, The State of Latin America, trans. Harriet dc Onis (New York, 
1952), p. 291. 

2. The Pan-American (New York), December, 1949. 

3. Juan Jose" Arevalo, Discursos en la Presidcncia, 1945-47 (Guatemala City, 1947), p. 68. 
(JDM)* 

4. Juan Jose Arevalo, op. cit., p. 52 (JDM) 

5. Daniel James, Red Design for the Americas (New York, 1954), p. 46. 

6. Ibid. 

7. Bertram Wolfe, Three Who Made a Revolution (New York, 1948), p. 295. 

8. Daniel James, op. cit., p. 73. 

9. For a Lasting Peace, For a People's Democracy I (Moscow), February 22, 1952, p. i. 

10. U.S. Department of State, White Paper on Communism in Guatemala (Washington, 

1954). 

n.Jacobo Arbenz, Discourses (Guatemala City, 1951)) pp. 3*6. 

12. John D. Martz, Communist Infiltration of Guatemala (New York, 1956), p. 54. 

i$.New Yor\ Times, February 21, 1954, p. 21. 

14. Spruille Braden, The Communist Threat in the Americas (New York, 1953), p. 10. 

15. Leo A. Suslow, Aspects of Social Reform f in Guatemala, 1944-1949 (Hamilton, 
New York, 1949), p. 107. 

i6.Neus Yor^ Times, May 18, 1952, p. 10. 

17. New Yor/fc Times, February 23, 1953, p. 4. 

1 8. U.S. Department of State, op. cit. 

19. Archer C. Bush, Organised Labor in Guatemala (Hamilton, New York, 1950). 

20. "Official Guatemalan Government Information Bulletin'* (Guatemala City, 1954), 
p. i. 

21. Ibid., p. 2. 

*The initials JDM following a note indicate that the passage in question has been 
translated from the Spanish by the author. 



342 NOTES 

22. Washington Post, March 9, 1954, p. z. 

23. "Tenth Inter-American Conference, Caracas, Venezuela, March 1-28, 1954, Final 
Act, (Washington, 1954), pp. 2-3. 

14. Ibid. 

25. Washington Post, March 15, 1953, p. 12. 

26. New York Times, March 6, 1954, p. I. 

27. John D. Martz, op. cit. t p. 97. 

28. Reprinted from 17. S. News & World Report (May 28, 1954, p. 32), an independent 
weekly news magazine published at Washington. 1954 United States News Publishing 
Corp. 

29. Boston Advertiser, May 23, 1954, p. i. 

30. Washington Post, May 23, 1954, p. I. 

31. Time (New York), June 7, 1954, p. 35. 

32. New York Times, June 24, 1954, p. I. 

33. New York Times, June 26, 1954, p. I. 

34. New Yor% Times, June 28, 1954, p. i. 

35. New Yor^ Times, July 14, 1954, p. 3. 

36. New York Times, July i, 1954, p. i. 

37. El Impartial (Guatemala City), June 17, 1955, p. n. (JDM) 

38. Latin American Report (New Orleans), June, 1956, p. 20. 
Sg.Prensa Libre (Guatemala City), March 17, 1956, p. i. (JDM) 

40. Latin American Report, op. cit. f p. 21. 

41. Hoy (Guatemala City), June 27, 1956, p. i. (JDM) 

42. Hoy, June 29, 1956, p. i. (JDM) 

43. Daniel James, "Church and State in Guatemala,'* The Commonweal (New York), 
September 30, 1955, p. 6. 

44. Ibid. 

45. Guatemalan Trade Union Council Bulletin, May i, 1957, p. i. 

46. New York Times, October 24, 1957, p. i. 

47. New York Times, March i, 1958, p. i. 

CHAPTER THREE 

1. El Diario de Hoy (San Salvador), December i, 1954, p. i. (JDM) 

2. Daniel James, Red Design for the Americas (New York, 1954), p. 217. 
S.Prensa Grdfaa (San Salvador), April 22, 1953, p. i. (JDM) 

4. Diario de Costa Rica (San Jose*), June i, 1954, p. 5. (JDM) 

5. Consultaci6n por los Principles de Trabajo (San Salvador, 1952), p. 5. (JDM) 

6. El Diario de Hoy, March 22, 1954, p. i. (JDM) 

7. El Diario de Hoy, June 8, 1955, p. i. (JDM) 

8. Tim* (New York), January 23, 1956, p. 32. 
g.Prensa Grdfica, February 28, 1956, p. i. (JDM) 
lo.Prensa Grdfica, March i, 1956, p. i. (JDM) 

1 1. Time, March 12, 1956. 

12. El Diario de Hoy, March 6, 1956, p. i. (JDM) 

13. Miami Herald, September, 1956, p. 12. 

iq.Revista Mexicana (Mexico City), November, 1955. (JDM) 
15. Diario de Costa Rica, July 23, 1953, p. 7. (JDM) 

CHAPTER FOUR 

i.William S. Stokes, Honduras (Madison, Wisconsin, 1950), p. 3. 

2. Ibid., pp. 223-4. 

3. Ibid., p. 297. 

4. Russell H. Fitzgibbon (ed.), Constitutions of the Americas (Chicago, 1948), p. 495. 

5. Ibid., p. 484. 



NOTES 343 

6. William S. Stokes, op. cit., p. 193. 

7. Todo (Mexico City), July 10, 1952, p. 7. (JDM) 

8. Diario de Costa Rica (San Jose*), July 30, 1952, p. I. (JDM) 

9. Abel Alexis Latendorf, LatinoamSrica (Buenos Aires, 1956), p. 84. (JDM) 

10. Daniel James, Red Design for the Americas (New York, 1954), p. 220. 

11. La Epoca (Tegucigalpa), June 3, 1954, p. i. (JDM) 

12. El Dia (Tegucigalpa), June 8, 1954, p. i. (JDM) 

13. Diario de Costa Rica t June n, 1954, p. 5. (JDM) 

14. Daniel James, op. cit. t p. 220. 

15. El Dia, July 21, 1954, p. i. (JDM) 

1 6. Diario de Costa Rica, March 17, 1954, p. 5. (JDM) 

17. El Pueblo (Tegucigalpa), July i, 1954, p. i. (JDM) 

1 8. Russell H. Pitzgibbon, op. cit., p. 480. 

19. El Mundo (Tegucigalpa), October 14, 1954, p. 4. (JDM) 

20. Diario de Costa Rica, November n, 1954, p. 13. (JDM) 

21. Time (New York), December 10, 1954, p. 35. 

22. La Epoca, December 17, 1954, p. i. (JDM) 

23. Diario de Costa Rica, August 20, 1955, p. I. (JDM) 

24. Ibid. (JDM) 

25. El Pueblo, May 20, 1956, p. I. (JDM) 

26. La Epoca, July 9, 1956, p. i. (JDM) 

27. Diario de Costa Rica, July 18, 1956, p. 7. (JDM) 

28. Proclamation of the Armed Forces of Honduras, a leaflet released and circulated 
in Tegucigalpa October 21, 1956. (JDM) 

zg.New Yor% Times, October 22, 1956, p. I. 

30. El Dia, March 22, 1956, p. i. (JDM) 

51. Diario de Costa Rica, December 4, 1954, p. 7. (JDM) 

CHAPTER FIVE 

1. A Modern Nicaragua (Managua, I955) P- 7- 

2. Ibid., pp. 5-6. 

3. Ibid., p. 8. 

4. "The Economic Development of Nicaragua" (Baltimore, 1953), p. 5. 

5. A Modern Nicaragua, p. 13. 

6. "The Economic Development of Nicaragua," p. 78. 
j.Novedadcs (Managua), December 12, 1948, p. i. (JDM) 

8. "Inter- American Treaty of Reciprocal Assistance" (Washington, 1948), p. 3. 

9. Novedades, April 5, 1954, p. i. (JDM) 

10. New Yori( Times, April 6, 1954. 

1 1. Diario de Costa Rica (San Jose*), April 24, 1954, p. i. (JDM) 

12. Chicago Daily News, April 26, 1954, p. i. 

13. Novedades, May 5, 1954, p. i. (JDM) 
H.Prensa Libre (San Jose"), June 4, 1954, p. i. (JDM) 
15. Time (New York), August 9, 1954, p. 37. 

i6.La Naci6n (San Jose"), November 28, 1954, p. i. (JDM) 

17. New Yor\ Times, January 10, 1955, p. i. 

iS.Neu/ Yor\ Times, January 13, 1955, p. i. 

ig.La Republica (San Jos), January 14, 1955, p. i. (JDM) 

20. A Modern Nicaragua, p. 18. 

21. La Rfpublica, May 6, 1956, p. i. (JDM) 

22. A Modern Nicaragua, p. 16. 

23. Mercury (New York), September, 1952. 

24. Ibid. 

25. Quoted by a U.S. embassy official during a conversation with the author in Managua. 
2.6. A Modern Nicaragua, p. 12. 



344 NOTES 

27. El Mitndo (Buenos Aires), October I, 1956, p. I. (JDM) 

28. Washington Post and Times-Herald, October i, 1956, p. 12. 
2g.New Yor% Times, February 3, 1957, p. 7. 

30. New Yor Times, July 7, 1957, p. u. 

31. Ibid. 

32. Latin American Report (New Orleans), May, 1958, pp. 19-20. 

33. New Yor 7Yif, April 29, 1958, p. i. 

CHAPTER Six 

i. New Yor^ Times, February 4, 1947. 

2. Roberto Fernandez, La Httelga de Brazos Caidos (San Jose*, 1953)* P- IO - 

3. Ibid., p. 12. (JDM) 

4. /&</., pp. 17-18. (JDM) 

5. Mw Yor^ Times, July 26, 1947. 

6. Roberto Fernandez, op. tit., p. 30. (JDM) 

7. Ibid., p. 35- (JDM) 
8./&W., pp. 36-7- (PM) 

9. Ibid., p. 38. (PM) 

10. Ibid., p. 40. (JDM) 

11. Diario de Costa Rica (San Jose*), February 8, 1947, p. i. (JDM) 

12. Ultima Hora (San Jose"), February 10, 1948, p. i. (PM) 

13. Ultima Hora, March 7, 1948, p. i. (PM) 

14. Arturo Castro, Jose Figueres Ferrer (San Jos, I955)> PP- "6-17- 

15. Ztor/o <fe Corf* Itoa, March 17, 1948, p. i. (PM) 

16. La Naci6n (San Jose"), April 28, 1948, p. i. (JDM) 

17. l////m* Hor*, April 30, 1948, p. i. (PM) 

1 8. Nottedades (Managua), December 12, 1948, p. i. (PM) 
ig.Diario de Costa Rica, December 13, 1948, p. i. (PM) 

20. Ruhi J. Harriett, The Record of American Diplomacy (New York, 1952), pp. 735-36". 

21. La Nation, April 3, 1949, p. i. (PM) 

22. Constitucion Politica de Costa Pica (San Jose, I955) P- 2O - 

23. Diario de Costa Rica, November 4, 1951, p. i. (PM) 

24. Diario de Costa Rica, July 25, 1953, p. i. (PM) 

25. El Hombre Justo (San Jose), January, 1952, pp. 4-18. (PM) 

26. "A Latin American Looks at Point Four" (San Jos6, 1953), pp. 7-15- (JDM) 

27. "Inaugural Address" (San Jose, 1953)* PP- 3-*8. 

28. Ibid., p. 5. 

29. New Yor Times, June 4, 1954, p. x. 

30. Diario de Costa Rica, March 24, 1956, p. 2. (PM) 

31. Otilio Ulate, "Where Does Sr. Figueres Take Costa Rica?" (San Jose*, 1955)* PP- 3-34- 

32. Prensa Libre (San Jose 1 ), February 10, 1957, p. i. (pM) 
33 .7&W.,p. 7. (PM) 

34. La Nation, May 5, 1958, p. 5. (PM) 

CHAPTER SEVEN 

i. German Arciniegas, The State of Latin America, trans. Harriet de Onis (New York, 
1952), p. 283. 

z.Diario de Costa Rica (San Jose"), January 12, 1952, p. i. (JDM) 
S.Estrella de Panama. (Panama City), February 9, 1952, p. i. (PM) 
^.Estrella de Panama, February 20, 1952, p. i. (JDM) 

5. Panama-American (Panama City), May 19, 1952, p. i. (PM) 

6. Estrella de Panama, May 22, 1952, p. i. (PM) 

7. Diario de Costa Rica, July i, 1952, pp. i, 5. (PM) 

8. Diario de Centro America (San Salvador), September 2, 1952, p. i. (PM) 

9. Panama- American, October i, 1952, p. i. (PM) 



NOTES 345 



10. El Diario (Panama City), August 4* 1952. P- i- 

u.Estrella de Panamd, October 24, 1953, p. I. (JDM) 

12. Ibid. (JDM) 

i^.Estrella de Panamd, December 23, 1953, p. i. (JDM) 

14. Christian Science Monitor (Boston), February 19, 1954. 

i^. Estretta de Panama, May 29, 1954, p. I. (JDM) 

1 6. Prensa Libre, (San Jos), October 27, 1947, p. 7. (JDM) 

17. Prensa Libre, December 16, 1947, p. 8. (JDM) 

1 8. Daniel James, Red Design for the Americas (New York, 1954). P. 214- 

ig.Neur Yor^ Times, August 25, 1953, p. i. 

^.Q. Estretta de Panamd, September 3, 1953, p. i. (JDM) 

21. Estretta de Panamd, September 9, 1953, p. i. (JDM) 

22. Panama- American, October i, 1953, p. i. (JDM) 

23. New Yor^ Times, October 14, 1953, p. i. 

24. "Bulletin, November 25, 1953" (Washington), p. i. 

25. Washington Post, January 4, 1952, p. 12. 

26. Time (New York), January 10, 1955. 

27. Washington Post and Times-Herald, January 18, 1955, p. 12. 
zZ.Estrella de Panamd, March 18, 1955, p. x. (JDM) 

29. Panama- American, March 19, 1955, p. i. (JDM) 

30. Estretta de Panamd, March 23, 1955, p. i. (JDM) 

31. Diario de Costa Ricft, February 2, 1954, p. i. (JDM) 

32. La Repubtica (San Jose"), April 26, 1954, p. i. (JDM) 

33. Estretta de Panamd, April 6, 1955, p. i. (JDM) 

34. Ibid. (JDM) 

3$.Estrella de Panamd, May 11, 1956, p. i. (JDM) 

36. Estretta de Panamd, May 15, 1956, p. i. (JDM) 

37. Neur Yor\ Times, August 16, 1956, p. I. 

38. Washington Post and Times-Herald, September 20, 1956, p. n. 

39. Treaty between the Republic of Panama and the Republic of the United States, 
1955, Article III. 

40. The Americas Daily, August 30, 1956, p. 5. 

41. Estretta de Panamd, August 18, 1956, p. i. (JDM) 

42. Estrella de Panamd, September 16, 1956, p. i. (JDM) 
43.EstreIla de Panamd, October 2, 1956, p. i. (JDM) 
44- Ibid. (JDM) 

CHAPTER EIGHT 

i.Novedades (Managua), September 30, 1956, p. i. (JDM) 

2. La Flecha (Managua), October 4, 1956, p. i. (JDM) 

3. John Moors Cabot, Toward Our Common American Destiny (Mcdford, Mass., 1954). 



a 



s 



s 



o 
s 



|o 

2t- 
l II 



6d 8 

-sQ 

5 ^ 



B 



i '3 0fS .i g2 < 
:-?i*7Sai 



:=o 



S-g-S-S-g 



||| 

Ili 

la-alljjft- 

s- s a & j-3-!' S 

S-3 5,-g jg.3v!' s ' s -3f 

!l(S.I|i||||. 
?33 .? 

4>-p>pL,|i 



S3 5 

a-2' 
-S c 



HS rk 
fife . 



-s-s 



I 

1 






i 2 1 

! 



llRa 

iltlli 



"it! 




Bibliography 



Adler, John Hans, with Eugene R. Schlesinger and Ernest C. Olsen. Public 

Finance and Economic Development in Guatemala. Palo Alto, California, 

1952. 

Arbenz, Jacobo. Discursos. Guatemala City, 1951. 
Arciniegas, German. Caribbean: Sea of the New World. New York, 1946. 

. The State of Latin America. Harriet de Onis, trans. New York, 1952. 

Arevalo, Juan Jose*. Discursos en la Presidencia t 7945-47. Guatemala City, 

1947. 

. Escritos Politico* y Discursos. Havana, 1953. 

. La Democracia y El Imperio. Santiago, Chile, 1955. 

Bartlett, Ruhl J., ed. The Record of American Diplomacy. New York, 1952. 
Biesanz, John and Mavis. Costa Eicon Life. New York, 1944. 

. The People of Panama. New York, 1955. 

Bemis, Samuel Flagg. The Latin American Policy of the United States. 

New York, 1943. 

. A Diplomatic History of the United States. New York, 1953. 

Braden, Spruille. The Communist Threat in the Americas. New York, 1953. 
Bush, Archer C. Organized Labor in Guatemala, 1944-1949. Hamilton, New 

York, 1950. 
Cabot, John Moors. Toward Our Common American Destiny. Medford, 

Mass., 1954. 

Canas, Alberto. Los Ocho Anos. San Jose*, Costa Rica, 1955. 
Castro, Arturo. ]os6 Figueres Ferrer, El Hombre y su Obra. San Jose*, Costa 

Rica, 1955. 

Clark, L. B. All the Best in Central America. New York, 1946. 
Consultacidn for los Principales de Trabajo. San Salvador, 1952. 
Crow, John A. The Epic of Latin America. New York, 1946. 



348 BIBLIOGRAPHY 

Del Rio, Angel, ed. Responsible Freedom in the Americas. New York, 1955. 

"The Economic Development of Guatemala." Baltimore, 1951. (Report of a 
Mission from the International Bank for Reconstruction and Development.) 

"The Economic Development of Nicaragua." Baltimore, 1953. (Report of 
a Mission from the International Bank for Reconstruction and Develop- 
ment.) 

Fernandez, Ricardo. History of the Discovery and Conquest of Costa Rica. 
Harry Weston Van Dyke, trans. New York, 1913. 

Fernandez, Roberto. La Huelga de Brazos Caidos. San lose, Costa Rica, 

'953- 

Fitzgibbon, Russell H., ed. Constitutions of the Americas. Chicago, 1948. 
Garcia, Jose. Nuestra Revolucidn Legislativa. Guatemala City, 1949. 
Geiger, Theodore. Communism versus Progress in Guatemala. New York, 

1952. 

Gunther, John. Inside Latin America. New York, 1941. 
Hancock, Ralph. The Rainbow Republics. New York, 1947. 
Hanson, E. P., ed. The New World Guides to the Latin American Republics. 

3 vols. New York, 1950. 

Holleran, Mary P. Church and State in Guatemala. Chicago, 1949. 
Inman, Samuel Guy. A New Day in Guatemala. Wilton, Conn., 1951. 
James, Daniel. Red Design for the Americas. New York, 1954. 
Jones, Chester Lloyd. Costa Rica and Civilization in the Caribbean. San 

Jose, Costa Rica, 1940. 

Kelsey, Vera. Four Keys to Guatemala. New York, 1952. 
Krehm, William. Democracia y Tiranias en El Caribe. Santiago, Chile, 1955. 
Latendorf, Abel Alexis. Latino america. Buenos Aires, 1956. 
MacDonald, Austin F. Latin American Politics and Government. New York, 

*955- 

Martz, John D. Communist Infiltration of Guatemala. New York, 1956. 

May, Stacy, et. al. Costa Rica: A Study in Economic Development. New 
York, 1952. 

Mepia Medardo. El Movimiento Obrero en La Revolucidn de Octubre. Guate- 
mala City, 1949. 

A Modern Nicaragua. Managua, 1955. 

Navarro, Hugo. ]ose Figueres en la Evoluci6n de Costa Rica. Mexico City, 

1953- 

Ordonez, Alberto. ArSvalo Visto For AmSrica. Guatemala City, 1951. 
Peck, Anne Merriman. The Pageant of Middle America. New York, 1947. 
Perkins, Dexter. Hands Offl. Boston, 1945. 
Schurz, William Lytle. Latin America. New York, 1949. 
Statesman's Yearbook 1955. New York, 1954. 
Stokes, William S. Honduras: An Area Study in Government. Madison, 

Wisconsin, 1950. 



BIBLIOGRAPHY 349 

Suslow, Leo A. Aspects of Social Reforms in Guatemala, 1944-1949. Hamilr 

ton, New York, 1949. 

Toriello, Guillermo. La Batalla de Guatemala. Santiago, Chile, 1955. 
Vogt, William. The Population of El Salvador and Its Natural Resources. 

New York, 1946. 
Wallich, H. C. Public Finance in a Developing Country: El Salvador. New 

York, 1951. 
Williams, Mary W. The People and Politics of Latin America. New York, 

1938. 
Worcester, Donald E., and Wendell G. Schaeffer. The Growth and Culture of 

Latin America. New York, 1956. 
Zuiiiga, Angel. Idolo Desnudo. Mexico City, 1939. 



Index 



Agrarian Reform Law (Guatemala), 
provisions, 43-5; UFCO land ex- 
propriation, 48-9; mentioned, 41. 
See also, United Fruit Company 

Alfaro, Ricardo, 284-5 

Amador, Edmundo, 206 

Arana, Francisco, assassination, 38; 
mentioned 37, 45, 189 

Arbenz, Jacobo, early years, 37-8; 
part in Arana assassination, 38-9; 
becomes president, 39-40; legislative 
program, 40, 43-5; anti-America- 
nism, 47; UFCO expropriations, 
48-50; political reprisals, 56-7; re- 
signs, 61; mentioned, 16, 41-2, 58, 
66, 79, 91-2, 109, 329, 335 

Arbenz, Maria Vilanova, 37 

Arellano Bonilla, Roberto, 138 

Ar^valo, Juan Jose 1 , philosophy of 
government, 29-31; UFCO relations, 
50; mentioned, 59, 152, 255-6, 337 

Arguello, Leonardo, 197 

Arias, Arnulfo, as president, 266-8; 
continuing influence, 273, 279, 294, 
298-9, 307 

Arias, Celeo, 115 

Arias, Harmodio, 294 



Arias, Ricardo, becomes president, 
298-9; administration accomplish- 
ments, 304-7; Suez dispute, 312-3; 
mentioned, 202, 291-3, 309, 315 

Arosemena, Alcibiades, 268, 271 

Arosemena, Domingo, 266 

Arrocha Gaell, Catalino, 296 

Aycook, J. Felix, 133, 138-9 

Bannell, Marshall, 57, 187 
Barletta, Heraclio, 308, 311 
Beekman, Francisco, 311 
Berger, Paul, 250-2 
Blanco Cervantes, Raul, 259 
Bolanos, Oscar Adan, 94 
Bonilla, Policarpo, 115-6 
Boyd, Alberto, 314, 315 
Braden, Spruille, 42-3 

Cabot, John Moors, 53, 288, 290, 340 

Calder6n Guardia, Rafael, re-election 
campaign, 216-8; revolutionary ac- 
tivities, 220, 222-3; attempts to re- 
turn from exile, 225-8, 236, 262; 
mentioned, 181-3, 191-6, 212-4 

Calvo, Victor, 301-3 

Canal Zone, and Panama, 264-5; treaty 



INDEX 



351 



renegotiations, 282, 286-93; early 
history, 283-5. $ e * a ^ so Rcm6n, 
Jose* Antonio 

Canessa, Roberto, on coffee prices, 
85; presidential campaign, 97-101 

Caraccioli, Hector, 159^0 

Cardona, Edgar, 227, 229-30 

Carias, Gonzalo, 154 

Carias, Tiburcio, as caudillo, 114-5; 
early political activity, 115-7; &dj 
years in power, 118-20; one-man 
rule, 121-4; *954 campaign, 142-8; 
mentioned, 15, 19, 129-30, 140, 151, 
158, 382 

Caribbean Legion, 185-6, 192, 228, 
255-7. See also Figueres, Jose* 

Carranza, Rafael, 98-104 

Casa de Cultura, 127-8 

Castellanos, Israel, 295-6 

Castillo Armas, Carlos, prepares for 
revolution, 56-60; assumes power, 
62-6; land reform, 66-8; economic 
development, 68-71; internal securi- 
ty, 71-4; church relations, 74-5; 
death, 76; mentioned, 14, 15, 21, 
95, 109, 135, 156 

Castro, Fernando, 239-41, 254. See 
also Partido Democritico Revolu- 
cionario Hondureno 

CEL, See Comisi6n Ejecutiva Hi- 
droele'ctrica del Rio Lempa 

Central America, geography and cli- 
mate, 4-6, 27, 80, 112-3, 164, 210-1, 
264-5; agriculture, 5-6; racial and 
population factors, 6-9; land distri- 
bution, 9-10, 22; unrepresentative 
institutions, 10-20; military tradi- 
tions, 15-6; economic instability, 22- 
6; regional union, 80, 108-111. See 
also Organizaci6n de Estados Cen- 
troamericanos 

CGT, See Confcderacion Guate- 
malteca de Trabajadores 

Chacuatete, 84 



Chamorro, Emiliano, 187, 197, 203 

Chapin, Seldin, 291 

Chiari, Roberto, 271, 273-4 

Civic Betterment Committee, 182, 

242 

CNUS, 33 
Coalicion Patri6tica Nacional (CPN), 

268, 273, 296, 302, 308-9 
Comision Ejecutiva Hidrocle*ctrica del 
Rio Lempa (CEL), 89, 90, 107. 
See also Compania de Alumbrado 
Ele\rico 

Comitc* Nacional dc Unidos Sindicatos 
(GNUS), 33 

Committee of the National Strike, 213 

Communism, in Guatemalan labor 
movement, 31-4; study groups, 32, 
35; opposition to Castillo, 64-5; in 
El Salvador, 91; influence from out- 
side, 91-3; anti-government plots, 
92-3; in Honduras, 135-8; opposi- 
tion to Lozano, 152-4; interest in 
Honduras, 162; in Panama, 279-82; 
mentioned, 2, n. See also Guate- 
mala, El Salvador, Partido Demo- 
cratica Revolucionario Hondureno, 
Partido Panamenista, Vanguardia 
Democratica, Vanguardia Popular 

Compania de Alumbrado El&trico, 
89-90. See also Comisi6n Ejecutiva 
Hidroel&trica del Rio Lempa 

Compania Etectrica de Oriente, 90 

Confederaci6n de Trabajadorcs Cos- 
tarricensenses (CTC), 236 

Confederaci6n General de Trabaja- 
dores de Guatemala (CGTG), 45 

Confederaci6n Guatemalteca de Tra- 
bajadores (CGT), 3 r- 3 , 45 

Conservative Party (Nicaragua), 197, 
206 

Continuismo, 118-9 

Cosenza, Francisco, 64 

Costa Rica, 1949 elections and revolu- 
tion, 212-25; junta rule, 225-31; 



352 



INDEX 



Ulate administration, 231-41; Figu- 

eres administration, 241-63 
Goto, Agusto, 136-8 
CPN, See Coalici6n Patriotica Na- 

cional 

Cruz, Jose* Luis, 77-8 
CTC, See Confedcraci6n de Trabaja- 

dores Costarricensenscs 
Cuenca, Abel, 32 

DAN, 44-5 

Davila, Celeo, 143 

Declaration of Caracas, 55-6. See also 

Dulles, John Foster 
De la Guardia, Ernesto, campaign for 

president, 308-11; election, 315-16; 

early policies, 316-9 
De la Vega, Jose Lasso, 301-2, 304 
Diaz, Carlos Enrique, 61-2 
Diaz, Jose Alvaro, 100-1 
Diaz, Temistocles, 308 
Diaz Zelaya, Filiberto, 143 
Duke, Angier Biddle, 94 
Dulles, John Foster, at Caracas Con- 

ference, 53-5; Dulles Doctrine, 55-6; 

Guatemalan Communism, 60, 63; 

Canal Zone affairs, 288, 312-4; men- 

tioned, 59, 333 
Dur6n, Jorge Fidel, 163 

Echandi Jimenez, Mario, presidential 
candidate, 259-63; mentioned, 238- 

9.331 
Eisenhower, Dwight, 58, 66, 289, 293, 



4 
Eisenhower, Milton, 53 

El Salvador, population, 81; economic 
history, 81-91; communist threat, 
91-6; PRUD political activities, 96- 
104; Lemus administration, 104-11 

Empresa Elfctrica, 70 

Escalante, Manuel, 260-1 

Escobar, Felipe Juan, 301, 303 

Escuela Claridad, 32, 35 



Esquivel, Mario, 185, 187-8, 251-2 
Export-Import Bank, 119, 225 

Federacion Sindicalista de Guatemala 
(FSG), 32-3 

Feuerlein, W. J., 86 

Figueres, Jose*, feud with Somoza, 
181-96; revolutionary leader, 219- 
23; head of provisional government, 
224-5; establishes own party, 237- 
41; becomes president, 241-2; legis- 
lative program, 242-5; UFCO re- 
negotiations, 246-9; political activi- 
ties, 250-4; foreign affairs, 255-8; 
1958 elections, 261-3; mentioned, 
14, 15, 22, 108-9, 204, 305, 328-31. 
See also Caribbean Legion, United 
Fruit Company 

Flores, Oscar, 155 

Flores, Saturnino, 294, 298 

Fortuny, Manuel, communist organ- 
izer, 33-5; early years, 36; influence 
on Arbenz, 38; agrarian reform, 
45; mentioned, 61 

FPL, 31 

Frente Popular de Liberacion (FPL), 

3 1 

FSG, See Federacion Sindicalista dc 
Guatemala 

Funes, Jose Alberto, ambassador to 
Guatemala, 92; campaign for presi- 
dent, 98-102 

Galvez, Juan Manuel, becomes presi- 
dent, 124-8; democratic ideals, 128- 
30; activity in UFCO strike, 131-2, 
135-41; 1954 elections, 142-4; illness, 
149-50; mentioned, no, 146, 157 

Gilvez Barnes, Roberto, 159-60 

Garcia Granados, Jorge, 39 

Giordani, Victor Manuel, 39 

Gonzalez, Luis Arturo, 76 

Good Neighbor Policy, 165 

Goyria, Victor Florcncio, 308-11 



INDEX 



353 



Gruson, Sydney, 57 

Guatemala, communism emerges, 28- 
37; Arbenz administration and com- 
munism, 37-44; anti-Americanism 
and UFCO, 47-52; Caracas Con- 
ference, 52-6; Castillo revolt, 56-63; 
Castillo administration, 63-76; elec- 
tions of 1957-58, 77-9. See also 
United Fruit Company 

Guerra, Virgilio, 32 

Guerra Borges, Alfredo, 35, 40, 46 

Guizado, Jose* Ram6n, acting presi- 
dent, 294-6; connection with Rem6n 
assassination, 297-302; conviction by 
Assembly, 303-5; mentioned, 288-9 

Gutierrez, Victor Manuel, organizes 
PROG, 33; visits Moscow, 34; ri- 
valry with Fortuny, 36; speaks in 
Assembly, 41; directs Octubre, 45- 
6; mentioned, 38, 42, 43 

Hamer, Walter, 248 

Hannah, Matthew, 167 

Heaton, Leonard, 202 

Herbruger, Rodolfo, 269-70 

Herrera, Jorge, 224 

Hillings, Patrick, 58 

Holland, Henry, 53, 195, 290 

Honduras, population and topogra- 
phy, 112-4; Carias administration, 
114-24; Gdlvez administration, 124- 
30; 1954 labor strikes, 130-41; 1954 
elections, 141-51; Lozano adminis- 
tration, 151-9; Villeda administra- 
tion, 159-63 

Hoselitz, Bertrand F., 85-6 

Huertematte, Roberto, 288-9, 2 9 X ? 3^ 

IFE, 278 

Inestroza, Juan Antonio, 133 

Institute) de Fomcnto Econ6mico 

(IFE), 278^ 
Institute Nacional de Viviendas Ur- 

banas (INVU), 257-8 



Inter-American Conference (Tenth), 

52-3 

International Bank for Reconstruction 
and Development, 173, 179, 233 

International Monetary Fund, 207, 
225 

International Railways of Central 
America, UFCO relations, 47; men- 
tioned, 49-50, 70 

INVU, 257-8 

IRCA, See International Railways of 
Central America 

Jimenez, Enrique, A., 266, 286 
Juaregui, Arthur, 139, 141 

Klee, Waldemar Barrios, 45 

La Chorrero del Guayabo, 89-90, 94 

Lahey, Edwin, 190 

Lara, Fernando, 260-1 

Lemus, Jose* Maria, opposition to com- 
munism, 95; campaign for presi- 
dent, 98-104; early years, 104-5; 
legislative program, 105-6; economy 
and trade, 106-8 

Liberaci6n Nacional (Costa Rica), 
221-3 

Liberal Party (Honduras), 115-9, *43> 
147-50, 153-7. $ ee dso Villeda 
Morales, Ram6n 

Liberal Party (Panama), 308-9 

L6pez P&ez, Rigoberto, 203-5, 333 

Lozano Diaz, Julio, replaces Gilvcz, 
149-50; movement toward dictator- 
ship, 151-7; resignation, 158; men- 
tioned, 14, 129 

Maxnenic steamship lines, 179 
Marroquin Wyss, Ernesto, 41 
Marshall, George C., 183 
Martinez, Maximiliano Hernandez, 

81, 82, 92, 98 
Masis, Bruce, 250-1 



354 

MDO, 259-60 

Mendez Montenegro, Mario, 77-8 
Men^ndez, Andres Ignacio, 82 
Menzies, Robert G., 312 
Milla Bermudez, Francisco, 155 
Miro, Rub&i, 297-300, 304 
Moncada, General, 166-7 
Monzon, Elfego, 62-4 
Mora, Manuel, 202, 222-3 
Movimiento Democrftico Oposicionis- 
ta (MDO), 259-60 

National Agrarian Department 
(DAN), 44-5 

National Anti-Communist Front, 63 

National Liberal Party (Nicaragua), 
197-8. See also Somoza, Anastasio 

National Party (Honduras), 115-7, 
143, 147-50, 154, 158 

Nicaragua, industry and natural re- 
sources, 164-5; rise of Somoza, 165- 
8; economic status, 168-81; Costa 
Rican relations, 181-97; Somoza 
dictatorship, 197-201; Somoza as- 
sassination, 201-5; Somoza's succes- 
sors, 205-9 

Nixon, Richard M., 177, 289-90; 305 

OAS, 184-5, 194-6, 228 

ODECA, 80, no-ii; mentioned, 95, 
106 

Oduber, Daniel, 193, 253 

Ordonez, Miguel Angel, 272 

Oreamuno Flores, Alberto, acting 
president, 237; presidential candi- 
date, 260-1 

Organizaci6n de Estados Centroameri- 
canos (ODECA), 80, no-n; men- 
tioned, 95, 106 

Organizaci6n Regional Interameri- 
cana de Trabajo (ORIT), 140-1, 
152 

Organization of American States, 184- 
5, 194-6, 228 



INDEX 



Orlich, Francisco, presidential candi- 
date, 259-62; mentioned 250, 252 

Ortiz, Enrique, 143 

Osegueda, Flix, 109 

Osorio, Oscar, becomes president, 83- 
4; economic development, 84-7; 
agricultural development, 85-7; 
health, housing, and highways, 88- 
90; opposition to communism, 91- 
5; protests to OAS, 93-4; head of 
PRUD, 96-103; mentioned, 14, 107, 
109, in, 328. See also Partido 
Revolucionario de Unificaci6n 
Dem6crata 

PAC, 271 

Panama, Arnulfo Arias administra- 
tion, 266-8; Arosemena provisional 
administration, 268-75; Rem6n ad- 
ministration, 275-82; Canal Zone, 
282-93; Remon assassination, 293- 
304; Ricardo Arias administration, 
304-11; Canal contract dispute, 311- 
5; De la Guardia administration, 

315-9 

Panama Canal. See Canal Zone 
Panama disease, 50-1, 127, 235 
Partido Alianza Civilista (PAC), 271 
Partido Comunista dc Guatemala 

(PCG), 33, 35-6 
Partido del Pueblo, 281-2. See also 

Communism, in Panama 
Partido Democratic, 238, 254. See 

also Castro, Fernando 
Partido Democrltico Revolucionario 

Hondurefio, 133, 137 
Partido Guatemalteco de Trabajo 

(PGT), 35, 61 
Partido Independiente, 259 
Partido Liberacion Nacional (PLN), 

237-9, 246, 250, 253, 259-63 
Partido Panamenista, 269-70 
Partido Reformists, See Reformistas 
Partido Republicano Nacional, 215 



INDEX 



355 



Partido Revolucionario de Obreros 
Guatemaltecos (PROG), 33-4 

Partido Revolucionario de Unifica- 
ci6n Democrdtica (PRUD), 83, 96- 
9; mentioned, 81. See also Osorio, 
Oscar 

Partido Uni6n Nacional (PUN), 154, 

157 

Paz Baraona, Miguel, 117 
PCG, 33, 35-6 

Peralta Salazar, Jos Maria, 99 
Peurifoy, John, 58, 61-2 
PGT, 35, 61 
Picado, Rene, 216-8, 220 
Picado, Teodoro, 212-6, 220-3, 22 9> 

242 

Pineda Gomez, Jos, 137 
Pinto Usaga, Manuel, 33, 43 
PLN, See Partido Liberacion Nacional 
Ponce, Federico, 28, 37 
Potter, William R., 202, 315 
Prio Socorras, Carlos, 186, 189 
PROG, 33-4 
PRUD, See Partido Revolucionario 

de Unificacion Democritica 
PUN, 194, 157 

Quintanilla, Luis, 185 

Ratton, Daniel, 251 
Redmond, Kenneth, 248 
Refonnistas, 142-3, 147-50, 154, 157 
Rem6n, Alejandro, 276, 296, 302, 310 
Rem6n, Cecilia de, 275, 287, 289, 299- 

302 
Rem6n, Jose* Antonio, as police chief, 

267-8; campaign for president, 269- 

75; legislative program, 275-82; 

renegotiation of Canal contract, 282, 

286-91; assassination, 293-300, 319; 

mentioned, 302, 304. See also 

Canal Zone 

Remon y Reyes, Victor, 197 
Rerum Novarum, 96, 236 
Ribas, Jorge, 189 



Roderick, George, 314 
Rodriguez, Roque, 159-60 
Romero, Arturo, 82 
Roosevelt, Franklin D., 177, 201 
Rossell y Arellano, Mariano, 74-5 
Rossi, Jorge, 259, 261-2 
Ruiz Cortines, Adolfo, 205 

Saint Malo, Rodolfo de, 297 

SAMF, 32 

Sanabria, Miguel, 184 

Sandino, Manuel, 167 

Sevilla, Alberto, 194 

Sevilla, Guillermo, 187, 193-4, X 99 

Sevilla, Oscar, 185, 187, 189-91, 203 

Sindicato de Acci6n y Mejoramiento 
de los Fcrrocarrilcros (SAMF), 32 

Sindicato de Trabajadores Educaciona- 
les Guatemaltecos (STEG), 31 

SIP, 198 

Siri, Carlos, 93-4 

Sociedad Interamericana Prensa 
(SIP), 198 

Somoza, Anastasio, early years, 166-8; 
foreign enterprise and finance, 169- 
71; economic development and agri- 
culture, 172-8; education and health, 
179-81; feud with Jos Figueres, 
181-96; as dictator, 197-201; as- 
sassination, 201-5; mentioned, 15, 
19, 20-1, 94, 108-9, 165* 228, 330, 
332-3. See also National Liberal 
Party (Nicaragua) 

Somoza, Anastasio, Jr., position after 
father's death, 202-9; mentioned, 
189, 197 

Somoza, Jose*, 200, 204 

Somoza, Luis, replaces father, 202-3; 
president, 205-9; mentioned, 184, 
189, 197, 204 

Stahlman, James G., 158, 198 

Standard Fruit Company, 133-4, I 4> 
152, 235. See also United Fruit 
Company 



356 

STEG, 31 

Stimson, Henry L., 166 



INDEX 



Taillon, William, 136 
Tejardo, Edgardo, 297-8 
Tela Railroad Company, 132 
Toledano, Vicente Lombardo, 31, 34, 

38 

Toriello, Guillermo, at Caracas Con- 
ference, 53-6, freedom of the press, 
57; communist arms shipment, 
58; Castillo rebellion, 59-61; men- 
tioned, 52, 135, 337 

Toriello, Jorge, 37 

Ubico, Jorge, 28, 37, 43, 72, 82, 329 
Ucl6s, Jos Trinidad, 73-4 
UFCO, See United Fruit Company 
mate, Otilio, opposition leader, 212- 
4; presidential candidate, 216-9; 
presidential administration, 231-41; 
attacks Figueres, 252-3, 255*7; men- 
tioned, 14, 129, 188, 193, 224-5, 245, 
259, 262 

Uni6n Nacional, 215, 226-7, 230, 238 
United Fruit Company (UFCO), en- 
terprises, 47; land expropriation, 
48-9; IRCA relations, 4950; labor 
relations in Guatemala, 50-2; rela- 
tions with Castillo, 68-70; Hon- 
duran strike, 131-41; position in 
Central America, 323-6, 336; men- 
tioned, 127, 130, 277, 279. See also 
Agrarian Reform Law (Guate- 
mala); Figueres, Jos; Glvez, Juan 
Manuel 

United States, occupation of Nica- 
ragua, 165-6, 191, 193; Panamanian 
air base dispute, 285-6, 291; irrita- 
tions caused by foreign policy, 321- 
3; foreign investment, 323-4; recog- 
nition of representative govern- 



ments, 327-8, 331-2; military aid, 
328-9; misunderstood by Central 
Americans, 330; Panama and the 
Canal Zone, 334-6; need for policy 
re-appraisal, 336-40. See also Ar- 
benz, Jacobo; Canal Zone; Dulles, 
John Foster; Guatemala; Inter- 
American Conference 

Valencia, Manuel, 135, 137-8 

Valenzuela, J. Edgardo, 135-6 

Valladares, Paulino, 115 

Vallarino, Bolivar, 271 

Vallarino, J. J., 312 

Vanguardia Democrdtica, 33, 36 

Vanguardia Popular, 214, 220, 225, 
235 

Villeda Morales, Ram6n, 1954 presi- 
dential candidacy, 143-8, 150; exiled, 
155-6; becomes president, 161-2; 
problems of administration, 162-3; 
mentioned, 151, 153, 154, 158. See 
also Liberal Party (Honduras) 

Whelan, Thomas, 201, 332 

White, Lincoln, 135 

Whitman, W. M., 312 

Willauer, Whiting, 139 

Williams Calder6n, Abraham, as vice- 
president, 118-24; *954 presidential 
candidacy, 143, 145-9; mentioned, 
154, 158-9 

Woodbridge, Edmond, 25 

Ydigoras Fuente, Manuel, elected 
president, 78-9; mentioned, 39, 77, 
262 

Zappi, Italo, 271 

Zelaya Reyes, Gregorio, 142 

Zepeda Duron, Fernando, 120 




105535