The Overthrow of Zelaya, 1909: How the US Removed a Defiant Nicaraguan President for Banks and Mines

The overthrow of Zelaya is the story of how in 1909 the United States got rid of Nicaraguan President José Santos Zelaya, who dared to behave independently. Washington backed a rebellion on the Atlantic coast, broke off diplomatic relations with Nicaragua, and then landed marines so that the rebels would not lose. Meanwhile, the money for the uprising came from the bookkeeper of an American mining company. A year later this bookkeeper would become president of the country.

I do not idealise Zelaya. He was a harsh ruler, jailed opponents and meddled in his neighbours’ affairs, as I wrote in my article on the war between Nicaragua and Honduras. But let’s be honest: the US did not overthrow him for that at all. There were plenty of dictators in the region who obeyed Washington, and nobody touched them.

Why Washington disliked Zelaya

Zelaya had ruled Nicaragua since 1893. He built railways, schools and telegraph lines, and separated church and state. In addition, in 1894 he returned to Nicaragua the Mosquito Coast, where the British and American traders had previously run things. In other words, he was a nationalist who wanted to be master in his own country.

This is where the problems began. First, Zelaya demanded that foreign companies pay taxes and honour their concessions, and he was in litigation with the American timber firm Emery. Second, after the US chose Panama, rumours spread in Washington that Zelaya would offer the rights to a Nicaraguan canal to Japan or Germany. Third, in 1909 he took a large loan from British bankers rather than American ones. For the Taft administration, which had just proclaimed “dollar diplomacy”, this was almost an insult.

A secretary of state with interests in Nicaragua

Taft’s secretary of state was Philander Knox, a former corporate lawyer from Pittsburgh. And here is a coincidence: one of the main American enterprises in Nicaragua was the La Luz and Los Angeles gold-mining company, also linked to Pittsburgh money. Historians have repeatedly pointed to Knox’s ties with its owners. Moreover, it was the company’s secretary-bookkeeper, Adolfo Díaz, who would turn out to be the main sponsor of the coup.

The revolt in Bluefields: the overthrow of Zelaya begins

On 10 October 1909, the governor of the Atlantic coast, Juan José Estrada, raised a revolt in Bluefields. He was joined by the conservative Emiliano Chamorro and that same Adolfo Díaz. According to widespread accounts, Díaz contributed about 600 thousand dollars to the revolution, although he earned roughly a thousand dollars a year at the company. Where a modest bookkeeper got that kind of money is not hard to guess.

Meanwhile, American mercenaries were fighting in the rebel ranks. In November, Zelaya’s troops caught two of them, Lee Roy Cannon and Leonard Groce, as they tried to blow up a government steamer on the San Juan River. Both were tried and shot. Of course, it was a brutal reprisal. However, let’s not forget that these men had come of their own accord to fight in someone else’s civil war.

The Knox Note

For Washington, the execution was the perfect pretext. On 1 December 1909, Knox sent the Nicaraguan chargé d’affaires a note that would later be called the “Knox Note”. In it he called Zelaya’s regime “a blot upon the history of Nicaragua”, broke off diplomatic relations and declared that the revolution represented the “will of a majority” of Nicaraguans. In other words, the US government officially sided with the rebels.

By the way, Mexico tried to soften the blow, and President Porfirio Díaz offered mediation. However, Washington had no need for mediators. What’s more, in those same years American mercenaries and banana magnates were also running things in neighbouring Honduras, where in 1911 they would stage the “Christmas coup”. Thus the overthrow of Zelaya was part of a broader campaign: Central America had to be made safe for American money. The American filibusters had reasoned in much the same way half a century earlier, only now the State Department acted instead of private armies.

How the overthrow of Zelaya was completed

Zelaya understood that he could not hold out against America. In December 1909 he resigned and fled to Mexico on a Mexican gunboat. Congress elected the liberal José Madriz as president, but Washington did not recognise him either. After all, Madriz was from the same party, and the US needed not a new liberal but “its own” man.

In the spring of 1910, Madriz’s troops almost crushed the rebels and approached Bluefields. And then the US Marines landed under the command of Major Smedley Butler. The Americans declared the town a “neutral zone” where government troops were forbidden to fight. In addition, the US Navy did not allow the government to blockade the port, so the rebels calmly received customs money and weapons. As a result, Madriz fell in August 1910, and Estrada entered Managua.

Butler himself later admitted that he had been “a gangster for capitalism” and had helped “purify Nicaragua for the international banking house of Brown Brothers”. It’s hard to put it more precisely. I tell what happened next with the new regime in my article on dollar diplomacy in Nicaragua. The Americans, incidentally, had meddled in this country before — remember William Walker — and two years later a long occupation of Nicaragua would begin. A biography of Zelaya himself is in the Wikipedia article.

Nothing has changed: defiant presidents are still removed today

If you think the overthrow of Zelaya is a thing of the distant past, look at the news. The method has stayed the same: declare an unwanted leader a criminal, support his enemies, and then send in the military. Only the words have changed. Instead of a “blot on history” they now say “narco-terrorist”, instead of the “will of the majority” — “liberating the people”.

Venezuela, 2025–2026. First Washington raised the bounty on Nicolás Maduro’s head to 50 million dollars and called him the head of a drug cartel. Then an armada was assembled off Venezuela. And on 3 January 2026 the Americans bombed Caracas and took Maduro to the US on an amphibious assault ship. After that, Trump demanded “total access” to Venezuelan oil — just as American companies once did in Nicaragua.

Iran, February 2026. On 28 February, American and Israeli strikes killed Iran’s supreme leader, Ali Khamenei. Trump at the same time called on Iranians to “take your destiny into your own hands”, that is, to overthrow their own government. The Knox Note, after all, also declared that the revolution expressed “the will of the people”.

Colombia, October 2025. President Gustavo Petro criticised the American strikes on boats in the Caribbean. In response, Trump called him an “illegal drug leader”, and the US Treasury imposed sanctions on Petro and his family. The legitimately elected president of an allied country was punished for disagreeing.

The overthrow of Zelaya showed how it works: an inconvenient leader is declared a villain, and a convenient one is put in his place. More than a hundred years have passed, and the only thing that has changed is that instead of Major Butler there are now special forces, and instead of a note — a social media post.