COMPANY STORE
By Tom Sanders
The clerks running the U.S. conmpany store in Central America known as "Nicaragua, Incorporated" realize that they will soon face new problems. The light from the fires lit by guerrilla forces in neighboring Guatemala are sufficient to throw frightening Vietnameselike shadows on Nicaragua's store windows.
However, it is nothing new for the people of Central America to be involved in wars of this kind.
William Walker's North American filibusters in the 1850's were the first to give Nicaraguans the baptism of U.S. firepower; but their visit was brief, although it met little opposition. The first invasion of Nicaragua by United States forces in the twentieth century took place in 1909; and by 1926, during the third invasion, there was major resistance.
The second occupation by U.S. troops started in 1912 and lasted for fourteen years.
It was very profitable for the foreign owners of the property and investments the soldiers "protected." The principal business venture of the New York bankers was the purchase of a modest 51% of the stock of the Pacific railway from which they enjoyed a fantastic 20.75% return annually upon their origi-
nal investment.
As a sideline, and in order to
"help" the Nicaraguan government with its
so-called fiscal reforms, the friendly
American bankers founded the National
Bank of Nicaragua as called for by Nica-
raguan law, but organized the bank as a
Connecticut corporation under a charter
certified by the Connecticut secretary
of state on June 7, 1912, the very year
this occupation began!
It opened for business two months
later with a board of directors composed
100% of North Americans. But the board
was democratically minded and only one
year later permitted the Nicaraguan gov-
ernment to appoint two members.
A further step towards the solu-
tion of Nicaragua's financial crisis was
made by the friendly American bankers
when they discovered that it was within
Nicaraguan law to make the notes of the
bank legal tender, eliminate import du-
ties on necessary supplies, gain tax ex-
emption and maintain their reserves on
deposit in U.S. banks. The bankers more
than showed their sense of fair play by
agreeing to a time limit to their bank
concession, a conservative 99 years!
Banking is difficult for people to
understand, especially in a country like
Nicaragua where the national literacy
rate is 33%. But treaties are another
matter.
In 1926, a Liberal party revolt, headed by General José Maria Moncada, attempted to overthrow the regime of President Emiliano Chamorro, a general who owed his position to the U.S. marines and who showed his appreciation by signing the Bryan-Chamorro treaty.
This ceded to the United States "in perpetuity and for all time" (Article I), "free from all taxation or other public charge, the exclusive proprietary rights necessary and convenient for the construction of a canal, by way of any route over Nicaraguan territory," together with the perpetual privilege of fortifying the Corn Islands and of constructing a naval base on the Gulf of Fonseca, for a price of $3,000,000 (Article III) that must remain in the U.S. to cover Nicaragua's debts and credits.
The treaty was immoral, because Nicaragua was not a free agent, and illegal because her 1905 constitution specifically forbade all public servants from Signing any treaty unless authorized to do so by Congress.
In 1917 the Court of Central American Justice also declared the treaty to be illegal.
In order to maintain legality, the government cancelled the constitution and convened three constitutional congresses in a row. Each time, however, Congress retained the treaty regulation article.
The U.S. opposed Moncada in his attempt to overthrow Chamorro in 1926 and to make sure that the revolt failed, U.S. Secretary of State Kellog denounced Central America and Mexico as centers of Communist propaganda and sent the U.S. marines.
The marines soon had the situation well in hand and imposed a new election plan which was contrary to Article 84, paragraph 2, of the Nicaraguan constitution which states that Congress shall "regulate the votes, judge and declare the election of President and Vice President...
But one of Moncada's lieutenants, a farmer and mining engineer named