In political science, 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. In 1901, the American author O. Henry coined the term to describe Honduras and neighbouring countries under economic exploitation by U.S. corporations, such as the United Fruit Company.Typically, a banana republic has a society of extremely stratified social classes, usually a large impoverished working class and a ruling-class plutocracy, composed of the business, political, and military elites of that society. The ruling-class controls the primary sector of the economy by way of the exploitation of labour; thus, the term banana republic is a pejorative descriptor for a servile dictatorship that abets and supports, for kickbacks, the exploitation of large-scale plantation agriculture, especially banana cultivation.
In economics, a banana republic is a country with an economy of state capitalism, whereby the country is operated as a private commercial enterprise for the exclusive profit of the ruling class. Such exploitation is enabled by collusion between the state and favored economic monopolies, in which the profit, derived from the private exploitation of public lands, is private property, while the debts incurred thereby are the financial responsibility of the public treasury. Such an imbalanced economy remains limited by the uneven economic development of town and country, and usually reduces the national currency into devalued banknotes (paper money), rendering the country ineligible for international development credit.
In the 19th century, the American writer O. Henry (William Sydney Porter, 1862–1910) coined the term banana republic to describe the fictional Republic of Anchuria in the book Cabbages and Kings (1904),a collection of thematically related short stories inspired by his experiences in Honduras, where he lived for six months until January 1897, hiding in a hotel in Trujillo, Colón, when he was wanted in the U.S. for embezzlement from a bank.
In the early 20th century, the United Fruit Company, a multinational American corporation, was instrumental to the creation of the banana republic phenomenon.Together with other American corporations, such as the Cuyamel Fruit Company, and with occasional support from the United States government, the corporations created the political, economic, and social circumstances that established banana republics in Central American countries such as Honduras and Guatemala.
The history of the banana republic began with the introduction of the banana fruit to the U.S. in 1870, by Lorenzo Dow Baker, captain of the schooner Telegraph, who bought bananas in Jamaica and sold them in Boston at a 1,000% profit. equivalent to $6.47in 2019) bought a dozen bananas, but only two apples. In 1873, to produce food for their railroad workers, the American railroad tycoons Henry Meiggs and his nephew, Minor C. Keith, established banana plantations along the railroads they built in Costa Rica; recognizing the profitability of exporting bananas, they began exporting the fruit to the Southeastern U.S.The banana proved popular with Americans, as a nutritious tropical fruit that was less expensive than locally grown fruit in the U.S., such as apples; in 1913, 25 cents (
In the mid-1870s, to manage the new industrial-agriculture business enterprise in the countries of Central America, Keith founded the Tropical Trading and Transport Company: one-half of what would later become the United Fruit Company (UFC), later Chiquita Brands International, created in 1899 by merger with the Boston Fruit Company, and owned by Andrew Preston. By the 1930s, the international political and economic tensions created by the United Fruit Company enabled the corporation to control 80–90% of the banana business in the U.S.
By the late 19th century, three American multinational corporations (the United Fruit Company, the Standard Fruit Company, and the Cuyamel Fruit Company) dominated the cultivation, harvesting, and exportation of bananas, and controlled the road, rail, and port infrastructure of Honduras. In the northern coastal areas near the Caribbean Sea, the Honduran government ceded to the banana companies 500 hectares per kilometre (2,000 acre/mi) of a laid railroad, despite there being neither passenger nor freight railroad service to Tegucigalpa, the capital city. Among the Honduran people, the United Fruit Company was known as El Pulpo ("The Octopus"), because its influence pervaded Honduran society, controlled their country's transport infrastructure, and sometimes manipulated Honduran national politics with anti-labor violence.
In 1924, despite the UFC monopoly, the Vaccaro Brothers established the Standard Fruit Company (later the Dole Food Company) to export Honduran bananas to the U.S. port of New Orleans. The fruit-exporting corporations kept U.S. prices low by legalistic manipulation of Latin American national land use laws to cheaply buy large tracts of prime agricultural land for corporate banana plantations in the republics of the Caribbean Basin, the Central American isthmus, and tropical South America; the American fruit companies then employed the dispossessed Latin American natives as low-wage employees.
By the 1930s the United Fruit Company owned 3.5 million acres of land in Central America and the Caribbean and was the single largest landowner in Guatemala. Such holdings gave it great power over the governments of small countries, one of the factors confirming the suitability of the phrase "banana republic".
In the early 20th century, the American businessman Sam Zemurray (founder of the Cuyamel Fruit Company) was instrumental to establishing the "banana republic" stereotype, when he entered the banana-export business by buying overripe bananas from the United Fruit Company to sell in New Orleans. In 1910, Zemurray bought 6,075 hectares (15,000 acres) in the Caribbean coast of Honduras for use by the Cuyamel Fruit Company. In 1911, Zemurray conspired with Manuel Bonilla, an ex-president of Honduras (1904–1907), and the American mercenary Gen. Lee Christmas, to overthrow the civil government of Honduras and install a military government friendly to foreign businessmen.
To that end, the mercenary army of the Cuyamel Fruit Company, led by Gen. Christmas, effected a coup d'état against President Miguel R. Dávila (1907–1911) and installed General Manuel Bonilla (1912–1913). The U.S. ignored the deposition of the elected government of Honduras by a private army, justified by the U.S. State Department's misrepresenting President Dávila as too politically liberal and a poor businessman whose management had indebted Honduras to Great Britain, a geopolitically unacceptable circumstance in light of the Monroe Doctrine. The coup d'état was consequence of the Dávila government's having slighted the Cuyamel Fruit Company by colluding with the rival United Fruit Company to award them a monopoly contract for the Honduran banana, in exchange for the UFC's brokering of U.S. government loans to Honduras.
The political instability consequent to the coup d'état stalled the Honduran economy, and the unpayable external debt (c. US$4 billion) of the Republic of Honduras was excluded from access to international investment capital. That financial deficit perpetuated Honduran economic stagnation and perpetuated the image of Honduras as a banana republic.Such a historical, inherited foreign debt functionally undermined the Honduran government, which allowed foreign corporations to manage the country and become sole employers of the Honduran people, because the American fruit companies controlled the economic infrastructure (road, rail, and port, telegraph and telephone) they had built in Honduras.
The U.S. dollar went on to become the legal-tender currency of Honduras; the mercenary Gen. Lee Christmas became commander of the Honduran army, and later was appointed U.S. Consul to the Republic of Honduras.Nonetheless, 23 years later, after much corporate intrigue among the American businessmen, by means of a hostile takeover of agricultural business interests, Sam Zemurray assumed control of the rival United Fruit Company, in 1933.
Guatemala suffered the regional socio-economic legacy of a 'banana republic': inequitably distributed agricultural land and natural wealth, uneven economic development, and an economy dependent upon a few export crops—usually bananas, coffee, and sugar cane. The inequitable land distribution was an important cause of national poverty, and the concomitant sociopolitical discontent and insurrection. Almost 90% of the country's farms are too small to yield adequate subsistence harvests to the farmers, while 2% of the country's farms occupy 65% of the arable land, the property of the local oligarchy.[ citation needed ]
During the 1950s, the United Fruit Company sought to convince the governments of U.S. Presidents Harry Truman (1945–1953) and Dwight Eisenhower (1953–1961) that the popular, elected government of President Jacobo Árbenz Guzmán of Guatemala was secretly pro-Soviet for having expropriated unused "fruit company lands" to landless peasants. In the Cold War (1945–1991) context of the pro-active anti-communist politics exemplified by U. S. Senator Joseph McCarthy in the years 1947–1957, geo-political concerns about the security of the Western Hemisphere facilitated President Eisenhower's ordering and authorizing Operation Success, the 1954 Guatemalan coup d'état by means of which the U.S. Central Intelligence Agency deposed the democratically elected government (1950–1954) of President Jacobo Árbenz Guzmán and installed the pro-business government of Colonel Carlos Castillo Armas (1954–1957), which lasted for three years until his assassination by a presidential guard.
A mixed history of elected presidents and puppet-master military juntas were the governments of Guatemala in the course of the 36-year Guatemalan Civil War (1960–1996). However, in 1986, at the 26-year mark, the Guatemalan people promulgated a new political constitution, and elected Vinicio Cerezo (1986–1991) president; then Jorge Serrano Elías (1991–1993).
In the book Canto General (General Song, 1950), the Chilean poet Pablo Neruda (1904–73) denounced foreign corporate political dominance of Latin American countries with the four-stanza poem "La United Fruit Co."; the second-stanza reading in part:
... The Fruit Company, Inc.
Reserved for itself the most succulent,
The central coast of my own land,
The delicate waist of the Americas.
It rechristened its territories
As the "Banana Republics",
And over the sleeping dead,
Over the restless heroes
Who brought about the greatness,
The liberty and the flags,
It established a comic opera ...
The novel One Hundred Years of Solitude (1967), by Gabriel García Márquez, depicts the imperialist capitalism of foreign fruit companies as voracious socio-economic exploitation of natural resources of the fictional South American town of Macondo and its people. Domestically, the corrupt national government of Macondo abets the business policies and labor practices of the foreign corporations, which brutally oppress the workers.
Countries that obtained independence from colonial powers in the 20th and 21st centuries have at times thereafter tended to share traits of banana republics due to influence of large private corporations in their politics;for example, Maldives (resort companies), and the Philippines (tobacco industry, U.S. government and corporations).
On 14 May 1986, then Australian Treasurer Paul Keating stated that Australia might become a banana republic.This has received a lot of commentary and criticism and is seen as part of a turning point in Australia's political and economic history.
In the 21st century some critics called the United States a banana republic,and this is referenced in the title of the book Banana Republicans by Sheldon Rampton and John Stauber.
Honduras was already occupied by many indigenous peoples when the Spanish arrived in the 16th century. The western-central part of Honduras was inhabited by the Lencas, the central north coast by the Tol, the area east and west of Trujillo by the Pech, the Maya and Sumo. These autonomous groups maintained commercial relationships with each other and with other populations as distant as Panama and Mexico.
The economy of Honduras is based mostly on agriculture, which accounts for 14% of its gross domestic product (GDP) in 2013. Leading export coffee (US$340 million) accounted for 22% of total Honduran export revenues. Bananas, formerly the country's second-largest export until being virtually wiped out by 1998's Hurricane Mitch, recovered in 2000 to 57% of pre-Mitch levels. Cultivated shrimp is another important export sector. Since the late 1970s, towns in the north began industrial production through maquiladoras, especially in San Pedro Sula and Puerto Cortés.
The United Fruit Company was an American corporation that traded in tropical fruit, grown on Latin American plantations, and sold in the United States and Europe. The company was formed in 1899, from the merger of Minor C. Keith's banana-trading concerns with Andrew W. Preston's Boston Fruit Company. It flourished in the early and mid-20th century, and it came to control vast territories and transportation networks in Central America, the Caribbean coast of Colombia, Ecuador, and the West Indies. Though it competed with the Standard Fruit Company for dominance in the international banana trade, it maintained a virtual monopoly in certain regions, some of which came to be called banana republics, such as Costa Rica, Honduras, and Guatemala.
Puerto Cortés, originally known as Puerto de Caballos, is a city on the north Caribbean coast of Honduras, right on the Laguna de Alvarado, north of San Pedro Sula and east of Omoa, with a natural bay. The present city was founded in the early colonial period. It grew rapidly in the twentieth century, thanks to the then railroad, and banana production. In terms of volume of traffic the seaport is the largest in Central America and the 36th largest in the world. As of 2014, Puerto Cortés has a population of some 200,000.
The 1954 Guatemalan coup d'état, code-named Operation PBSUCCESS, was a covert operation carried out by the U.S. Central Intelligence Agency (CIA) that deposed the democratically elected Guatemalan President Jacobo Árbenz and ended the Guatemalan Revolution of 1944–1954. It installed the military dictatorship of Carlos Castillo Armas, the first in a series of U.S.-backed authoritarian rulers in Guatemala.
Samuel Zemurray was a businessman who made his fortune in the banana trade. He founded the Cuyamel Fruit Company, and later became head of the United Fruit Company, the world's most influential fruit company at the time. Both companies played highly controversial roles in the history of several Latin American countries and had a significant influence on their economic and political development.
Decree 900, also called the Agrarian Reform Law, was a Guatemalan land reform law passed on June 17, 1952, during the Guatemalan Revolution. The law was introduced by President Jacobo Árbenz Guzmán and passed by the Guatemalan Congress. It redistributed unused lands of sizes greater than 224 acres (0.902 km²) to local peasants, compensating landowners with government bonds. Land from at most 1,700 estates was redistributed to about 500,000 families—one sixth of the country's population. The goal of the legislation was to move Guatemala's economy from pseudo-feudalism into capitalism. Although in force for only eighteen months, the law had a major effect on the Guatemalan land reform movement.
Minor Cooper Keith was an American businessman whose railroad, commercial agriculture, and shipping enterprises much influenced the national economies of the Central American countries, and that of Colombia. His pioneering banana interests were absorbed by the then powerful United Fruit Company, today industry dominating giant Chiquita Brands International.
The Banana Wars were occupations, police actions, and interventions on the part of the United States in Central America and the Caribbean between the end of the Spanish–American War in 1898 and the inception of the Good Neighbor Policy in 1934. These military interventions were most often carried out by the United States Marine Corps, which developed a manual, The Strategy and Tactics of Small Wars (1921) based on its experiences. On occasion, the Navy provided gunfire support and Army troops were also used.
The Union of Banana Exporting Countries was a cartel of Central and South American banana exporting countries established in 1974, inspired by OPEC. Its aim was to achieve better remuneration from the North American banana trade oligopoly, which consisted of three US companies. UPEB's proposal of an export tax was undermined by the U.S. oligopoly bribing Honduran and Italian officials. The UPEB cartel collapsed when bribes became public. What is referred to as the Bananagate scandal paved the way for the U.S. Congress to create the 1977 Foreign Corrupt Practices Act.
The U.S. Central Intelligence Agency (CIA) has a rich history of intervention over many decades in Guatemala, a country in Central America that the US government has generally viewed as "its backyard." Guatemala is bordered by the North Pacific Ocean and the Gulf of Honduras. The four bordering countries are Mexico, El Salvador, Honduras and Belize. Due to the proximity of Guatemala to the United States, the fear of the Soviet Union creating a beachhead in Guatemala created panic in the United States government during the Cold War. The panic was later avoided after operation PBSUCCESS which was completed in 1954 as a means to overthrow democratically-elected Árbenz. With what has been released by the CIA we know that due to the 1954 Guatemalan coup d'état and the installation of militarized leadership, more than 100,000 Guatemalan citizens have been killed. The U.S. utilized forms of physical and psychological torture to break down Guatemalans into submission.
Banana production in Honduras plays an important role in the economy of Honduras. In 1992, the revenue generated from banana sales amounted to US$287 million and along with the coffee industry accounted for some 50% of exports. Honduras produced 861,000 tons of bananas in 1999. The two corporations, Chiquita Brands International and the Dole Food Company are responsible for most Honduran banana production and exports.
This article is about the history of Honduras from 1838 to 1932. Honduras is a republic in Central America. It was at times referred to as Spanish Honduras to differentiate it from British Honduras, which became the modern-day state of Belize.
A general election was held in Honduras on 28–30 December 1924. Voters went to the polls to elect a new President of the Republic and a new Congress.
The 1963 Honduran coup d'état was a military takeover of the Honduran government on 3 October 1963, ten days before a scheduled election. Oswaldo López Arellano replaced Ramón Villeda Morales as the President of the country and initiated two decades of military rule.
The general strike of 1954 was a watershed political and economic event in the history of Honduras that ushered in widespread change.
Cuyamel Fruit Company, formerly the Hubbard-Zemurray Steam Ship Company, was an American agricultural corporation operating in Honduras from 1911 until 1929, before being purchased by the United Fruit Company. Samuel Zemurray, a Jewish Russian immigrant to the United States, founded Cuyamel to export bananas and sugar from the northwestern Cortés region of Honduras to international markets. Zemurray would later become the head of the United Fruit Company. Both Cuyamel and United Fruit are corporate ancestors of the modern-day firm Chiquita Brands International.
The Guatemalan Revolution was the period in Guatemalan history between the popular uprising that overthrew dictator Jorge Ubico in 1944 and the United States-orchestrated coup d'état in 1954 that overthrew the democratically elected President Jacobo Árbenz. This period has also been called the Ten Years of Spring, highlighting the only years of representative democracy in Guatemala from 1930 until the end of the civil war in 1996, which saw the implementation of a program of social, political, and especially agrarian reform that was enormously influential across Latin America.
During the first half of the 20th century the economy of Honduras was dominated by American companies such as the United Fruit Company, the Standard Fruit Company and the Cuyamel Fruit Company, which established enormous banana plantations along the north coast. These companies quickly made bananas the primary export of the country in return for large land grants from conservative politicians. Foreign capital, life in the banana plantations, and conservatives determined the politics of Honduras from the mid-20th century to 1988.
The Cuyamel River flows past the city of Cuyamel, Honduras and into an off branch of the Motagua River that marks the boundary between Honduras and Guatemala. American businessman Sam Zemurray purchased his first banana plantation along this river and named his company Cuyamel Fruit Company after it. A proposed dam on the river was approved by the Honduran National Congress in 2014, but has run into local opposition and has not yet been built.