The National Bank of Nicaragua was founded under the Financial Plan of 1917, with the New York bankers in control, but the Nicaraguan Government holding 49% of the stock; the bank was operated by the Bank of Central and South America, New York, now dissolved. At the time (1925) that the interests of the Bank of Central and South America were transferred, so far as Latin American branches were concerned, to the Royal Bank of Canada, the Bank of Nicaragua was sold to the Nica raguan Government; American management was retained, how ever, and the Government elected as directors, in New York, the men from the interested banks who had been in charge previously. This bank was given full power to issue currency in the form of bank notes, with the new unit of currency, the cordoba, equal to the American dollar.
Nicaragua has been virtually without an army since 1912, when American marines were first landed, to remain 13 years, and furnished ample defence to the Government from enemies within and without. A small guard was maintained at the capital, largely for parade purposes. When the marines were withdrawn on Aug. 3, 1925, a National Guard had been designed, but was organized only with difficulty by former American army officers employed by the Nicaraguan Government. Following the return of the American marines in 1927, the guard was organized on a new basis, with active American army officers and non commissioned officers detailed to the work. The Guardia Nacional numbered (1929) between 2,000 and 2,500 men and is used as both police and military; the American marine guard continues in the country.
Nicaragua is prosperous when the coffee crop is good and the world prices high; other factors in its economic life are dependent almost alone on the political and financial situation. The coffee crop in 1927, owing to revo lutionary disturbances and somewhat lowered world prices, was the lowest since 1923, a year of low prices throughout the world. Coffee, even in 1927, amounted to about 45% of the total exports. The figures of imports and exports for the five years 1923-27 are Coffee exports in 1927 were 10,255,112 kilo., valued at C$4, 081,605. In 1926 they were 17,671,644 kilo., valued at C$8,100, 397. Lumber, the second item of export, was valued at C$1,
in 1927, and at C$1,342,238 in 1926. Bananas were exported in 1927 to a total of 2,386,191 bunches, worth C$1, 442,383, and in 1926 2,162,745 bunches, worth C$1,225,661.
In the import trade of Nicaragua, the United States is the chief source, sending
in 1927; Great Britain second with C$1,169,632 and Germany third with C$687,812. The United
States also receives the bulk of the exports. In 1927 France was second, Germany third and Great Britain fourth. Nicaragua exports a considerable number of cattle, including draught animals, to the other Central American countries. It is also a producer of gold and silver, the gold mines in the interior on the Caribbean side of the country having been the scene of the depredations of the insurrecto Sandino in 1927-28.
Nicaragua has one excellent port, Corinto (q.v.), on the Pacific coast ; and San Juan del Sur is also used for the southern part of the country. On the Caribbean coast, Bluefields (q.v.) and San Juan del Norte or Greytown (q.v.) are the chief ports, although San Juan is now virtually isolated by sand bars. Within the country communications are limited. The only railway is the Pacific railway, extending from Corinto to Granada, a distance of 118 m., but reaching en route Chinan dega, Leon, Managua and Masaya, among the principal towns of the country. Highways are not greatly developed.
The history of Nicaragua in connection with the other Central American countries and down to the dissolution of the Union is discussed in the article on CENTRAL AMERICA. The first white man to see Nicaragua was Gil Gonzalez de Avila, who landed on the coast of Chirique in 1522. The leading Indian tribe of the country was then led by a great chief called Nicarao, from whom the country doubtless derived its name. Nicarao was baptized, and his tribe converted to the Roman Catholic faith, and moved with the Spaniards to the conquest of the other tribes. Hernan de C6rdoba, who succeeded Gil Gonzalez in command of the province for Spain, founded Granada in
the city then being situated between the two great lakes. Nica ragua was incorporated, for administrative purposes, in the cap tain-generalcy of Guatemala. Nicaragua, with independent exist ence dating from the dissolution of the Central American Union in 1838, early developed into a battle between the two rival cities of Leon and Granada, the former the capital of the Liberals, the latter of the Conservatives. In 1856 the American fili busterer, William Walker (q.v.), arrived with his 66 followers, espousing the cause of Leon and waging a bitter war against the Granadinos which ended in his execution in 186o.