The main concern of President Font was seeing whether he could work with his Congress. He had low expectations for the Liberals, who had, in his eyes, ruined the administrations of both Diaz and Bonifaz with their plain refusal to work together with the Conservatives. The Pelucones were more promising. The Triumvirate of Cauca, meeting with him in the Executive Palace, assured him of their intention of advancing his agenda if, in return, he and his party conceded to them as well. They refused to be “absorbed” into the PCN as some politicians hoped. But they were willing to work with Font, as shown when Font put forward his choices for his cabinet and they approved them immediately.
Adolfo Dominguez, Bonifaz’s Chancellor (the name of the Minister of Foreign Affairs in several Latin American countries) was allowed to remain in his post due to being a fairly neutral politician, and to continue advancing an imperialist foreign policy and protect Colombian interests in the face of US ambitions over the Caribbean and Central America. The office of Economy Minister went to a progressive National Conservative, Marco Ureña, who championed a structured tax-plan so that the poorest Colombians would not be unduly burdened.
Font was fortunate in that he came in the right moment to reap the fruits of economic recovery. Coffee and cacao started replace sugar as the main Colombian export, with Colombia quickly becoming the greatest exporter and producer of both goods. The expansion of the global market meant that Europe and the US became fertile markets for both products, and soon the government started to report surpluses from the first time since 1846. This money surplus was quickly invested back into the economy when Font signed a widely supported bill that reversed some of the Diaz-era cuts while maintaining the main frame of Bonifaz’s tax and tariff plans.
Colombia was mostly aided by more robust banking institutions. Shook by the Crash of 51, Colombian banks sought new, more responsible and more stable sources of investment and specie. There was greater cooperation with the Federal government, especially the use of bonds and a strengthened piastra. With the confidence on the National currency restored, Colombian investment on and by foreign and national enterprises started anew. The better situation in Mexico, La Plata, and Brazil opened the way for abundant Anglo-Colombian projects. In the Caribbean, the situation in Cuba was degenerating, with the island descending into open rebellion in 1858, and investors turned to Colombia once again.
The government moved away from foreign loans as a main means of finance, turning instead to government bonds and land sales for revenue. Bonds for arms, steel, guano, railways, shipyards, and plantations sold very well. The expansion of Latin American armies, navies, and infrastructure was financed and done by Anglo-Colombian companies.
To manage this, Congress passed several pro-industry and pro-bank laws, that made it easier to sell bonds. The first was the National Currency Decree of 1859, which regulated which banks could print the national currency, the Colombian piastra. Theretofore, the piastra had been printed by several state banks and not been regulated, leading to inflation as these banks printed more and more notes to finance investment and prevent crashes. Though the decree fell short of the Liberals’ cherished project of a Central Bank, it did introduce a measure of regulation by the way of chartering banks. The government was empowered to grant charters to certain banks. Only chartered banks could print piastras, and they could only print up to a certain number of notes. The Banks of Caracas, Cartagena, and Guayaquil received charters.
Lack of economic centralization meant that some state-issued notes beared different names, such as peso, real or dollar instead of the official designation of piastra
Stabilizing the piastra and restoring confidence on it as a method of payment allowed for the creation of a dynamic market of bonds. To regulate them, Congress created the Secretariat of Finance, under the Ministry of Economy. The Secretariat created two categories of bonds: “blue bonds” which were investments in secure and steady industries such as steel, railroads, and guano; and “red bonds”, investments in more volatile but also more lucrative products like coffee, sugar, and cacao.
“Blue bonds” were sold only at their nominal price, which kept investors from reaping high interests at government’s expense. They were also long-term investments. But in exchange, the government was required to pay them in specie, and the interests where high. “Red bonds”, on the other hand, were short-term and sold at market value. This made them far more lucrative, but the government often paid in piastras, while investors were required to buy them with gold. Consequently, “blue bonds” were safe investments, while “red bonds” were more lucrative but presented some dangers. To prevent the formation of economic bubbles, Congress, aside from the limitations of the Currency Decree, also sold less “red bonds”, and sold them mainly to established investors.
This was a prototype of a Stock Exchange, and as such was based in the economic heart of the nation, Caracas. Though not a proper stock exchange per se, it did allow investors to more carefully select their bonds and invert their capital, and streamlined the process, making it far easier and faster.
Shortly after the National Currency Decree, the House Economical Committee, headed by the National Conservative Juan Fernando Kelly, presented its tax scheme. The National Taxation Decree of 1859 was revolutionary in that it introduced a progressive tax system, the most important part of which was the fact that people whose salaries and properties were worth less than 500 piastras payed no income tax anymore, which was more than the previous floor of 100 piastras. A 3% tax was leveled on incomes from 500 to 1,000 piastras, and only on the income over the limit, thus creating tax brackets. The next bracket was 5% for incomes between 1,000 and 2,500; 7% for incomes between 2500 and 10,000; 10% for incomes between 10,000 and 25,000; and 15% for incomes between 25,000 and 50,000. Any further income would not be taxed.
For example, a man earning 1,700 piastras would pay no tax for the first 500; 15 piastras for the next 500; and 35 for the final 700; a total of 50 piastras in taxes, 1 piastra less than the 51 he would pay under the old flat tax of 3%. The tax plan put most of the weight of taxes in the richest Colombians, and was paired with taxes in luxury goods, added value to certain products, inheritance, insurance, and the receipts of corporations. Other progressive parts of the decree were that small business and small inheritances were exempted from these taxes. However, the pro-business reforms and the lack of a tax on bonds and loans meant that bankers, industrialists, and plantation owners won far more in investments than they paid in taxes.
More importantly, the progressive measures of the decrees were very popular with a people that had been struggling for over 6 years by then. Other progressive decrees were the Agricultural Credit Decree, which reformed and rationalized the Banco Agricola, making acquiring and paying for land more affordable and efficient; and the Land Tax Decree, which eliminated land taxes for the low and middle classes, and most importantly, immigrants who were already paying into the Banco Agricola. Coupled with the lower tariffs of the Bonifaz administration, this meant that the Colombian people now had more disposable income, and the market revolution and the increase in Colombian production gave them abundant products to choose and buy.
National Conservatives saw economic progressivism as the way towards the future, but being a coalition of industrialists and hacendados meant that that wealth concentrated in a few hands
As a result of finance reform and the boom in plantations, there was an extreme demand for labor that increased yet again the movement of Colombian farmers, laborers and immigrants to the coast, alleviating the unemployment in the cities. Many small farmers would sell their land to the Secretariat of Land Reform, which would then combine and reorganize the lands and sell them to European immigrants through the Banco Agricola. At the same time, the normalization of relations with other Latin American countries and their population increases created a demand for Colombian textiles, tools, and railways. The national companies started to expand once again. By 1859, the Textile mills of Quito and the ironworks of Caracas were working and hiring again.
This process of economic recovery started towards the tail-end of the Bonifaz administration in 1857, but the collapse of the Federalist Party and the relatively slow pace prevented the beleaguered President from taking the credit. The canny Font took it instead. Font was part of the progressive, “European” wing of the party, which was more preoccupied with economic progress than with social conservatism. In this he was very similar to former president Esteban Cruz. The National Conservatives remained a mostly an heterogenous coalition of reformers who sought to “Europeanize” Colombia through economic development, led by a paternal and strong Executive that kept social order and traditional structures of power and hierarchy. Their main model of inspiration was the British ideology of “one-nation conservatism.”
However, many National Conservatives also believed that the state should secure the wellbeing of the people. As a result, many of them identified as moderates who were willing to allow some reform, as opposed to Pelucones who wanted to roll back reforms. This exemplified a realignment of political ideals, as National Conservatives started to believe that a slow and measured evolution of political rights for the common man was acceptable, even beneficial. As the
Anglo-Colombiano, which represented business and industrial interests said, “to not reform willingly is to invite revolution.” Indeed, conservative Colombians started to see liberal reformers and Young Colombia agitators as their version of the British chartists, and feared that political repression could cause violent revolution and the end of the Republic.
The strengthening of the Liberal Party also helped to fame the flames. “Free from the chains of the conservative faction,” a Liberal orator rejoiced, “our party will be able to soar and rise like the mighty Andean condor.” Senator Santoya of the Cali Triumvirate, who was feeling despondent over the Democrats’ poor performance in the election, lamented that “without moderate and conservative men to hold them back, the radicals will be able to take over our old party.” Noboa himself proclaimed that “the forces of reaction and tyranny will no longer be able to push against the wheel of progress.”
Indeed, while National Conservative control of the Senate and Font’s veto was enough to prevent any meaningful reforms, many leading party men recognized that they would not be able to stall indefinitely. This realization created mixed feelings within them. If Liberals claimed the legacy of Santandarean Liberalism, National Conservatives saw themselves as the heirs of Bolivarian conservatism. Like the man himself, Bolivarian ideology was never clear, and perhaps that explained its success as it was able to easily gather enemies of Santander into a wide conservative coalition. Some elements of it, such as its regressive economic thinking or militarism, were forgotten; yet many remained, such as the emphasis on a powerful executive, traditional hierarchies that protected the Church and the hacienda as the pillars of the Republic, and an underlying belief that the people were not ready for democracy.
When it came to civil rights and racial relations, National Conservatives were firmly in the Pelucon side. No one of them seriously believed in the more outlandish proposals, such as forms of racial segregation or classification. Yet they did employ policies designed to keep the White and Mestizo majority at the top of the economic and social pyramids. For example, they required voters to register with citizen boards, which could reject them on the basis of “character” – of course, this was used as a tool to prevent the formation of Pardo and Indigenous voting blocks. Some charged that Cruz’s and Diaz’s pro-immigrations stances were attempts to “whiten” Colombia. Venezuelans in special saw the rise of the Liberals among the Pardo population as threatening; similarly, efforts by Liberals and Young Colombians to emancipate the Indians were seen as dangerous. As much as Colombians then and now like to deny it, race was still strongly correlated to class, and the dominant criollos saw racial equality as an existential threat towards their way of life.
The ghost of Jose Tomas Boves, a caudillo who rallied pardos and slaves towards his Royalist banner, still haunted Venezuela almost 50 years after the Independence Wars
Still, it was clear that some National Conservatives at least were warming up to limited reform. In Ecuador, though Governor Nueces was still firmly against any attempt to emancipate the Indians from the tribute and the hacienda, many started to push back against these institutions as “gross injustices.” “The Indian tribute is against the ideals of our Republic,” a state legislator asserted, “and it must be extirpated no matter the financial cost.” Another added that “a government funded on and maintained with injustice cannot last, for it carries within itself the seed of its termination.” Senator Casas (PCN-EC) joined them by warning Nueces that “pushing against progress is like pushing against a wild torrent of water – you will eventually lose your strength, and be carried to a tumultuous sea.”
In Venezuela the main preoccupation was with regards to the Pardos. Some Venezuelans were still haunted by visions of Pardos massacring white people during the Independence War; in this they were joined by Dominicans who suspected the Haitians of wanting to start another race war. In fact, that so many Pardos rebelled during the Gran Crisis was what convinced many Venezuelans that maintaining the Union was necessary to ensure their own wellbeing and safety, lest an independent Venezuela degenerate into a bloody racial war. Liberals and reformers scoffed at these notions. “The sons of godos and royalists have no right to oppress the sons of Patriots,” said Senator Martin Schwimmer Hernandez (PLC-AP) in one of the speeches that justified his popularity with the Pardos of Apure. The Liberal
Estrella del Orinoco printed an editorial asking rhetorically whether “the blood the Pardo patriots shed for the liberation of Colombia is not as red and as worthy as the blood shed by White patriots?”
Pardos and Blacks desired to take part in the bonanza of economic expansion, and to achieve a better social position. They were conscious that the color of their skin automatically limited their social mobility when compared to Mestizos and immigrant “blancos de orilla.” Their condition had been improving, and it is significant that Esteban Cruz’s government tried to integrate them into the Republic, opening minor posts for them and offering education. The Republican authorities, whether Conservative or Liberal, claimed that racial equality had been achieved, and school texts often claimed it as one of the legacies of the Revolution. Some practical efforts were made, such as admitting men of color into universities, preventing courts from mentioning a man’s race to avoid biases, or trying to replace the word “indio” with the supposedly more benevolent “indigena.” A college professor would claim that “our shared history, customs, and country bound us together in ties of friendship and love that transcend the imaginary lines of race and class.” Yet many Pardos were painfully aware that such lines were anything but imaginary.
In any case, despite their misgivings about race and class and their wish to maintain the social structure of Colombia as intact as possible, National Conservatives started to move towards the center as a reaction to the hard turn towards the right the Pelucones took. Many did so because the alliance with the Pelucones had proven to be more of a hindrance – Liberals were more likely to work with them in their economic plans than the Pelucones were. And the disappointing 1858 election proved that the Democrats were not really the electoral juggernaut Cruz and Diaz thought they were. The events of the next few years would render universal male suffrage without distinction of classes and further democratization tolerable at the very least. The growing disenchantment of the PCN with the Democrats also helped along, for the Triumvirate of Cali opposed Font's economic agenda vigorously.
Senator Casas served in the Army in the Colombo-Peruvian War, and he often wore his official's uniform during formal events
By the start of 1859, Font had become convinced that some reform was necessary, especially in the face of rising racial and social tensions in Venezuela, Choco, and Ecuador. In a gala hosted in La Casa de Nariño, the President reunited with Governor Sepulveda (PCN-VZ), Economy Minister Ureña and Senators Casas (PCN-EC), Mejia (PCN-ZL) and Perez (PCN-VZ). They met in secret in the storeroom, and thus their conversation would come to be known as the “Storeroom debates.” They mainly discussed the points of the 1857 Liberal plank, which included universal suffrage, secret ballots, racial equality, elimination of the property requirements for office and payment of officials so that common people could hold elected office, and economic progressivism. The President and his guests agreed that the last would be going too far, and wanted a hands-off approach regarding race relations so as to not upset conservative elements within the Party. Nonetheless, they accorded not to oppose civil rights legislation from the Liberals.
The Party leaders left the gala with reinvigorated optimism. Passing gradual reforms would deflate the tensions and take the steam out of the Liberal movement. This, together with the improving economy and Font’s popularity would assure PCN control of the National government for at least 8 years. Unfortunately for them, and possibly for the country, the President came down with a powerful and sudden fever. A month later, he was dead. Unlike the dead of Marshal Sucre, Font’s passing did no cause a Constitutional Crisis for the Constitution this time explicitly designated the vice-president as the next president until the end of the normal period. But National Conservatives and Liberals alike were grieving, because the Vice-president was the arch conservative Cristian Hurtado. The climate of optimism suddenly was lost, for everyone knew Hurtado wasn’t open to neither economic progressivism nor reform, whether gradual or immediate. Events during the next three years would happen with increased acceleration, as the Decade of Sorrow reached its peak.
