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In the mid-nineteenth century El Salvador's export economy rested on indigo, and when synthetic dyes undercut demand for natural indigo after the 1860s, the country's landowners turned to coffee. The volcanic highlands of the west were ideal for the crop, but much of that land belonged to Indigenous communities that held it in common. To clear the way for coffee estates, the liberal government of Rafael Zaldivar decreed the abolition of communal and municipal lands in 1881 and 1882. Within a generation, many community holdings were divided, transferred, or enclosed, and thousands of families became landless wage workers.
The land laws provoked fierce resistance. Indigenous communities protested, petitioned, and at times rose in local revolts, which the army suppressed. To enforce the new order the state created rural police forces, and later, in 1912, a National Guard that answered to the planters. Vagrancy laws obliged landless workers to carry employment documents and pushed them onto the coffee estates during harvest. A small group of families came to control the best land, the banks, and the export trade, forming an oligarchy so concentrated that outsiders spoke of the fourteen families who ran the country.
Coffee remade El Salvador's landscape and society. Shade-grown estates spread over the western volcanoes, railways linked the interior to the port of Acajutla, and the crop supplied the great majority of export earnings. The elite invested their profits in San Salvador's parks, theaters, and European-style buildings, presenting their country as an orderly, modern republic. In 1895 El Salvador joined Honduras and Nicaragua in the short-lived Greater Republic of Central America, an attempt at union that collapsed within three years, and thereafter the coffee elite concentrated on guarding their position at home.
After the assassination of President Manuel Enrique Araujo in 1913, the presidency came under the control of the related Melendez and Quinonez families. Through the early 1920s their dominance gave the oligarchic system a surface stability. The state depended on coffee revenues, and planters relied on the state to discipline labor. Beneath the calm, landlessness and poverty deepened in the countryside. By 1924 coffee dominated export earnings, while Indigenous communities continued to defend their lands, institutions, and traditions under severe pressure.
Wikipedia - Coffee production in El Salvador
Hispanic American Historical Review - Land, Community, and Revolt in Late-Nineteenth-Century Indian Izalco
ECA - La tenencia de la tierra en El Salvador