{"id":466,"date":"2012-08-29T10:20:16","date_gmt":"2012-08-29T15:20:16","guid":{"rendered":"http:\/\/library.brown.edu\/modernlatinamerica\/?page_id=466"},"modified":"2012-08-29T10:20:16","modified_gmt":"2012-08-29T15:20:16","slug":"independent-ecuador","status":"publish","type":"page","link":"https:\/\/library.brown.edu\/create\/modernlatinamerica\/chapters\/chapter-6-the-andes\/moments-in-andean-history\/independent-ecuador\/","title":{"rendered":"Independent Ecuador"},"content":{"rendered":"

A Cacao Republic
\n<\/strong>by Catherine Carbone<\/p>\n

From colonial times until the early 20th<\/sup> C, cacao, the pepa de oro<\/em>, was just that\u2014the seed of Ecuador\u2019s wealth. By the turn of the 20th<\/sup> century, cacao was inseparably intertwined with every aspect of Ecuadorian society. In 1895, liberal forces came to power in Ecuador, and they reinvented the nation in the context of a burgeoning cacao economy. For years their economy thrived, and great wealth flowed into the country. However, when cacao trade began to decline, the weaknesses of the new system became apparent and the nation entered into crisis.<\/p>\n

\"\"<\/a>

Cacao pod on a trunk (2011), courtesy of user AlejandroLinaresGarcia<\/p><\/div>\n

Ecuador is excellently suited for the cultivation of cacao. In the 1860s when Swiss confectioners invented milk chocolate, thereby propelling the cacao economy to new heights, Ecuador was poised for success. The Guayas river valley had ample water, mild temperatures, and rich alluvial soil. The cacao could be cultivated without spraying, fertilizing or pruning (Fowler 77). It required little attention except during the December and June harvest when the labor demand increased. Cacao also required few supporting industries. Planters utilized the network of rivers crisscrossing the valley to float the cacao downstream to the port city of Guayaquil where it was dried in the streets, bagged, and sent off by foreign ship. Production was concentrated in the hands of a few families that controlled most of the property and the river transport (Dash 91). The regions abundant natural resources and comparative advantage suggested a promising future for the Ecuadorian cacao export market.<\/p>\n

Cacao stimulated the establishment of an extremely stratified society. Inland, there emerged a wealthy planter class comprised of mostly post-Independence migrants who acquired unclaimed lands, and an extremely poor, maltreated labor class. On the coast, there emerged an \u201cagro-mercantile bourgeoisie\u201d comprised of bankers, merchants and other businessmen (Henderson 174). These groups were all united by their investment in the Banco Comercial y Agricola<\/em>. The Banco <\/em>in turn gave loans to the government, resulting in an interweaving of interests all tied to the success of the cacao trade.<\/p>\n

This economic situation was markedly different than that of other Latin American states at the time because there was surprisingly little foreign control. Ownership of the hacendados<\/em> was overwhelmingly domestic (Henderson 175), and they were not reliant on US run railroads because of the natural system of rivers crisscrossing the valley and leading to Guayaquil. However, control of international shipping was still in the hands of the US. Ecuador held surprising control over its finances, growth, and development, compared to other Latin American countries at this time, but the income from the cacao industry was spent by the wealthy on imported luxury goods and the limited amount of money that went to the government was distributed throughout the nation (Pineo 715). Partly because of this, the state was weakened. It relied solely on customs revenues because regionalism and civil war made direct taxation impossible (Henderson 179).<\/p>\n

In the period from the 1870s to the 1920s, cacao exports rose more than 700 percent (Pineo 711). As more and more money flooded into the new nation, the conservative dictatorship lost power to the wealthy elite. The conservative state was a negligible influence as the Banco Comercial y Agricola<\/em> and the liberal elites became more and more powerful, maintaining the social order. In 1895, there was a liberal revolution lead by Eloy Alfaro that brought about many reforms, but also resulted in a succession of weak governments that became economically dependent on and therefore subject to the Banco Comercial y Agricola<\/em>.<\/p>\n

\"\"<\/a>

Eloy Alfaro (1842-1912)<\/p><\/div>\n

With the outbreak of World War I in 1914, Ecuador was cut off from key consumers in Europe and the government was forced to take out loans as its only source of revenue dwindled. Plagued by a history of bad debt, the Ecuadorian government turned to the Banco Comercial y Agricola<\/em>. The coastal elite that held stock in the bank now held control over the government. Furthermore, the decline in exports was accompanied by increased migration to the cities, which were ill equipped to handle the influx of people. The city became horribly unsanitary\u2014the death rate reached as high as 144 per 1,000 (Pineo 715). However, the low wages, miserable conditions and abuses of coerced labor in the hinterlands caused people to come to the coast in search of work (Henderson 177).<\/p>\n

Prior to World War I, the liberal revolution and accumulating wealth in Guayaquil had led to many liberal policies including separation of church and state, educational reform, and improvements in public health, technology and transportation. However, as the president of the Asamblea Nacional<\/em> complained, the projects brought forth were for superficial improvements to the cities but, \u201cFor the nation, for Ecuador? That is secondary.\u201d (Henderson 178). Nothing had been done to address the root of the problem: that the state was indebted to the Banco Comercial y Agricola<\/em>, borrowing against the future while its only source of money was in decline. What\u2019s more, large portions of government spending were going to the military, which was still working to suppress civil wars and regionalism.<\/p>\n

Though the state was able to artificially prop up the economy by taking out loans from the Banco Comercial y Agricola<\/em>, the cacao industry was given another blow when sweeping blights of witches broom and monila pod rot took out entire crops of cacao. By 1914, Ecuador had lost its dominance in world cacao trade and was only holding on because of its access to the US market (Henderson 179). In an attempt to artificially bolster export prices, the Asociaci\u00f3n de Agricultores<\/em> was established to function as a non-governmental subsidizer. It would buy up some of the cacao paying half in IOUs, and then export the cacao on consignment. This model had been employed in Brazil and Chile for coffee and nitrates, respectively, but its success in those countries was dependent on them having a dominant share in world trade. Because Ecuador had lost its preeminence, the Asociaci\u00f3n was destined for failure. Not much later, it too was forced to borrow from the Banco Comercial y Agricola<\/em> in order to finance its operations. The Banco<\/em> now controlled not only the government and the land, but also the foreign trade.<\/p>\n

At this stage in Ecuador\u2019s history, the nation was rife with discontent and social unrest. The planter elite of the valley were angered by the control held by the coastal elite, and blamed them for the country\u2019s ills. The people of the cities were fed up with abysmal living conditions, cuts to social spending, and rampant inflation. In 1922, inspired by the recent success of striking railway workers, there was a general strike in Guayaquil. Initially a small strike of trolley workers with modest demands, it gathered force until the entire city was shut down and even the strike leaders had lost control of the actions of their followers (Pineo 723). When negotiations soured, it became a full-scale protest that was brutally repressed by the military. Innocent bystanders trying to escape were cornered and shot. According to one account, the river ran red with blood (Pineo 728). When gunshots could no longer be heard the death toll was difficult to ascertain. Mass graves were filled with the dead and mortally wounded, bodies were disposed of \u201clike cord wood,\u201d and people were prevented from identifying the dead (Pineo 729). It is estimated that 300 strikers were killed, but not a single soldier’s life was lost (Pineo 730).<\/p>\n

\"\"<\/a>

Edwin Kemmerer, courtesy of the U.S. Library of Congress<\/p><\/div>\n

Despite the military\u2019s oppressive actions, the coastal oligarchy was still blamed for the ills of the country. In 1925 the military, supported by socialists, overthrew the government and established a new regime that would try to improve government finance. The Banco Comercial y Agricola<\/em> closed in 1926 and the military regime recruited American \u201cmoney doctor\u201d Edwin Kemmerer to help revive the economy. Only a few years later, the Great Depression plummeted Ecuador into hard times once more, leaving the nation with a crumbled economy entirely dependent on foreign purchasing.<\/p>\n

**********<\/p>\n

Bibliography:<\/span><\/p>\n

Dash, Robert C. “Cacao and the Urbanization of Guayaquil.” Latin American Perspectives, Ecuador Part II: Women and Popular Classes in Struggle<\/em> 24.4 (1997): 90-92. Jstor.org<\/em>. JSTOR. Web. 23 Mar. 2010.<\/p>\n

Fowler, Robert L. “Evaluation of Certain Factors Affecting the Yield of Cacao in Ecuador.” Ecology<\/em> 37.1 (1956): 75-81. Jstor.org<\/em>. JSTOR. Web. 12 Mar. 2010.<\/p>\n

Henderson, Paul. “Cocoa, Finance and the State in Ecuador, 1895-1925.” Bulletin of Latin American Research<\/em> 16.2 (1997): 169-86. Jstor.org<\/em>. JSTOR. Web. 12 Mar. 2010.<\/p>\n

Pineo, Ronn F. “Reinterpreting Labor Militancy: The Collapse of the Cacao Economy and the General Strike of 1922 in Guayaquil, Ecuador.” Hispanic American Historical Review<\/em> 4th ser. 68 (1988): 707-36. Jstor.org<\/em>. JSTOR. Web. 12 Mar. 2010.<\/p>\n","protected":false},"excerpt":{"rendered":"

A Cacao Republic by Catherine Carbone From colonial times until the early 20th C, cacao, the pepa de oro, was just that\u2014the seed of Ecuador\u2019s wealth. By the turn of the 20th century, cacao was inseparably intertwined with every aspect … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":38,"featured_media":0,"parent":462,"menu_order":1,"comment_status":"closed","ping_status":"closed","template":"sidebar-page.php","meta":{"footnotes":""},"class_list":["post-466","page","type-page","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/library.brown.edu\/create\/modernlatinamerica\/wp-json\/wp\/v2\/pages\/466","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/library.brown.edu\/create\/modernlatinamerica\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/library.brown.edu\/create\/modernlatinamerica\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/library.brown.edu\/create\/modernlatinamerica\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/library.brown.edu\/create\/modernlatinamerica\/wp-json\/wp\/v2\/comments?post=466"}],"version-history":[{"count":0,"href":"https:\/\/library.brown.edu\/create\/modernlatinamerica\/wp-json\/wp\/v2\/pages\/466\/revisions"}],"up":[{"embeddable":true,"href":"https:\/\/library.brown.edu\/create\/modernlatinamerica\/wp-json\/wp\/v2\/pages\/462"}],"wp:attachment":[{"href":"https:\/\/library.brown.edu\/create\/modernlatinamerica\/wp-json\/wp\/v2\/media?parent=466"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}