British and United States interests in Nicaragua grew during the mid-1800s because of the country's strategic importance as a transit route across the isthmus. British settlers seized the port of San Juan del Norte -- at the mouth of the Río San Juan on the southern Caribbean coast -- and expelled all Nicaraguan officials on January 1, 1848. The following year, Britain forced Nicaragua to sign a treaty recognizing British rights over the Miskito on the Caribbean coast. Britain's control over much of the Caribbean lowlands, which the British called the Mosquito Coast (present-day Costa de Mosquitos), from 1678 until 1894 was a constant irritant to Nicaraguan nationalists. The start of the gold rush in California in 1849 increased United States interests in Central America as a transoceanic route, and Nicaragua at first encouraged a United States presence to counterbalance the British.
The possibility of economic riches in Nicaragua attracted international business development. Afraid of Britain's colonial intentions, Nicaragua held discussions with the United States in 1849, leading to a treaty that gave the United States exclusive rights to a transit route across Nicaragua. In return, the United States promised protection of Nicaragua from other foreign intervention. On June 22, 1849, the first official United States representative, Ephraim George Squier, arrived in Nicaragua. Both liberals and conservatives welcomed the United States diplomat. A contract between Commodore Cornelius Vanderbilt, a United States businessman, and the Nicaraguan government was signed on August 26, 1849, granting Vanderbilt's company--the Accessory Transit Company--exclusive rights to build a transisthmian canal within twelve years. The contract also gave Vanderbilt exclusive rights, while the canal was being completed, to use a land-and-water transit route across Nicaragua, part of a larger scheme to move passengers from the eastern United States to California. The westbound journey across Nicaragua began by small boat from San Juan del Norte on the Caribbean coast, traveled up the Río San Juan to San Carlos on Lago de Nicaragua, crossed Lago de Nicaragua to La Virgen on the west shore, and then continued by railroad or stagecoach to San Juan del Sur on the Pacific coast. In September 1849, the United States-Nicaragua treaty, along with Vanderbilt's contract, was approved by the Nicaraguan Congress.
British economic interests were threatened by the United States enterprise led by Vanderbilt, and violence erupted in 1850 when the British tried to block the operations of the Accessory Transit Company. As a result, United States and British government officials held diplomatic talks and on April 19, 1850, without consulting the Nicaraguan government, signed the Clayton-Bulwer Treaty, in which both countries agreed that neither would claim exclusive power over a future canal in Central America nor gain exclusive control over any part of the region. Although the Nicaraguan government originally accepted the idea of a transit route because of the economic benefit it would bring Nicaragua, the operation remained under United States and British control. Britain retained control of the Caribbean port of San Juan del Norte, and the United States owned the vessels, hotels, restaurants, and land transportation along the entire transit route.
Continued unrest in the 1850s set the stage for two additional elements in Nicaragua history: frequent United States military interventions in Nicaragua and a propensity for Nicaragua politicians to call on the United States to settle domestic disputes. In 1855 a group of armed United States filibusters headed by William Walker, a soldier of fortune from Tennessee who had previously invaded Mexico, sailed to Nicaragua intent on taking over. Internal conflict facilitated Walker's entry into Nicaragua. In 1853 conservative General Fruto Chamorro had taken over the government and exiled his leading liberal opponents. Aided by the liberal government in neighboring Honduras, an exile army entered Nicaragua on May 5, 1854. The subsequent conflict proved prolonged and bloody; Chamorro declared that his forces would execute all armed rebels who fell into their hands, and the liberal leader, General Máximo Jérez, proclaimed that all government supporters were traitors to the nation.
The liberals enjoyed initial success in the fighting, but the tide turned in 1854 when Guatemala's conservative government invaded Honduras, forcing that nation to end its support of the liberals in Nicaragua. Chamorro's death from natural causes in March 1855 brought little respite to the beleaguered liberals, who began to look abroad for support. Through an agent, they offered Walker funds and generous land grants if he would bring a force of United States adventurers to their aid. Walker leaped at the chance--he quickly recruited a force of fifty-six followers and landed with them in Nicaragua on May 4, 1855.
Walker's initial band was soon reinforced by other recruits from the United States. Strengthened by this augmented force, Walker seized Granada, center of conservative power. The stunned conservative government surrendered, and the United States quickly recognized a new puppet liberal government with Patricio Rivas as president. Real power, however, remained with Walker, who had assumed command of the Nicaraguan army.
As Walker's power and the size of his army grew, conservative politicians throughout Central America became increasingly anxious. Encouraged by Britain, the conservative governments of the other four Central America governments agreed to send troops to Nicaragua. In March 1856, Costa Rica declared war on the adventurer, but an epidemic of cholera decimated the Costa Rican forces and forced their withdrawal. Encouraged by this victory, Walker began plans to have himself elected president and to encourage colonization of Nicaragua by North Americans. This scheme was too much even for his puppet president Rivas, who broke with Walker and his followers and sent messages to Guatemala and El Salvador requesting their help in expelling the filibusters.
Undeterred, Walker proceeded to hold a farcical election and install himself as president. Making English the country's official language and legalizing slavery, Walker also allied himself with Vanderbilt's rivals in the contest for control of the transit route, hoping that this alliance would provide both funds and transportation for future recruits. His call for Nicaragua's annexation by the United States as a slave state garnered some support from United States proslavery forces.
In the meantime, forces opposing Walker were rapidly gaining the upper hand, leading him to attack his liberal allies, accusing them of half-hearted support. Most Nicaraguans were offended by Walker's proslavery, pro-United States stance; Vanderbilt was determined to destroy him, and the rest of Central America actively sought his demise. The British also encouraged opposition to Walker as a means of curbing United States influence in the region. Even the United States government, fearful that plans to annex Nicaragua as a new slave state would fan the fires of sectional conflict growing within the United States, became opposed to his ambitions.
The struggle to expel Walker and his army from Nicaragua proved to be long and costly. In the process, the colonial city of Granada was burned, and thousands of Central Americans lost their lives. The combined opposition of Vanderbilt, the British Navy, and the forces of all of Central America, however, eventually defeated the filibusters. A key factor in Walker's defeat was the Costa Rican seizure of the transit route; the seizure permitted Walker's opponents to take control of the steamers on Lago de Nicaragua and thereby cut off much of Walker's access to additional recruits and finances. Vanderbilt played a major role in this effort and also supplied funds that enabled the Costa Ricans to offer free return passage to the United States to any of the filibusters who would abandon the cause. Many took advantage of this opportunity, and Walker's forces began to dwindle.
The final battle of what Nicaraguans called the "National War" (1856-57) took place in the spring of 1857 in the town of Rivas, near the Costa Rican border. Walker beat off the attacks of the Central Americans, but the strength and morale of his forces were declining, and it would be only a matter of time until he would be overwhelmed. At this point, Commander Charles H. Davis of the United States Navy, whose ship had been sent to Nicaragua's Pacific coast to protect United States economic interests, arranged a truce. On May 1, 1857, Walker and his remaining followers, escorted by a force of United States marines, evacuated Rivas, marched down to the coast, and took the ships back to the United States.
Walker's forced exile was short-lived, however; he made four more attempts to return to Central America (in 1857, 1858, 1859, and 1860). In 1860 Walker was captured by a British warship as he tried to enter Honduras. The British Navy turned him over to local authorities, and he was executed by a Honduran firing squad. Walker's activities provided Nicaraguans with a long-lasting suspicion of United States activities and designs upon their nation.