How a Nicaraguan Revolt Altered American Foreign Policy

The first ship to pass through the Panama Canal at the formal opening, SS Ancon, Aug. 15, 1914. Public Domain

During the mid- to late-1800s, revolution swept through Latin America. Most countries were politically dominated by the Liberal and/or Conservative parties. Nicaragua was a latecomer in the revolutionary movement. The country had been under Conservative rule for about 30 years before the party splintered, and the Liberals shoved their way to power in 1893 with military assistance. José Santos Zelaya became president of Nicaragua, a position he would hold for nearly 20 years.

José Santos Zelaya, President of Nicaragua. Illustration in Harper's Weekly, 1895. Public Domain

In many ways, these revolutions were inspired by the American way of life with the push for technological modernization and the end of religio-political dominance. Zelaya’s Liberal leadership was not entirely liberal in the classical sense. Though he pushed for urbanization, better communication technology, efficient commerce through railroad and shipping, and improved education, Zelaya had  issue imprisoning or assassinating political opponents and critics.

As Nicaragua’s economy grew, groundwork was laid for an economic boom. The country was heavily favored as the location for a new canal across the Central American isthmus.

Considering the Canal

The construction of a canal was not a new idea (actually tracing back to the 16th century). In 1850, the Clayton-Bulwer Treaty was signed between America and Great Britain, ensuring neither country would single-handedly build the canal, thereby guaranteeing neither country would colonize nor control any country in Central America. Additionally, if a canal were to be constructed, it would be by both countries and also protected by both countries.

The need for a canal was made painfully obvious to the Americans during the Spanish-American War when the USS Oregon battleship took two months to travel from California to Cuba. A shortcut through Central America would not only significantly reduce sailing time, but would greatly assist global commerce.

Less than a year after the war, the United States government created the Isthmian Canal Commission to determine the most practicable route across the isthmus. The commission conducted its geographical investigation from 1899 to 1901 and issued its report in November of 1901, recommending Nicaragua.

A New President and Canal Location

While the commission was conducting its surveys, President William McKinley directed Secretary of State John Hay to renegotiate the Clayton-Bulwer Treaty. The result was the Hay-Pauncefote Treaty of 1901 (named after the British ambassador to the United States, Lord Julian Pauncefote), which was signed during this week in history, on Nov. 18, 1901. This treaty granted America the power to construct and fortify the canal, while giving the British equal access. By the time the treaty was ratified on Dec. 16, 1901, McKinley was dead—assassinated on Sept. 14—and Theodore Roosevelt was president.

Concurrently, the French had been working on its isthmus canal in Panama, a province of Colombia, since 1881; the effort had been an unmitigated disaster. A month after the U.S. commission issued its report, the Compagnie Nouvelle du Canal de Panama offered to sell its equipment to the Americans and the commission issued its recommendation for Panama.

Hay, who remained Secretary of State for Roosevelt until 1905, renegotiated the Hay-Pauncefote Treaty. Thus, two years later, also during this week in history, on Nov. 18, 1903, the Hay-Bunau-Varilla Treaty, which gave America exclusive rights to the Panama zone, was signed, making Panama the canal’s location, much to the chagrin of the Nicaraguans and Zelaya.

Additionally, two weeks prior to this signing, Panama became its own country, separating itself from Colombia after the successful Panamanian Revolution. Roosevelt is often criticized for his influential support of the revolution.

Map showing the railway and the proposed Panama Canal route. Public Domain

Dealing With Zelaya

Embittered, Zelaya, once favored in Washington, became a staunch anti-American. He had grown into his dictatorial role by ruthless suppression of opposition, while ignoring his Liberal constituents. According to Christopher Minster, professor at the Universidad San Francisco de Quito in Ecuador, Zelaya and his political cronies “​​sold concessions to foreign interests and kept the money, siphoned off of lucrative state monopolies, and increased tolls and taxes.” Nicaragua grew into a regional power, enabling it to disrupt neighboring republics. Zelaya had great aspirations. His grand design was to consolidate the Central American republics under his rule.

Roosevelt and his new secretary of state, Elihu Root, were increasingly concerned about Nicaragua’s growing power and destabilizing efforts. This led to the Washington Conference in 1907, where the American and Mexican governments created the Central American Court of Justice (often considered the forerunner of the Permanent Court of International Justice at The Hague, established in 1922), which encouraged and enabled negotiations among the Central American republics. Roosevelt and Root agreed that working hand-in-hand with the Porfirio Díaz-led Mexican government to encourage Central American cooperation was the best path. In 1908, their efforts helped halt the outbreak of war in the region.

A New President and Policy

Roosevelt’s successes in Central America came to an end as his presidency concluded in 1909, though he hoped his policies would continue via his hand-picked successor, William Howard Taft. Taft, however, strayed from Roosevelt’s methods.

Taft and Secretary of State Philander C. Knox (along with Assistant Secretary Huntington Wilson, who served as Acting Secretary during Knox’s absences), developed a new policy called “Dollar Diplomacy.” America would purchase the European loans of Latin American countries, and resupply them with new ones at better rates. Along with the policy’s commercial interests, purchasing these often defaulted loans ensured that European countries weren’t tempted or obliged to intervene further economically, politically, or, worse, militarily. By “substitution of dollars for bullets,” Taft hoped to maintain America’s century-long Monroe Doctrine.

Secretary of State Philander Knox in 1904. Public Domain

European intervention was the least of Taft’s troubles. Increasing conflict with Zelaya soon altered America’s geopolitical strategies in Latin America and led directly to what Taft had hoped to avoid.

A Timely Rebellion

With America committed to a canal in Panama, rumors swirled that Zelaya had been in negotiations with the Japanese government to construct a Nicaraguan canal. These 1908 rumors were compounded by the increasingly poor treatment of American diplomats, forcing Knox to recall the Chargé d’Affaires from Managua. American businesses received poor treatment as well, such as the Emery Claim; the Nicaraguan government canceled an American logging company’s concessions and confiscated its equipment.

Knox viewed Zelaya as “the cause of all the unrest which now blocks the material and political progress of Central America.” Removing Zelaya was desirable, but there was hardly opportunity. That was until the fall of 1909.

Zelaya’s misdeeds had come back to haunt him. Members of his Liberal party had become disaffected with him, not to mention those in the Conservative party. A revolt was in the works, and it was not just America that was interested in Zelaya’s downfall. Nicaragua’s neighboring republics were too. In October, Juan Estrada, governor of Nicaragua’s East Coast, launched a Conservative rebellion. Despite Acting Secretary Wilson’s wishes, the U.S. State Department declared itself neutral.

A Fateful Choice

About a month into the rebellion, a large group of revolutionaries were captured by Zelaya’s forces in El Castillo. Among these were two Americans, Lee Roy Cannon and Leonard Groce. Cannon and Groce were captured while placing mines in the San Juan River. The two were brought before a military tribunal and confessed.

“We implore our pardon from Gen. Zelaya, but quick. The council has sentenced us to death,” Cannon wrote to Nicaraguan Vice Consul Henry Caldera on Nov. 14. Caldera consulted Zelaya, who responded casually. Caldera informed Cannon that he had consulted the president and was awaiting his decision. Zelaya’s decision would lead to his undoing.

It was during this week in history, on Nov. 17, 1909, that Cannon and Groce were executed by firing squad. Conversely, a Frenchman who had been captured at the same time was spared execution.

“It is to be noted that the sentenced men were well known in Central American revolutions; that they had been arrested for like offenses … and that Cannon was recently sentenced to the penitentiary in Honduras for taking an active part against Nicaragua,” Nicaraguan Chargé d’Affaires Felipe Rodriguez wrote to Knox on Nov. 19. “All this will be fully substantiated by the record of the trial which is now on the way and which will, I have no doubt, be the best justification of the action of the Nicaraguan military tribunal.”

Taft and the State Department were incensed, and more so after receiving a memo from Caldera the following day. “It is very seldom that anybody in Nicaragua has dared to express an opinion contrary to that of the President. … Nevertheless in this occasion knowing that the execution of these two men was one of his most unpopular acts he hastened to do it, it is believed, not so much because they were revolutionists, but because they were Americans.”

A Clear Response

Taft, who had been content to remain neutral, made a fateful decision for Zelaya and American diplomacy on Nov. 18 by dispatching two warships to the coast of Nicaragua. The rebellion continued, and it was obvious that America supported the Conservatives. The support was made unmistakable by Knox’s public response to Rodriguez’s message.

He did not mince words, calling Zelaya’s regime “a blot upon the history of Nicaragua and a discouragement to a group of republics whose aspirations need only the opportunity of free and honest government.”

Washington severed diplomatic relations, and it now accepted both the Zelaya government and the rebellion leaders on equal terms. Knox further placed the murder of Cannon and Groce, as well as Central America’s ongoing political instability, at Zelaya’s feet.

“In pursuance of this policy, the Government of the United States will temporarily withhold its demand for reparation, in the meanwhile taking such steps as it deems wise and proper to protect American interests,” Knox added. Such steps included 1,000 Marines sailing toward Nicaragua by way of the U.S. Navy. Zelaya resigned on Dec. 16 and fled to Mexico. It was, according to foreign policy analyst and author Sean Mirski, the first time “officials in Washington had openly toppled a foreign government.”

USS Missouri, an Iowa-class battleship, passes through the canal in 1945. Public Domain

Never miss a This Week in History story! Sign up for the American History newsletter here.

What arts and culture topics would you like us to cover? Please email ideas or feedback to [email protected]