Nicaragua: The First Real American Coup


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.

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 to 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. Many turned for help to William Nelson Cromwell. In appearance Cromwell was almost eccentric, with light blue eyes, a fair complexion, and long locks of snow-white hair. Behind that odd façade lay a brilliantly sharpened mind. Cromwell’s business triumphs were legendary.

As both a master of corporate law and consummate Washington lobbyist, Cromwell was an ideal partner for the French canal syndicate. In 1898 the chief of the syndicate, Philippe Bunau-Varilla, hired him and gave him a daunting assignment: arrange for the U.S. to build its canal across Panama instead of Nicaragua.

It is also around this time that probably the most influential stamp in history first appears. To the naked eye, this stamp looks unremarkable. It is printed in purple and depicts a steaming volcano at the edge of a lake. Around the edges are the words “Nicaragua”, “Correos”, “5 Centavos” and, in tiny letters at the bottom, “American Bank Note Company NY”. The stamp set off a chain of events that reverberates to this day.

Like a number of other small countries, Nicaragua had hired this reputable New York firm to manufacture its postage stamps. The company’s designers produced stamps that showed Nicaragua’s most notable geographical landmarks. Among them was a series depicting the majestic Momotombo volcano, complete with a plume of smoke spiraling from its crater.

By coincidence, 1902 (2 years after the stamps were published) was a year of extraordinary volcanic activity in the Caribbean. In May a devastating eruption killed 30,000 people on the island of Martinique. Soon there was another eruption, on St. Vincent. American newspapers were full of horrifying stories about the destructive power of volcanoes, and for several months the public mind was seized by a kind of volcano hysteria. Cromwell realized that he could take great advantage of this happenstance.

Few people in Washington knew that Momotombo is nearly dormant and that it lies more than 100 miles from the proposed canal route. 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, three days after the senators received the Momotombo stamps, they voted for thePanamaroute by a margin of 42 – 34. For his lobbying services, Cromwell collected a fee of $800,000.

On June 29th , President Roosevelt signed the law authorizing construction of a canal across Panama. Today a block of the Momotombo stamps is prominently displayed at the Interoceanic Canal Museum there.

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 aprovince of Colombia, and Colombian leaders were reluctant to surrender sovereignty over the proposed canal zone.

“I feel there are two alternatives,” Roosevelt wrote to Secretary of State Hay. “(1) To take up Nicaragua; (2) in some shape or way interfere when it becomes necessary so as to secure the Panama route without further dealing with the foolish and homicidal corruptionists in Bogota”. After a brief reflection, he chose the second option.

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.

On November 2, 1903, the American gunboat Nashville anchored at Colon on Panama’s Caribbean coast. The next day a hastily assembled group of rebels announced in the provincial capital, Panama City, that they were declaring Panama independent. A second American warship, the Dixie docked at Colon on November 5 and put 400 marines ashore. The next day the United States formally recognized the rebels as leaders of a new Republic of Panama. Eight more gunships quickly appeared in the waters off Colon, forming a blockade that made it impossible for Colombian vessels to reach the breakaway providence. One historian called it “as brazen – and successful – act of gunboat diplomacy as the world has ever seen.”

Back to Nicaragua…

Like idealists and utopians up to the present day, Zelaya dreamed of reestablishing the united Central America that existed from 1821 – 1838. In 1902 he called the presidents of the other four Central American countries – Guatemala, El Salvador,Honduras, and Costa Rica – to a conference at which he hoped to launch accords, but soon the isthmus fell back into the age-old conflict between Conservatives and Liberals.  Zelaya began trying to impose his will, first by applying political pressure and then by sending military expeditions into Honduras and El Salvador.

This threatened to create a full scale Central American war which would endanger the United States Panamanian canal and give European nations, such as Germany, an excuse to intervene to protect the collection of their bank’s payments in the region or if failing that then demand a land concession.

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.

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.

Roosevelt left the presidency in March 1909. His successor, William Howard Taft, was very close to big business, and chose Philander Knox, a highly successful corporate lawyer and former attorney general, to be Secretary of State. Knox had spent years representing major American corporations, most notably Carnegie Steel, and had worked closely with William Nelson Cromwell to organize the company that became United States Steel. One of his most cherished clients was the Philadelphia-based La Luz and Los Angeles Mining Company which 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. Knox’s anger flared when Zelaya signed an agreement to borrow £1.25 million from European banks to finance his dream project, a coast-to-coast railroad. Knox had nothing against the railroad, but he understood perfectly well that by borrowing money from European rather then American banks, Zelaya was trying to make his country less dependent on the United States. This he could not abide.

In the summer of 1909, 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. American businessmen in Bluefields, the main town in the Caribbean coast, rushed to carry out the execution.  With tacit approval from the American consul, William Moffett, they formed a conspiracy with the ambitious provincial governor, General Juan Jose Estrada. On October 10, 1909, Estrada declared himself president of Nicaragua and appealed to the U.S.for diplomatic recognition.

This revolution was extraordinarily well financed. The chief accountant for the La Luz Mining Company, Adolfo Diaz, served as its treasurer. American companies operating in and around Bluefields sent him large sums of money. The cost of the revolution has been variously estimated at between $63,000 and $2 million.

Estrada used much of the money to raise and equip a militia. It did not prove a great fighting force. His march to Managua quickly bogged down to the jungle.  Zelaya sent his troops to crush it. The revolution was quickly collapsing, the U.S.needed a pretext to intervene. Zelaya gave them one.

Estrada’s call for rebel fighters, like every call for fighters in Central America, had attracted dozens of American adventurers, mercenaries, and gunslingers. Two would go down in Nicaraguan history: Lee Roy Cannon and his buddy Leonard Groce. The two men carried out several operations together. After one of them, both were captured and confessed to having laid a mine in the San Juan River with the intention of blowing up the Diamante, a naval vessel that was carrying 500 Nicaraguan soldiers. Both were summarily convicted of “the crime of rebellion” and sentenced to die. Zelaya rejected their pleas for clemency, and early on the morning of Nov. 17, 1909, they were put to death by firing squad.

As soon as news of the executions reached Washington, Knox fired off an angry note to the Nicaraguan foreign minister declaring that the U.S. would “not for one moment tolerate such treatment of American citizens”. Then he issued an official legal opinion holding that because Estrada’s rebellion had given his men the “stature” of belligerents, Cannon and Groce had been entitled to prisioner-of-war status. That made Zelaya a war criminal.

Knox tried to persuade Guatemala, El Salvador, and Costa Rica to send armies Nicaragua to topple Zelaya, but all three refused. That left the secretary of state and President Taft to decide on whether the U.S.should act alone. They had no trouble making up their minds.

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 [Zelaya] 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.

With the seat of power vacant, General Estrada was able to march unopposed to Managua. While under way, he sent a telegram to Secretary of State Knox assuring him American leaders of “the warm regard entertained for them by the victorious party of the revolution”. He entered the capital and was sworn in as president on August 21, 1910.

“On that day,” 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 thePhilippines, American “regime change” operations were part of a larger war. The overthrow of President Zelaya in Nicaragua was the first real American coup.

Thanks for reading,


The article above is comprised of excerpts and information from “Overthrow: America’s Century of Regime Change from Hawaii to Iraq” by Mr. Stephen Kinzer.

4 responses to “Nicaragua: The First Real American Coup”

  1. First may have been an economic confrontation between C. Vanderbilt funding C.A. goverments to defeat idealist William Walker all because $$$$$

  2. Very interesting and also very sad, as you see the US continuing to do the same thing over and over again even in the present day. Supporting a foreign leader until he’s no longer ‘useful’ to the US, and then setting off a campaign of lies to bring him down. One of the world’s worst countries, IMO.

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