United States occupation of Nicaragua The United States occupation of Nicaragua was part of the larger conflict known as the Banana Wars . The formal occupation began in 1912 , although several other operations were conducted before the full - scale invasion . United States military interventions in Nicaragua were intended to prevent the construction of the Nicaraguan Canal by any nation but the United States . Nicaragua assumed a quasi - protectorate status under the 1916 Chamorro - Bryan Treaty . The occupation ended as Augusto C . Sandino , a Nicaraguan revolutionary , led guerrilla armies against U . S . troops . The onset of the Great Depression made it costly for the U . S . government to maintain the occupation so a withdrawal was ordered in 1933 . Conflict . Estrada ’ s rebellion . In 1909 Nicaraguan President José Santos Zelaya of the Liberal Party faced opposition from the Conservative Party , led by governor Juan José Estrada of Bluefields who received support from the U . S . government . The United States had limited military presence in Nicaragua , having only one patrolling U . S . Navy ship off the coast of Bluefields , in order to protect the lives and interests of American citizens who lived there . The Conservative Party sought to overthrow Zelaya which led to Estrada ' s rebellion in December 1909 . Two Americans , Leonard Groce and Lee Roy Cannon , were captured and indicted for allegedly joining the rebellion and the laying of mines . Zelaya ordered the execution of the two Americans , which severed U . S . relations . The forces of Chamorro and Nicaraguan General Juan Estrada , each leading conservative revolts against Zelaya ' s government , had captured three small towns on the border with Costa Rica and were fomenting open rebellion in the capital of Managua . U . S . Naval warships that had been waiting off Mexico and Costa Rica moved into position . The protected cruisers , , and collier lay in the harbor at Bluefields , Nicaragua on the Atlantic coast with en route for Colón , Panama , with 700 marines . On December 12 , 1909 , " Albany " with 280 bluejackets and the gunboat with 155 , arrived at Corinto , Nicaragua , to join the gunboat with her crew of 155 to protect American citizens and property on the Pacific coast of Nicaragua . Zelaya resigned on December 14 , 1909 , and his hand - picked successor , Jose Madriz , was elected by unanimous vote of the liberal Nicaraguan national assembly on December 20 , 1909 . U . S . Secretary of State Philander C . Knox admonished that the United States would not resume diplomatic relations with Nicaragua until Madriz demonstrated that his was a " responsible government . . . prepared to make reparations for the wrongs " done to American citizens . His request for asylum granted by Mexico , Zelaya was escorted by armed guard to the Mexican gunboat " General Guerrero " and departed Corinto for Salina Cruz , Mexico , on the night of December 23 , with " Albany " standing by but taking no action . As the flagship of the Nicaraguan Expeditionary Squadron , under Admiral William W . Kimball , " Albany " spent the next five months in Central America , mostly at Corinto , maintaining U . S . neutrality in the ongoing rebellion , sometimes under criticism by the U . S . press and business interests that were displeased by Kimball ' s " friendly " attitude toward the liberal Madriz administration . By mid - March 1909 , the insurgency led by Estrada and Chamarro was seemingly collapsed and with the apparent and unexpected strength of Madriz , the U . S . Nicaraguan Expeditionary Squadron completed its withdrawal from Nicaraguan waters . On May 27 , 1910 , U . S . Marine Corps Major Smedley Butler arrived on the coast of Nicaragua with 250 Marines , for the purpose of providing security in Bluefields . United States Secretary of State Philander C . Knox condemned Zelaya ' s actions , favoring Estrada . Zelaya succumbed to U . S . political pressure and fled the country , leaving José Madriz as his successor . Madriz in turn had to face an advance by the reinvigorated eastern rebel forces , which ultimately led to his resignation . In August 1910 , Juan Estrada became president of Nicaragua with the official recognition of the United States . Mena ' s rebellion . Estrada ’ s administration allowed President William Howard Taft and Secretary of State Philander C . Knox to apply the Dollar Diplomacy or " dollars for bullets " policy . The goal was to undermine European financial strength in the region , which threatened American interests to construct a canal in the isthmus , and also to protect American private investment in the development of Nicaragua ' s natural resources . The policy opened the door for American banks to lend money to the Nicaraguan government , ensuring United States control over the country ' s finances . By 1912 the ongoing political conflict in Nicaragua between the liberal and conservative factions had deteriorated to the point that U . S . investments under President Taft ' s Dollar Diplomacy including substantial loans to the fragile coalition government of conservative President Juan José Estrada were in jeopardy . Minister of War General Luis Mena forced Estrada to resign . He was replaced by his vice president , the conservative Adolfo Díaz . Díaz ’ s connection with the United States led to a decline in his popularity in Nicaragua . Nationalistic sentiments arose in the Nicaraguan military , including Luis Mena , the Secretary of War . Mena managed to gain the support of the National Assembly , accusing Díaz of “ selling out the nation to New York bankers ” . Díaz asked the U . S . government for help , as Mena ’ s opposition turned into rebellion . Knox appealed to president Taft for military intervention , arguing that the Nicaraguan railway from Corinto to Granada was threatened , interfering with U . S . interests . In mid - 1912 Mena persuaded the Nicaraguan national assembly to name him successor to Díaz when Díaz ' s term expired in 1913 . When the United States refused to recognize the Nicaraguan assembly ' s decision , Mena rebelled against the Díaz government . A force led by liberal General Benjamín Zeledón , with its stronghold at Masaya , quickly came to the aid of Mena , whose headquarters were at Granada . Díaz , relying on the U . S . government ' s traditional support of the Nicaraguan conservative faction , made clear that he could not guarantee the safety of U . S . persons and property in Nicaragua and requested U . S . intervention . In the first two weeks of August 1912 , Mena and his forces captured steamers on Lakes Managua and Nicaragua that were owned by a railroad company managed by U . S . interests . Insurgents attacked the capital , Managua , subjecting it to a four - hour bombardment . U . S . minister George Wetzel cabled Washington to send U . S . troops to safeguard the U . S . legation . At the time the revolution broke out , the Pacific Fleet gunboat was on routine patrol off the west coast of Nicaragua . In the summer of 1912 , 100 U . S . Marines arrived aboard the USS " Annapolis " . They were followed by Smedley Butler ’ s return from Panama with 350 Marines . The commander of the American forces was Admiral William Henry Hudson Southerland , joined by Colonel Joseph Henry Pendleton and 750 Marines . The main goal was securing the railroad from Corinto to Managua . 1912 occupation . On August 4 , at the recommendation of the Nicaraguan president , a landing force of 100 bluejackets was dispatched from " Annapolis " to the capital , Managua , to protect American citizens and guard the U . S . legation during the insurgency . On the east coast of Nicaragua , the North Atlantic Fleet protected cruiser was ordered to Bluefields , Nicaragua , where she arrived on August 6 and landed a force of 50 men to protect American lives and property . A force of 350 U . S . Marines shipped north on the collier from the Canal Zone and disembarked at Managua to reinforce the legation guard on August 15 , 1912 . Under this backdrop , " Denver " and seven other ships from the Pacific Fleet arrived at Corinto , Nicaragua from late August to September 1912 , under the command of Rear Admiral W . H . H . Southerland . " USS Denver ( CL - 16 ) " , commanded by Commander Thomas Washington arrived at Corinto on August 27 , 1912 , with 350 navy bluejackets and marines on board . Admiral Southerland ' s priorities were to re - establish and safeguard the disrupted railway and cable lines between the principal port of Corinto and Managua , 70 miles to the southeast . On August 29 , 1912 , a landing force of 120 men from USS " Denver " , under the command of the ship ' s navigator , Lieutenant Allen B . Reed , landed at Corinto to protect the railway line running from Corinto to Managua and then south to Granada on the north shore of Lake Nicaragua . This landing party reembarked aboard ship October 24 and 25 , 1912 . One officer and 24 men were landed from the " Denver " at San Juan del Sur on the southern end of the Nicaraguan isthmus from August 30 to September 6 , 1912 , and from September 11 to 27 , 1912 to protect the cable station , custom house and American interests . " Denver " remained at San Juan del Sur to relay wireless messages from the other navy ships to and from Washington until departing on September 30 , for patrol duty . On the morning of September 22 , two battalions of marines and an artillery battery under Major Smedley Butler , U . S . M . C . had entered Granada , Nicaragua , where they were reinforced with the marine first battalion commanded by Colonel Joseph H . Pendleton , U . S . M . C . . General Mena , the primary instigator of the failed coup d ' etat surrendered his 700 troops to Southerland and was deported to Panama . Beginning on the morning of September 27 and continuing through October 1 , Nicaraguan government forces bombarded Barranca and Coyotepe , two hills overlooking the all - important railway line at Masaya that Zeledón and about 550 of his men occupied , halfway between Managua and Granada . On October 2 , Nicaraguan government troops loyal to President Diaz delivered a surrender ultimatum to Zelaydón , who refused . Rear Admiral Southerland realized that Nicaraguan government forces would not vanquish the insurgents by bombardment or infantry assault , and ordered the marine commanders to prepare to take the hills . On October 3 , Butler and his men , returning from the capture of Granada , pounded the hills with artillery throughout the day , with no response from the insurgents . In the pre - dawn hours of October 4 , Butler ' s 250 marines began moving up the higher hill , Coyotepe , to converge with Pendletons ' s 600 marines and landing battalion of bluejackets from " California " . At the summit , the American forces seized the rebel ' s artillery and used it to route Zeledón ' s troops on Barranca across the valley . Zeledón and most of his troops had fled the previous day during the bombardment , many to Masaya , where Nicaraguan government troops captured or killed most of them , including Zeledón . With the insurgents driven from Masaya , Southerland ordered the occupation of Leon to stop any further interference with the U . S . - controlled railroad . On October 6 , 1 , 000 bluejackets and marines , from the cruisers , , and " Denver " led by Lieutenant Colonel Charles G . Long , U . S . M . C . captured the city of Leon , Nicaragua , the last stronghold of the insurgency . The revolution of General Diaz was essentially over . On October 23 , Southerland announced that but for the Nicaraguan elections in early November , he would withdraw most of the U . S . landing forces . At that point , peaceful conditions prevailed and nearly all of the embarked U . S . marines and bluejackets that had numbered approximately 2 , 350 at their peak , not including approximately 1 , 000 shipboard sailors , withdrew , leaving a legation guard of 100 marines in Managua . Of the 1 , 100 members of the United States military that intervened in Nicaragua , thirty - seven were killed in action . With Díaz safely in the presidency of the country , the United States proceeded to withdraw the majority of its forces from Nicaraguan territory , leaving one hundred Marines to " protect the American legation in Managua " . The only American journalist who interviewed Sandino during this occupation was Carleton Beals of " The Nation " .