Rosario and the Election of 1887: The Political Economy of Mining in Honduras

Traditional Central American historiography conventionally dates the beginning of Honduran modernization from 1876 with the inauguration of the liberal regime of Marcos Aurelio Soto. Evidence supporting this year as a watershed in Honduran development consists of such “innovations” as suppression of the tithe, inauguration of public education, and codification of legal, commercial, mining, and administrative laws. From today’s vantage point, much of this supposed transformation seems inconsequential: superficial reformism that produced few genuine benefits.¹

Much more interesting to contemporary historians is that Soto and his successor, Luis Bográn, helped initiate and facilitate the reestablishment of permanent economic links between Honduras and the North Atlantic market system.² Honduras had, of course, been incorporated into earlier stages of this evolving economic system. Spanish colonists had intermittently participated in Spain’s imperial economy by exporting such commodities as slaves and placer gold in the 1520s and 1530s, silver bullion in the 1570s, and in another brief cycle produced silver during the late Bourbon era of mineral developmentalism. The vertiginous political turmoil and social disruption following the independence of Central America destroyed the nascent economic projects of British entrepreneurs; thereafter, until 1876, Honduras drifted virtually ignored in a quiet backwater of the burgeoning West European-North American economic system.³ In short, none of these colonial economic ties permanently bound Honduras to the emerging world system.

After 1876 Honduras attracted a small, vitalizing stream of foreign entrepreneurs and capital seeking to exploit the country’s natural resources. Most of these first adventurers came to seek their fortune in the country’s famous gold and silver mines. For almost twenty years, until surpassed by banana production, precious metal mining dominated the visible horizon of the Honduran economy. This mining activity brought Honduras a small measure of economic development: substantial wage payments, stimulation of commercial and ancillary enterprises, a loosening of monetary restraints to trade, and the laying of some infrastructure. The amount of development accomplished did not, however, begin to match the hopes of Soto and Bográn who labored diligently to initiate, nurture, and sustain mining and other potential economic growth sectors. Their promotional efforts, tax concessions, administrative and legal streamlining, labor recruiting, and general assistance to miners did much to facilitate the mining companies’ operations but failed to sponsor widespread and sustained economic development.⁴ Nevertheless, during the course of these two decades, the mining boom brought about the permanent incorporation of Honduras into the world economy.⁵

Equally important, however, for the modern historian are the political ramifications of establishing economic ties between Honduras, an underdeveloped country, and the developed center nations. The political context and ramifications of economic development via diffusion has increasingly come to constitute a focal concern for both liberal modernization theorists and their radical critics. The question addressed in this study is whether the intrusion of free enterprise and technologically innovative mining into Honduras fostered the growth of pluralistic participatory political forms as the liberals would expect. Or did the mining boom instead reinforce the hierarchical, authoritarian, and clientelisi political system inherited from the colonial era as the radicals would argue?⁶ It is within the scope of these alternative hypotheses that this study of the political economy of mining in Honduras during the 1880s is examined.

In Honduras, as elsewhere in the world, gold and silver mining ventures failed more often than they succeeded. Not surprisingly, therefore, of the almost 100 mining companies formed in Honduras from 1880 to 1900, fewer than 10 were able to do more than meet expenses. Of these 10, only 1—The New York and Honduras Rosario Mining Company—could be termed successful.⁷ Julius J. Valentine and his four sons, Washington S., Ferdinand C., Louis F., and Lincoln, who founded this important enterprise in 1880, managed to surmount the assorted obstacles to mining in Honduras. Within a decade after the company began operations at the Rosario mine up the mountain from the small village of San Juancito twenty miles northwest of Tegucigalpa, it had produced silver and gold bullion worth in excess of three and one-half million dollars. By the turn of the century, Rosario, as the company was known, employed more than 1,000 miners. One of the great mines of the Western Hemisphere, Rosario produced more than “$100,000,000 from slightly less than 6,500,000 tons” of ore before it closed down in 1954.⁸

Washington S. Valentine, the moving force behind Rosario, encountered and overcame a variety of conflicts between his company and local citizens during the first decade of mining operations. Most, but not all, of these conflicts of interest derived from the exigencies of operating the mine itself. A main source of friction was competition with nearby residents for land and other scarce natural resources such as timber, water, and limestone (cal). Other difficulties arose over law enforcement and tax exemptions. To cope, Valentine needed more than mere entrepreneurial skill; a solid grasp of local political realities was essential. During a long career in Honduras, Valentine repeatedly demonstrated his thorough command of Honduran politics.⁹

The record of these early conflicts of interest and their resolution provides a useful format for studying the Honduran political economy of the late nineteenth century. It indicates the way in which monopoly control over precious metal mining by Rosario was transformed into corporate, political, and legislative immunity. The complete story, of course, goes beyond the bounds of this paper, but early in Luis Bográn’s second administration (1888-1892) Rosario’s managers firmly grasped the means of power essential for its unmolested operation. In this process of consolidation, the presidential election of 1887 proved a decisive turning point.

Early Conflicts and Resolutions

In contrast to many other Honduran mining companies, early Rosario agents displayed shrewd foresight in acquiring what seemed sufficient land to provide free access to the mine. The company’s actual success, however, brought about steady growth. Expansion soon meant that the company’s requirements outran the early golden dreams of the founders and forced the company to encroach more and more upon local land and resources in the environs of San Juancito.¹⁰

The hard-rock mining done at Rosario required a surprising amount of timber. Much of it was used in underground structural braces and supports. By the turn of the century, the company needed 20,000 of these “sticks” inside the mine.¹¹ Furthermore, sawed into lumber, company carpenters utilized it, together with the cal, to construct the mill buildings, offices, living quarters, laboratories, and other surface edifices necessary for a permanent mining camp.¹² Finally as charcoal, timber constituted an important energy force used to turn several steam engines employed in the milling process.¹³ Eventually the company denuded the entire east face of San Juancito mountain of timber and had to drive an adit all the way through the mountain to the west face specifically to reach virgin stands of trees.¹⁴ In addition, Washington Valentine undertook to import eucalyptus seeds to reforest the area around the mine entrance.¹⁵

Rosario’s drive for access to such a large amount of timber and cal provoked the earliest recorded conflicts with its neighbors. The Honduran mining code was vague on many aspects of the procedure for acquiring natural resources. For the most part, the code reaffirmed the traditional Spanish American distinction between surface and subsoil rights. In effect, this provision forced miners to negotiate with property owners for topsoil water, timber, and other surface rights. In one departure, however, the mining code delegated responsibility for allocation of local deposits of cal to municipios. Mining companies thus had to bargain with town councils for supplies of this essential masonry commodity.¹⁶ In early 1883, the government responded to the expanding mining sector’s rapidly growing appetite for water and wood by setting aside all “timber and waters” found on government-owned lands (baldíos) for the exclusive benefit of large-scale mining concerns. It declared a moratorium on sales of government land to private parties within a three-league radius of all mining camps.¹⁷

As early as 1883, loggers working for Valentine began felling trees growing on the San Juancito commons or ejido.¹⁸ Rosario employees also began quarrying cal deposits within the town’s patrimony. Local officials soon expressed alarm at Rosario’s rapacious wasting of their municipio’s resources. They demanded that Valentine pay the township 2,000 pesos for timber already cut and charged the company eighteen cents a load for cal. Valentine grudgingly paid a token 150 pesos for the timber but absolutely refused to pay one centavo fol the limestone. Instead, he complained to the newly elected, openly pro-American president of Honduras, Luis Bográn. Valentine charged that local townspeople had embarked on an antibusiness policy. If allowed to persist, he warned, the company’s operations would be hampered and further expansion made impossible. Valentine knew his thinly veiled threat would induce the government to defend his enterprise.¹⁹

Local officials called a special town meeting to reply to Valentine’s charges. In their report of this meeting to the government, they flatly rejected Valentine’s accusations. They pointed out that the town had spent 300 pesos securing a clear title to its ejido, the resources of which Valentine plundered at will. These local authorities urged the government to prohibit any more timbering or quarrying until such time as the town and the company could agree on mutually acceptable terms. In a parting accusation manifesting considerable frustration, they held Valentine in contempt of the Honduran constitution because he continually ran roughshod over legally constituted local authorities.²⁰

Unfortunately the record does not indicate how the town and company resolved their limestone quarrying problem, but Valentine did circumvent local obstructionists to secure adequate timber. He discovered an 1865 decree awarding timber rights to road contractors proportionate to the miles of road constructed. Since Rosario needed a new outlet from San Juancito to Tegucigalpa anyway, Valentine offered to build a wagon road from his mining compound to the capital if the government would set aside sections of forest for the company’s exclusive use. Despite the doubly self-serving nature of this proposal, the government readily accepted Valentine’s offer.²¹ In this fashion, Valentine intended to bypass municipio officials.

Road construction turned out to be one of the most thankless, difficult, and unrewarding tasks Valentine ever undertook in Honduras. The work began expeditiously enough. Valentine drove his road gang hard—so hard, in fact, that forty additional workers recruited from the neighboring mining camp at Yuscarán deserted shortly after arriving. A mining inspector specifically appointed to ensure that workers fulfilled their contracts proved unable to staunch the flow of fleeing laborers.²² For the first time, Valentine found that he could not count on an abundance of labor. Heretofore, relatively generous wages,²³ a well-stocked company store used quite explicitly to recruit workers from among the frequently famine-ridden Hondurans,²⁴ and the industry-wide exemption from all military service for miners contracted for six months or more to mining companies had assured a steady supply of workmen.²⁵ But now, noticeably frustrated as his road construction fell further and further behind schedule, Valentine sought government assistance in recruiting workers.

Initially the federal government eschewed direct intervention. In early March, the Bográn administration circulated an order to departmental governors urging them to persuade their unemployed campesinos to migrate to “the mining camps.” The introductory paragraphs of this circular paid tribute to the ideal that government should promote worthy industries for the good of the country and its citizens. It went on to praise the mining companies such as Rosario at San Juancito as “very important” agents of economic development for Honduras. There followed a brief statement of the companies’ “pressing needs for … workers” if they were “to maintain or expand their present level of operations.” The circular guaranteed a minimum salary of $.50 a day and held out the possibility of raises “for those peasants who distinguished themselves by their industriousness and intelligence in carrying out their assigned tasks. Interestingly, the communication ended with a veiled threat: “In the very unlikely event that the inhabitants of your department should refuse to accept employment with the mining companies,” more coercive measures would be invoked.²⁶

Nothing happened. By the end of the month, Valentine’s pleas for more workers became so insistent that the government stepped up its recruitment efforts on his behalf. Although clearly determined to make available an adequate work force, authorities appeared remarkably hesitant to resort unequivocably to forced draft labor. As a half measure, the government threw its weight behind the rather common system of contract labor called habilitar y enganchar.²⁷ The minister of government, in a directive to officials of the town of Texiguat, ordered 100 workers sent to San Juancito. Commissioned civilian and military officials in the town served as recruiting agents for Valentine. The recruiters were empowered to advance travel expenses to potential employees. The names of all the men sent were to be inscribed in a book along with the amount of money advanced. Valentine agreed to pay an unspecified commission for each man enlisted.²⁸

Clearly doubtful that this system of contract labor would prove sufficient, the minister closed his directive to Texiguat officials with the peremptory instruction that if 100 workers could not be found willing to work at San Juancito, the local commandant was to send members of the militia.²⁹ The workers from Texiguat did little to ease Valentine’s labor shortage. Indeed, they exacerbated it. Almost as soon as they arrived, they quit or fled without fulfilling their contracts. Soon only 1 worker from Texiguat remained, and he wanted to go home as soon as possible.³⁰

Again the call went out for additional workers—this time to Yuscarán. Members of the militia arrived from Yuscarán in early April, but they too fled. To make matters worse, they convinced several veteran employees to go with them. Quickly alerted by Valentine, central government officials ordered the military in Yuscarán to arrest the fleeing workmen. Before authorities could act, the fugitives crossed into Nicaragua. Valentine found himself more shorthanded than ever. He needed 400 miners but had only 50. He claimed to want 100 workers for the mill but could hire merely 40; a scant 15 men worked on the road project.³¹ By the end of April, he cabled the president: “Work on the road halted for lack of workers. If you do not send us fifty or more workers, it will be impossible to conclude the project before wet season.”³²

Recruiting became more and more difficult in spite of these Draconian measures. Towns began soliciting specific exemptions from Rosario’s labor drafts. The people of Comayagua, for example, asked to finish harvesting their corn and beans. On these grounds, all but eighteen draftees won a reprieve.³³ As much as a year later, the government still took an active part in procuring recalcitrant labor for Valentine.³⁴ The problem persisted, but eventually Valentine completed the road.³⁵ The Honduran government’s active intervention on behalf of Rosario in the labor market illustrates the growing alliance between the national government and foreign mining interests during the Bográn administration.

By 1886, the mining boom had attracted the attention of local Honduran entrepreneurs. Most important among these was Abelardo Zelaya, prominent political figure, scion of a leading Central American family, and owner of most of the mineral rights adjacent to the Rosario claim at San Juancito. As Rosario’s activities began to grow and prosper, Zelaya resolved to bring his own long abandoned mines into production. This decision placed him in direct competition with Rosario. From 1886 until 1890 when Zelaya quit and sold out, this capable Honduran engaged in a hard-fought struggle with his American rival. The Rosario-Zelaya conflict surfaced in various areas.³⁶ Both companies scrambled to acquire slivers of unclaimed land adjacent to the major veins at San Juancito and extend their control to outlying mineral zones, but explicit claim and concession regulations written into the mining code and reasonably accurate surveys reduced the scope for confrontation.

The mining code’s less precise treatment of timber rights, however, made logging a source of intercompany rivalry in San Juancito as well as elsewhere. Valentine’s earlier difficulties in obtaining enough timber for his enterprise now reemerged in the form of a timber war with his local rival. Unfortunately, the records do not provide sufficient details to fully understand all the dimensions of the Zelaya-Rosario timber war. It appears, however, that about the time Valentine completed the San Juancito-Tegucigalpa road in order to secure exclusive rights to nearby timber stands outside the local municipio ejidos, Zelaya used his extensive connections in the government to acquire a large timber concession from the Ministry of Development with minimum scrutiny and publicity. Zelaya’s concession embraced much of the timber Rosario intended to claim as payment for road construction.³⁷

After all the difficulties Valentine had overcome to build the road, he was infuriated by being outmaneuvered in this fashion. Valentine’s lawyers studied the matter carefully and discovered that the Zelaya concession contained the pro forma stipulation that the award could not infringe upon the rights of third parties. The American repeatedly entreated President Bográn to intervene in the controversy. Valentine made these appeals knowing that Bográn’s normal pro-American bias was further strengthened in this case by the president’s suspicion that Zelaya secretly supported the political ambitions of a powerful rival, ex-President Marco Aurelio Soto.³⁸ Valentine left Honduras for the United States in late 1886 for a brief visit thus obscuring his own role in the resolution of the timber war. Bográn eventually issued an amending acuerdo substantially reducing Zelaya’s grant on grounds that the original award exceeded the parameters established by the mining code.³⁹

Rosario officials might have been inclined to continue settling their timber and other difficulties on an ad hoc basis, but the government preferred to settle such issues once and for all by enacting generally applicable legislation. With regard to timber, other mining companies scattered throughout the highlands of Honduras had encountered similar difficulties with local citizens and rival miners. Thus in early March 1887, Bográn issued a decree granting miners exclusive right to all timber standing on land awarded them under mining claims or mineral concessions. This, he hoped, would alleviate permanently the miners’ logging troubles.⁴⁰

Ironically, local officials at San Juancito maliciously interpreted this decree as superseding all previous arrangements and sought to restrict Rosario loggers to the boundaries of the company’s mineral concessions. Louis Valentine, Washington’s brother temporarily in charge, promptly appealed to Bográn: “Inasmuch as you have always dealt with us justly and have shown yourself ready to protect this enterprise, please tell us what we should do. If we accede to local citizens’ demands, we will suffer great injury. We do not think you will just stand by in silence and let this happen.” As expected, Bográn interceded.⁴¹

By 1887, the question of timber rights, however, became entangled in a larger web of conflicts between Rosario and its neighbors in San Juancito. The question of whose interests should prevail generated more and more hostility over the next two years. Local citizens increasingly defied the mining operations proliferating in their midst. For his part, Valentine seemingly disregarded the ill will aroused by his cavalier treatment of local interests. Land tenure, which had previously presented little difficulty, suddenly became a bitter issue in 1887. Almost a year earlier, however, battle lines began to be drawn. During 1886, Rosario aggressively expanded its productive capacity within the mine and ore output soon exceeded the company’s beneficiation facilities. Rosario announced plans to construct two additional mills to augment the two already in place.⁴²

Unfortunately, Rosario’s earlier mill zone concessions could not accommodate the additional larger mills that Valentine envisioned. The old mills stood in a steep gorge formed by the San Juan River just upstream from San Juancito where the Escobales River emptied into the San Juan. Further mill construction here would entail extensive excavation at a prohibitive cost.⁴³ Valentine found an ideal site immediately east of San Juancito. He submitted a formal petition for a mill zone embracing the new location. He prefaced the solicitud with a rosy prediction on the future expansion of the mining complex and its economic significance to Honduras and carefully explained the company’s needs for this new zone. Bográn’s government automatically granted the zone to Valentine on January 23,1886.⁴⁴

Troubles arose not long thereafter when a small Honduran mining outfit led by Marcial Funes staked out a mill site adjacent to Rosario’s new concession. During the customary official survey of the claim, the government surveyor inadvertently included a small portion of Rosario’s mill zone in the Funes’ lot.⁴⁵ Valentine objected strenuously to this encroachment and, as usual, he took his complaint directly to Bográn. The president delegated this matter to subordinates and these officials called for both sides to present relevant evidence bearing on the case. Although the legal facts of the situation proved somewhat ambiguous, the economic realities did not. The magnitude of Rosario’s operations completely overshadowed the Hondurans’ enterprises—a fact Valentine let no one overlook.⁴⁶ After hearing both sides, the government called for a resurvey of the Funes’ claim and the available evidence suggests that the American mining company got its way.⁴⁷

Rosario and the Election of 1887

The new year, 1887, began optimistically: prosperous, progressive, and ostensibly peaceful. The American consul at Tegucigalpa wrote on January 12 that Rosario is “at present the best established and most extensively operated mine in Honduras.” Furthermore, he continued, “it should be a source of pride to any American as he beholds the busy and thriving little town of San Juancito, with its 3,000 inhabitants gaining their livelihood mediately or immediately, by means of this American enterprise situated in their midst.”⁴⁸ Within another twelve months, however, events in the mining compound would partially transform the political economy of Honduras, and, over the next twenty-four months Rosario emerged triumphant in its quest for security from local interference. After that time, threats to the company’s operations did not originate on the local level.

The struggle between the townspeople of San Juancito and Rosario took on a new, national dimension during the 1887 presidential election. President Luis Bográn was persuaded to run for reelection and was challenged by an aging former president, Céleo Arias.⁴⁹ Arias’ opposition to Bográn’s reelection stemmed in part from a personal rivalry dating back to Arias’ own brief tenure as president in the early 1870s. In 1872, the Arias’ presidency was imposed on Honduras by Guatemalan President Miguel García Granados as part of the Guatemalan liberals’ effort to consolidate their “revolution.”⁵⁰ Rival liberals in El Salvador under the leadership of President Santiago González, reluctant to allow the Guatemalans to consolidate their hegemony in Central America, backed the moderate veteran campaigner Ponciano Leiva in an attempt to overthrow the Arias regime.⁵¹ Luis Bográn, President Arias’ very young secretary of war and treasury, resigned his post and defected to serve with his fellow townsman, Leiva.⁵² Leiva quickly routed Arias, restored the conservative constitution of 1865 (to the consternation of liberals throughout Central America), and appointed Bográn governor of the department of Santa Bárbara.⁵³

Leiva’s return to the conservative 1865 constitution all but guaranteed Guatemalan and Salvadorean intervention. Guatemala’s new strongman, Justo Rufino Barrios, initially backed José María Medina (who toppled Leiva from power in 1875), but then changed his mind and in an accord signed at Chingo with the new president of El Salvador, Andrés Valle, raised up one of his Honduran lieutenants, Marcos Aurelio Soto, against both Leiva and Medina.⁵⁴ With the decision to install Soto as the liberal champion in Honduras, the frenetic pace of elite circulation slowed considerably. Both Leiva and Bográn made their peace with Soto and soon joined his government. Arias, meanwhile went into semi-retirement in Guatemala City.⁵⁵

Within several years, Bográn rose to become Soto’s Minister of Justice-Education and Interior.⁵⁶ In 1883, under increasing pressure from Barrios in Guatemala, Soto resigned, leaving control of Honduras to a council of ministers composed of Bográn, Enrique Gutiérrez, and Rafael Alvarado.⁵⁷ General Gutiérrez, Soto’s heir apparent, died suddenly in September, leaving Bográn with virtually complete control of Honduran affairs. Moving quickly to take advantage of a propitious situation, Bográn called for new elections and simultaneously announced his own candidacy. His only opposition came from Céleo Arias. Former President Arias counted on his close personal ties with many of the departmental commandants to give him the election, but Bográn adeptly won over the military. As a result, Bográn swept the election in a landslide—40,598 to 3,500 votes—and was installed as president on November 30,1883.⁵⁸

Four years later, with his term rapidly drawing to a close, Bográn convened a council of notables in early January to begin discussions about choosing a successor. In his opening remarks to this council, Bográn announced his opposition to reelection, but most members of the council insisted that he run for a second term.⁵⁹ The four years of relative peace and prosperity that marked Bográn’s first term gave him most of the advantages of incumbency. His Unity party included the bulk of the small but influential cadre of government officials and functionaries. These bureaucrats naturally sought to safeguard their positions for four more years.⁶⁰ In addition, the small foreign community although barred from voting appears to have supported Bográn’s reelection campaign enthusiastically. Many of the foreigners in Honduras at this time had received concessions from the Bográn regime. They could be counted upon not to jeopardize these arrangements by shifting their allegiance to an unknown who might alter their already advantageous position.⁶¹

Against this formidable official candidacy, Céleo Arias had few advantages of his own. Although both he and Bográn espoused liberalism, Arias was able to wrap himself more tightly in the liberal cloak by emphasizing “no reelection.” This slogan proved to be Arias’ most powerful weapon in the campaign. In particular, it enabled him to win the eager backing of the university students, who rallied to his banner behind the leadership of the aspiring lawyer Policarpo Bonilla.⁶² Unfortunately most of them were unqualified to vote. Arias’ alliance with Policarpo Bonilla proved extremely helpful. Moreover, Bonilla’s decision to campaign on Arias’ behalf substantively altered the nature of the election. Bonilla sought to transform what would have been a mere trial of strength between two decidedly unequal personal rivals into an ideological struggle over issues. Bonilla himself seems to have been a strange mixture of realpolitik and ideology. For example, he initially refused to campaign for Arias on the grounds that the cause was hopeless, but changed his mind when political developments in Guatemala opened up the possibility that outside pressure could be exerted in favor of Arias.⁶³ On the other hand, the evident reason that he opposed Bográn’s candidacy in the first place stemmed from his fanatical refusal to countenance reelection.⁶⁴ The slight differences between the political tenets of the two parties— excepting, of course, the reelection matter—forced Bonilla and Arias to produce unusually clear and comprehensive position statements such as Arias’ political testament, Mis ideas.⁶⁵ An interesting long-term consequence of this effort was the foundation of what subsequently emerged as the Honduran two-party system—Liberals and Nationalists.

In the end, however, Bonilla’s indefatigable effort to instill ideological rigor and party spirit in Arias’ feebly organized Liga Liberal was overwhelmed by the entrenched and seemingly popular Unity party of Bográn. Electoral success hinged on the ability to win voter support. Bonilla and fellow Arista workers found it imperative to take advantage of whatever dissatisfaction had arisen during Bográn’s first term, including anticompany feelings at San Juancito.⁶⁶ Likewise, Rosario’s enemies attempted to use the upcoming election to retaliate against the company. Thus local economic and administrative issues converged with power politics at the national level to make Rosario and San Juancito a focal point of the election.

The foes of the company could hardly have chosen a more disastrous tactic. During the months leading up to the balloting, Valentine taught his neighbors a brutal lesson in practical politics. Realizing that the mainspring of power in the Honduran political system lay in the executive branch of the central government, Valentine took all problems to the top and depended on his cordial personal relationship with the president and subordinates to advocate his best interests.

Company efforts to continue currying governmental favor took many forms. Rosario’s management distributed gifts, threw expensive parties, made ostentatious donations to worthy charities, and unleased a flood of self-serving propaganda hammering home the economic importance of the company to the country.⁶⁷ For example, while in New York City on a short vacation in the spring of 1887, Valentine invited two of President Bográn’s sons, a son of Vice President Ponciano Leiva, a nephew of the minister of public works, the brother of the mayor of Tegucigalpa, and other scions of the Honduran elite to visit him for a tour of the city. The young men, all students at the Carmel Institute of Central Valley, New York, and their Cuban tutor, Tomás Estrada Palma, spent several days in New York City during which their host, Valentine, entertained them in a manner guaranteed to turn their heads and fill their letters home to doting parents: supper at Martinelli’s on Fifth Avenue, a party at Tony Pastoris, where they “occupied three front rows of the orchestra chairs and were vastly entertained,” an elaborate champagne supper in one of the ornate private dining rooms of the Hoffman House, a visit to the pressroom of the New York World newspaper, and finally, the next morning, a stop at the Eden Musée.⁶⁸

Rosario’s leaders also extended their active participation in the upper-class social life of Tegucigalpa. On Honduran independence day, almost the entire American community at San Juancito traveled to Tegucigalpa to attend the dance and otherwise celebrate.⁶⁹ Washington Valentine’s brother, Louis, and Louis’ Guatemalan wife, Concepción Matheu de Valentine, moved to Tegucigalpa. On November 8, 1887, they hosted a splendid fete which attracted the cream of Honduran society resident at Tegucigalpa. After supper and drinks, the Valentine children sang for the guests in Spanish, French, German, and English, accompanied by their mother on the piano. The evening concluded after a round of toasts hailing the eternal success of The New York and Honduras Rosario Mining Company and declaring its importance for Honduras.⁷⁰ A few days later, Concha Valentine gave a more intímate but equally lavish party before leaving the capital for a short visit to the mines at San Juancito.⁷¹

In contrast to his courting of central government officials, Valentine did almost nothing to win support among his neighbors in the mining compound at San Juancito. Indeed he seemed determined to exacerbate existing animosities. Although continuing conflicts between company and villagers probably could not have been avoided completely, Valentine seemed to create additional problems almost as if to spite the opposition. In retrospect, some of the issues could have been avoided without jeopardizing the mining enterprise.⁷²

Valentine began by threatening local peasant holdings. He embarked on an enclosure movement pursued far beyond the strict necessities of his mining activities. Not long after receiving the large milling zone mentioned above, he solicited an even larger area that embraced both milpas and peasant huts. The San Juancito town fathers were outraged and urged that the concessions not be granted. This would amount to expropriating the means of livelihood from many campesinos and swallowing up La Carboneras, a fifty-seven house satellite hamlet of San Juancito.⁷³ The central government, however, dismissed local objections and gave Rosario the land it requested on the technical grounds that no one in San Juancito held legal land titles. Officials justified their decision by appealing to the most blatant developmentalist cant: the mining industry’s contribution to the commonweal; the government’s duty to afford such enterprises the full protection of the law; and the natural requirements of the company as it grew “bigger each day” for “additional land, be it on which to erect buildings, install machinery, or cut the timber it consumes.”⁷⁴

Valentine’s next move did nothing to alleviate the anxieties of those whose homes now stood on Rosario land. Three homes belonging to prominent citizens of San Juancito—Marcial Funes, Emeterio Segura, and Francisco Argeñal—stood on the mill zone received the year before. Valentine tried to evict them in order to clear the way to erect the new mills. The Hondurans refused to budge. Rosario took the matter to court, but the first sectional judge at Tegucigalpa denied the company’s eviction request. A company appeal to a higher court met a second refusal. Finally, after more than a year’s litigation, the matter went before the Honduran Supreme Court.⁷⁵ The supreme court’s decision and subsequent events came after the 1887 election and will be examined later.

Valentine further offended local feelings when he offered to pay the central government 500 pesos a year and to construct a school, a hospital, a market, and a municipal building at San Juancito if the government would exempt Rosario from all local taxes. He argued in support of this unprecedented request that the 500 pesos he offered would reach the Tegucigalpa treasury whereas many of the miscellaneous taxes he wished abolished found their way to tax collectors’ pockets—a candid, but rather ungenerous observation. He clinched his arguments with an interesting advocacy of business paternalism as an important feature of developmental capitalism.⁷⁶ “The company which I represent,” he wrote, “in addition to tending to its own interests, also seeks to look after those of the town and the country in general. Thus, if my proposal is accepted as indicated, it will provide a powerful stimulus for other foreign companies to come with adequate science and capital, to exploit the rich mines of the nation.”⁷⁷ Despite vigorous protests from maligned officials, the government accepted Valentine’s offer.⁷⁸

In an attempt to influence the election, Valentine intervened directly in local politics. He wrote President Bográn that “several people interested in annoying” the company had come to San Juancito to draw up a list of official candidates to run for local offices. The slate selected (and in the circumstances, almost certain to be elected as it came entirely from Bográn’s party) included only implacable enemies of the company. He asked the president to revise the list of candidates “naming persons in whom are joined the necessary legal qualifications and, in addition, those of imparciality [sic]” in town-company affairs.⁷⁹

As tensions mounted in San Juancito over the November election, anticompany forces foresaw that they might succumb completely before Valentine’s mining juggernaut, and their efforts became rather desperate. For example, on August 2, the following broadside appeared in both San Juancito and Tegucigalpa:

HONDURAS IS FREE⁸⁰

Several months later, Valentine’s situation took a more sinister turn as rumors surfaced that a conspiracy had been formed to assassinate the American entrepreneur. In mid-October two witnesses confirmed the reports. One had overheard plans being laid for the attempt; another claimed to have been offered money to help ambush Valentine between Tegucigalpa and San Juancito. Those named as conspirators included Marcial Funes, Francisco Argeñal, and Emeterio Segura. All three were involved in the eviction suit pressed by Rosario, and Funes had been the prime contender in the mill boundary dispute won by Valentine earlier. It is not unreasonable to believe that they might have decided to resolve their troubles by direct action.⁸¹

Despite threats and rumors, the November 30, 1887 election took place with minimal upheaval. To the end, Policarpo Bonilla sought to block Bográn’s reelection by every means available. Bográn deftly turned back each attack without resorting to more than the usual amount of strong-arm tactics.⁸² The last minute support of diehard partisans of Marcos Aurelio Soto proved counterproductive for Arias and Bonilla.⁸³ In the balloting, Bográn won a second term “by the almost unanimous will of the people”: 28,394 to 5,326–300 voters of whom Valentine himself made sure followed the straight Bográn ticket, Tammany Hall style.⁸⁴ On the surface, the election seemed anticlimatic. Bográn kept the presidency for the four additional years and turned it over to his friend Ponciano Leiva in another quiet election. In retrospect, however, Bográn’s landslide win decided the eventual outcome of all the town-company conflicts still unresolved. Many in the local mining community seemed to sense that they had suffered an irreversible defeat. A death note nailed on a post beside the road between San Juancito and Tegucigalpa gave voice to this feeling. It read:

Two skulls, each labeled “Valentine” bracketed this threat.⁸⁵ Clearly the election, while deciding the issues, did little to reduce tensions at San Juancito.

Most of all, however, Bográn’s reelection strengthened the president’s already iron grip on Honduras. With more reason than ever Valentine could turn to his president friend to tie up the loose ends. Nevertheless, the American redoubled his goodwill campaign and invited the national congress to visit his mining camp. The congress politely turned down the junket claiming that it “did not believe that the congress should occupy itself in the matter.”⁸⁶ The following February, however, the president and his cabinet accepted a similar invitation. A large entourage of public officials accompanied Bográn the twenty miles to the mine. On arrival, the party was welcomed by the sound of musket fire, mill whistles, and warehouse bells. Soldiers presented their arms; workers presented their tools such as spades, hammers, saws, and planes; and the Americans yelled “Rah, rah, Bográn!” The camp itself was festooned with evergreens, inscriptions and banners, and Honduran and American flags. The outlandishly orchestrated but effective visit reportedly impressed Bográn very much.⁸⁷

These and other gestures returned high dividends. In fact Valentine’s unswerving support among the Bogranistas proved critical in the only remaining arena that might have circumscribed the mining company’s activities: the courts. As recounted above, Rosario had attempted to evict Marcial Funes, Emeterio Segura, and Francisco Argeñal from the mill zone. Lower and appellate courts had refused to dispossess them. Finally, after more than a year’s litigation, Valentine took the matter to the supreme court.

Rosario rested its case on Article 1 of a legislative decree issued on March 20, 1885, amending the mining code in order to give mineowners the option to stake out claims to mill sites adjacent to their mines. Valentine’s lawyers interpreted this amendment to mean that the Honduran government had abandoned the Spanish legal distinction between surface and subsoil rights in these special circumstances. The Supreme Court of Honduras thought otherwise. The judges unanimously agreed that the March 20, 1885 decree did not “confer property rights to concessionaires.” Sufficiently strong property rights to evict homeowners could only be acquired under provisions of the civil code.⁸⁸ In fact, the court’s opinion so strongly attacked the provisions of the mining code that a shock wave washed across the Pacific slope mining sector of Honduras. Many miners began wondering whether their concessions retained any worth at all.⁸⁹

President Bográn was away on vacation in Santa Bárbara when the legal crisis broke. It fell to his ministers Jerónimo Zelaya and Carlos Alvarado to handle the repercussions and particularly to quiet the fears of foreign mining agents. Valentine decided to force the issue; he threatened to shut his company down and leave the country if the court’s ruling was allowed to stand. Bográn’s ministers convinced him to postpone so precipitous an action until Bográn had an opportunity to iron out the difficulty. Both Alvarado and Zelaya wrote Bográn urgent letters advising him to give the company the definitive title it needed to continue operations.⁹⁰ Bográn went a step further, directing Alvarado to issue a decree reforming the mining code in such a way that it would satisfy the requirements set forth in the civil code.

This extremely important but little known decree of September 26, 1888, appeared in the official newspaper. The candid editorial which prefaced the decree deserves quoting at some length as it captures the spirit of the Bográn administrations political economics. The statement began by establishing the executive’s right, indeed his duty, to promote economic activities contributing to the commonweal. The mining industry, the editorialist claimed, played a primary role of this sort in Honduras.

The text of the decree followed this subversive attack on the judicial branch of the Honduran goverment. Article 4 went straight to the heart of the conflict between Rosario and Marcial Funes, Emeterio Segura, and Francisco Argeñal.⁹¹ Valentine, after seeing Bográn’s telegram to Carlos Alvarado commissioning him to change the law, wrote the president: it “set our minds at complete ease, because we are now assured that you will arrange everything satisfactorily.” The “good efforts of you on behalf of the company will save us; if this country did not have such a progressive chief, the company would have had to end its operations because of this judicial set back.” But now the company saw its way clear to continue mining gold and silver in the mountains around San Juancito.⁹²

For the mining industry, this September 26, 1888 presidential decree constituted an important benchmark. It gave the mining companies rights not only to land but also to other natural resources such as water, timber, and limestone. From this time forward, townsmen in San Juancito and elsewhere had very little legal room to maneuver in struggles against mining concerns intruding into their midst.⁹³

And yet the real importance of this measure enacted by Bográn lay not so much in its content, but in the political precedent it established. Ever since the Marco Aurelio Soto coup in 1876, the executive had consistently led the campaign to attract foreign capital and enterprise to Honduras. The congress, bastion of local special interests predating the country’s commitment to export developmentalism often lagged behind the presidency in supporting foreign companies. The courts seemed unconcerned with the economic ramifications of their blind justice in the Rosario eviction case. Bográn allowed the supreme court to make its decision and then overturned the decision by executive fiat. His ability to carry off this nullification of the judicial system’s autonomy provides an enlightening glimpse of the functional lack of separation of powers between the executive and judicial branches in Honduras. The incident itself, tipped the balance even more in the direction of the already preponderant domination of the central goverment by the executive branch. Foreign capitalists discerned which branch of the government was best able and willing to abet their interests. Subsequent waves of foreign entrepreneurs seeking their fortunes in other ventures followed in the political path to economic security blazed by Washington S. Valentine.⁹⁴

In conclusion, the New York and Honduras Rosario Mining Company (and to some extent the other mining companies) played an ambiguous role in the Honduran political economy of the late nineteenth century. On the one hand, it did bring about a modicum of economic development. The degree to which Hondurans benefited from these changes and how long they lasted is more difficult to assess. But in the words of one American economist after studying the country’s economy in the early 1950s: “the outstanding fact about … Honduras is that it has not progressed.” With its natural advantages, “Honduras might be expected to have become a thriving microcosm of economic development. Instead, it has gotten nowhere. To the considerable extent that it has wasted its resources, its situation is worse today than it was 140 years ago.”⁹⁵ Liberals would blame the mining boom’s failure to initiate an economic “take off” on the persistence of archaic cultural traditions and feudal institutional obstacles blocking the process of modernization. In contrast, radicals would characterize the mining boom as merely an early step in the “capitalistic underdevelopment” of Honduras.⁹⁶

As for the political ramifications, the evidence suggests that the 1887 reelection of Bográn was one of the freest, least violent, and perhaps even fairest ballotings in the country’s history. In spite of the predictable liberal charges of preelection harrassment of opposition candidates and election day coercion, there is little proof of the overt foreign intervention which would later become standard practice and relegate Honduras to the status of a “Banana Republic.” Yet beneath the superficially participatory democratic forms, the underlying reality is that the campesinos, such as those who lived in San Juancito, were unable to assert meaningful control over the economic, political, and social forces impinging on their lives or to resist arbitrary leaders and laws.⁹⁷ Presidents Soto and Bográn were ideologically predisposed to grant Rosario agents any assistance necessary and afford them all possible protection. The company came to expect generous mineral concessions, tax exempt status, but more significantly, executive intervention whenever mining conflicted with other local interests. In the absence of an autonomous middle-class political force the mining entrepreneurs, who might have allied themselves to the former to implement pluralistic political patterns, instead supported the established regime and utilized liberal economic ideological constraints, diplomatic pressure, and some subornation of strategically placed high officials to protect their favored status. Their alliance with traditional landed and bureaucratic elites mitigated against political innovations prejudical to their economic advantage. Predictably, this amalgam fashioned and sustained what has been aptly labeled “authoritarian semiparliamentary government” by one observer and “bureaucratic-authoritarianism” by another.⁹⁸ Such a coalition increasingly concentrated power at the top of the socioeconomic system and to that extent led Honduras further and further away from the path of actual democratic practice.

Author notes