Honduras



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1990 Census data

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Along with the other Central American states, Honduras is geographically situated within the "Ring of Fire", a string of volcanoes which run from the western shores of South America well into the eastern shores of Asia. Honduras has thus suffered from violent volcanic eruptions and massive earthquakes throughout its history. Conservative dictatorships in Honduras feared foreign investment at the dawn of the Industrial Revolution in 1870, and chose to focus the economy on the mining industry rather than on coffee. As a result, Honduras missed the coffee boom which inspired modernization and the development of infrastructure in its Central American neighbors, and the banana exporting industry only operated along the country's coasts. Without foreign investment, the interior has remained underdeveloped, and the capital city of Tegucigalpa did not construct its first railroad until 1980.



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Important Dates in Honduran History




 

1823

"The Kingdom of Guatemala"

The entire Central American region, from Guatemala to Costa Rica, collectively declares its independence from Spain in 1821 and later from Mexico in 1823. The new sovereign state comprising the entire Central American region is named "the Kingdom of Guatemala".

 

 

late 1820's-30's

"The attempt for unity"

Liberal policies designed to promote equality and to protect native Indians and mestizos from discrimination are the norm in Guatemala. Yet high taxes for social welfare programs create tension, even amongst the Indian population. The Catholic Church helps right-wing conservatives opposed to the liberal policies to organize. Tensions also exist between peasants and privelged elites.

 

 

1837-1840

"Anarchy!"

The Kingdom of Guatemala has been troubled since its inception, due largely to a lack of a strong central government in the face of the competing interests of the different regions. Individual cities have developed their own militias, which at times fight each other concerning disputes over territory and governmental representation. In 1837, all-out civil war erupts across the Kingdom of Guatemala, and the national government of General Francisco Morazan disappears without fanfare in 1839 amidst all the fighting. Cessesions are made by newly independent Central American states along natural geographic boundaries, and the fighting finally ends in 1840.

 

 

1838

"A new state"

The region of Costa Rica secedes from the Kingdom of Guatemala and becomes an independent state. Due to the horrific violence of the civil war, the Liberal parties across Central America have lost all political influence, and Conservative dictatorships will control the Costa Rican government until 1870.

 

 

1840-1870

"A slow start"

Economic development is slow in this period. The social structure resembles that of colonial times, and free trade with foreign nations is discouraged as the dictatorial governments impose high tariffs on imports. Distrust of foreign power leads to slow, if any, development of infrastructure (railroads, bridges, etc.).

 

 

1870-1929

"Missing the coffee train"

New regimes in Costa Rica, Guatemala, and El Salvador open their countries' respective markets to world trade and foreign investment. As a result, the coffee boom leads to modernization and development of infrastructure. Contrarily, the old dictatorships in Nicaragua and Honduras fear foreign investment, and choose to concentrate their economic development on the exporting of gold and silver, a venture which causes Honduras to fall behind its Central American neighbors economically. To try to compensate, Honduras encourages the development of the banana exporting industry, and bananas comprise 88% of all Honduran exports by 1925. Yet bananas were grown only along the coasts, and the interior remained underdeveloped. The capital city of Tegucigalpa does not construct its first railroad until 1980.

 

 

1890-1910

"The birth of United Fruit"

Minor Keith receives a huge track of land in Costa Rica in exchange for building a railroad to link its Atlantic and Pacific shores. Keith uses his land and this railroad to export bananas, which eventually becomes a highly-demanded Central American export, even capable of rivaling coffee. Keith links together his company with other smaller banana exporters in Central America and the Boston Fruit Co, and the ologopoly becomes known as the United Fruit Co. By 1910, American companies such as United Fruit owned 80% of the banana crop in Central America and most of the prime lands along the Carribean coast. By 1925, bananas comprised 88% of Honduran exports.

 

 

1914

"The Big Stick"

World War I drastically reduces the amount of trade with European nations, and increases that with the United States. The administration of Theodore Roosevelt has advocated that the US government actively involve itself in the affairs of Central American politics in order to protect their overseas business interests. This official government policy is called the Roosevelt Corrolary, later nicknamed "The Big Stick" Policy. · U.S. investmets in Central America rose from $11.5 million in 1897 to $76.9 million by 1914, almost surpassing the region's highest investor Britain ($115 million). U.S. also refinanced many loans between Central American and European nations, thus making Central American countries more dependent on their northern neighbor. U.S. investmets came in form of banana companies, mines, shipping companies, and railroads. As Foster declares, "Foreigners controlled the natural resources; they owned the railroads and the telegraph lines they had built, along with the shipping lines and, often, the banks; in some instances, their (foreign) governments actually collected customs receipts - all as their price for modernizing the republic and lending them funds." (p. 189)

 

 

1911-1925

"The yankee factor"

"From 1911 to 1925, U.S. warships frequently anchored in the Bay of Honduras, and the U.S. intervened 6 times in Honduran political affairs. In one three year period, there were 17 coups and revolutions. Honduran instability did not result simply from Central American factionalism. Rival banana companies instigated many of the conflicts, including the overthrow of the US-selected interim president in 1907. Each corporation bribed Central American governments for favors, and if that method failed, they paid for coups and conflicts that would give them the desired result - even if, at times, such actions were in direct conflict with the policies of the US governmentt." (Foster, 194-95).

 

 

1930's

"The end of the Big Stick"

President Franklin D. Roosevelt repeals the Roosevelt Corrolary, thus ending the "Big Stick" policy with Central America. Roosevelt works to establish a good neighbor policy with Latin America by abolishing all US protectorates over Central American countries and establishing trade agreements to provide these nations with priveleged access to US markets, especially the coffee market.