As coffee plantations increased, the US and European countries such as Spain, Italy, and Britain invested in Salvadoran coffee production and exports. At this point, Us involvement in Salvadoran coffee industry became a major factor in influencing the development of conflicts as it allied with the state and oligarchy to fight peasants' resistance and protect its economic interests (Hamilton & Chinchilla, 2001). In addition, investing in Oligarchy controlled businesses made the oligarchy wealthier and more powerful hence indirectly denying the peasants access to power and ultimately widening the social class divide (Baylora-Herp, 1983). .
In the 1930's, the economic depression led to a decrease in wages and unemployment for coffee industry peasant workers which led to an increase in resistance through strikes and uprisings. The social resistance was met by government repression and consolidation of military dictatorship which took on power for the following decades (Baylora-Herp, 1983; Hamilton and Chinchilla, 2001). This had devastating impacts on peasant communities. In 1932, "General Maximino Hernandez Martinez became the president in El Salvador through a coup and instituted a reign of terror against peasant population in which 10,000 to 30,000 were killed " (Hamilton & Chinchilla, 2001 p.25). Frustrations continued to rise as many peasant Salvadorans were expelled from their lands in western coffee growing regions to subsistence regions in the north and east although many came back for labor every harvesting season. Meanwhile, the military regime continued to govern and to protect the interests of the oligarchy (Hamilton & Chinchilla, 2001). Despite its reputation of promoting human rights and democracy, US remained reluctant to the dictatorship that was taking place in El Salvador (Best, 1985). .
In 1960's and 1970's there was a creation of Central American Common Market which aimed at reducing tariffs among the five countries involved namely El Salvador, Guatemala, Honduras, Costa Rica, and Panama.