The Fragile Republic 49The Estrada Palma government, despite the American
minister's complaints about its skilful defense of Cuba's
interests, lived up to the expectations of the Roosevelt
administration.
Within Cuba, however, the political and economic situation
was less than promising. The spirit of annexationism still lived
in the aliens and in Cuban conservatives, and their hold
on the island's wealth forced Estrada Palma to hear their
views. As the adrenalin of independence drained away from
the bureaucracy, inefficiency and corruption spread. To quiet
the veterans and stimulate the economy, Estrada Palma negoti
ated a $35 million loan with Speyer and Company, a New
York banking house. With this loan, he paid part of a bonus
voted the veterans by the Cuban congress. Although the
sugar industry began to recover, its patterns of employment
and the distribution of its profits still created unrest in the
growing season, the tiempo muerto. In 1903 and 1904, there
were strikes in the cities and banditry in the countryside.
Spanish immigration, encouraged as a means of building a
white yeoman class, instead increased the competition for
urban jobs. Although Estrada Palma tried to offset unem
ployment with public-works spending, he could not get the
congress to vote the funds. His own fiscal policies kept the
cost of living high.^51
Politically, Estrada Palma did not take a party label or
try to exert party leadership. In the congress the Nationalists
and Federal Republicans proved unwilling to implement the
Constitution. They turned their energies, instead, to voting
themselves immunity, passing veteran bonuses (one of which
Estrada Palma vetoed), bickering over patronage. Personal
ambitions and regional rivalries determined a politician's
position on a given issue. The congress was most unified on
one point, opposition to the United States and those whose
interests its legation supported: sugar growers, the Catholic
Church, investors, the alien business community, and annex
ationists. The Estrada Palma government became the object
of criticism from the politicians because it was blamed for