The Second World War impacted every corner of the earth, including Central America and the Caribbean, which in turn affected the United Fruit Company. Indeed, the war negatively affected the UFC both politically and economically.1
After World War Two, a series of political and social revolutions throughout Central American and the Caribbean altered the United Fruit Company’s ability to exercise total authority throughout the regions that they inhabited.2 Throughout the late 1940s, new labor codes were implemented across Central America, including Costa Rica, Nicaragua, Honduras, and Guatemala.3 These labor codes varied, but general themes included increased wages for laborers and reductions in the maximum weekly work hours for workers. This hurt the UFC’s ability to maximize profits by forcing laborers to work unreasonably long days with very little pay.
Additionally, during the 1940s, another fungal disease, this one known as Sigatoka, swept through banana plantations, creating great economic difficulties for countries already struggling because of the second World War.4 The Sigatoka disease, or Cercospora muitsae, attacked the leaf of the banana plant and spread rapidly, effectively destroying the foliage of the banana plant.5 This often caused the stems of the banana plant to ripen prematurely, which essentially made it impossible to ship bananas to North America. Thus, the rapid spread of the Sigatoka disease throughout South and Central America further negatively impacted the profitability of the United Fruit Company.
The Sigatoka disease had a specific impact on the development of the United Fruit Company in Colombia. In 1941, the Colombian government signed a contract with United Fruit to work together to fight the disease.6 However, this never came to fruition because of the outbreak of the war. Furthermore, shipments were halted from Magdalena because of the war effort and the presence of German submarines throughout the Caribbean. The combination of these factors led to an unprecedented increase in the number of local banana growers in the Magdalena region. These developments decreased the dominance of the United Fruit Company in Colombia.
Also of great significance was the overthrow of the Guatemalan government in 1954. In 1944 the “October Revolution” occurred in Guatemala as the result of protests and demands for social and political reform by university students and middle-class Guatemalans.7 Strikes and protests prompted authoritarian dictator, Jorge Ubico, to resign from office.8 Juan Jose Arevalo was elected as the democratic leader of Guatemala and instituted many changes in the Guatemalan government. Over the next ten years, under democratic leadership, Guatemala saw radical transformation in social and economic policies. This opposed the United Fruit Company’s economic and political objectives, as they lost revenue due to new labor policies and political influence within Guatemala.
By the 1950s, labor tensions between the Guatemalan labor force and the United Fruit Company were escalating.9 In 1950, Jacobo Arbenz was popularly elected following a campaign calling for agrarian reform and land redistribution.10 At the same time as the campaign and election, there were several significant labor strikes against the United Fruit Company.11 Following Arbenz’s election, the Agrarian Farm Law of 1952 was passed, which called for a comprehensive redistribution of land to peasant families and development of physical infrastructure, with little concern being given to interests of the landed elite.12 This act specifically called for any holdings of uncultivated land over 269 hectares to be redistributed to rural and peasant households.13 The United Fruit Company, one of the largest land holders in Guatemala, faced serious loss of their Guatemalan assets as a result. The UFC had already been lobbying in Washington D.C. for U.S. government intervention in Guatemala, but this legislation caused the company to advocate for immediate action to prevent the Guatemalan government from enacting further policies that would threaten the power and profitability of the United Fruit Company. The leftist leaning political agenda of the government under Arbenz seriously hurt the capitalistic nature of the United Fruit Company’s business endeavors, which prompted an already anti-communist U.S. government to intervene.
In 1954, the American Central Intelligence Agency, with the support of the United Fruit Company, intervened in Guatemala by creating an armed anti-government movement aimed at overthrowing the government.14 In May of 1954, the U.S. government determined that there was a small communist faction developing in Guatemala and that because of this, the U.S. government had the responsibility to remove the faction from the country at whatever cost it may take. This, of course, was motivated by both the American anti-communist hysteria of the 1950s and the lobbying efforts of the United Fruit Company to intervene on their behalf. On June 18, General Castillo Armas, a Guatemalan general, invaded Guatemala from Honduras. However, the major point of military action in the insurgency was massive bombing by U.S. planes over Guatemala city. Additionally, the C.I.A. used psychological warfare by taking over media in order to deliver pro-rebel propaganda to the Guatemalan people.15 In June, after pressure from the military action and army representatives, Arbenz resigned. Ten days after his resignation, General Castillo Armas, an ardent supporter of the U.S., became president of Guatemala. Guatemala returned to authoritarian rule with the backing of the United States.16 The U.S. government continued to have significant influence in Guatemala, but their actions tended to be motivated not by a desire to prevent the further spread of communism, but to protect their economic interests, namely, the United Fruit Company.
(Cover image: TortugaHalo, CC BY-SA 4.0 https://creativecommons.org/licenses/by-sa/4.0, via Wikimedia Commons)
1Marcelo Bucheli, “The United Fruit Company in Latin America: Business Strategies in a Changing Environment,” in Bananas and Business: The United Fruit Company in Colombia, 1899-2000 (New York: NYU Press, 2005): 44-85.
2 Marcello Buchelli, “The United Fruit Company in Latin America.”
3 Douglas Southgate and Lois Roberts, “The Octopus Book,” Globalized Fruit, Local Entrepreneurs Book Subtitle: How One Banana-Exporting Country Achieved Worldwide Reach (University of Pennsylvania Press, 2016): 7-19.
4 Marcelo Bucheli, “Enforcing Business Contracts in South America: The United Fruit Company and Colombian Banana Planters in the Twentieth Century,” The Business History Review 78, No. 2 (Summer, 2004): 181-212.
5 Earl B. Shaw, “Recent Changes in the Banana Production of Middle America,” Annals of the Association of American Geographers 32, No. 4 (December 1942): 371-383.
6 Marcelo Bucheli, “Enforcing Business Contracts in South America.
7 Cindy Forster, “Banana Workers and the United Fruit Company in Tiquisate,” The Time of Freedom Book Subtitle: Campesino Workers in Guatemala’s October Revolution (Pittsburgh: University of Pittsburgh Press, 2001): 117-137.
8 Kenneth J. Grieb, “The Guatemalan Military and the Revolution of 1944,” The Americas 32, No. 4 (April 1976): 524-543.
9 Marcello Buchelli, “Enforcing Business Contracts in South America.”
10 Max Gordon, “A Case History of U. S. Subversion: Guatemala, 1954,” Science & Society 35, No. 2 (Summer 1971): 129-155.
11Max Gordon, “A Case History of U. S. Subversion: Guatemala, 1954.”
12 Piero Gleijeses, “The Agrarian Reform of Jacobo Arbenz,” Journal of Latin American Studies 21, No. 3 (October 1989): 453-480.
13 Southgate and Roberts, “The Octopus.”
14 Max Gordon, “A Case History of U. S. Subversion: Guatemala, 1954.”
15 David M. Barrett, “Sterilizing a “Red Infection” Congress, the CIA, and Guatemala, 1954,” Center for the Study of Intelligence Archives 44, no 5. Accessed 21 April 2020. https://www.cia.gov/library/center-for-the-study-of-intelligence/kent-csi/vol44no5.
16 Charles D. Brockett, “An Illusion of Omnipotence: U.S. Policy toward Guatemala, 1954-1960,” Latin American Politics and Society 44, No. 1 (Spring, 2002): 91-126.
