Showing posts tagged as: United Fruit Company
United Fruit, CIA, Do Business in Guatemala, Cold War Style: 3) Precursor to Civil War and an Export Model for Anti-Communists a
A fortnight after Jacobo Árbenz Guzman fell on his sword, resigning the presidency of Guatemala, Colonel Carlos Castillo Armas, who had led the so-called “Army of Liberation”—the US-financed and trained rebel force which had invaded the country—was made president of Guatemala’s ruling military junta. Despite Washington’s professed intention to rebuild Guatemala through comprehensive reforms into a “showcase for democracy”, the US’s ongoing preoccupation with the drive to eliminate communism in the region took precedence [Brockett, Charles D. “An Illusion of Omnipotence: U.S. Policy toward Guatemala, 1954-1960.” Latin American Politics and Society, vol. 44, no. 1, 2002, pp. 91–126. JSTOR, www.jstor.org/stable/3177112. Accessed 4 Aug. 2020].
Árbenz’s resignation speech ⍗
Doubling down on communism America’s ‘Liberator’ for Guatemala however took a blanket approach to the communist witch hunt, his repressive crackdown targeted anyone suspected of opposing his increasingly dictatorial regime. Political opponents, labour leaders, remnants of the Árbenzista peasantry, were all rounded up (over 3,000 were arrested by Castillo Armas and an unknown number liquidated). Non-communists were routinely caught up in the purge, including ordinary farm workers from local agrarian committees. Árbenz’s agrarian land reform system was dismantled, the land appropriated from United Fruit Company (UFCo) was returned to it. Resistance to Castillo Armas’s removal of peasants from their lands acquired during the revolution was met with repression by the regime. Castillo Armas also had to deal with insurrections by disaffected left-wing Ladino officers (remnants of the military remaining loyal to Árbenz and Areválo), fighting a guerrilla insurgency from the highlands (Brockett).
Árbenz and his supporters spent 73 days in asylum in the Mexican Embassy before an inglorious exile ⍗
Armas’ presidency, which ended in 1957 when he was assassinated by an Árbenz sympathiser, was a disaster for a recovering Guatemala. The fallout from the Armas regime’s soaring debts and entrenched corruption was that it became almost completely dependent on US aid. The deteriorating situation under Ydígoras (the new president) led him to declare a “state of seize” in 1960, suspending civil liberties and establishing military rule. An attempt by a group of dissident military officers to overturn Ydígoras’ increasingly oppressive government triggered a civil war in Guatemala which lasted 34 years and claimed the lives of approximately 200,000 civilians, including a genocidal “scorched earth” policy conducted against the indigenous Q’eqchi Maya community [‘Foreign Relations of the United States, 1958-1960, American Republics, Volume V’, Office of the Historian, www.history.state.gov/]
⍐ the Guatemalan junta post-democracy
“Guatemala as domino” – a blueprint for coups in Latin America and the Caribbean Post-1954 the US continued to provide Guatemalan security forces with “a steady supply of equipment, training and finance, even as political repression grew ferocious”. The type of practices rehearsed in Guatemala—covert destabilisation operations, death squad killings by professional intelligence agencies—were lessons learnt for dealing with future ‘maverick’ regimes trying to chart a different political and economic path to that acceptable to Washington [Greg Grandin, The Last Colonial Massacre: Latin America in the Cold War, (2011)].
The most tragic and wide-reaching legacy of the 1954 Guatemala coup is that it provided a model for future coups and instability in the region set off by a heightened Cold War. The US followed the Guatemala playbook in orchestrating the Bay of Pigs invasion of Cuba by reactionary exiles in 1961 – albeit with a very different outcome. The US’ toppling, with British complicity, of the democratically elected Jagan government in British Guiana in 1964 had familiar reverberations to 1954: Washington’s fear of confronting a communist government in the hemisphere after the Cuban Revolution resulted in “an inflexible and irrational policy of covert subversion towards a moderate PPP government” in British Guiana [Stephen Rabe, U.S. Intervention in British Guiana: A Cold War Story, (2005)]. The CIA and right-wing dissidents within the Brazilian military colluded in a coup which overthrew the liberal government of João Goulart in 1964 (golpe de 64), replacing it with an uncompromising military junta. Washington’s involvement was prompted by Goulart’s plans to nationalise the Brazilian oil industry and other large private businesses. The same techniques and rhetoric were employed in the Dominican Republic coup/counter-coup in 1965. Most notoriously the Guatemalan putsch was to have echoes in the 1973 coup d’état in Chile which violently removed Marxist president, Salvador Allende. This was in response to Allende’s move to nationalise foreign businesses including US-owned copper mines and telecommunications giant I.T.T. US president, Richard Nixon, in fact had already tried to prevent Allende from taking office after the socialist won the Chilean elections fair and square in 1970❅ [‘Chilean president Salvador Allende dies in coup’, History, www.history.com/].
⍐ CIA headquarters in Virginia, USA
CIA hit-list for Guatemala CIA documents declassified in the 1990s reveals lists were compiled as early as 1952 of individuals in the Árbenz government “to (be) eliminated immediately in event of (a) successful anti-Communist coup”. Because the names were deleted during the agency declassification it can’t be verified if any of the assassinations were actually carried through [‘CIA and Assassination: The Guatemala 1954 Documents’, (Edited by Kate Doyle & Peter Kornbluh), The National Security Archive, www.nsarchive2.gwu.edu].
Footnote: the removal of Árbenz from Guatemala didn’t mean the CIA and Washington were done with the deposed president. The CIA continued its campaign to trash the reputation of Árbenz in exile, even though, personally, he was a politically impotent figure by this time. The CIA found it useful to continue to smear Árbenz as a “Soviet agent”, tying him to the ongoing US crusade against communism in the hemisphere✪ [Ferreira, Roberto Garcia. “THE CIA AND JACOBO ARBENZ: HISTORY OF A DISINFORMATION CAMPAIGN.” Journal of Third World Studies, vol. 25, no. 2, 2008, pp. 59–81. JSTOR, www.jstor.og/stable/45194479. Accessed 6 Aug. 2020].
Nixon and Armas ⍗
PostScript: A mea culpa of sorts Decades later the US government through President Clinton issued an apology, not for the 1954 coup, but for the US’ role in the human rights abuses of the civil war in Guatemala, which slaughtered thousands of civilians. It wasn’t until 2011 that the Guatemalan government (under President Colom) apologised for the “historic crime” against Árbenz and his family [‘Apology reignites conversation about ousted Guatemalan leader’, (Mariano Castillo), CNN, 24-Oct-2011, www.edition.cnn.com; ‘Clinton apology to Guatemala’, (Martin Kettle & Jeremy Lennard), The Guardian, 11-Mar-1999, www.theguardian.com].
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❅ US I.T.T. (International Telephone and Telegraph Corporation) entreated the Nixon administration to wage “economic warfare” and take other covert measures against the Allende regime to ensure its ouster from power, ‘Papers Show I.T.T. Urged U.S. to Help Oust Allende’, New York Times, 03-Jul-1972, www.nytimes.com
✪ back in Guatemala, President Armas and the latifundios (rich conservative landowners opposed to the Árbenz agrarian policy) provided a in-synch chorus, echoing the US charges of communist collusion by Árbenz
United Fruit, CIA, Do Business with Guatemala, Cold War Style: 2) Democracy to Coup D’état
With the go-ahead from incoming president Eisenhower in March 1953, Allen Dulles and the CIA continued the covert plot to undermine and destabilise the Árbenz government. The highly-orchestrated assault on the Árbenz regime took place on several fronts. Washington blocked a much needed loan from the World Bank to Guatemala and imposed an arms embargo on the country❈. The CIA forged an alliance of neighbouring states which were hostile or potentially hostile to Árbenz. The dictators running Nicaragua, Honduras, El Salvador, Dominican Republic and Venezuela didn’t require much persuading. Success by Árbenz in redistributing Guatemalan land could easily inspire the peasantries in their own countries to make similar demands, so the tiranos-caudillos were only too happy to get on-board with the CIA’s mission and pass on valuable intelligence about Guatemala to the US, and in the case of Nicaragua’s Somoza, Dominican Republic’s Trujillo and Venezuela’s Jiménez, help finance and arm the anti-Árbenz rebels.
⬆️ Dulles Bros Inc
Within the turbulent atmosphere of Guatemala CIA pursued a strategy of divide-and-rule. The US dangled the carrot of future armaments before the country’s military high command – the arms withheld from them would be made available on the proviso that they were prepared to break with their loyalty to Árbenz. [Bowen, Gordon L. “U.S. Foreign Policy toward Radical Change: Covert Operations in Guatemala, 1950-1954.” Latin American Perspectives 10, no. 1 (1983): 88-102. Accessed July 28, 2020. www.jstor.org/stable/2633365].
Peurifoy and anti-communism in one country At the same time the US State Department also utilised diplomatic channels to lever pressure on the Guatemalan regime. The State Department purposefully chose John Peurifoy as the new ambassador to Nicaragua. Peurifoy came with the right credentials to ‘help’ in Guatemala. As US ambassador to Greece in 1950 he interfered in post-civil war Greece to consolidate an anti-communist climate in the country. As Washington’s man-on-the-ground in Guatemala Peurifoy played a key role in destabilising the Árbenz government. The ambassador approached the task of rooting out communists in Guatemalan politics very zealously, describing a meeting with Àrbenz thus, “I came away definitely convinced that if President is not a communist, he will certainly do until one comes along, and that normal approaches will not work in Guatemala” [‘The Ambassador in Guatemala (Peurifoy) to the Department of State, Office of the Historian, www.history.state.com/]⧆. The CIA’s anti-Árbenz propaganda campaign also secured the assistance of the Catholic Church in Guatemala, whose priests infused their sermons with censure of the government.
Washington parachutes ”anti-red troubleshooter” into Guatemala (New York Times) ⬇️
Self-appointed gatekeeper of the Western Hemisphere Historians have debated the reasons for Washington’s persistently determined pursuit of the Guatemalan democracy. In the early to mid-Fifties the mania of anti-communism was at its peak in America. Eisenhower had been elected in 1952 pledging to stop the spread of the “communist scourge” both at home and globally⌑. In such a charged climate the US Administration found itself very disposed towards seeing developments in Guatemala under Árbenz as evidence of a Soviet beachhead in the region, as a violation of the Monroe Doctrine◰, and therefore justification for Washington to intervene in Guatemala’s affairs [‘Upholding the Monroe Doctrine: American Foreign Policy in the 1954 Guatemalan Coup d’Etat’, (Nadjalisse C. Reynolds-Lallement), [Dr. Karen E. Hoppes HST 201: US History June 5, 2013], http://pdxscholar.library.pdx.edu/].
A symbiosis of political and economic interests? The consensus among historians is that Cold War politics was the prime mover for the US, and that the economic interests and profitability of United Fruit Company (UFCo) in Guatemala always was secondary in the scheming – although as Gordon has argued, there was a reciprocal relationship between the two at play, the US’ government’s “Cold War and anti-communist hysteria provided public cover for government action on behalf of UFCo, (the company’s) personnel facilitated the CIA’s Cold War task of subverting the Árbenz government” [Gordon, Max. “A Case History of U. S. Subversion: Guatemala, 1954.”Science & Society 35, no. 2 (1971): 129-55. Accessed July 27, 2020. www.jstor.org/stable/40401561].
Notwithstanding the fact that local communists held some sway over the Guatemalan labour movement, their impact on decision-making within the Árbenz government was at best minimal. Árbenz’ objectives on taking control were not doctrinal but pragmatically liberal ones – political liberalisation, creation of a middle class, modernisation of the country, to free the Guatemalan economy from dependency on world coffee prices and from control by foreign corporations𝄪 (Gordon). Try as they may, US apologists arguing that the intervention was saving the country from communism have failed to make any plausible, even indirect, connexion between the Árbenz government and the Soviet Union✧. Immerman’s view is that the State Department confused communism and nationalism [cited in Bowen)❂.
⬆️ JF Dulles, Time’s “Man of the Year, 1954”
Isolating the Western Hemisphere’s outlier state With former UFCo lawyer John Foster Dulles guiding US foreign policy, the diplomatic isolation of Guatemala was complete when it cajoled the other members of the Organisation of American States (OAS) into accepting its anti-communist resolution in the region at the Caracas meeting early in 1954. The US, with assistance from the UK, also blocked Guatemala’s efforts to secure UN intervention against those seeking to destabilise its democracy.
⬆️ Rebel troops attacking Guatemala City (Source: www.latinamericanstudies.org)
End-game: The putsch and its denouement By late 1953 Eisenhower had given the “green light” to the invasion plan that became Operation PBSUCCESS in 1954. The US propaganda campaign intensified a few months later with saturation airdrops of anti-Árbenz leaflets across the country. Concurrently, the US Embassy in Guatemala City employed blocking equipment to jam the government’s official wireless channels and replace it with misinformation discrediting the Árbenz regime (Bowen). The CIA chose a renegade, expat Guatemalan officer on the outer with Árbenz to lead the coup attempt. From Honduras, Colonel Castillo Armas, with a small force of Guatemalan exiles and mercenaries and financed largely by the CIA, invaded the country. At first repulsed by Árbenz’s troops, the rebels fortunes turned around after Peurifoy persuaded JF Dulles to provided them with air cover. US-piloted planes duly strafed Guatemala City and other towns. American intimidation and terror had a telling psychological effect on the population. Guatemalan army commanders, fearful of a full US military intervention, defected from Árbenz, and refused to allow the president to arm the peasant militia to resist the invaders, this prompted a demoralised Árbenz to resign his office in June 1954 and seek asylum in the Mexican Embassy. After some jockeying for power within the country’s military junta Castillo Armas emerged as the new (US recognised) national leader, hurling Guatemala once again into the void of a crippling military dictatorship [RABE, STEPHEN G. “The U.S. Intervention in Guatemala: The Documentary Record.” Diplomatic History 28, no. 5 (2004): 785-90. Accessed July 30, 2020.www.jstor.org/stable/24914824.]
⬇️ Mexican artist Diego Rivera’s graphic take on the Guatemalan putsch
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❈ forcing it to seek arms from Czechoslovakia, allowing the US to fling further mud, characterising it as an evidence of Árbenz’s ongoing collusion with communism
⧆ revealingly, the New York Times at the time described Peurifoy as “a man of action rather than a diplomat”, The New York Times, 18-July-1954
⌑ as Moye has noted, the Guatemala crisis provided a convenient and fairly easy way for the Eisenhower administration to demonstrate its promised “victory over communism” [MOYE, LAURA. “The United States Intervention in Guatemala.” International Social Science Review 73, no. 1/2 (1998): 44-52. Accessed July 31, 2020. www.jstor.og/stable/23883544/].
◰ a foreign policy position of the US, first enunciated in 1823, warning off European powers from interfering with the governance of existing countries on the American continent
𝄪 at the time of Guatemala’s to transition to a democratic state, the US accounted for 77% of its exports of 65% of its imports. UFCo functioned in Guatemala (and elsewhere in the region) as a “state within a state”, controlling 42% of the Guatemalan land and benefitting from light tax and import duty burdens [‘Background on the Guatemalan Coup of 1954’, www.umbc.edu/].
✧ Marks offers a contrary view, that the Árbenz government did pose a genuine communist threat, had a tendency towards authoritarianism itself and that the president had lost the confidence of the majority of Guatemalans by 1954 [MARKS, FREDERICK W. “The CIA and Castillo Armas in Guatemala, 1954: New Clues to an Old Puzzle.” Diplomatic History 14, no. 1 (1990): 67-86. Accessed July 30, 2020. www.jstor.org/stable/24912032]. Although Rabe et al have countered that Marks’ conclusions rely on early State Department documents that have been discredited
❂ Getchell contends that in fact the USSR were “unwilling to prop up what they considered a bourgeois-democratic revolution” [‘Revisiting the 1954 Coup in Guatemala: The Soviet Union, the United Nations, and “Hemispheric Solidarity”’, (Michelle Denise Getchell), Journal of Cold War Studies, 17(2):73-102. April 2015. DOI: 10.1162/JCWS a 00549]
United Fruit, CIA, Do Business with Guatemala, Cold War Style: 1) 1944 Revolution to FBFortune
From the late 19th century to the Second World War Guatemalan politics followed a familiar path to most states in Latin America at the time – dominance by caudillos – military strongmen who were favourably disposed towards foreign investment and economic exploitation, especially from the USA. Under General Jorge Ubico (president 1931-44), this practice intensified with massive concessions given to Guatemala’s biggest foreign investor, the US United Fruit Company (UFCo), and to the country’s wealthy landowning class.
⇑ Belize (to the west of Guatemala) was the colony of British Honduras till 1964
By 1944 the economy in Guatemala was effectively monopolised by a “Big Three” oligopoly of US corporations – UFCo, in commanding control of the banana industry, International Railways of Central America, with its stranglehold (together with UFCo) over the country’s rail and ports facilities, and Electric Bond and Share, which controlled over 80% of Guatemala’s electricity supply. Poverty among the bulk of the rural population was endemic, agricultural workers earned between five and 20 centavos a day. 72% of the country’s land was held by just 2% of the population and there was an over-reliance on food imports because of the under-utilisation of land. Ubico’s oppressive rule was iron-tight and likened by international visitors to a “police state” [Gordon, Max. “A Case History of U. S. Subversion: Guatemala, 1954.” Science & Society, 35, no. 2 (1971): 129-55. Accessed July 27, 2020. www.jstor.org/stable/40402561].
Guatemala. Izabal. Banana plantation.(Source: AFAR)
The spring of democracy 1944-1954 In 1944 a coalition of middle class professionals, teachers and junior army officers❈, with the backing of trade unions, forced Ubico’s removal [Juan Gonzalez, Harvest of Empire: A History of Latinos in America, (2011)]. This “Guatemalan Revolution” paved the way for free elections and an overwhelming victory for liberal professor Juan José Arévalo. The Arévalo government followed a moderate reformist path, establishing civil rights, a social welfare apparatus and achieved considerable success in improving national literacy levels. Arévalo was succeeded in 1951 by another democratically elected government, this time led by former soldier and defence minister Jacobo Árbenz. The progressive Árbenz moved beyond his predecessor in introducing much-needed, comprehensive agrarian reforms, something Arévalo had carefully avoided for fear of antagonising Guatemala’s landed elite and being branded pro-communist [‘Foreign Relations of the United States, 1952-1954, Guatemala’, Office of the Historian, www.history.state.gov/].
President Árbenz Guzman ⇓ (www.wikia.org)
Decreto número 900 This put the Árbenz regime on a collision course with UFCo and the US government. The government’s Agrarian Reform Law (Decree 900) allowed for the expropriation of all Guatemalan land more than around 600 acres in size that was not under cultivation (which nonetheless only added up to less than 5% of all private land-holdings). UFCo’s reaction was to complain to Washington that Árbenz’s land reforms threatened its monopolistic position in Guatemala. The Company’s resolve to resist the Guatemalan move was hardened by the government’s offer of about $627,000, a figure derived from UFCo’s own estimate of the land value for tax purposes. The US State Department then demanded compensation from Guatemala of over $15,800,000 for UFCo’s properties in the country [‘Decree 900’, Wikipedia, http://en.m.wikipedia.org/].
Árbenz’s ‘gift’ to the landless masses (Source: Life Mag.) ⇓
Upturning democracy: the build-up to the coup UFCo turned its energies to lobbying Washington to secure its assets and investments in the small Central American country. The US government however had its own (wider) agenda in mind. With America in the grip of the “Second Red Scare” of McCarthyism in the early 1950s, the US chose to see Árbenz’s anti-colonial land reforms (an attempt by the Third World agrarian country to extricate itself from a backward feudal mode of existence) as prefiguring an encroachment of communism onto the Guatemalan political landscape⍟. The US government, operating through the agency of the CIA⚄, initiated a smear campaign against the Árbenz regime, using misinformation and infiltration to try to undermine its legitimacy within the country and the region. By 1952 the decision had been made to intervene in Guatemala. President Truman authorised the CIA to launch Operation PBFORTUNE, with the complicit involvement of Nicaraguan dictator Somoza García (Snr), but when its cover was prematurely blown the operation was quickly aborted. Plans in Washington for the coup d’état were shelved – for the time being, and the CIA and its co-conspirators resumed the covert task of subverting and destabilising the increasingly isolated Guatemalan government.
⇑ Allen Dulles, CIA director
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❈ drawing inspiration from FD Roosevelt’s American “New Deal” and from Mexico’s nationalising Cárdenas regime
⍟ Árbenz has the support of the small Guatemalan Communist Party and some communists filled minor offices in the administration but there were no communist members in the ruling cabinet
⚄ which had connexions with UFCo through those arch-cold warriors, the Dulles brothers, John Foster and Allen
The Pan Am Journey – the Singular and Boundless Vision of One Man, Juan Trippe
Pan American World Airways, or as it was universally known in its peak, Pan Am, is a name that is no longer displayed on the flight indicator boards of international airports across the globe. However up to the Eighties it was one of the premier names in the international airline industry. At the top of it’s game the airline was completing up to 214 flights from the US to Europe a week (1964) [‘Juan Terry Trippe, Founder of Pan Am World Airways and InterContinental Hotels’, Stanley Turkel (PDF, 2006), www.ishc.com].
From the ground up
Like quite a few young, middle class American men during the Great War, Tripp gravitated towards a future in the air, at first aspiring to be a navy pilot. After the war he transitioned from running a failed taxi service into a small regional air transport company. Trippe’s drive to succeed led him within a few years to merge his group with two other similar-sized ones to form Pan American Airways Inc.
The New Jersey-born businessman came up with a steady stream of novel ideas for innovation in the airline industry – which however required money. Prospects were bright though as new airline ventures were a good selling point. As William Stadiem explains, flying in the “Roaring 20s” was “the high-tech startup of its time!” Financiers, including members of the Rockefeller and Vanderbilt families, were all too willing to bankroll Trippe’s burgeoning airline industry ambitions [William Stadiem, Jet Set: The People, the Planes, the Glamour, and the Romance, in Aviation’s Glory Years (2014)].
By 1927 Trippe had started to assemble the rudiments of a fleet of aircrafts, initially with a brace of tri-motored Fokkers supplemented by some ageing surplus floating boats which he converted into the Pan American Flying Clippers (Trippe was a pioneer of these multi-engine seaplanes). Thus modestly began Pan Am’s first air mail service to the Caribbean (maiden flight in a 65-horsepower Seagull – Key West Florida to Havana) which paved the way for further Pan Am incursions into the region. Expansion followed innovation – from the West Indies he moved into Central and South America, and the foundations were laid for a global transport business✲.
Eschewing managerial orthodoxy
As textbook BUS101 management orthodoxy goes, Tripp was far from the desired model. His inclination was not to delegate and he was given to making unilateral decisions without consulting – much to the chagrin of his boards of directors [‘Juan Trippe and Pan Am’, (Richard Branson), Time, 07-Dec-1998, www.content.time.com]. What he was really exceptional at though, was anticipating the market in air travel, working out usually before anyone else what the next big thing was going to be…and going for it totally!
Business transparency was not part of the Trippe management style…his early inroads in the industry owed a lot to his “stealthy lobbying for U.S. mail licences”, which gave Pan Am a precious legup! [Harold Evans, Gail Buckland & David Lefer, They Made America, (2004)]. Trippe took a ruthless approach to competition and was not adverse to doing secret deals to outmanoeuvre his airline rivals [‘Juan Trippe Revolutionized Trips By Air With Pan Am’, (Scott S Smith), Investor’s Business Daily, 09-Oct-2014, www.investors.com].
Pan Am at times resorted to outright bribery to stay ahead of the pack, eg, offering several 100 thousand dollars to a Mexican president to block rival American Airlines’ bid for landing rights in the US’ southern neighbour [‘Juan Trippe’s Pan Am’, (Ann Crittenden), New York Times, (Archives), 03-July 1977, www.nytimes.com].
Thoroughly innovative Juan
By continually expanding the scope of Pan Am’s operations, creating many new routes, Trippe opened up both the Atlantic and the Pacific to air travel❂. Trippe’s list of innovations in the industry are legion – including the pioneering of round-the-world commercial flights; the introduction of cockpit electronics allowing Pan Am pilots to fly in any weather; he also came up with “fly now, pay later” plans; his personnel came up with an advanced (computerised) reservations system first [Stadiem, op.cit.; ‘Dead Airlines And What Killed Them’, (Jean Folger), 25-Jun-2010, Investopedia, www.investopedia.com].
Before Laker Air there was …
Perhaps Trippe’s greatest legacy however was the pivotal role he played in making affordable air tourism a reality to everybody. When Trippe and Pan Am entered the still embryonic industry, seats were expensive and airline passengers tended to be exclusively from the well-off sectors of society. The airline ‘biz’ was run by a cartel called IATA (the International Air Transport Association) who contrived to maintain airline prices at a high level [Scott, op.cit.].
The first discount king of airlines
The Pan Am boss’ idea was to introduce a new class of passenger, “tourist class”, slashing the round-trip fare from New York to London by half (to US$275). The cartel reacted by trying to impede the US maverick’s move. British airports were closed to all Pan Am flights with tourist seats (Pan Am was forced to switch its European flights to remote Shannon Airport in Ireland). Pan Am managed eventually to get round the cartel’s net, it’s tourist class proved so popular that IATA caved in and accepted the reality of it [Branson, loc.cit. ; Smith, op.cit.]. Trippe’s actions thus brought air travel within the reach of ordinary people.
Airline entrepreneur and “friends with benefits”
Part of Trippe’s success owed a lot to influential people in high places…he benefited from a personal rapport with presidents like FDR and Truman. In fact, far from it being exclusively a triumph of free enterprise, federal government cooperation and support were integral to Pan Am’s overall success in the business [Crittenden, loc.cit.].
⍔ JT Trippe & CA Lindbergh (Source: The Trippe Family)
Juan Trippe had the nous to surround himself with the right people from the start…in 1927 he ‘headhunted’ the (then) most marketable figure in world aviation, famed pilot Charles Lindbergh, to work for Pan Am (Lindbergh’s Continental survey flights helped establish the company’s early trade routes✥).
Another key figure within the company was its chief engineer Andre Priester who wrote the specifications for Pan Am’s flying boats. Priester set and maintained the airline’s meticulous safety standards [‘Pan Am Series – Part XLVIII: Skygods’, (Jpbtransportation: the Blog and Website of James Patrick Baldwin), 15-Feb-2015, www.jpbtransconsulting.com]. Staff training and airline safety were things Trippe refused to take shortcuts with – insisting on a high level of training for his pilots, flight crews, mechanics and support staff [Folger, loc.cit.].
With a little help from his (fellow capitalist) friends
Trippe in retirement freely acknowledged the help he received from United Fruit Company…the powerful US banana multinational assisted Pan Am early on to establish a presence in Latin America, thanks to United Fruit’s unique(sic) insider knowledge of the region’s states and its capacity to open doors to various governments [ibid.]. Trippe and Pan Am also prospered from cultivating a good friendship and working relationship with long-time Boeing head Bill Allen.
Enter the jet age
By the 1950s the heyday of “prop-liners” (propellor-driven aircraft) had come to an end. Jet liners were the future, trouncing ‘props’ for both aircraft speed and carrying capacity…and as ever Trippe got in at the ground floor! Trippe immediately bought up big on Boeing 707s and the first 707 Pan Am commercial flight took place in 1958 (NY-Paris)✮. He then got to work on making it more economical by figuring out how to reduce the jet’s seat-mile cost [Branson, op.cit.].
While going full-tilt into 707s Trippe was already looking beyond…to the 747, the jumbo-jet. As Evans et al observes, Trippe had “an almost clairvoyant grasp of the future (and a) determination to find aircraft to fit that vision” [Evans, Buckland & Lefer, op.cit.]. Unfortunately for Trippe, the antennae didn’t work as desired every single time and a few missteps had serious ramifications for the long-term future of Pan Am (see below).
⍔ 1st InterContinental: Belém (Brazil)
Pan Am ‘accommodates’ – airport to hotel…
Inevitably, the holistic approach Trippe brought to the airline industry✢ led him to capitalise on the airline ‘s success by directly entering the hospitality field… connecting the dots between passenger transportation and accommodation. With government encouragement from US president FD Roosevelt, Trippe began InterContinental Hotels & Resorts in 1946 as a subsidiary of Pan Am…the first international hotel was situated in Belém, Brazil. Between 1946 and 1996 there were 222 I-C Hotels doing business worldwide (>90% of them outside the US) [Turkel, loc.cit.]※.
Changing fortunes
Pan Am – once a ‘Titan’ of the airways – is no more, what then led to its demise? Some observers trace the seeds of its eventual fall to the late 1940s – years before the company had reached the peak of its powers. Earlier in the Thirties, during Pan Am’s formative first decade, Trippe lobbied the US government, advocating his “chosen instrument” theory (by which Washington would designate a single air carrier for all foreign flights). Pan Am in fact secured this special status, initially with the awarding of a 10-year mail contract by the US Postmaster-General. Eventually though other carriers were green-lighted to enter the overseas field and started to claw back Pan Am’s advantage [Smith, loc.cit.]. Postwar, competitors such as Howard Hughes’ Trans-World Airlines (TWA), Braniff and North West Orient were allowed to enter Pan Am’s routes in South America and Asia, and contest it’s semi-official monopoly✧ over those regions [‘Pan-American World Airways: the rise and fall of a 20th century cultural icon’, (06-Jan-2017), www.seanmunger.com]. The “catch-up” had commenced.
However when Pan Am sought to establish a competitive foothold domestically in the late Forties, the US government flatly rejected its request to start a connecting domestic route network [‘Lots of Reasons Why Pan Am Failed’, (Robert J Byrne), Washington Post, 25-Jan-1992, www.washingtonpost.com]. This setback proved a critical handbreak on Pan Am’s expansion into the profitable US internal passenger market.
⍔ Pan Am logo, the “blue meatballs”
In 1968 Juan Trippe stepped down as company president, however he remained active and influential in Pan Am’s executive decision-making, maintaining an office in the company’s headquarters. Pan Am still looked in solid business shape, it has 40,000 employees and was flying seven million passengers a year to some 86 countries. Trippe’s unflagging desire and capacity for change and innovation was to be a “two edged sword”, sparking Pan Am’s upward trajectory but also contributing to its ultimate decline. Not content with the revolutionary 707, Trippe cajoled the jet manufacturers to design a new “jumbo jet” capable of carrying in excess of 180 passengers⊡. The 747 answered this ‘need’, with the first commercial flight of a Pan Am 747 taking place in 1970. Trippe employed a similar stratagem with the Kennedy Administration which was reluctant (because of the exorbitant cost involved) to embrace the next level up, the SST-2707 supersonic jet. By signalling that he intended to purchase five Anglo-French Concorde planes, Trippe pressured President Kennedy into launching the American Supersonic Transport project. But this was one instance where Trippe’s ‘hunch’ was badly off target. The Boeing 2707 proved so problematic (and costly) that the project was dropped altogether in 1971.
⍔ Two Pan Ams, 707 & 747 (source: Boeing)
The ill-timed expansion into 747s: Capacity overload
Trippe, always striving to be ahead of the curve, placed his order for the new 747s before they were designed, let alone off the assembly line! On this occasion the economy brought him and the company unstuck. The timing of the introduction of 747s, 1970, was not great – coinciding with a recession! Trippe didn’t foresee the 1973 oil crisis, which blew out the costs for maintaining the fleet of jumbos – fuel prices skyrocketed after the Middle East energy backlash [Folger, loc.cit.].
The state of Pan Am’s finances in the early Seventies was not propitious for taking on something of the magnitude of the 747. Commencing from 1969-70 Pan Am experienced seven straight years of losses. By 1977 the company’s long-term debt amounted to a disquieting $727 million! The financial burden on Pan Am was too much – and the problem was compounded by one of Trippe’s successors as company head (Najeeb E Halaby) who bumped the order of 747s from Trippe’s original 25 up to 33 aircrafts [Crittenden, loc.cit.].
Other developments in the world added to the company’s woes. The spate of terrorist incidents involving Pan Am, culminating in the 1988 Lockerbie tragedy, damaged the company’s reputation and precipitated a decline in travel numbers [Folger, loc.cit.].
Deregulation
Another setback for Pan Am came in the late 1970s with industry deregulation. The legislation of course brought more competition for Pan Am into the game, but this time coming from the big international airline players. Deregulation also meant that Pan Am could now at last enter the American domestic market, and it acquired National Airlines which unfortunately failed at a time Pan Am was in need of a financial “pick-me-up” [Smith, loc.cit.].
When the end came for Pan Am, it came fairly abruptly – in 1991. Pan Am offices everywhere simply closed their doors, virtually overnight. Rising costs of operation, falling market share, a trough in passenger numbers (a further blow in this respect was brought on by the 1990 Gulf War which led to a fall-off in international travellers) [Folger, loc.cit.]. There was a failure to make preparations for a smooth transition for Pan Am after the head’s departure. Trippe, having been so dominant and instrumental in the company’s success over four decades, was negligent in not planning for a long-term successor to himself [Byrne, loc.cit.]. This hurt Pan Am during the rocky days ahead when it was in desperate need of clear-headed, astute leadership.
Footnote: in the 1920s and 30s Juan Trippe was one of a handful of great US airline pioneers – the elite list also included CR Smith (American Airlines), WA Paterson (United Airlines), Eddie Rickenbacker (Eastern Airlines) and Collett E Woolman (Delta Airlines).
PostScript: Pan Am’s broader role
Under Trippe, Pan Am’s planes could be called upon when required to provide service outside it’s core commercial role. This happened in war, both hot and cold (eg, active role of Pan Am Clippers in WWII; humanitarian trips during the 1948-49 Berlin evacuation; collecting “refugees from communism” in Cuba during the early years of the Castro regime). Trippe also came to the rescue of his fellow “captain of industry” Henry Ford in 1931, by flying the Brazilian military into the remote Amazon to put down a worker revolt in the Fordlândia rubber plantation.
﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎
✲ in addition to a purely business opportunity, Trippe’s focus on this region was to help forestall the establishment of a German (and possibly also a French) airline service to the Panama Canal (in which the US held a strategic interest), [Sean Munger, op.cit.]
❂ by the 1970s the Pan Am publicity arm was able to boast that it was “the World’s Most Experienced Airline”
✥ often taking him to inassessible places in South and Meso-America where Trippe’s workers would follow, having the arduous job of hacking out landing strips from the dense jungle [Smith, loc.cit.]
✮ in very quick time BOAC, QANTAS, Air France and Lufthansa, among others, rushed to embrace 707s. In 1959 the Douglas company debuted its DC-8, virtually a copy of the 707 [Stadiem, loc.cit.]
✢ in the early years Trippe had even helped build airports in the jungles of Latin America to fit in with the new air routes planned for Pan Am
※ the hotel chain was sold to an English conglomerate, Grand Metropolitan, after Trippe’s death in 1981
✧ Pan Am’s role at that time has been described as the US’ “unofficial flag carrier”, [George C Larson, ‘Moments & Milestones: Birth of the Clippers’, Air & Space Smithsonian, Nov 2010, www.airspacemag.com]
⊡ skillfully Trippe played the big manufacturers (Boeing, Douglas and Lockheed) off against each other, manipulating them into commiting to an even larger jet before they were ready to build it! [Smith, loc.cit.]
The United Fruit Company: Neocolonial Elites, Banana Monopolists and Oligarchs in the Tropical Americas, Part 2
In Part 1 we saw how robust intervention of the United Fruit Company and other commercially aggressive American companies in Central and South America brought about the socio-economic conditions that led to the characterisation of some of the countries therein as “banana republics”. This second part will focus on the experience of one particular country in the region, British Honduras (modern-day Belize), which, although a different type of polity to the other neighbouring states at the time, nonetheless exhibited the same or similar patterns of disruption and exploitation from the North American banana barons.
Pre-conditions for the banana importers
British Honduras in 1900 was a British crown colony, a status it had since 1862✱. At the head of the colony, the Crown’s representative, was the governor [‘British Honduras’, Wikipedia, http://en.m.wikipedia.org]. Before bananas, the prized commodity in BH was timber – logwood, cedar, chicle, and above all mahogany✪. Moberg notes that despite the abolition of slavery in 1838, the conditions peculiar to British Honduras (BH) continued to perpetuate a debt servitude of rural workers to an oligarchy of local and immigrant land-holders. Nineteenth century BH economy was dependent on mahogany exports, a situation which created what has been described as an elite ‘forestocracy’ made up of timber companies and merchants (both domestic and foreign) [CH Grant]. This bound generations of forestry workers in BH to the powerful employer-class…one resident colonial secretary described the plight of the workforce as being “virtually enslaved for life”. Moberg’s case study describes the role of the British authority in this status quo as one of aiding and abetting the goals of the timber and mercantile elites [Moberg 1996].
Br.Honduras mahogany exports ▸
The debt peonage that the unskilled BH farm workers were forced into (known locally as the “advance-truck” system), helped create a climate favourable to industry (ie, cheap and docile labour force) in the later American intervention by banana companies. Banana industry workers on plantations inherited similar harsh working conditions, including being subjected to the draconian ‘Masters and Servants’ Acts. Checks on what the United Fruit Co (UFCo) could do within British Honduras resided at least on paper with the colonial chief official, the governor (after 1884), (formerly the lieutenant governor 1862-1884, who during which time was subordinate to the governor of Jamaica). As Moberg’s study shows, the will to resist United Fruit’s incursions into the colony varied considerably from governor to governor. Early governors like Goldsworthy earned the ire of the resident elites who agitated for more political power. Under pressure from the business elites and oligarchs, the Colonial Office (in London) was forced to curb the power of governors in the 1890s and give the Legislative Council (and especially its five ‘unofficial’ members) a right of veto over the governor. In the 1900s governors like Sweet-Escott and Swayne made token efforts to dilute the members’ clout on council (with minimal success), but most governors ultimately conceded power to the elites [ibid.].
Acceding to the demands of big foreign capital
The governors discovered that the interests of foreign capital in British Honduras – initially through British mercantile and timber firms but increasingly through a burgeoning of US investors❅ – could not be ignored. By around 1900 bananas represented 71% of the value of exports to the US✥. It amounted to increasingly significant revenue for the colony’s coffers. The British Honduras government saw it as vital to the colony’s economy. Moberg indicates that “despatches from the governors to the Colonial Office reveal an eager accommodation to the banana multinational”. One of the most compliant, Governor Wilson, proposed to his masters in London that the government build railroads in the colony as an incentive for United Fruit to invest. Governor Swayne, undergoing a 180° turn from his earlier opposition to UFCo, started to act like a “virtual agent for the company in London”, negotiating the approval of incredibly generous land concessions to UFCo…under its terms United Fruit was asked to pay only $1 an acre compared to between $3 and $8 an acre required of small landholders (and UFCo was largely exempted from standard land tax). Sometimes UFCo received land gratis or for virtually nothing in exchange for the company’s promise to build railroads in the tropical lowlands (which of course benefitted UFCo’s business!) [ibid.].
United Fruit Co’s corporate muscle-flexing On the rarer occasions that the BH government were reluctant to automatically lay down and do the American banana giant’s bidding, UFCo’s immediate reflex was to engage in bullying tactics against the government and threaten retaliatory action. When United Fruit asked the government for the unprecedented control of the British Honduras wireless (a very “banana republic” situation by which the British Central American colony’s entire radio communications would be held in foreign hands!), the Colonial Office declined its request. UFCo responded by withdrawing its steamship passenger line from service until the Colonial Office finally caved in to its demands for control of the radio system in 1911. UFCo took the same measure with its service on another occasion (which deprived the colony of mail delivery for over a month) in order to extract a higher subsidy payment from the government [ibid.].
United Fruit Co’s strategy in BH: Beginnings of the ‘Musaocracy’ When it commenced business as a buyer of bananas in Central America (1899/1900), UFCo embarked on a strategy that envisaged a monopoly situation end-game. One of the first moves was into transport. In 1900 UFCo acquired majority ownership of six Caribbean coast steamship lines⌖, this also gave it the government mail contract as well (the Belize Royal Mail). The strategy to maximise its stake in the colony’s bananas was clinical and precise: UFCo first raised the price it was paying to independent growers, this allowed it to eventually crush all competition from other buyers…a monopoly of the market achieved, the company was now free to “dictate ruinous prices and conditions to private growers”. At the same time United Fruit thwarted the marketing efforts of independent growers, thus denying them alternate sources for the sale of their produce [ibid.].
Restrictive competitive practices 101: United Fruit achieves vertical integration in bananas
After securing a stranglehold over the exporting side of the banana game in Belize and having established its own rail network to transport the produce, UFCo’s next step was to create its own banana plantations in the colony’s south at Stann Creek and Toledo. As a major BH producer United Fruit consolidated its position in several stages, it set about monopolising the land available for cultivation. By 1930, the land area of Belize cultivated by the company comprised 139,000 acres, but UFCo also held over 20 times this area of unused land in BH, seriously limiting the area of cultivable land available to competing planters. United Fruit’s price-fixing had the ultimate effect of decimating the local banana growers✧ [ibid.]
Fusarium wilt (‘Panama disease’) ⬆️
Industry reversals and exit strategy In the 1910s the banana business in British Honduras was hit by a series of natural and climatic disasters…heavy rains causing flooding with loss of 90% of banana crop; infectious diseases especially the Panama disease (a soil-borne fungus), particularly devastating to UFCo’s Middlesex and Stann Creek estates; poor cultivation techniques exacerbated the losses (reliance on primitive milpa cultivation). The persistence of Panama disease⊠ further depressed production and United Fruit gradually reduced its banana operations in BH and in some cases, in locations like South Stann Creek, eventually replaced banana cultivation with citrus fruit [ibid.].
⬇ UFCo promotional booklet (Source: JJ Burns Library, Boston College)
Successive Belize colonial governments were repeatedly outwitted by United Fruit negotiations leaving it in a default position vis-á-vis the US company that was inferior and subordinate. One weakness stemming from the contractual arrangements was the governors’ abject failure to make UFCo keep its side of bargains. When things started to go “belly-up” for United Fruit in the banana colony, UFCo in imperious contempt of their contractual obligations simply pulled the plug. To compound the folly, subsequently, the colonial officials meekly bought back the key Middlesex estate from United Fruit✜, incredibly and bizarrely on terms which allowed the withdrawing company to make a profit! [ibid.].
United Fruit’s activities in British Honduras were typical of its approach throughout the Caribbean littoral. Large-scale integration into the local economy with massive infrastructure, using its economic clout to manipulate the local authorities into making advantageous concessions banana market…control of the market in bananas allowed it to set artificial low prices which Belize suppliers were obliged to accept because they were bereft of alternate viable markets. BH, being a colony of the British, varied from the prevailing pattern in other Central and South American countries in only one respect, a lack of personal graft. Unlike the banana republics, UFCo had no recourse to bribery with the colony’s British career diplomats, but bluff and intimidation usually produced the results it sought. As Moberg noted, “Colonial officials acted on behalf of the multinational not from venality or corruption…rather (it) reflected an ascendant US political and economic influence…one that officials found increasingly difficult to resist” [ibid.].
Tentacles of ‘El pulpo’ (“the octopus”)
United Fruit was particularly adept at playing one country off against another. When British Honduran officials kicked back against the demands of the company, UFCo would make clear that not acquiescing to what it wanted, had serious consequences. A standard ploy was to pit British Honduras against neighbouring states. On the occasions that the BH governor would deviate from his default submissive position to UFCo demands, the company manager in Belize Town would drop none-too-subtle hints about moving the centre of United Fruit’s Central American banana operations to Puerto Cortés in Hondurus. Similarly, United Fruit would also periodically issue threats to both Guatemala and British Honduras that it would switch its investments from one to the other [ibid.]
PostScript: Modern Belize Tiny British Honduras was one of the last crown colonies in the Americas to shed the shackles of European colonialism. It achieved self-governing status in 1964, renamed Belize in 1973, it finally gained full independence from Britain in 1981. Mestizos, Creoles, Maya and Garifuna make up around 90% of the population. Belize’s much delayed passage to full independence largely stems from its neighbour Guatemala’s long-standing claim on the territory of Belize (or part thereof). Guatemala’s largely military regimes have aggressively pursued its claim (including making a number of threats to invade Belize and border-massing of troops since the 1940s), with Guatemala refusing to recognise the new nation in 1981. Accordingly the UK maintained armed forces in Belize after independence (till 2011) [‘Belizean-Guatemalan territorial dispute’, Wikipedia, http://en.m.wikipedia.org].
—————————————————————–——————————-———–
✱ although as far back as 1783 a local British presence had existed following the Treaty of Versailles which gave them the right to cut logwood between the Hondo and Belize Rivers
✪ the following, outlining what transpired in British Honduras in particular between 1900 and 1920, is heavily based on a case study by Mark Moberg [Moberg, Mark. “Crown Colony as Banana Republic: The United Fruit Company in British Honduras, 1900-1920.” Journal of Latin American Studies, vol. 28, no. 2, 1996, pp. 357–381. JSTOR, JSTOR, www.jstor.org/stable/157625]
❅ by the early 1900s US capital had attained a hegemonic position in BH (overtaking British capital) as it was in the rest of the Caribbean littoral
✥ at the same time the Belize mahogany trade was starting to taper off
⌖ UFCo’s passenger and cargo ships were known as the Great White Fleet. The ships were painted white apparently to keep the shipment of bananas cooler! [‘United Fruit Company: The Great White Fleet’,https://visitpuertoarmuelles.com]
✧ tactics replicated elsewhere in the region with similar results – the independent Jamaican growers, the Jamaican Banana Producers’ Association, resisted the United Fruit Co dominance of the Caribbean island’s market for a time but in the end couldn’t compete in a price war
⊠ United Fruit established very large plantations in different countries (known as ‘divisions’), when Panama disease hit, it would abandon the farm and relocate…each time UFCo would “systemically destroy the infrastructure (railroads, bridges, telephone lines, etc) to prevent competitors from being able to renew production on a smaller scale” [PI Bourgois, Ethnicity at Work, cited in Moberg]
✜ these days United Fruit Co goes under the banner of ‘Chiquita Brands International’ (still extensively in bananas)
The United Fruit Company: Neocolonial Elites, Banana Monopolists and Oligarchs in the Tropical Americas, Part 1
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]
❖❖❖ ❖❖❖
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)].
‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗‗ ✱ 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]