In the case of Honduras, the central figure in the liberal reform was Marco Aurelio Soto, who became chief of state in 1876. The Soto government used the state apparatus to remove obstacles to economic development and to promote sustained capitalist development, especially the development of mining and agricultural production for export. Obsolete Spanish laws, incompatible with capitalist economic development, were replaced with new laws that stimulated credit, agriculture, commerce, and industry and which encouraged foreign investment.
The Soto government adopted a number of policies to promote the production of coffee, sugar, indigo, and cocoa for export. An 1877 law granted free land to agricultural producers. According to the law, enterprisers wanting to form a plantation on national lands were able to solicit the government to obtain free title to the land, with the size of the grant to be judged according to the importance of the enterprise. In regard to common lands of villages, which were legacies of pre-conquest Native American societies, villages were required to sell or lease any land not being cultivated permanently. In addition, the law exempted agricultural producers from payment of taxes on tools, machinery, fertilizer, seed, and housing construction materials. It defined an agricultural producer as someone who had enclosed land with a drainage system and who cultivated at least five manzanas of coffee, ten of sugar, eight of indigo, or eight of cocoa. In order to facilitate the sale of these products in the world market, the government constructed systems of transportation and communication. Moreover, the Soto government took measures to ensure the availability of cheap labor on agricultural plantations: it forced the rural masses to work by requiring villages to provide day laborers to agricultural plantations. In order to ensure control over the rural population and the coerced labor force, the government modernized the army and increased its size.
As a result of liberal policies, Honduras experienced a tremendous growth in the production of coffee in the 1870s and 1880s.
The liberal reform also facilitated a revival of mining activity in Honduras, which had declined after an initial growth during the sixteenth and seventeenth centuries. The 1880 constitution eliminated restrictions that had prohibited foreigners from owning and exploiting mines. In addition, concessions and privileges to national and foreign companies were granted. These included free rights of exploitation of silver, gold, copper and other minerals; exemptions from taxes and tariffs on machinery, equipment, and any material necessary for the exploitation of the mines; the free use of wood and water on national and common lands; the construction of highways; and coerced labor that villages were mandated by law to provide. As a result of these policies, mining exports comprised fifty-five percent of Honduran exports during the 1880s, with silver being the most important. By 1888-89, Honduras had become the most important exporter of minerals in the region. There were 300 silver, gold, lead, and copper mines in Honduras, with silver being the most important. The silver mining companies were almost entirely North American owned. In the 1890s, the international market for silver declined, due to the fact that most countries abandoned silver as a base for the monetary system. This decline in the world market, in conjunction with the relative inaccessibility of the mines due to the undeveloped transportation system and the mountainous terrain, led to a decline in the production of silver, such that by 1900 it virtually came to an end.
The liberal reform in Honduras at the end of the nineteenth illustrates what would become a fundamental characteristic of peripheral and semi-peripheral regions in the neocolonial world-system of the twentieth century: a government policy of attracting foreign investment by giving away the natural resources of the country. This policy was not only demanded by the core, but it also was actively supported by the peripheral elite, which took decisive action in defense of its particular interests, at the expense of the interests of the nation. The anti-neocolonial Third World movements of the twentieth century would seek to end this give-away of natural resources, and they would seek to develop policies that protect the natural and human resources of the country from the avaricious forces of the core, seeking to promote the true independence and the economic and social development of the nation.
Booth, John A. and Thomas W. Walker. 1993. Understanding Central America, Second Edition. Boulder: Westview Press.
Meza, Victor. 1982. Honduras: La Evolución de la Crisis. Tegucigalpa: Editorial Universitaria, Universidad Nacional Autónoma de Honduras.
Molina Chocano, Guillermo. 1976. Estado Liberal y Desarrollo Capitalista en Honduras. Tegucigalpa: Banco Central de Honduras.
Murga Frassinetti, Antonio. 1978. Enclave y Sociedad en Honduras. Tegucigalpa: Editorial Universitaria, Universidad Nacional Autónoma de Honduras.
Weaver, Frederick Stirton. 1994. Inside the Volcano: The History and Political Economy of Central America. Boulder: Westview Press.
Key words: Third World, revolution, colonialism, neocolonialism, imperialism, democracy, national liberation, sovereignty, self-determination, socialism, Marxism, Leninism, Cuba, Latin America, world-system, world-economy, development, underdevelopment, state, coffee, silver, open veins of Latin America, Galeano, Honduras, liberalism