Ecuador Reform, Chaos, and Debacle, 1925-44
Figure 2. Territory Disputed by Ecuador and Peru
Source: Based on information from Keesing's, Border and Territorial
Disputes, London, 1982, 368.
The reformist officers initially named a governing junta
consisting of prominent opponents of the Liberal plutocracy, but
neither it nor a succeeding junta was able to consolidate the power
necessary to govern effectively. In 1926 they named as provisional
president Isidro Ayora, a dedicated reformer who, although married
into one of the wealthiest coastal families, possessed a social
conscience and the vision to see that reform would help preserve
the status of the upper classes. Ayora quickly assumed dictatorial
powers, with which he set out to institute reforms that were partly
of his own making and partly the making of the League of Young
Officers.
An advisory mission from Princeton University, headed by Edwin
W. Kemmerer, was invited to propose measures to reorganize
Ecuador's fiscal and monetary structures. Its major accomplishment
was the creation of the Central Bank of Ecuador (Banco Central),
which replaced the private banks' authority in the issuing of
currency; in addition, the Kemmerer mission also reorganized the
state budgeting and customs agencies. The appropriation of these
functions, which were previously under the control of la
argolla, brought a revenue windfall to the government during
the next half-decade. In addition to building state fiscal and
social agencies, the funds were used to initiate a number of
programs, including pensions for state workers, that enhanced the
security of the middle and lower economic sectors of the
population. A range of social legislation--quite progressive for
its day--intended to protect the working class from unscrupulous
employers and to improve working conditions emerged from the
enactment of the 1929 constitution.
The same constitution, Ecuador's thirteenth in just under a
century as a republic, also provided for a powerful legislative
body with authority to censure presidential ministers. This
diminution of executive power, the appearance of a wide variety
(socialist, communist, and populist) of new groupings in political
competition with the traditional parties and with the military, and
the devastating effects of the Great Depression combined to make
Ecuador's political record especially unstable during subsequent
years. Ayora was the first of fourteen chief executives during the
1930s.
World demand for cacao and other Ecuadorian export crops
dropped precipitously in the wake of the 1929 Wall Street crash:
export crop value fell from US$15 million in 1928 to US$7 million
in 1931 and US$5 million in 1932, causing widespread unemployment
and misery. Few objections were voiced in 1931 when Ayora was the
victim of a military coup. Neptalí Bonifaz Ascázubi was then
elected with the help of a quasi-fascist grouping of the
serrano lower classes called the Consolidation of National
Workers (Compactación Obrera Nacional). In August 1932, after
various Liberal and leftist elements in Congress blocked Bonifaz's
assumption of power, the Compactación fought a bloody four-day
civil war against other paramilitary forces amassed by opponents of
the president-elect. The latter were victorious, largely because
the great majority of the government military forces remained in
their barracks rather than defend Bonifaz.
Another election two months later brought victory for the
Liberal candidate, Juan de Dios Martínez Mera, but soon accusations
arose that the election had been fraudulent. The congressional
opposition censured virtually every minister as soon as he was
named and also encouraged the Compactación to lead demonstrations
against the president in the streets of Quito. The campaign against
Martínez was led by the charismatic president of the Chamber of
Deputies, José María Velasco Ibarra, who at the time professed a
"total lack of presidential ambitions." In September 1934, less
than a year after Martínez was forced to resign, Velasco assumed
the presidency after having won popular elections by an
overwhelming margin.
The first of Velasco's five periods as president lasted only
eleven months. He was overthrown by the military after attempting
to assume dictatorial powers by dissolving Congress and jailing his
congressional opponents. Shortly thereafter, the military placed
Federico Páez in the presidential palace. An engineer and former
senator, Páez ruled precariously for two years, first with the
political support of the socialist left and then with that of the
right, and he tried to advance the reforms undertaken by Ayora a
decade earlier. Ongoing fiscal difficulties severely limited Páez's
efforts, however, and in September 1937 he was overthrown by his
minister of national defense, General Alberto Enríquez Gallo.
Although he ruled for less than a year, Enríquez achieved note as
a social reformer by his promulgation of the Labor Code of 1938.
Enríquez is also remembered for having initiated a protracted
confrontation with the United States-based South American
Development Company over the terms of its Ecuadorian concession and
the wages it paid its Ecuadorian employees. The company refused to
comply with Enríquez's entreaty that more of the profits from its
mining operations stay in Ecuador, and it won the support of the
United States Department of State. The Ecuadorian government
continued its demands despite United States pressure. In 1940 the
United States, hoping to obtain Ecuadorian cooperation in its
anticipated war effort, ended its support for the mining firm.
Ecuadorian President Carlos Alberto Arroyo del Río, in turn, proved
generous in his cooperation with the Allies, allowing the United
States to build a naval base on the Galápagos Islands and an air
base at Salinas on the Ecuadorian mainland.
In addition to being a genuine friend and admirer of the United
States, Arroyo del Río was the leader of the PLR and a
representative of the Guayaquil-based "plutocracy." He came to
power constitutionally in November 1939 upon the death of his
predecessor, but he continued in office in January 1940 through
fraudulent elections that were universally believed to have been
won by Velasco, and continued in power later, through repression.
Despite such antipopular methods of ruling, he managed to remain in
office for almost four years, thanks to economic support by the
United States and the recuperation of Ecuador's export markets as
worldwide economic depression gave way to recovery during World War
II.
Arroyo del Río's undoing was the disastrous 1941 war with Peru.
Although the prior sequence of events--the breakdown of talks aimed
at resolving the boundary issues in 1938, followed by repeated
border skirmishes--had given ample warning of a possible outbreak
of large-scale hostilities, Ecuador was unprepared to meet the July
5 Peruvian invasion. Furthermore, the president's fear of being
left unprotected from his opponents led him to keep the nation's
best fighting forces in Quito while Peruvian troops continuously
attacked the nation's southern and eastern provinces until a ceasefire went into effect on July 31.
Peru's occupation ended only after January 1942, when the two
nations signed the Protocol of Peace, Friendship, and Boundaries
while attending the Third Conference of Foreign Ministers of the
American Republics in Rio de Janeiro. Under the terms of the Rio
Protocol, the informal name of the agreement, Ecuador renounced its
claim to some 200,000 square kilometers of territory. Shortly
afterward, the Rio Protocol was ratified by a bare plurality of the
Ecuadorian legislature
(see
fig. 2).
The Ecuadorian government quickly regretted having become a
party to the Rio Protocol. The protocol became the focus of a surge
of Ecuadorian national pride and concomitant opposition to Arroyo
in a new coalition--the Democratic Alliance. The coalition brought
together a wide array of Ecuadorian politicians dedicated to
replacing the "president who had been unable to defend the national
honor." Arroyo's rejoinder that he would remain in office the full
four years, "neither one day more nor one day less," and his being
prominently hailed in Washington as "the Apostle of PanAmericanism " only increased his political isolation. A persistent
inflation that whittled away at the purchasing power of salaried
workers was a further cause of popular resentment against Arroyo.
In May 1944, following an uprising in Guayaquil that pitted the
military and civilian supporters of Velasco against Arroyo's
police, the president finally resigned. The military handed power
to the Democratic Alliance, which in turn named Velasco, whose
electoral candidacy had recently been vetoed by Arroyo, as the
popularly acclaimed president of the republic. The populist master
returned triumphantly from exile in Colombia, greeted by throngs of
enthusiasts during a three-day journey to Quito, to assume the
presidency for the second time.
Data as of 1989
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