From a Whorehouse to a White House

excerpted from the book

Overthrow

America's Century of Regime Change from Haiti to Iraq

by Stephen Kinzer

Times Books, 2006, paper

 

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During the last decades of the nineteenth century, the ideals of social and political reform swept across Central America. Visionary leaders, inspired by European philosophers and nation builders, sought to wipe away the feudal systems that had frozen their countries into immobility. One of them, President José Santos Zelaya of Nicaragua, took his nationalist principles so seriously that the United States felt compelled to overthrow him.

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Zelaya was six weeks short of his fortieth birthday when he was sworn( in as president of Nicaragua. He proclaimed a revolutionary program and set out to shake his country from its long slumber. He built roads, ports, railways, government buildings, and more than 140 schools; paved the streets of Managua, lined them with street lamps, and imported the country's first automobile; legalized civil marriage and divorce; and even founded the nation's first baseball league, which included a team called "Youth" and another called "The Insurgency." He encouraged business, especially the nascent coffee industry. In foreign affairs, he promoted a union of the five small Central American countries and fervently embraced the grand project that had thrust Nicaragua onto the world stage: the interoceanic canal.

Every American president since Ulysses S. Grant had pushed for the canal project. In 1876 a government commission studied possible routes and concluded that the one across Nicaragua "possesses, both for the construction and maintenance of a canal, greater advantage, and offers fewer difficulties from engineering, commercial and economic points of view, than any one of the other route. Slowly the project gained momentum. In 1889 a private company chartered by Congress began dredging near Nicaragua's Atlantic coast. It was undercapitalized and went broke shortly before Zelaya came to power.

One group of men cheered this failure. They were members of a Paris-based syndicate that owned a great swath of land across Panama, where French engineers had tried and failed to build a canal. These men stood to become very rich if they could find a buyer for their land. The only possible customer was the United States government, but it was pursuing the Nicaragua route. Persuading Washington to change course would require a highly sophisticated lobbying campaign o direct it, the syndicate hired a gifted New York lawyer who understood better than anyone else of his generation how to bend government to the will of business.

As American corporations began expanding to enormous size in the late nineteenth century, they encountered a host of organizational and political problems.

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When debate over the canal bill began in the Senate, Mark Hanna delivered a passionate speech favoring the Panama route, illustrating it with a frightening though highly fanciful map purporting to show zones of seismic danger in Central America. His speech and behind-the-scenes lobbying, closely coordinated with Cromwell's parallel efforts, produced the desired result. On June 19, 1902 ... they voted for the Panama route by a margin of forty-two to thirty-four. Soon afterward the House reversed itself and also accepted that route.

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During the years when it appeared that the canal was going to be built across Nicaragua, American officials got along well with President Zelaya. In 1898 the American minister in Managua wrote in a dispatch that Zelaya "has given the people of Nicaragua as good a government as they will permit him .... Foreigners who attend to their own business, and do not meddle with politics which does not concern them, are fully protected." Two years later, Secretary of State John Hay praised Zelaya's "ability, high character and integrity." The American consul at San Juan del Norte, which was to be the Caribbean terminus of the canal, called him "the ablest and strongest man in Central America" and reported that he "is very popular with the masses, and is giving them an excellent government."

After Congress chose the Panama route, this admiration quickly turned to disdain. American officials who had once viewed Zelaya's campaign to promote Central American unity as noble began to see it as destabilizing. His efforts to regulate American companies, once thought of as symbols of his self-confident nationalism, started to look defiant.

"To the State Department, Nicaragua was no longer a country that needed to be coddled or cared for in preparation for future usefulness," the American historian john Ellis Findling later wrote. "Rather, it was now a country that needed to be watched carefully and kept in line."

President Roosevelt plunged into the canal project with unrestrained vigor. Before he could build anything in the Republic of Panama, however, he had to resolve one remaining problem. There was no such thing as a Republic of Panama. Panama was a province of Colombia, and Colombian leaders were reluctant to surrender sovereignty over the proposed canal zone ...

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The United States had little experience in fomenting revolutions. It did, however, have one model. A decade earlier, the American diplomat John L. Stevens had devised a simple plan that allowed a handful of people with little popular support to overthrow the government of Hawaii. Roosevelt decided to adapt that plan for Panama. He would encourage Panamanian "revolutionaries" to proclaim independence from Colombia, quickly give them diplomatic recognition, and then use American troops to prevent the Colombian army from reestablishing control.

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Roosevelt was eager to resolve troubles with foreign nations peacefully when possible, and he took great pride in the fact that during his presidency, the United States never started a conflict in which a single life was lost. He had no sympathy for idle ruling classes like those that had long dominated Central America. In José Santos Zelaya, a man of restless intellect, impatient energy, and reformist zeal, he may even have seen a reflection of himself. As late as 1908, he was still addressing the Nicaraguan leader as his "great and good friend."

Nevertheless, Roosevelt was indirectly responsible for Zelaya's overthrow, because he propounded the principle that justified it. Since 1823, U.S. policy in the Western Hemisphere had been shaped by the Monroe Doctrine, a unilateral declaration that the United States would not tolerate any attempt by European powers to influence the course of events in the Americas. Once work began on the Panama Canal, Roosevelt decided to go further. In 1904 he proclaimed the "Roosevelt Corollary" to the Monroe Doctrine, which asserted the right of the United States to intervene in any country in the Western Hemisphere that it judged to be in need of intervention.

If a nation shows that it knows how to act with reasonable efficiency and decency in social and political matters, if it keeps order and pays its obligations, it need fear no interference from the United States. Chronic wrongdoing, or an impotence which results in a general loosening of the ties of civilized society, may in America, as elsewhere, ultimately require intervention by some civilized nation, and in the Western Hemisphere the adherence of the United States to the Monroe Doctrine may force the U.S., however reluctantly, in flagrant cases of such wrongdoing or impotence, to the exercise of an international peace power.

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... the Philadelphia-based La Luz and Los Angeles Mining Company ... held a lucrative gold mining concession in eastern Nicaragua. Besides his professional relationship with La Luz, Knox was politically and socially close to the Fletcher family of Philadelphia, which owned it.

The Fletchers protected their company in an unusually effective way. Gilmore Fletcher managed it. His brother, Henry Fletcher, worked at the State Department, holding a series of influential positions and ultimately rising to undersecretary. Both detested Zelaya, especially after he began threatening, in 1908, to cancel the La Luz concession.

Encouraged by the Fletcher brothers, Knox looked eagerly for a way to force Zelaya from power.

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In the summer of 1909, [Philander Knox] began orchestrating a campaign designed to turn American public opinion against Zelaya. He seized on several minor incidents in Nicaragua, including one in which an American tobacco merchant was briefly jailed, to paint the Nicaraguan regime as brutal and oppressive. He sent diplomats to Nicaragua whom he knew to be strongly anti-Zelaya, and passed their lurid reports to friends in the press. Soon American newspapers were screaming that Zelaya had imposed a "reign of terror" in Nicaragua and become "the menace of Central America." As their sensationalist campaign reached a peak, President Taft gravely announced that the United States would no longer "tolerate and deal with such a medieval despot."

With this declaration, the United States pronounced Zelaya's political death sentence.

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On December 1, Knox wrote the Nicaraguan minister in Washington an extraordinary letter demanding that Zelaya's government be replaced by "one entirely disassociated from the present intolerable conditions." Nicaraguan schoolchildren study it to this day.

It is notorious that President Zelaya has almost continually kept Central America in tension or turmoil .... It is equally a matter of common knowledge that under the regime of President Zelaya, republican institutions have ceased in Nicaragua to exist except in name, that public opinion and the press have been throttled, and that prison has been the reward of any tendency to real patriotism ....

Two Americans who, this government is now convinced, were officers connected with the revolutionary forces, and therefore entitled to be dealt with according to the enlightened practice of civilized nations, have been killed by direct order of President Zelaya. Their execution is said to have been preceded by barbarous cruelties. The consulate at Managua is now officially reported to have been menaced...

The government of the United States is convinced that the revolution represents the will of a majority of the Nicaraguan people more than does the government of President Zelaya .. . . In these circumstances, the President no longer feels for the government of President Zelaya that respect and confidence which would make it appropriate hereafter to maintain with it regular diplomatic relations.

There was no mistaking the seriousness of this message. "We are stricken to the heart, we are paralyzed," the Nicaraguan minister said after receiving it. Zelaya was also taken aback. He appealed to Mexico and Costa Rica, whose leaders were on good terms with the Taft administration, to intercede on his behalf, but they refused. Then he proposed that a commission made up of Mexicans and Americans come to Nicaragua to investigate the Cannon and Groce cases, and promised to resign if it found him guilty of any wrongdoing. Taft replied by ordering warships to approach both Nicaraguan coasts, and the marines to assemble in Panama.

The Knox Note, as it came to be known, made clear that the United States would not rest until Zelaya was gone. Given the American military forces arrayed against him, he had no alternative but to comply. On December 16, 1909, he submitted his resignation. In his farewell speech to the National Assembly, he said he hoped his departure would produce peace "and above all, the suspension of the hostility shown by the United States, to which I wish to give no pretext that will allow it to continue intervening in any way with the destiny of this country." A few days later he boarded a ship at the Pacific port of Corinto and sailed into exile.

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"On that day [August 21, 1910]," New York Times correspondent Harold Denny later wrote, "began the American rule of Nicaragua, political and economic."

... This was the first time the United States government had explicitly orchestrated the overthrow of a foreign leader. In Hawaii, an American diplomat had managed the revolution, but without specific instructions from Washington. In Cuba, Puerto Rico, and the Philippines, American "regime change" operations were part of a larger war. The overthrow of President Zelaya in Nicaragua was the first real American coup.

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"Sam the Banana Man" [Zemurray] was one of the most colorful figures in the history of American capitalism. In New Orleans he is remembered as a philanthropist who donated $1 million to Tulane University and paid to build a hospital for black women. Agronomists still admire his contributions to the science of banana cultivation. Some Jews consider him an exemplary figure of their Diaspora, an immigrant from Eastern Europe who arrived at Ellis Island as a penniless youth and rose to great wealth and power. In Honduras, people know him as the man who overthrew their government and took over their country.

It is safe to presume that no one in Kishinev, today the capital of Moldova, had ever seen a banana when Samuel Zemurray was born there in 1877. Nor had most people in Alabama, where the renamed Sam Zemurray landed with relatives when he was fifteen years old. He found work as a dock laborer in Mobile. There he watched sailors dump bunches of overripe bananas into the sea. He came up with the idea of buying them and sending them quickly to inland towns. Business boomed. By the time Zemurray was twenty-one, he was worth more than $100,000.

After selling other people's bananas for more than a decade, Zemurray decided to try growing his own. He borrowed half a million dollars, some of it at usurious interest rates of up to 50 percent, and bought fifteen thousand acres of land in Honduras. Once again he was brilliantly successful, easily paying off his loans and becoming a major force in the banana trade. His only problem was the Honduran government.

Like many other American businessmen 1n Central America, Zemurray considered his land a private fiefdom. He resented having to pay taxes and abide by Honduran laws and regulations. That put him in conflict with President Miguel Dávila, who not only insisted that foreign businesses submit to taxation but was campaigning to limit the amount of land foreigners could own in Honduras.

Dávila was a Liberal who had been a protégé of the deposed Nicaraguan leader José Santos Zelaya. When Zelaya fell, he lost a vital political and military ally. Among those who realized this was Sam Zemurray. He decided that Dávila was now ripe to be overthrown, and with typical resolve set out to do the overthrowing himself.

The first thing Zemurray needed was a pretender, someone who could take over the Honduran presidency and run the country on his behalf. Bonilla, a conspiracy-minded former general who had once before seized the presidency, was an ideal candidate.

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The United States had a special interest in Honduras at this moment. Under a series of Liberal presidents, Honduras had fallen into the habit of borrowing money from European banks. President Taft and Secretary of State Knox disapproved of this practice, just as they had disapproved of Zelaya's railroad loan in 1909. They asked President Dávila to transfer his debt by accepting a $30 million loan from the American banking firm of J. P. Morgan, most of which would be used to pay off the European creditors. To guarantee repayment, J. P. Morgan would take over the Honduran customs service and oversee its Treasury, in effect turning the country into a protectorate.

This proposal put President Dávila in an impossible position. He knew that if he accepted the loan, many of his fellow Liberals would erupt in anger. If he rejected it, the Americans were certain to punish him.

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Officials in Washington were ambivalent when the Honduran revolution broke out, but they soon concluded that its success would benefit the United States. They considered Dávila untrustworthy because of his well-known Liberal sympathies and feared that, if allowed to remain in office, he would become a dangerous symbol of independence who might inspire nationalists elsewhere in Central America. His doubts about the Morgan loan confirmed his lack of deference to American power. Bonilla, on the other hand, was eager to lead Honduras into what would necessarily be a highly unequal partnership with the United States. It was an easy call.

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President Bonilla handsomely rewarded the man who had placed him in power. Soon after taking office, he awarded Zemurray 10,000 hectares of banana land-about 24,700 acres-near the north coast. Later he added 10,000 hectares near the Guatemalan border. Then he gave Zemurray a unique permit allowing his businesses to import whatever they needed duty-free. Finally, he authorized Zemurray to raise a $500,000 loan in the name of the Honduran government, and use the money to repay himself for what he claimed to have spent organizing the revolution.

With assets like these, it is no wonder that Zemurray soon became known as "the uncrowned king of Central America." He was certainly the king of Honduras. After Bonilla's death in 1913, he controlled a string of presidents. In 1925 he secured exclusive lumbering rights to a region covering one-tenth of Honduran territory. Later he merged his enterprises with United Fruit and took over as the firm's managing director. Under his leadership, United Fruit became inextricably interwoven with the fabric of Central American life. According to one study, it "throttled competitors, dominated governments, manacled railroads, ruined planters, choked cooperatives, domineered over workers, fought organized labor and exploited consumers." Four decades later, this uniquely powerful company would help overthrow another Central American government.


Overthrow

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