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Rh Guatemala is surpassed only by Brazil and the East Indies in the quantity of coffee it exports. The chief plantations are owned and managed by Germans; more than half of the crop is sent to Germany, while three-fifths of the remainder go to the United States and one-fifth to Great Britain. The average yearly product is about 70,000,000 ℔, worth approximately £1,300,000, and subject to an export duty of one gold dollar (4s.) per quintal (101 ℔). Sugar, bananas, tobacco and cocoa are also cultivated; but much of the sugar and bananas, most of the cocoa, and all the tobacco are consumed in the country. During the colonial period, the cocoa of western Guatemala and Soconusco was reserved on account of its fine flavour for the Spanish court. The indigo and cotton plantations yield little profit, owing to foreign competition, and have in most cases been converted to other uses. The cultivation of bananas tends to increase, though more slowly than in other Central American countries. Grain, sweet potatoes and beans are grown for home consumption. Cattle-farming is carried on in the high pasture-lands and the plains of Peten; but the whole number of sheep (77,000 in 1900) and pigs (30,000) in the republic is inferior to the number kept in many single English counties. Much of the wool is sold, like the native cotton, to Indian and Ladino women, who manufacture coarse cloth and linen in their homes.

By the Land Act of 1894 the state domains, except on the coasts and frontiers, were divided into lots for sale. The largest holding tenable by one person under this act was fixed at 50 caballerias, or 5625 acres; the price varies from £40 to £80 per caballeria of 112½ acres. Free grants of uncultivated land are sometimes made to immigrants (including foreign companies), to persons who undertake to build roads or railways through their allotments, to towns, villages and schools. The condition of the Indians on the plantations is often akin to slavery, owing to the system adopted by some planters of making payments in advance; for the Indians soon spend their earnings, and thus contract debts which can only be repaid by long service.

In addition to the breweries, rum and brandy distilleries, sugar mills and tobacco factories, which are sometimes worked as adjuncts to the plantations, there are many purely urban industries, such as the manufacture of woollen and cotton goods on a large scale, and manufactures of building material and furniture; but these industries are far less important than agriculture.

During the five years 1900 to 1904 inclusive, the average value of Guatemalan imports, which consisted chiefly of textiles, iron and machinery, sacks, provisions, flour, beer, wine and spirits, amounted to £776,000; about one-half came from the United States, and nearly one-fourth from the United Kingdom. The exports during the same period had an average value of £1,528,000, and ranked as follows in order of value: coffee (£1,300,000), timber, hides, rubber, sugar, bananas, cocoa.

Finance.—Within the republic there are six banks of issue, to which the government is deeply indebted. There is practically neither gold nor silver in circulation, and the value of the bank-notes is so fluctuating that trade is seriously hampered. On the 25th of June 1903, the issue of bank-notes without a guarantee was restricted; and thenceforward all banks were compelled to retain gold or silver to the value of 10% of the notes issued in 1904, 20% in 1905 and 30% in 1906. This reform has not, to any appreciable extent, rendered more stable the value of the notes issued. The silver peso, or dollar, of 100 centavas is the monetary unit, weighs 25 grammes .900 fine, and has a nominal value of 4s. Being no longer current it has been replaced by the paper peso. The nickel coins include the real (nominal value 6d.), half-real and quarter-real. The metric system of weights and measures has been adopted, but the old Spanish standards remain in general use.

Of the revenue, about 64% is derived from customs and excise; 9% from property, road, military, slaughter and salt taxes; 1.7% from the gunpowder monopoly; and the remainder from various taxes, stamps, government lands, and postal and telegraph services. The estimated revenue for 1905–1906 was 23,000,000 pesos (about £328,500); the estimated expenditure was 27,317,659 pesos (£390,200), of which £242,800 were allotted to the public debt, £42,000 to internal development and justice, £29,000 to the army and the remainder largely to education. The gold value of the currency peso (75 = £1 in 1903, 70 = £1 in 1904, 58 = £1 in 1905) fluctuates between limits so wide that conversion into sterling (especially for a series of years), with any pretension to accuracy, is impracticable. In 1899 the rate of exchange moved between 710% and 206% premium on gold. According to the official statement, the gold debt, which runs chiefly at 4% and is held in Germany and England, amounted to £1,987,905 on the 1st of January 1905; the currency debt (note issues, internal loans, &c.) amounted to £704,730; total £2,692,635, a decrease since 1900 of about £300,000.

Government.—According to the constitution of December 1879 (modified in 1885, 1887, 1889 and 1903) the legislative power is vested in a national assembly of 69 deputies (1 for every 20,000 inhabitants) chosen for 4 years by direct popular vote, under universal manhood suffrage. The president of the republic is elected in a similar manner, but for 6 years, and he is theoretically not eligible for the following term. He is assisted by 6 ministers, heads of government departments, and by a council of state of 13 members, partly appointed by himself and partly by the national assembly.

Local Government.—Each of the twenty-two departments is administered by an official called a jefe politico, or political chief, appointed by the president, and each is subdivided into municipal districts. These districts are administered by one or more alcaldes or mayors, assisted by municipal councils, both alcaldes and councils being chosen by the people.

Justice.—The judicial power is vested in a supreme court, consisting of a chief justice and four associate justices elected by the people; six appeal courts, each with three judges, also elected by the people; and twenty-six courts of first instance, each consisting of one judge appointed by the president and two by the chief justice of the supreme court.

Religion and Instruction.—The prevailing form of religion is the Roman Catholic, but the state recognizes no distinction of creed. The establishment of conventual or monastic institutions is prohibited. Of the population in 1893, 90% could neither read nor write, 2% could only read, and 8% could read and write. Primary instruction is nominally compulsory, and, in government schools, is provided at the cost of the state. In 1903 there were 1064 government primary schools. There are besides about 128 private (occasionally aided) schools of similar character, owners of plantations on which there are more than ten children being obliged to provide school accommodation. Higher instruction is given in two national institutes at the capital, one for men with 500 pupils and one for women with 300. At Quezaltenango there are two similar institutes, and at Chiquimula there are other two. To each of the six there is a school for teachers attached, and within the republic there are four other schools for teachers. For professional instruction (law, medicine, engineering) there are schools supported by private funds, but aided occasionally by the government. Other educational establishments are a school of art, a national conservatory of music, a commercial college, four trades’ schools with more than 600 pupils and a national library. There is a German school, endowed by the German government.

Defence.—For the white and mixed population military service is compulsory; from the eighteenth to the thirtieth year of age in the active army, and from the thirtieth to the fiftieth in the reserve. The effective force of the active army is 56,900, of the reserve 29,400. About 7000 officers and men are kept in regular service. Military training is given in all public and most private schools.

History.—Guatemala was conquered by the Spaniards under Pedro de Alvarado between 1522 and 1524. Up to the years 1837–1839 its history differs only in minor details from that of the neighbouring states of (q.v.). The colonial period was marked by the destruction of the ancient Indian civilization, the extermination of many entire tribes, and the enslavement of the survivors, who were exploited to the utmost for the benefit of Spanish officials and adventurers. But although the administration was weak, corrupt and cruel, it succeeded in establishing the Roman Catholic religion, and in introducing the Spanish language among the Indians and Ladinos, who thus obtained a tincture of civilization and ultimately a desire for more liberal institutions. The Central American provinces revolted in 1821, were annexed to the Mexican empire of Iturbide from 1822 to 1823, and united to form a federal republic from 1823 to 1839. In Guatemala the Clerical, Conservative or anti-Federal party was supreme; after a protracted struggle it overthrew the Liberals or Federalists, and declared the country an independent republic, with Rafael Carrera (1814–1865) as president. In 1845 an attempt to restore the federal union failed; in 1851 Carrera defeated the Federalist forces of Honduras and Salvador at La Arada near Chiquimula, and was recognized as the pacificator of the republic. In 1851 a new constitution was promulgated, and Carrera was appointed president till 1856, a dignity which was in 1854 bestowed upon him for life. His