In 1848, soon after gold was discovered in California, a great migration began of Easterners to the west coast of the United States. Since no continental railroad yet bridged the country, many fortune hunters and settlers were forced to sail around the tip of South America to get there.
Cornelius Vanderbilt thought that he had a better solution. In 1851, he established a quicker, safer, and cheaper route to San Francisco through Nicaragua. Passengers embarking in New York or New Orleans on Vanderbilt ships disembarked at the mouth of the San Juan River in Nicaragua at the small town of San Juan del Norte (“Greytown” to the British). There they began their voyage across Nicaragua on river and lake boats and on mules and in stagecoaches operated by Vanderbilt’s Accessory Transit Company. The trip took them 121 miles up the San Juan River, 56 miles across Lake Nicaragua, and then 12 miles by land to the Pacific Ocean. At San Juan del Sur, they embarked again on other Vanderbilt ships for the final leg of the journey to San Francisco.
Tens of thousands used this Nicaragua route to and from San Francisco, and disputes over the route’s ownership and over profit-sharing often broke out between Nicaragua and the United States, between Vanderbilt and his partners, and between the town of San Juan del Norte and the Accessory Transit Company. As for the latter disputes, the townspeople of San Juan del Norte resented the refusal of Vanderbilt’s company to pay any fees to the town, to allow its passengers to shop in the town, or to obey arrest warrants for Company employees who committed crimes.
When the Accessory Transit Company failed to remedy these matters, the town council of San Juan del Norte decreed that the Company headquarter buildings at Punta de Castillo, a headland across the bay from the town, be destroyed. A band of armed citizens took it upon themselves to fulfill the order, and they succeeded in burning a few Company buildings and stealing some goods before Company employees chased them off. The directors of the Accessory Transit Company immediately sought the support of the U.S. ambassador to Nicaragua, Solon Borland, to seek recompense and to prevent future attacks.
Borland, who was a vocal proponent of the incorporation of Nicaragua and other Central American countries into the United States of America, took a personal interest in the matter as he, too, was attacked by some of the same angry citizens when he passed through San Juan del Norte on his return to the United States. Once home, he convinced the U.S. Government to send the U.S. warship Cyane to San Juan del Norte to defend American honor and property.
The Cyane, under the command of Captain George Hollins, arrived off the coast near San Juan del Norte on July 11, 1854. Captain Hollins immediately posted an ultimatum in the town demanding that the town apologize to the U.S. Government for its treatment of its ambassador. It also insisted that the town pay reparations to the Accessory Transit Company for the damages done to its property. Hollins made it clear that if these demands were not met by 9:00 a.m. on July 13, he would destroy the town with his ship’s canons. Since no response was received by that time, the guns of the Cyane opened fire at precisely 9:00 a.m. The actual barrage lasted for an hour and thirty-five minutes, and the town was totally destroyed, although with no loss of human life.