Myths of Latin America

The Banana Republic: The Myth of the United Fruit Company

A Nuestro Pobre Enterraremos Hoy No 3 by Eddie AlvarezFor most young adults, the term “banana republic” invokes the image of the upscale, trendy clothing store at the shopping mall. The store, owned by Gap, Inc., was started in 1978 to sell “safari-inspired” clothes. The first stores had safari-themed decorations, such as real foliage and Jeeps. Its unfortunate name was taken from the derogatory term for poor, unstable countries in Latin America, where consumers could now travel in style. The original “banana republic” was Honduras: United Fruit Company had many banana plantations, practically controlled the country economically and got involved in politics as well. Since the term was coined, the word has grown to be applied to any country with unstable, non-democratic governments, and abundant foreign influence, especially in economics. The many countries in Latin America that were dominated by United Fruit Company (UFCo) in the first half of the 20 th century certainly fit that definition.

"Banana Republic Flag"

 

 

 

 

 

 

The Myths

This essay deals with the many roles and myths surrounding United Fruit Company and their presence in the so-called “banana republics”. One mythic figure in Latin America is Samuel Zemurray, or Sam the Banana Man, [see below] who came to be the head of UFCo. The Fruit Banana Republic by Keith Morrison Company’s extensive role in Latin American economies and politics is also mythic in those countries, such as the part it had in the 1954 Guatemalan coup [see below]. UFCo and the banana republics are important to the culture of the area. One common nickname for UFCo was “el pulpo,” or the octopus, for its wide-reaching influence throughout the region.

As the poem “La United Fruit Company” by Pablo Neruda demonstrates, UFCo was prevalent in many parts of society. The poem laments the taking of Latin American wealth by United Fruit and other US corporations. It also mentions the “flies” or dictators with close ties to the United States and US corporations. The countries that UFCo dominated saw United Fruit as the epitome of imperialism, a corporation that took resources from the region and tried its hardest to prevent economic independence. There is also artwork that deals with the topic of “banana republics”.

Scene from BananasThe movie Bananas, with Woody Allen, portrays the story of a United States man who ended up ‘El Presidente’ of a fictional Latin American country through a series of strange events. The protagonist, Fielding Mellish, is a geeky man who finds himself the leader of this country and tries his hardest to be a macho leader, even donning a fake beard like Fidel Castro’s. In the character’s “rise to power”, there was a coup, and then a counter-coup, which really aren’t uncommon events in many parts of Latin America. It is especially common in countries with foreign economic and political control, in this case in the form of a president. The film shows the US opinion of the countries that can’t keep a leader, are constantly in turmoil, and rely on the United States for help.

 

Brief History

The banana trade began in 1870, when Captain Baker of Boston, MA, brought some bananas back from his trip to the Caribbean. He found it very profitable to sell the exotic fruit, and formed Costa Rican railroad Boston Fruit Company. Around this time, Minor Keith was building railroads through Latin America, and growing bananas alongside the tracks to finance his expensive and dangerous project. The two joined forces in 1899 to form United Fruit Company. Minor Keith went on to become very involved in Costa Rican politics and married the daughter of a former president, Cristina Castro. He earned the title of the “uncrowned king of Central America”. Ever since then, railroads have been vital to the banana industry, as the main mode of transportation for export, and the economic benefits that go with owning them.

In 1915, UFCo bought out its biggest rival, Cuyamel Fruit. United Fruit was then the largest shipper, grower, and seller of bananas in the industry. The company grew to become the largest landowner in Central America, with 212,394 acres of land, the largest portion of it in Guatemala, but also spread throughout Honduras, Costa Rica, Panama, and several others nations.[1] UFCo’s Great White Fleet of ships, painted white to reflect the hot sun and used for Great White Fleet transporting bananas, was recognizable to everyone. It was the largest private fleet of ships in the world. The company’s economic and political power was widespread. The most notorious of United Fruit’s political actions was its role in the 1954 coup in Guatemala. However, the mid-1950s were the peak of UFCo’s power. At that point, UFCo represented the merging of approximately 21 once-independent banana companies.[2] In 1958, an antitrust suit forced UFCo to sell part of the company. Today it is still a large fruit company by the name of Chiquita Brands International.

Sam the Banana Man

Samuel Zemurray came to the United States from Russia with his family in 1892 as a child. He first became involved in the banana business in Alabama, where he would buy nearly-ripe bananas and transport them quickly enough to be sold in stores the next day before they went bad. In 1905, Zemurray went to Honduras as a contractor, with hopes of starting his own Samuel Zemurray banana company. His goal was to buy land, build a railroad, and make a deal with authorities for tax protection. However, when he got there, Sam the Banana Man discovered that President Dávila was negotiating a loan with a New York bank in return for their own agent to make sure the loan agreements were being followed. Sam quickly realized he would never achieve the concessions he was seeking under those circumstances, so he struck a deal with Dávila’s enemy, Manuel Bonilla, who was in exile in the United States. Zemurray bought rifles, machine guns, ammunition, and a ship, and waved goodbye as Bonilla and some followers cruised out of New Orleans. Within a matter of weeks, there was a coup in Honduras. Samuel Zemurray’s Cuyamel Fruit Company was granted every concession by the Bonilla government. Of course this was 20 years before Zemurray was affiliated with United Fruit Company, but it is a good example of the huge influence the banana trade had in Latin America and the kind of person Sam the Banana Man is.

The extent of Samuel Zemurray’s legacy doesn’t stop there. With his freedom to grow bananas, Zemurray’s Cuyamel Fruit Co flourished. He pioneered many techniques for banana plantations, such as new irrigation and pruning methods. The bananas he grew were as good as or better in quality than United Fruit’s. When Cuyamel was given land on the Honduran-Guatemalan border in 1915, in Motagua Valley, things started to get heated. One outcome was a skirmish between the neighboring countries over the disputed land. This was considered by many to be a battle between United Fruit and Cuyamel, with the governments as fronts. United Fruit was feeling threatened by Cuyamel, so they bought out the company for 300,000 shares in UFCo, worth $31.5 million.[3] Zemurray was forced to retire from the banana business as a very rich man.

Sam the Banana Man stayed away from the business for a few years, until the Great Sam the Banana Man Depression hit. In 1933, his stockholdings, once worth over $50 million, were only worth around $6 million.[3] Convinced that the problem was poor managing, Zemurray, the largest stockholder, went to a board of directors meeting and declared, “You gentlemen have been f***ing up this business long enough. I’m going to straighten it out.”[4] He persuaded the directors to name him Managing Director in Charge of Operations and the price of the stock soon rose due to his reputation as a leader in the banana industry.

In the 1950s, Sam the Banana Man was back in Central America. He was placed in charge of local operations by United Fruit. While he was typically insensitive to workers’ demands, he had high production, and fended off interference from Boston with his slogan “I’m here, you’re there.”[5] Eventually, Zemurray even became president of UFCo, where he continued to increase profits and power for the company.

 

 

Guatemala and United Fruit

The United Fruit Company had very significant influence in Guatemala for many years. It was the single largest landowner in the country and was directly or indirectly responsible for almost 40,000 jobs in Guatemala.[6] Through close ties with dictators such as Jorge Ubico, the company was promised low taxes, duty-free imports, and low wages for workers. United Fruit UFCo had $60 million invested in the country and owned the telegraph and telephone facilities, nearly every mile of railroad track, and the only Atlantic port in Guatemala, Puerto Barrios.[6] Needless to say, United Fruit had a vast amount of economic control in the country.

Tension started in 1951, when United Fruit went to President Jacobo Arbenz to get their contracts and concessions extended. The president, known as a champion for the peasants, requested that UFCo recognize Guatemalan law and consider the government the final arbitrator in any disagreements in return, which was unusual for the company. He had also just passed the agrarian reform law Decree 900. This angered UFCo because they no longer were granted their one-sided concessions, which started a series of altercations between the company and the government. United Fruit’s move was to lay off four thousand workers, and in return, the Guatemalan government seized land. The main disagreement was over a large tract of land taken in 1953. As part of the new agrarian reform laws, unused land belonging to large landowners could be taken away for compensation, to be given to peasants. The area the government seized in 1953 was completely uncultivated. UFCo was offered $627,572 in bonds, which is the value United Fruit had declared the property to be worth for tax purposes.[7] However, United Fruit, like many corporations in the area, had been undervaluing their land to avoid heavy taxation. A formal complaint was filed in 1954, not by United Fruit, buy by the United States State Department, which UFCo had connections to. The complaint demanded nearly $16 million for the land.[7]

By this time, United Fruit was fed up with this sudden strictness. They started spreading propaganda in the United States that President Arbenz was Communist and had to be stopped, even hiring lobbyists and publicists for that purpose. UFCo started meeting with leaders in Washington to search for an end to the “problem” in Guatemala. As early as 1951, United Fruit Company had started a press campaign against Arbenz. They would fly journalists Political cartoon "Brought to Light" down to Guatemala for tours and interviews so they would write about the bad Communist Guatemalan government. They also worked on convincing the CIA that Arbenz posed a threat to the United States. One of their main roles after the coup plan, Operation Success, was in the works was choosing someone to lead the coup. They decided on Castillo Armas because he was supposedly a stupid man, and they would be able to get what they wanted from him.

In June, 1954, the coup was finally carried out. The United States armed forces, acting as a nationalist group hiding out in Honduras, and Armas’ rebel group fought for a few days until Castillo Armas was the new leader of Guatemala. It was a tougher struggle than expected, but imperialism finally won out. During the coup, Arbenz went on the radio saying, “Our crime is having enacted an agrarian reform which affected the interests of the United Fruit Company.”[8] With Armas in power, UFCo got their land back and banana trade unions were banned. At this time, a young man by the name of Ernesto “Che” Guevara was in Guatemala; witnessing the US-led coup angered him and led him to take a major role in the Cuban Revolution in 1959 with his good friend, Fidel Castro.

Conclusion

To be fair to United Fruit Company, they had a reputation for having the best working conditions in Latin America. They paid their workers fairly well compared to other companies in the region and gave them some benefits, like a hospital. Also, the concessions they sought weren’t extremely unreasonable at that time in that area. The land they bought very Banana plantation inexpensively was viewed as useless at the time they acquired it, as the countries couldn’t find any better use for the land, usually a thick jungle. However, these things should have seemed unfair to the rest of the world.

Through these few examples, it is easy to see how United Fruit Company became such an influential myth in Latin America, and these just scrape the top of the mountain. For example, in order to repay their debt to the CIA, UFCo donated two boats for use in the Bay of Pigs attack on Cuba. They also had close ties to dictators and military action in Dominican Republic and Honduras. United Fruit was the first company to cause a country to be termed a “banana republic” and its economic influence throughout the region was unmatched. UFCo’s influence was more than economic in several cases, such as the coup in Guatemala. Also, many figures associated with United Fruit were larger than life, like Sam the Banana Man. The mythic United Fruit Company left its mark on Latin America and the world through their immense power and notorious actions in overturning leaders.

Citations:

[1] Bitter Fruit , p. 67

[2] United Fruit Company in Latin America , p. 15

[3] Bitter Fruit , p. 69

[4] http://www.everything2.com/index.pl?node_id=962298

[5] Bitter Fruit , p. 75

[6] Bitter Fruit , p. 12

[7] Bitter Fruit , p. 15

[8] Bitter Fruit , p. 19

Bibliography

Cuban Revolution The man behind the revolution

Allende and Pinochet in Chile Evolving Myths

MIR The Revolutionary Left in Chile

Banana Republic United Fruit Company in
Latin America