After the Spanish–American War, Spain and the United States signed the 1898 Treaty of Paris, by which Spain ceded Puerto Rico, the Philippines, and Guam to the United States for the sum of $20 million (equivalent to $610 million in 2019).[8] Cuba gained formal independence from the Spain. on 20 May 1902, as the Republic of Cuba.[9] Under Cuba's new constitution, the U.S. retained the right to intervene in Cuban affairs and to supervise its finances and foreign relations. Under the Platt Amendment, the U.S. leased the Guantánamo Bay naval base from Cuba.

US occupation, 1906–1909

Following political purging and a corrupt and rigged election in 1906, the first president, Tomás Estrada Palma, faced an armed revolt by veterans of the war.[10] As in the independence war, Afro-Cubans were overrepresented in the insurgent army of 1906. For them, the August Revolution revived hopes for a 'rightful share' in Cuba's government. On 16 August 1906, fearing the government ready to smash the plot, former Liberation Army general Pino Guerra raised the banner of revolt. Immediately Palma arrested every Liberal politician in reach; the remainder went underground. In an effort to avert intervention Roosevelt sent two emissaries to Havana to seek a compromise between government and opposition. Regarding such impartiality as a vote of censure on his government, Estrada Palma resigned and made his entire cabinet resign too, leaving the Republic without a government and forcing the United States to take control of the island. Roosevelt immediately proclaimed that the USA had been compelled to intervene in Cuba and that their only purpose was to create the necessary conditions for a peaceful election.[11]

1909–1924

In 1909, home-rule government was restored when José Miguel Gómez was inaugurated as Cuba's second president, while the U.S. continued intervening in Cuban affairs. In 1912, the Partido Independiente de Color attempted to establish a separate black republic in Oriente Province,[12] but was suppressed by General Monteagudo with considerable bloodshed.

Sugar production played an important role in Cuban politics and economics. In the 1910s, during and after World War I, a shortage in the world sugar supply fueled an economic boom in Cuba, marked by prosperity and the conversion of more and more farmland to sugar cultivation. Prices peaked and then crashed in 1920, ruining the country financially and allowing foreign investors to gain more power than they already had. This economic turbulence was called "the Dance of the Millions".[13][14]

Machado era

In 1924, Gerardo Machado was elected president. During his administration, tourism increased markedly, and American-owned hotels and restaurants were built to accommodate the influx of tourists. The tourist boom led to increases in gambling and prostitution in Cuba.[15] Machado initially enjoyed support from much of the public and from all the country's major political parties. However, his popularity declined steadily. In 1928 he held an election which was to give him another term, this one of six years, despite his promise to serve only for one term.