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The Federal Republic of Central America (Spanish: República Federal de Centroamérica), also simply called Central America, is a sovereign state in Central America. It is bordered by Mexico to the north and the West Indies and Panama to the east.
Central America came into existence is 1821 when it declared independence from Spain, but was soon annexed by the First Mexican Empire later that year. After the collapse of the First Mexican Empire, Central America again became independent and formed the Federal Republic in 1823.
In 1838, tensions within Central America began to stir between Conservatives and Liberals as well as separatists who wanted their states to be independent. The turmoil within the federal government almost led to all-out civil war, until what would become known as the "San Salvador Compromise" was approved by the Federal Congress. The compromise split the capital of San Salvador into a separate Federal District, much like the Washington D.C. and Mexico City. This ended the tensions between the Conservatives and Liberals and began what is referred to as Pax Centralis American ("Central American Peace"), a time where Central America experienced incredible economic and domestic progress.