Corporate Rule : Banana Wars

Sep 25

Corporate Rule : Banana Wars :

Guatemala , Jocobo Arbenz & the United Fruit Company CIA coup of 1954

Written By J Scott Alfieri

Long before Guatemala attained independence from its Spanish overlords in 1821 after 300 years of colonial rule, its lands contained the core of the diverse Mayan Civilization. The home of the Maya was comprised of what is present day Guatemala , the western areas of modern Honduras and El Salvador, the entire Yucatan as well as parts of the present day Mexican states of Chiapas and Tabasco.

The Mayan were a Mesoamerican civilization which began in the neolithic period who developed sophisticated science of astronomy , the 365 day calendar and hieroglyphic writing. The Maya also created the concept of zero. Mayan architecture was extremely elaborate . Palaces , temples, pyramids,cities were all erected , many that still stand today all made of stone without metal tools.

Mayan civilization reached its peak around the 6th century c.e..By 900 c.e. most of the cities were abandoned and reconquered by the lush vegetation and the jaguars , monkeys, reptiles , birds and insects who resided in and below its canopy.

From 1821 to 1944 Guatemala suffered political instability. There were three main classes of people in the Guatemalan social strata. Criollos , people of European ancestry who dominated the upper echelon of Guatemalan society . Ladions , ppl who were of mixed European and indigenous Mayan ancestry who comprised the merchant and artisan class, and the Mozos who were the descendants of native Mayan people and African slaves who had escaped the plantations of the southern United States and the Caribbean.

The first 43 years of the 20th century was dominated by the Criollos and their collaboration /subservience to multinational corporations from the United States. Over those 43 years the United Fruit Company developed such a foothold in Guatemala that the corporation was a state within the Guatemalan nation . UFCO (United Fruit Co) by 1936 owned the railroad , the only major port in the country at Puerto Barrio , the postal service and over 40% of all the land in Guatemala ( 70% of the arable land was in the hands of 2% of the population).

In 1943 the dictator Jorge Ubico, a man who openly called himself "the Central American Hitler" was overthrown in a coup led by a coalition of Guatemalans. A triumvirate led by Juan Jose Arevalo instituted reforms which enabled a free press, an open political process, the building of hospitals and schools and new social programs like social security for the Guatemalan people.

In 1950 when his term as leader of the triumvirate ended Arevalo, who wanted to set a precedent for Democratic ideals, enabled free elections . Jacobo Arbenz , Arevalos defense minister was elected as the new President. Arbenz, a large landowner from the Criollo class, ran on a platform of ending the UFCO monopoly over the Guatemalan nation through agrarian reform. Specifically the implementation of export duties on UFCO, the construction of a highway to Puerto Barrios and a power plant to compete with the only one in the nation. The new President's policies threatened UFCO's and its board members, many of whom were in the United States government. Almost immediately the company began implementing plans to thwart Arbenz and the fledgling Democracy of Guatemala.

Arbenz had aligned himself against powerful men. These included John Moors Cabot, the assistant Secretary of State for Inter American Affairs and his brother Thomas Cabot (President of United Fruit till 1948), their cousin , U.S. Senator and the U.S. Ambassador to the U.N. Henry Cabot Lodge and grandson of imperialist Henry Cabot Lodge. John Foster Dulles who worked for the major Washington D.C. law firm of Sullivan & Cromwell (who represented Standard Oil and Schrodingger Bank of Boston who was the major financier of UFCO) and became Secretary of State in 1952. John Foster Dulles' brother, Allan Dulles who also had worked for Sullivan & Cromwell , was a shareholder of UFCO and a board member of Schrodingger Bank was named head of the Central Intelligence Agency in 1953. World War Two Allied Commander General Dwight D Eisenhower who was recruited to run for the office by Senator Winthrop Aldridge ( David and Nelson Rockafellers maternal grandfather and banking scion) was also a major shareholder in UFCO whose personal secretary Ann Whitman ( also a personal confidant of Nelson Rockefeller) husband was head of Public Relations for UFCO. This group all saw the Arbenz government and its policies as a threat to the suzerainty of UFCO and the United States of America imperial aspirations.

In 1951 , 7 months after Arbenz took office UFCO executive Walter Turnbull arrived in Guatemala and demanded that the Arbenz government extend the existing labor contract for 3 more years, a promise not to increase the company's modest taxes and protection against any possible devaluation of the Guatemalan currency. Arbenz responding by informing Turnbull that for the contract to be extended UFCO needed to reduce rail freight rates ( which at the time were the highest in the world as determined by the International Development Bank), improve the docks at Puerto Barrios , pay modest export duties ,consider paying compensation for the use of Guatemalan land and accept the Guatemalan government as the final arbiter of disputes between labor and management.

UFCO responded by laying off 4,000 Guatemalan workers. The Guatemalan Court then seized 260,100 acres of land from UFCO as a guarantee for the back wage demands of the workers. Arbenz and Labor leaders settled the dispute with UFCO in 1952 by renewing the 3 year labor deal requested by UFCO executive Turnbull in exchange for $650,000 in back wages.

In 1953 Arbenz instituted the agrarian reforms he promised when he ran in 1950 and expropriated 209,842 acres of land from UFCO. 85% of the companies land lay fallow . UFCO claimed the fallow land was necessary in case of disease arising on existing banana plantations. The Arbenz government did not expropriate the land to punish UFCO but to distribute it to the Guatemalan people who needed it to grow their own food for survival. In return the Guatemalan government offered to pay UFCO for the land using UFCOs own estimate of the land's worth based on their evaluations for tax purposes, about $627,572. UFCO had purposely undervalued the land to evade paying taxes and demanded a little under $16 million dollars from the Guatemalan government for the land. Arbenz and the Guatemalan nation scoffed at the response.

Arbenz made his views clear in a speech in 1953, " The essential character of the international situation with relation to Guatemala is that as a consequence of the agrarian reform and the economic and social development of the country, we face a growing threat of foreign intervention in the internal affairs of Guatemala, placing in danger the stability of our constitutional life and the integrity of our national independence.....The source of the political controversies and struggles , especially during 1953, was the agrarian question...For some time our measures have conflicted with the policies of great foreign consortiums which form the dominate circles in some countries, primarily the United States of America...The explanation is in the progressive measures and in the application of the labor code to all companies , including the United Fruit Company...As long as we do not conform to the UFCO and some others affected by the agrarian reform , they will continue to try to recoup the lands which popular sovereignty had legitimately expropriated for the benefit of the nation and the peasants "- Jacobo Arbenz ( Bitter Fruit , Ch7 , paragraph 30)

Dwight D Eisenhower was elected President of the United States in 1952. His incoming administration would be much more open to covert action by the Central Intelligence Agency . One of the first decisions the new President made was to depart from former President Truman's use of the newly formed CIA as an intelligence gathering apparatus only.

In 1953 the CIA led the overthrow of Mohammed Mossadegh , the democratically elected President of Iran who nationalized British oil interests. Kermit Roosevelt, the CIA officer in charge of the coup, recounted later that when British intelligence approached him in 1952 about overthrowing Mossadegh he told them," We had , I felt sure, no chance to win approval from the outgoing administration of Truman and Acheson. The new Republicans , however might be different".( Bitter Fruit, Ch7, paragraph 15)Eisenhower's newly appointed CIA chief Allen Dulles activated the paramilitary unit led by Frank Wisner that was created by the 1948 NSC provision that authorized the creation of the agency that Truman had curtailed.

There were indirect CIA attempts to remove Arbenz before 1953 but with the new administration and new CIA chief Dulles the agency was now in the driver's seat to lead the operation against the Guatemalan President. It was decided that President Arbenz would not be the victim of a "silent bullet" so as not to make him a martyr. The decision was made to use bribery either directly to Arbenz or to the Guatemalan military officers and psychological warfare on both the Guatemalan military and populace who supported Arbenz.

The American people needed to be primed as well for what was to come in the Guatemalan nation. The psychological campaign on the American people was to be directed by public relations specialist Edward Bernays. Bernays was a successful young Wall Street propagandist , nephew of Sigmund Freud who had " discovered that targeting people's emotions instead of their logic caused people to flock to a product"( history.wsu.edu). Once Arbenz enacted his land reform policies in 1953 UFCO had Bernays design a campaign to convince the U.S government and American people that Arbenz was a communist. Bernays was very talented but he also had connections to the people who ran the major U.S. media outlets of the day. "In a 1953 article by the New York Times , Guatemala was described as "operating under increasingly severe Communist inspired pressure to rid the country of the U.S. companies". (history.wsu.edu)

The paramilitary operation named “success” was led by CIA officer Albert Haney who assembled a group of CIA officers on his team whose names have become notorious for their involvement in CIA covert ops through the Cold War . Men like Allen Dulles, Frank Wizner , David Atlee Phillips , E Howard Hunt, Richard Bissell , J.C. King, Ashley Barnes and others. The leadership role for the plot was originally offered to Kermit Roosevelt who led the coup against the Iranian President Mohammed Mosadegh but Roosevelt turned the offer down recounting later that he said to Dulles "for a plot to be successful the people have to want what we want. I don't think the Guatemalan people want what United Fruit wants". ( Overthrow, Ch5 , paragraph 20)

On April , 20th, 1954 a formal complaint was delivered to the Guatemalan government by the U.S. State department. The notre demanded as outlined before the almost $16 million dollars in compensation for the expropriated UFCO land. U.S. officials were adamant publicly that the disagreement between the U.S. and Guatemala had nothing to do with UFCO and centered around "Arbenz's failure to oust communists from his government"( Bitter Fruit , CH7, paragraph 32).

On April 26th President Eisenhower warned Congress that Guatemala was spreading " Marxist tentacles to its neighbors, the Reds are in control in Guatemala". Then on May, 15th 1954 the Gov of Guatemala received a shipment of weapons from Czechoslovakia. The Guatemalns were forbidden from buying weapons from the U.S. since 1948.

"Arbenz seems to have turned to Czechoslovakia as a last resort when Guatemala's normal suppliers refused his request to purchase military hardware", concluded historian Cole Blasier. In short Arbenz had no choice with the imminent invasion of Armases forces.

It seems more than likely the U.S. allowed the docking of the shipment of Czech weapons ( which turned out to be almost useless due to the type of armaments like anti tank weapons and their age) at Punta Barrios to justify the invasion. The US state department and the White House pounced on the incident as further evidence of Communist/Soviet subversion in Guatemala. They declared the weapons might lead to the establishment of a Communist dictatorship on this continent to " the detriment of all American nations".

The last decision to be made was which Guatemalan exile to recruit to lead the country after Arbenz was removed. UFCO's top Washington lobbyist Thomas Corcoran met with Dulles to seek reassurance that the company's interests would be looked after once Arbenz was removed. General Miguel Ydigoras Fuentes , and Guatemalan lawyer and coffee grower Juan Cordova Cerna were considered but the CIA and UFCO settled on Colonel Carlos Castillo Armas."He had no strong ideology beyond simple nationalism and anti-communism . But he had that good Indian look about him. He looked like an Indian which was good for the people," recalled Howard Hunt ( Bitter Fruit , Ch8, paragraph 11)

The money to bribe the Guatemalan military officers was provided to the CIA by United Fruit . Colonel Haney's team had C-47's stationed in Honduras which flew supply runs and dropped leaflets over Guatemala stating President Arbenz's days were numbered. P-47's and P-51's which were stationed in Nicaragua flew bombing and strafing runs to demoralize the Presidents supporters and provide proof of the futility of their support in the face of possible U.S. military intervention.

J.C.King raised prophetic concerns to Dulles and Wizner after one of his deputies who was related to Dulles made a trip to visit Haney saying " What Teddy Roosevelt did in Panama will pale in comparison with what you're planning to do in Guatemala. You'll start a civil war and have the blood of thousands on your hands" ( Bitter Fruit , Ch7 , paragraph 22). Despite some officers uneasiness about the size , methods and possible consequences of the undertaking operation Success went ahead with Dulles and Wizners blessings.

The final go ahead to proceed with the plot against President Arbenz led by Colonel Haney was given by CIA chief Allen Dulles in August 1954 in typical Dulles fashion , over cocktails at his highlands estate in Georgetown. As recounted by Kinzer in "Bitter Fruit " with Wizner , Haney and King assembled, CIA director Dulles made a dramatic entrance , walking directly up to Haney and asked "Colonel , there's one question I want to ask you. Do you think you can succeed"? "Sir" Haney answered , " with your help we can win." Dulles grinned and slapped his hands on Haney's shoulders. " Then go to it my boy ", he laughed, " you've got the green light" (Bitter Fruit , Ch7, last paragraph)

On June, 25th, 1945 Arbenz received an ultimatum from his officers on the front lines that he should resign or the army would side with Armases invaders ( the CIA’s cash payments to defectors had worked) . Arbenz tried one last maneuver by arming civilians. However many believed the CIA propaganda campaign and few showed up to fight.

Two days later on June , 27th, 1945 , President Jacobo Arbenz resigned as President of Guatemala. The newly installed triumvirat fought amongst themselves for control of the Presidency but UFCO got their holdings back and the companies business continued as usual. The nation of Guatemala and the majority of its people suffered as the gains made from 1944-1953 were lost. As CIA officer J.C. King had predicted, a civil war began shortly after that lasted over thirty years and was responsible for over 600,000 Guatemalan deaths. Even more native Guatemalans had to flee their homeland seeking asylum all over the continents of North and South America. All this so a fruit company could continue business as usual and the American government could pursue its imperialistic desires and serve its corporate constituents under the guise of "fighting communism".

Bibliography:

1)Thy Will Be Done Gerard Colby & Charlotte Dennett , Audible Studios, November ,21,2017

2)Bitter Fruit by Stephen C Schlesinger & Stephen Kinzer , David Rockefeller Center for Latin American Studies , 1982

3)Overthrow by Stephen Kinzer , Tantor Audio, June ,8, 2006

5) The Devils Chessboard by David Talbot, Harper Audio, October , 13, 2015

4) American Exception by Aaron Good, Blackstone Publishing , June, 7, 2022

Articles:

1.”A Case History of U. S. Subversion: Guatemala, 1954”

https://www.jstor.org/stable/pdf/40401561.pdf?refreqid=excelsior%3A6ab017915407887118c4468d266ec6fe&ab_segments=&origin=&initiator=&acceptTC=1

2.”Was United Fruit Connected to the Rockafellers”

https://history.stackexchange.com/questions/66858/was-united-fruit-company-connected-to-the-rockefeller-family

3. Jacobo Arbenz