In Guatemala, Part II [pp. 265-277]

In Guatemala
the national finances and the reasons for
the present financial conditions. Guatemala is inherently a remarkably rich country capable of producing for its home
consumption and for export sufficient to
establish it among the opulent governments of the world. Its foreign debt is
comparatively small-about $70,000,000
I believe,-but the interest thereon is
always far behind. The dishonesty of the
officials, collectors of internal revenue, customs officers and others insures the result
that only a very small proportion of the
receipts reach their proper destination.
Imbued with the ever false but ever popular idea that by stamping a bit of paper
with a dollar-mark money can be created
which will have the value assigned to it,
the government has issued from time to
time so-called paper money backed by
absolutely nothing, which, in the ordinary
course of events and following the undeniable law of supply and demand, has
retrograded in value till recently a dollar
of our money would buy ten Guatemalan
paper pesos. Silver, the staple coin of the
country, is hoarded and its place usurped
by private issues of metal tokens which
pass for their face-value according to the
known condition of solvency of the company, firm, or individual issuing them.
This system has the advantage of allowing every one to be his own mint, but
the disadvantages are obvious. The banks
are nearly all seriously involved, with large
issues of bills and small reserves and subject to frequent demands from the government for loans which they dare not refuse
and which are never repaid. The banking
features are too complicated to more than
briefly refer to in this article.
Then again, the labor question is one
that materially concerns the country's
prosperity. The present system of Mozo
labor is directly derived from Spanish customs, notoriously inefficient for modern requirements. The fincero, or planter,
makes advances to the Indian laborers,
and secures a hold upon them, increasing
as their debt to him increases, and he is
permitted by the law to follow, arrest and
bring back any indebted laborer seeking
by flight his freedom from this practical
serfdom. Once in debt, the Indian can
never escape, and the landlord is esteemed
the most fortunate who is the heaviest
creditor of his own plantation. Comment
is unnecessary to point out the viciousness
of such a system.
Coffee, the staple product of the country,
has depreciated enormously from various
causes, among which may be cited the
tremendous increase in the Brazilian yield,
the increased consumption of cheaper
grades, in the production of which Guatemala connot compete, owing to numerous
causes; hence the planter who regarded
his income a few years ago as absolutely
assured for all time, proceeded to discount
it by lavish and extravagant expenditures,
and in the majority of cases (I speak advisedly) mortgaged his plantation to procure the means of immediate enjoyment
which almost invariably included a large
gambling fund. This necessitated a heavy
rate of interest, and then, the inflated
valuation of the land coming down, crops
bringing smaller prices, and interest accumulating, came foreclosure and ruin. The
Germans loaned the largest amounts, and
hence have become the heaviest holders of
landed estates, their interests it is estimated now exceeding $50,000,000 on
securities that would not bring a quarter
of that sum and on which the revenue derived has shrunk in even greater proportion.
Back of all these causes is the insecurity
of the government, which is at any
moment liable to be overthrown. But,
first and foremost, the primary cause of all
the misfortunes that have overtaken this
unhappy land is its people. Unstable,
devoid of business integrity, treacherous,
turbulent, uniting the worst traits of the
low-class Spaniard and the Indian race
from which they trace their descent, they
are unfitted for the great responsibility of
self-government to which they have fallen
heir. The remark is attributed to the
third Napoleon (with how much truth I
cannot state), when speaking of this country, which he had never seen: "It is a
paradise. There is nothing it cannot produce." Then, after a pause, "What a pity
it is inhabited!"2 And so with these but
too true words I leave the country of
"Maninaa" and "No hay."
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