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The Bryan-Chamorro Treaty was signed on August 5, 1914 and ratified in 1916 during the United States occupation of Nicaragua. From 1912 to 1925, the United States controlled Nicaraguan affairs through puppet conservative party presidents Adolfo Diaz, Emiliano Chamorro, and Diego Manuel Chamorro. In exchange for political concessions from the presidents, the United States provided the military power needed to keep the government in power and to enforce the government's will.

By the terms of the Bryan-Chamorro Treaty, the United States acquired the rights to any canal built in Nicaragua in perpetuity, a renewable ninety-nine year option to establish a naval base in the Gulf of Fonseca, and a renewable ninety-nine year lease to the Great and Little Corn Islands in the Caribbean. For these concessions, Nicaragua received three million dollars.

Most of the three million dollars was paid back to foreign creditory by the United States officials in charge of Nicaraguan financial affairs.

At various times since the Panama Canal opened in 1914, the Nicaragua route has been reconsidered. Its construction would shorten the water distance between New York and San Francisco by nearly 800 kilometers (500 miles). The Bryan-Chamorro Treaty kept Nicaragua from competing with the Panama Canal.

The provision of the Bryan-Chamorro Treaty granting rights to United States in the Corn Islands was contested by El Salvador and Costa Rica. The Central American Court of Justice saw in the favor of the two countries. The United States ignored the court's decision contributing significantly to its collapse two years later.

• Walker, Thomas W. (2003). Nicaragua: Living in the Shadow of the Eagle (4th ed.). Westview Press. ISBN 0-8133-4033-0.