In the early colonial period, English and Dutch buccaneers preyed on Spanish shipping from there, and English loggers exploited the forest. England established a protective kingdom at Bluefields in 1678. Slaves from Jamaica were brought in to increase the labor supply. In 1848, the British took San Juan del Norte to offset U.S. interest in a transisthmian route to California. Nicaragua protested the seizure. The Clayton-Bulwer Treaty (1850) between the United States and Great Britain checked British expansion, but relinquishment of the coast was delayed until a separate treaty was concluded with Nicaragua (1860), which established the autonomy of the so-called Mosquito Kingdom.
In 1894, José Santos Zelaya ended the territory's anomalous position by forcibly incorporating it into Nicaragua. The northern part was awarded to Honduras in 1960 by the International Court of Justice, thus ending a long-standing dispute. The Nicaraguan portion was officially given partial autonomy in 1987, including control over local natural resources, but little real change has resulted and the area remains impoverished.
The Caribbean Mosquito Coast (or Miskito Coast) historically consisted of an area along the Atlantic coast of present-day Nicaragua, named after its native Miskito Indians and long dominated by British interests. The Mosquito Coast was incorporated into Nicaragua in 1894, however, in 1960 the northern part was granted to Honduras by the International Court of Justice.
The Mosquito Coast is so called from its principal inhabitants, the Miskito Indians, whose name was corrupted into Mosquito by European settlers. The Miskito Indians, of whom there are several tribes, are short of stature and very dark-skinned. Their colour is said to be due to intermarriage with shipwrecked slaves.
The first European settlement in the Mosquito country started in 1630, when the agents of the English chartered Providence Company — of which the Earl of Warwick was chairman and John Pym treasurer — occupied two small cays and established friendly relations with the local inhabitants.
From 1655 to 1860, Britain claimed a protectorate over the Miskito Indians; but little success attended the various endeavors to plant colonies, and the protectorate was disputed by Spain, the Central American republics, and the United States. The opposition of the United States was due very largely to the fear that Britain would acquire a privileged position in regard to the proposed interoceanic canal. In 1848, the seizure of Greytown (San Juan del Norte), by the Miskito Indians, with British support, aroused great excitement in the United States, and even involved the risk of war. In 1854, the American ship USS Cyane bombarded Greytown after failing to receive compensation for violence which had been directed against Solon Borland, an American diplomat, and other US citizens. But through the Clayton-Bulwer Treaty of 1850, both powers pledged themselves not to fortify, colonise or exercise dominion over any part of Central America; in November 1859, Britain delegated its protectorate to Honduras.
This caused great dissatisfaction among the Indians, who shortly afterwards revolted; and on 28 January 1860 Britain and Nicaragua concluded the treaty of Managua, which transferred to Nicaragua the suzerainty over the entire Caribbean coast from Cabo Gracias a Dios to Greytown (now San Juan del Norte) but granted autonomy to the Indians in the more limited Mosquito Reserve (the area described above). The local chief accepted this change on condition that he should retain his local authority, and receive a yearly subvention of £1000 until 1870. But on his death in 1864, Nicaragua refused to recognize his successor.
The reserve nevertheless continued to be governed by an elected chief, aided by an administrative council, which met in Bluefields; and the Indians denied that the suzerainty of Nicaragua connoted any right of interference with their internal affairs. The question was referred for arbitration to the Habsburg emperor of Austria, whose award (published in 1880) upheld the contention of the Indians, and affirmed that the suzerainty of Nicaragua was limited by the Indians right of self-government.
When in 1894 Rigoberto Cabezas led a campaign to annex the reserve, natives responded with vigorous protest, an appeal to Britain to protect them, and more militant resistance — to little avail. The situation was such that, from July 6 to August 7, the US occupied Bluefields to 'protect US interests'. After enjoying almost complete autonomy for fourteen years, on 20 November, 1894 their territory formally became incorporated in that of the republic of Nicaragua by Nicaraguan president José Santos Zelaya. The former Mosquito Coast was established as the Nicaraguan department of Zelaya. During the 1980s, the department disappeared, substituted by RAAN (Región Autónoma del Atlántico Norte) and RAAS (región Autónoma del Atlántico Sur), autonomous regions with a certain degree of self-government.