Coffee and Central America – Early 1900s

Coffee Series

Uncommon Grounds by Mark Pendergrast, 1999, Excerpts

The coffee economy of Guatemala, as well as that of nearby El Salvador, Mexico, and Nicaragua, relied on the forced labor and misery of the indigenous population. With this unhappy foundation a future of inequity and violence was all but assured. The history of Guatemala exemplifies that of the entire region.

The new crop spelled disaster for the indigenous people while it enriched the rising coffee oligarchy. Coffee in Guatemala brought a reliance on a fickle foreign market, the rise of coercive police state, gross social and economic inequality, and the virtual enslavement of the indigenous peoples.

“The strategies of government in Guatemala,” writes one Latin historian, “can be briefly summarized as: censorship of the press, exile and prison for the opposition, extensive police control, a reduced and servile state bureaucracy, matters of finance and the treasury in the hands of interrelated members of the large coffee-growing families, and benevolent treatment of foreign companies.”

The Mayans had little sense of private property, preferring instead to share their agricultural space with one another, but they resented being displaced from their traditional lands. Living in self-sufficient villages, most Mayans were loath to work other than briefly for a little money. The Liberal government solved the problem through forced labor and debt peonage. Through a series of laws and outright force, the Barrios government began to take prime coffee lands away from the Indians. For an Indian the only alternative to being dragged off to work on a farm, or to the army or gang labor on a road, or the go into debt to a coffee farmer was flight.

In El Salvador, the disenfranchisement of the Indians was even more violent. While in Guatemala the Mayans lived primarily above the coffee regions, in El Salvador the majority lived in areas suitable for coffee growing. In Nicaragua, coffee cultivation began early, but it did not dominate the economy as in Guatemala and El Salvador, and the Indian resistance in Nicaragua was not so easily broken.

Central America’s stability, important to North American businessmen, was guaranteed by the “dollar diplomacy” that sent US Marines into Haiti and Nicaragua to protect American interest. Retired General Smedley Butler admitted that he had spent the past three decades as a “muscleman for big business” while serving as a US Marine. “I helped in the rape of a dozen Central American republics for the benefit of Wall Street.” Although few US businesses owned coffee plantations, many American banks provided credit for the coffee industry.

The US support of the Latin American status quo did provide a beneficial business environment, particularly for coffee farmers. The famous “fourteen families” of El Salvador, along with growers in Guatemala and Costa Rica, thrived during the twenties.