Banana republic: In politics the term “banana republic”✱ describes a politically unstable country with an economy dependent upon the exportation of a limited-resource product such as bananas or minerals. The term was coined in 1901 by American author O. Henry as a depiction of Honduras and neighbouring countries under intense economic exploitation by US corporations as typified by the United Fruit Company of Boston [‘Banana Republic’, Wikipedia, http://en.m.wikipedia.org]

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When I first heard the saccharine, content-lite melodies of “Bubblegum Pop’s” 1910 Fruitgum Company, I didn’t realise that the name of this innocuous, syrupy 1960s musical group was a corny pun on a historic commercial entity that I did not know of at the time…this commercial enterprise was in fact something much less edifying and infinitely more sinister and consequential – the United Fruit Company of Boston, Mass. As the following will show, the United Fruit Co would come to epitomise the high degree of hegemony established by US business interests in the tropical regions of the Americas after the late 1890s.

Boston Fruit C°’s ‘Golden Vale’ plantation, Jamaica ⬇ From railroads to plantations
The United Fruit Company had its origins in 1899 from a merger of various fruit exporting concerns (including the Boston Fruit Company which had already embedded itself in the banana trade in Jamaica) controlled by American railroad constructor and entrepreneur Minor Cooper Keith. Earlier Keith stumbled into the banana trade virtually by accident. In 1872 Costa Rica defaulted on it’s bank loans and was unable to pay Keith for constructing the country’s railroad. In lieu of part of what it owed Keith, he was granted over 5% of vacant Costa Rican land. Accordingly the American used the land to establish banana farms alongside his newly finished railroad. The crops when yielded had a ready-made, on-the-spot transport line to carry the produce to port. Keith’s early banana experiments in Costa Rica proved a lucrative earner and paved the way for United Fruit’s later role as producer and exporter of the fruit. From that base in Costa Rica Keith the banana trader looked further afield in Latin America for other openings.

Monopoly, oligarchy? Other players in the tropical banana trade
Although classically monopolistic in its practices, United Fruit Co (UFCo) was not the only player (American or foreign) in the Central American/Caribbean banana game. In fact at the turn of the 20th century there was plenty of competition in bananas, in 1899 some 114 firms were engaged in importing bananas to the US via New Orleans [Davies 1990, cited in S Striffler et al, (Eds.), Banana Wars: Power, Production, and History in the Americas, (2003)]. UFCo grew by acquisition, quickly adding 20 smaller banana export firms to its list of business holdings.

United Fruit’s main rival during this time was the Standard Fruit Company. This company was first known as the Vaccaro Bros & Co✧. The Vaccaros began by importing fresh produce – initially coconuts and then bananas – from Honduras. After establishing a beachhead in the region the company diversified into operating steamships✪ and eventually provided the ice for onboard refrigeration❅. In 1924 Vaccaros Bros reformed into the Standard Fruit Company (in 1926 renaming itself ‘Standard Fruit and Steamship Co)…during this period Standard Fruit and United Fruit maintained competitive relations with each other for the lucrative banana trade in New Orleans – the principal marketplace in the US for banana sales. Like its gargantuan rival United Fruit, Standard Fruit’s profound impact on the economies of Latin American countries like Honduras courtesy of the high degree of control it was able to exert over the supposedly sovereign governments, contributed to the perception of these nations as banana republics. Hondurus was particularly vulnerable to the Banana barons with its banana monoculture and economic reliance on a single export crop. In the 1960s Standard Fruit was acquired by the Castle & Cooke Corporation (which in 1991 was renamed the Dole Food Company). [‘Standard Fruit Company’, Wikipedia, http://en.m.wikipedia.org; [‘Vaccaro brothers’, Wikipedia, http://en.m.wikipedia.org]

United Fruit Co soon extended its tentacles (the Latin American press was fond of labelling the firm El pulpo – “The Octopus”) beyond the Caribbean littoral, establishing banana exporting concerns in Columbia, Panama, Spanish Honduras, British Honduras (Belize), Jamaica and elsewhere in the region. Everywhere it invested, UFCo would rely on its famous “dollar diplomacy”  to induce the local elites to grant it concessions which allowed the company ever increasing  monopoly control over the banana trade.

Rivalry with mutual benefits
In addition to Standard Fruit, another US rival of United Fruit was the Cuyamel Fruit Company. Cuyamel started in transportation as the Hubbard-Zemurray Steam Ship Co and morphed into a large New Orleans-based agricultural corporation (see ‘Sam the Banana Man’ below). The three American companies in the Central and South American banana business (United Fruit, Standard Fruit and Cuyamel) were separate business entities, each in competition for bananas et al products from the same tropical region. And yet there was something slightly schizophrenic about the relationship between the three…concurrently with the earnest rivalry was the existence of a cartel-like cooperation between the companies – which was of mutual benefit financially, eg, being able to launch joint business efforts in advertising and in increasing banana agricultural outputs in Honduras. United Fruit Co’s dominant position in the triangle (always the senior player) facilitated this arrangement…it had both a 60% stake in Cuyamel and a 50% stake in Vaccaro Bros⊠ [Ralph Lee Woodward Jr, Central America, a Nation Divided (3rd ed. 1999), cited in ‘Cuyamel Fruit Company’ (Wikipedia entry].

‘Sam the Banana Man’
Schmuel Zmurri was an immigrant from the Russian Empire (born in Bessarabia, in modern Moldova) who changed his name to Samuel Zemurray after coming to the United States. Zemurray was to become a major player and shaper in the banana republic phenomenon, a seminal figure who contributed to the massive imprint left on the tropics by American banana barons.

Zemurray, establishing himself in Honduras around 1908, was to have a career as a “recidivist Yankee intervener” that made him one of the most controversial figures in the Central American banana republics’ tainted and sorry history. When the current Honduran regime favoured the rival Vaccaro Bros over Cuyamel, Zemurray agitated to foment a series of coups against President Dávila. The first coup failed but Zemurray in 1911 having chosen former president Manuel Bonilla to replace the elected Dávila government, bankrolled two Americans (“soldier of fortune” Lee Christmas and New Orleans gangster Guy “Machine Gun” Molony) to overthrow Dávila. With the malleable Bonilla back in charge, Zemurray’s Cuyamel was soon the beneficiary of generous land and tax concessions [‘The ousting of the president of Honduras, 1911’, (Stephen Kinzer), www.libcom.org]. Zemurray’s unconscionable incursion into the domestic politics of an independent state by hijacking its political process was to set a dangerous precedent for other banana republics.

Zemurray’s company made deep inroads into the Honduran banana trade (Zemurray became universally known as “Sam the Banana Man”), but at great cost to the national sovereignty of the country and to the detriment of the local economy✥. In 1930 Zemurray was able to sell his company to United Fruit for $31.5M in stock, after a short retirement he returned to active banana involvement, managing to join the board of UFCo and eventually take the helm of it (CEO and president until retiring for good in 1951) [K Norsworth & T Barry, Inside Honduras, (2nd Ed. 1994), cited in ‘Cuyamel Fruit Company’ (Wikipedia entry)].

United Fruit “a state within the state” of Guatemala: another intervention by Zemurray in the banana republics
Although no longer UFCo president, Zemurray wasn’t quite finished meddling to gain a financial advantage for United Fruit, he had one last contribution to the destabilisation of Central American regimes. The Guatemala banana trade had long been one of United Fruit’s most prized possessions…from the early 1900s President Manuel E Cabrera’s cosy relationship with UFC saw him grant the company a 99-year concession in Guatemala. United Fruit’s role in Guatemala has been described as “a state within a state” [William Blum, cited in ‘1954 Guatemalan coup d’être’, Wikipedia, http://en.m.wikipedia.org]. In 1953 Zemurray enlisted UFCo in a US State Department propaganda campaign to overthrow the left-leaning but democratically elected Guatemalan government of Colonel Jacobo Arbenz. The campaign together with the active intervention of the CIA paved the way for a coup the following year which ousted Arbenz and replaced it with a military junta which immediately reversed Arbenz’s decision to expropriate a portion of the unused land owned by the United Fruit Co [‘Sam Zemurray’, Wikipedia, http://en.m.wikipedia.org]. The fallout from the 1954 coup – for which the contribution of Zemurray and UFCo was no small part – was long-term destabilisation for the Guatemalans. The country, through a succession of military rulers, descended into three decades of civil war, 200,000 deaths including genocidal outrages against the native population [‘Ghosts of Guatemala’s Past’, (Stephen Schlesinger), New York Times, 04-Jun-2011, www.nytimes.com

United Fruit thrives in neo-colonial conditions
UFCo and Zemurray’s banana export and production triumph in the equitorial Americas owed in no small measure to the compliance of the countries’ political elites. In some instances, compliance, especially from right-wing authoritarian/military regimes, was bought. The neo-colonial charge against the banana republics and against UFCo as an employer, also concerned a claim of exploitative treatment of its labour force. In Part 2 I will focus on a case study of the United Fruit Company in one country which is instructive in detailing the pattern of how United Fruit went about securing and consolidating its “banana hegemony” in much of the region in the period.

PostScript: Banana Wars
The banana as a metaphor for the region lends itself to the pattern of American imperialist intervention in Latin America over the course of the 20th century. Coined by Lester D Langley in the early 1980s, the “Banana Wars” descriptor has been applied collectively to a sequence of ‘backyard’ US military occupations and police actions – these include the ‘1000 Days War’ (American intervention in support of Panamanian independence from Columbia/protection of US future interests in construction of the Panama Canal); the Spanish-American War (US invasion and occupation of Cuba and Puerto Rico); Dominican Republic (ongoing and intermittent occupations between 1903 and 1924); Nicaragua (an in/out pattern of occupation 1912-1933); the Border War with Mexico (1910-1919, including the occupation of Veracruz 1914); Haiti and the 1st and 2nd Caco Wars (occupation 1915-1934); and Honduras (seven interventions between 1903 and 1925). Aside from that, between 1869 and 1897 the US sent it’s warships a total of 5,980 times into Latin American waters to protect its national commercial interests [Greg Grandin, Empire’s Workshop: Latin America, The United States and the Rise of the New Imperialism, (2005)].

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✱ in political taxonomy, ‘republics’ they may (nominally) be, but in practice most so-called banana republics are grotesquely dysfunctional ‘republics’, typically, thinly masking what effectively are dictatorships and or regimes of ruthless military juntas
✧ the founders being three Italian-American businessmen brothers from Sicily (and their brother-in-law)
✪ expansion of fleet ownership was achieved by buying surplus steamships at a discount…by 1935 Standard Fruit had 35 ships in operation
❅ ultimately earning company president Joseph Vaccaro the sobriquet “Ice King”
⊠ this was a characteristic stratagem of United Fruit’s upward trajectory in Central America…the stake-holdings in Cuyamel and Vaccaro’s enterprises in Honduras were an initial import foothold on the path to becoming a direct producer in its own right – when United Fruit later acquired its own Honduran plantations in Trujillo and Tela [Woodward]
✥ as a disadvantaged party in its business dealings with UFCo, Honduras was worse off than all other banana republics in that it was unable to either urbanise or diversify its economy beyond the banana industry (for which its equatorial location was ideal) [Norsworth & Barry]