The Growth of the Coffee Industry
The biggest economic success was the takeoff of Colombia’s coffee industry. Coffee planting had grown steadily in the late nineteenth century. At the same time, the center of the industry was shifting westward, from the Cordillera Oriental to Antioquia and adjoining areas of antioqueño colonization. Here, the pattern of smallholdings was ideally suited to production of the higher grades of coffee in which Colombia came to specialize. Paradoxically, recurring crises of coffee overproduction in Brazil also helped, by causing the Brazilian government to undertake programs of crop reduction and price stabilization that in practice gave other nations, such as Colombia, an incentive to increase their output. Shipping problems and temporary loss of the German market hindered the advance of coffee during World War I, but in the mid-1920s it accounted for roughly three-quarters of Colombian export value, and Colombia was then the leading producer after Brazil. Colombia had no serious rival for that second-place ranking until the rapid rise of Vietnamese coffee production at the end of the twentieth century.
Although overshadowed by coffee and centered in a coastal enclave around the port of Santa Marta, bananas were another rising export commodity. The exploitation of petroleum deposits in the central Magdalena valley was also underway, initially for the domestic market, but by 1930 petroleum was being exported on a modest scale. The new textile mills clustered around Medellín were importers of cotton rather than exporters of finished cloth, but their growing importance was an indication of Colombia’s belated and still somewhat limited entry into the industrial age. They at least found an expanding home market, including among campesino families who until the rise of coffee could seldom afford factory-made cloth. Like coffee growing, textile manufacturing was almost entirely in Colombian hands, whereas the Boston-based United Fruit Company controlled the banana trade, and U.S. and British firms had a stake in exploiting Colombian oil.
The fact that Colombia’s leading export industry, coffee—with at least some presence in all parts of the country and multiple linkages to other segments of the economy—remained under native control tended to mute the appeal of economic nationalism, in which respect Colombia differed from much of Latin America. Total foreign investment remained low, mainly because foreign capitalists saw even greater advantages elsewhere. Yet most leaders of both parties were favorably disposed toward foreign capital, however much they might question the details of a concession or specific actions of a foreign company. For this reason, the Colombian government showed increasing interest in the very thing that led to Reyes’s downfall: full normalization of relations with the United States, which supposedly would demonstrate to outside investors that a friendly climate awaited them.
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