The administration of Warren G. Harding found itself facing the issue of Central American Union when it assumed office in March, 1921. Central Americans had debated combination since independence, and the question came to the fore periodically, resulting in numerous attempts to reunite the isthmus. But the previous proposals had all faltered when governments favoring confederation were overthrown. The issue was periodically revived whenever renewed coups returned pro-union regimes to power in several of the countries. In this way the debate continued throughout the late nineteenth and early twentieth century, ebbing and flowing with the frequent revolutions, coups, and counter coups that constituted Central American politics.

When the Mountain Men began their invasion of the Rockies n the 1820's, the tiny village of Taos, in New Mexico, took its place alongside Fort Vancouver and St. Louis as one of their three favorite “jumping-off points” in the search for beaver pelts. Spanish exploration of the area that now comprises the Southwestern United States had antedated that of the Anglo-American by over 250 years, but it was not until the arrival of the latter group that large-scale fur trapping took place. In the mountains and high plateaus of Colorado and New Mexico and in the beaver-rich valleys and tributaries of the Arkansas, Rio Grande, Green, Colorado, Gila, Sacramento and San Joaquin, the Anglo extracted great wealth where the Spaniard had seen only an unpromising wilderness. Although the Spaniard carried on a lively trade in deerskins and buffalo hides in the Southwest, there is little evidence of a significant trade in fine furs during the period of 1540 to 1821.

The 1936 Hull-Alfaro treaty, which fulfilled New Deal pledges to Panama, represented also the impact of Panamanian nationalism. For thirty years following the 1903 isthmian revolution, Panama remained a subject of American Canal policy. In 1921, for instance, the Panamanian government hurried troops to the Costa Rican boundary in order to compel a favorable decision in a long-standing border dispute. The Department of State, however, had decided that Panamanian military action against Costa Rica was unjustifiable. Arguing that hostilities between Panama and Costa Rica endangered Canal security, a warning was sent to Panama City, followed by the cruiser Sacramento. This act of “gunboat diplomacy” was castigated throughout Panama, but the Panamanian government withdrew its troops. Similarly, Panamanians voiced charges of economic domination, even exploitation, by arguing that the Canal failed to satisfy the republic's commercial aspirations. In 1903, Panamanians had welcomed military intervention by the United States on the grounds that it would be followed by technological intrusion capable of building the canal. By the late 1920's, however, it was obvious to many Panamanian critics that the profits of the isthmian waterway were returned to the United States. The American government strictly limited the operation of Panamanian merchants inside the Canal Zone. Moreover, the more desirable positions in Zone employment, the so-called “gold roll” jobs, were invariably meted out to Americans. Those Panamanians who found employment in the Zone were usually grouped with imported West Indian Negroes on the “silver roll,” a term referring to unskilled positions. Racial antagonism between West Indians and Panamanians resulted from economic competition.

In July, 1502, the fleet which Dom Manuel I had dispatched following Cabral's discovery of Brazil returned to Lisbon with news of Portugal's New World possession. The findings were incorporated into an official report and geographical observations were placed on the sea charts of the day, including the famous Cantino map of September, 1502. The three vessels in this expedition had sailed along the Brazilian coast for over a thousand miles, exploring and charting the major landfalls, from the northeastern tip around Cape Calcanhar to at least as far south as Cape Frio at 23° S. Lat. But no products of any great commerćial wealth which could compare with the riches being obtained in the Orient had been discovered, and the dispatch of further royal expeditions to Brazil seemingly was not justified. There were, however, private parties in Portugal who showed an interest in the slight commercial possibilities that were offered by this new land. The leader of this group was Fernão de Loronha, a wealthy merchant with a family business in Lisbon and sufficient capital to outfit several ships a year in overseas ventures. Moreover, Loronha had a first-hand acquaintance with this new land. He had been the overall commander of the fleet of 1501-1502 which had just returned from Brazil. There was one item of value in Brazil which particularly attracted Loronha. This was the dyewood trees growing in great abundance there. A large market for this commodity existed in northern Europe, for the dye extracted from the wood of the Asian variety of this tree had been a staple in the finishing of fine cloths produced by the weavers of Bruges, Liége, and other cities in the Low Countries since the twelfth century.

The distinction between privateering and piracy was blurring badly by the spring of 1819. The Spanish American revolutionaries, like their Anglo-American counterparts of four decades earlier, lacked a naval force able to challenge Spain's power while it was still en route to her vast American domains. Consequently it was only a question of time before the struggling republics hit upon the happy expedient of issuing letters of marque that authorized independent captains to war against Spain in their cause and under their auspices.