Finance.—Within the republic there are six banks of issue, to which the government is deeply indebted. There is practically neither gold nor silver in circulation, and the value of the bank-notes is so fluctuating that trade is seriously hampered. On the 25th of June 1903, the issue of bank-notes without a guarantee was restricted; and thenceforward all banks were compelled to retain gold or silver to the value of 10% of the notes issued in 1904, 20% in 1905 and 30% in 1906. This reform has not, to any appreciable extent, rendered more stable the value of the notes issued. The silver peso, or dollar, of 100 centavas is the monetary unit, weighs 25 grammes .900 fine, and has a nominal value of 4s. Being no longer current it has been replaced by the paper peso. The nickel coins include the real (nominal value 6d.), half-real and quarter-real. The metric system of weights and measures has been adopted, but the old Spanish standards remain in general use.
Of the revenue, about 64% is derived from customs and excise; 9% from property, road, military, slaughter and salt taxes; 1.7% from the gunpowder monopoly; and the remainder from various taxes, stamps, government lands, and postal and telegraph services. The estimated revenue for 1905-1906 was 23,000,000 pesos (about £328,500); the estimated expenditure was 27,317,659 pesos (£390,200), of which £242,800 were allotted to the public debt, £42,000 to internal development and justice, £29,000 to the army and the remainder largely to education. The gold value of the currency peso (75 = £1 in 1903, 70 = £1 in 1904, 58 = £1 in 1905) fluctuates between limits so wide that conversion into sterling (especially for a series of years), with any pretension to accuracy, is impracticable. In 1899 the rate of exchange moved between 710% and 206% premium on gold. According to the official statement, the gold debt, which runs chiefly at 4% and is held in Germany and England, amounted to £1,987,905 on the 1st of January 1905; the currency debt (note issues, internal loans, &c.) amounted to £704,730; total £2,692,635, a decrease since 1900 of about £300,000.
Government.—According to the constitution of December 1879 (modified in 1885, 1887, 1889 and 1903) the legislative power is vested in a national assembly of 69 deputies (1 for every 20,000 inhabitants) chosen for 4 years by direct popular vote, under universal manhood suffrage. The president of the republic is elected in a similar manner, but for 6 years, and he is theoretically not eligible for the following term. He is assisted by 6 ministers, heads of government departments, and by a council of state of 13 members, partly appointed by himself and partly by the national assembly.
Local Government.—Each of the twenty-two departments is administered by an official called a jefe politico, or political chief, appointed by the president, and each is subdivided into municipal districts. These districts are administered by one or more alcaldes or mayors, assisted by municipal councils, both alcaldes and councils being chosen by the people.
Justice.—The judicial power is vested in a supreme court, consisting of a chief justice and four associate justices elected by the people; six appeal courts, each with three judges, also elected by the people; and twenty-six courts of first instance, each consisting of one judge appointed by the president and two by the chief justice of the supreme court.
Religion and Instruction.—The prevailing form of religion is the Roman Catholic, but the state recognizes no distinction of creed. The establishment of conventual or monastic institutions is prohibited. Of the population in 1893, 90% could neither read nor write, 2% could only read, and 8% could read and write. Primary instruction is nominally compulsory, and, in government schools, is provided at the cost of the state. In 1903 there were 1064 government primary schools. There are besides about 128 private (occasionally aided) schools of similar character, owners of plantations on which there are more than ten children being obliged to provide school accommodation. Higher instruction is given in two national institutes at the capital, one for men with 500 pupils and one for women with 300. At Quezaltenango there are two similar institutes, and at Chiquimula there are other two. To each of the six there is a school for teachers attached, and within the republic there are four other schools for teachers. For professional instruction (law, medicine, engineering) there are schools supported by private funds, but aided occasionally by the government. Other educational establishments are a school of art, a national conservatory of music, a commercial college, four trades’ schools with more than 600 pupils and a national library. There is a German school, endowed by the German government.
Defence.—For the white and mixed population military service is compulsory; from the eighteenth to the thirtieth year of age in the active army, and from the thirtieth to the fiftieth in the reserve. The effective force of the active army is 56,900, of the reserve 29,400. About 7000 officers and men are kept in regular service. Military training is given in all public and most private schools.
History.—Guatemala was conquered by the Spaniards under Pedro de Alvarado between 1522 and 1524. Up to the years 1837-1839 its history differs only in minor details from that of the neighbouring states of Central America (q.v.). The colonial period was marked by the destruction of the ancient Indian civilization, the extermination of many entire tribes, and the enslavement of the survivors, who were exploited to the utmost for the benefit of Spanish officials and adventurers. But although the administration was weak, corrupt and cruel, it succeeded in establishing the Roman Catholic religion, and in introducing the Spanish language among the Indians and Ladinos, who thus obtained a tincture of civilization and ultimately a desire for more liberal institutions. The Central American provinces revolted in 1821, were annexed to the Mexican empire of Iturbide from 1822 to 1823, and united to form a federal republic from 1823 to 1839. In Guatemala the Clerical, Conservative or anti-Federal party was supreme; after a protracted struggle it overthrew the Liberals or Federalists, and declared the country an independent republic, with Rafael Carrera (1814-1865) as president. In 1845 an attempt to restore the federal union failed; in 1851 Carrera defeated the Federalist forces of Honduras and Salvador at La Arada near Chiquimula, and was recognized as the pacificator of the republic. In 1851 a new constitution was promulgated, and Carrera was appointed president till 1856, a dignity which was in 1854 bestowed upon him for life. His rivalry with Gerardo Barrios (d. 1865), president of Salvador, resulted in open war in 1863. At Coatepeque the Guatemalans suffered a severe defeat, which was followed by a truce. Honduras now joined with Salvador, and Nicaragua and Costa Rica with Guatemala. The contest was finally settled in favour of Carrera, who besieged and occupied San Salvador and made himself dominant also in Honduras and Nicaragua. During the rest of his rule, which lasted till his death in April 1865, he continued to act in concert with the Clerical party, and endeavoured to maintain friendly relations with the European governments. Carrera’s successor was General Cerna, who had been recommended by him for election. The Liberal party began to rise in influence about 1870, and in May 1871 Cerna was deposed. The archbishop of Guatemala and the Jesuits were driven into exile as intriguers in the interests of the Clericals. Pres. Rufino Barrios (1835-1885), elected in 1873, governed the country after the manner of a dictator; he expelled the Jesuits, confiscated their property and disestablished and disendowed the church. But though he encouraged education, promoted railway and other enterprises, and succeeded in settling difficulties as to the Mexican boundary, the general result of his policy was baneful. Conspiracies against him were rife, and in 1884 he narrowly escaped assassination. His ambition was to be the restorer of the federal union of the Central American states, and when his efforts towards this end by peaceful means failed he had recourse to the sword. Counting on the support of Honduras and Salvador, he proclaimed himself, in February 1885, the supreme military chief of Central America, and claimed the command of all the forces within the five states. President Zaldívar, of Salvador, had been his friend, but after the issue of the decree of union he entered into a defensive alliance with Costa Rica and Nicaragua. In March Barrios invaded Salvador, and on the 2nd of April a battle was fought, in which the Guatemalan president was killed. He was succeeded by General Manuel Barillas. No further effort was made to force on the union, and on the 16th of April the war was formally ended. Peace, however, only provided opportunity for domestic conspiracy, with assassination and revolution in view. In 1892 General José Maria Reina Barrios was elected president, and in 1897 he was re-elected; but on the 8th of February 1898 he was assassinated. Señor Morales, vice-president, succeeded him; but in the same year Don Manuel Estrada Cabrera (b. 1857) was elected president for the term ending 1905. Cabrera promoted education, commerce and the improvement of communications, but his re-election for the term 1905-1911 caused widespread discontent. He was charged with aiming at a dictatorship, with permitting or even encouraging the imprisonment, torture and execution without trial of political opponents, with maladministration of the finances and with aggression against the neighbouring states. A well-armed force, which included a body of adventurers from San Francisco (U.S.A.) was organized by General Barillas, the ex-president, and invaded Guatemala in March 1906 from Mexico, British Honduras and Salvador. Barillas (1845-1907) proclaimed his intention of establishing a silver currency, and gained, to a great extent, the sympathy of the German and British residents; he had been the sole Guatemalan president who had not sought to prolong his own tenure of office. Ocós was captured by his lieutenant, General Castillo, and the revolution speedily became a war, in which Honduras, Costa Rica and Salvador were openly involved against Guatemala, while Nicaragua was hostile. But Cabrera held his ground, and even gained several indecisive victories. The intervention of President Roosevelt and of President Diaz of Mexico brought about an armistice on the 19th of July, and the so-called “Marblehead Pact” was signed on the following day on board the United States cruiser “Marblehead.” Its terms were embodied in a treaty signed (28th of September) by representatives of the four belligerent states, Nicaragua taking no part in the negotiations. The treaty included regulations for the improvement of commerce and navigation in the area affected by the war, and provided for the settlement of subsequent disputes by the arbitration of the United States and Mexico.
Bibliography.—Besides the works cited under [Central America] see the interesting narrative of Thomas Gage, the English missionary, in Juarros, Compendio de la historia de Guatemala (1808-1818, 2 vols.; new ed., 1857), which in Bailly’s English translation (London, 1823) long formed the chief authority. See also C. Juan Anino, La Republica de Guatemala (Guatemala, 1894); T. Brigham, Guatemala, The Land of the Quetzal (London, 1887); J. M. Caceres, Geografia de Centro-America (Paris, 1882); G. Lemale, Guia geografica de los centros de poblacion de la republica de Guatemala (Guatemala, 1882); F. A. de Fuentes y Guzman, Historia de Guatemala o Recordacion Florida (Madrid, 1882); A. C. and A. P. Maudslay, A Glimpse at Guatemala, and some Notes on the Ancient Monuments of Central America (London, 1899); Gustavo Niederlein, The Republic of Guatemala (Philadelphia, 1898); Ramon A. Salazar, Historia del disenvolvimiento intelectual de Guatemala, vol. i. (Guatemala, 1897); Otto Stoll, Reisen und Schilderungen aus den Jahren 1878-1883 (Leipzig, 1886); J. Mendez, Guia del immigrante en la republica de Guatemala (Guatemala, 1895); Karl Sapper, “Grundzüge der physikalischen Geographie von Guatemala,” Ergänzungsheft No. 115, Petermann’s Mitteilungen (Gotha, 1894); Anuario de estadistica de la republica de Guatemala (Guatemala); Memoria de la Secretaria de Instruccion Publica (Guatemala, 1899); Handbook of Guatemala, revised (Bureau of the American Republics, Washington, 1897); United States Consular Reports (Washington); British Foreign Office Diplomatic and Consular Reports (London).