President Diaz found the country bankrupt. There is much controversy as to how the debt originated, each party blaming it on the other. The truth is that Zelaya had left several millions in the treasury because he had just negotiated a loan with British bankers and had not had time to spend it. He also left a long list of claims because of his high-handed confiscation of property. The revolutionists had doubled the bill by their own destruction of property during the warfare. Wherefore blame is divided. The important fact is that Don Adolfo found his country in debt to the extent of over thirty-two million dollars, a staggering sum to a small republic. He called upon a firm of New York bankers for a loan of fifteen million.
This transaction was arranged through the American State Department by a treaty which the Senate—newly turned democratic when Wilson replaced Taft—refused to ratify. Nicaragua, however, regarded it as an agreement. As security for the loan, the bankers took over the collection of the customs, and arranged to look after the whole business of the national debt. They never advanced the loan. They did advance a million and a half, followed by comparatively trifling sums, to stabilize the currency and reorganize the national bank, but they also took over the bank. Later, when another million was advanced, they took over the operation of the Nicaraguan railway.
President Diaz, now retired to civil life, assumes full responsibility for these transactions. He is a pleasant little gentleman with graying hair and a frank, boyish smile.
“I asked the bankers to do it. I was taking the only means I had to bring my country out of financial chaos. But I became, as a result, the most hated man in Nicaragua.”
In fact, all Nicaragua called him a traitor, accused him of selling the republic to the American capitalists, and rose to overthrow him. For three days, in 1912, the rest of the country poured cannon balls into Managua, until President Diaz asked the United States for protection. Two thousand American marines were promptly landed. Having suppressed the revolution, they left a “legation guard” in Managua as an intimation that the United States stood ready to suppress any further uprisings.
Indirectly these marines make presidents to-day.
Elections in Nicaragua are as much a farce as in Mexico. Whoever controls the polls wins the verdict. Wherefore the Conservative party, which first invited the American bankers, has remained steadily in power. It can be defeated only by revolution, which the marines prevent.
“You ought to be here at election time,” said an old American resident, “and see them run their voters from one booth to another by the truckload. They number about one-tenth of the population, but they always win.”
If the marines were withdrawn—even the Conservatives themselves admitted to me—the present government would be overthrown within twenty-four hours. Nicaragua, as a whole, never endorsed the invitation to the American capitalists. When the Conservatives invited them, the entire country turned Liberal. If Zelaya were to come to life and return to Managua, he would find the republic waiting with open arms. But while the marines are present, the Liberals are helpless.
