The United Fruit Company was an American corporation that traded in tropical fruit (primarily bananas), 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 (later Dole Food 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.
The United States of America (USA), commonly known as the United States or America, is a country comprising 50 states, a federal district, five major self-governing territories, and various possessions. At 3.8 million square miles, the United States is the world's third or fourth largest country by total area and is slightly smaller than the entire continent of Europe's 3.9 million square miles. With a population of over 327 million people, the U.S. is the third most populous country. The capital is Washington, D.C., and the largest city by population is New York City. Forty-eight states and the capital's federal district are contiguous in North America between Canada and Mexico. The State of Alaska is in the northwest corner of North America, bordered by Canada to the east and across the Bering Strait from Russia to the west. The State of Hawaii is an archipelago in the mid-Pacific Ocean. The U.S. territories are scattered about the Pacific Ocean and the Caribbean Sea, stretching across nine official time zones. The extremely diverse geography, climate, and wildlife of the United States make it one of the world's 17 megadiverse countries.
The Boston Fruit Company (1885-1899) was a fruit production and import business based in the port of Boston, Massachusetts. Andrew W. Preston and nine others established the firm to ship bananas and other fruit from the West Indes to north-eastern America. At the time, the banana was "considered a rare and delicious treat" in the United States. The major challenge for all banana importers was to get the highly perishable fruit to the American market before it spoiled." Ship captain Lorenzo Dow Baker served as president of the company and manager of the tropical division. By 1895 "the corporation own[ed] nearly 40,000 acres, included in 35 plantations, and deep-water frontage [in Jamaica] in the harbors of Port Antonio and Port Morant. They owned their own lines of steamships, which they operated between those ports and Boston, Philadelphia and Baltimore. Besides carrying their own fruits, they carried some outside freight, and afford passenger accommodations for many tourists visiting the West-India Islands."
The Caribbean Sea is a sea of the Atlantic Ocean in the tropics of the Western Hemisphere. It is bounded by Mexico and Central America to the west and south west, to the north by the Greater Antilles starting with Cuba, to the east by the Lesser Antilles, and to the south by the north coast of South America.
United Fruit had a deep and long-lasting impact on the economic and political development of several Latin American countries. Critics often accused it of exploitative neocolonialism, and described it as the archetypal example of the influence of a multinational corporation on the internal politics of the banana republics. After a period of financial decline, United Fruit was merged with Eli M. Black's AMK in 1970, to become the United Brands Company. In 1984, Carl Lindner, Jr. transformed United Brands into the present-day Chiquita Brands International.
Neocolonialism, neo-colonialism, or neo-imperialism is the practice of using capitalism, globalization and cultural imperialism to influence a developing country instead of the previous colonial methods of direct military control (imperialism) or indirect political control (hegemony). Coined by the French philosopher Jean-Paul Sartre in 1956, it was first used by Kwame Nkrumah in the context of African countries undergoing decolonization in the 1960s. Neo-colonialism is also discussed in the works of Western thinkers such as Jean-Paul Sartre and Noam Chomsky.
A multinational corporation (MNC) or worldwide enterprise is a corporate organization which owns or controls production of goods or services in at least one country other than its home country. Black's Law Dictionary suggests that a company or group should be considered a multinational corporation if it derives 25% or more of its revenue from out-of-home-country operations. A multinational corporation can also be referred to as a multinational enterprise (MNE), a transnational enterprise (TNE), a transnational corporation (TNC), an international corporation, or a stateless corporation. There are subtle but real differences between these three labels, as well as multinational corporation and worldwide enterprise.
E. M. Black was a Polish-born American businessman. He controlled the United Brands Company. His son Leon Black is a founding member of private equity firm Apollo Management.
In 1871, U.S. railroad entrepreneur Henry Meiggs signed a contract with the government of Costa Rica to build a railroad connecting the capital city of San José to the port of Limón in the Caribbean. Meiggs was assisted in the project by his young nephew Minor C. Keith, who took over Meiggs's business concerns in Costa Rica after his death in 1877. Keith began experimenting with the planting of bananas as a cheap source of food for his workers.
Henry Meiggs, was a promoter/entrepreneur and railroad builder born in Boston, Massachusetts
Costa Rica, officially the Republic of Costa Rica, is a country in Central America, bordered by Nicaragua to the north, the Caribbean Sea to the northeast, Panama to the southeast, the Pacific Ocean to the southwest, and Ecuador to the south of Cocos Island. It has a population of around 5 million in a land area of 51,060 square kilometers. An estimated 333,980 people live in the capital and largest city, San José with around 2 million people in the surrounding metropolitan area.
San José is the capital and largest city of Costa Rica. Located in the mid-west of the Central Valley, San José is the seat of national government, the focal point of political and economic activity, and the major transportation hub of this Central American nation. The population of San José Canton was 288,054 in 2011, and San José’s municipal land area measures 44.2 square kilometers, and an estimated 333,980 residents in 2015. The metropolitan area stretches beyond the canton limits and has an estimated population of over 2 million in 2017. The city is named in honor of Joseph of Nazareth.
When the Costa Rican government defaulted on its payments in 1882, Keith had to borrow £1.2 million from London banks and from private investors to continue the difficult engineering project. 800,000 acres (3,200 km2) of tax-free land along the railroad, plus a 99-year lease on the operation of the train route. The railroad was completed in 1890, but the flow of passengers proved insufficient to finance Keith's debt. On the other hand, the sale of bananas grown in his lands and transported first by train to Limón, then by ship to the United States, proved very lucrative. Keith eventually came to dominate the banana trade in Central America and along the Caribbean coast of Colombia.In exchange for this and for renegotiating Costa Rica's own debt, in 1884, the administration of President Próspero Fernández Oreamuno agreed to give Keith
The pound sterling, commonly known as the pound and less commonly referred to as sterling, is the official currency of the United Kingdom, Jersey, Guernsey, the Isle of Man, South Georgia and the South Sandwich Islands, the British Antarctic Territory, and Tristan da Cunha. It is subdivided into 100 pence. A number of nations that do not use sterling also have currencies called the pound.
Juan Primitivo Próspero Fernández Oreamuno was President of Costa Rica from 1882 to 1885.
Colombia, officially the Republic of Colombia, is a sovereign state largely situated in the northwest of South America, with territories in Central America. Colombia shares a border to the northwest with Panama, to the east with Venezuela and Brazil and to the south with Ecuador and Peru. It shares its maritime limits with Costa Rica, Nicaragua, Honduras, Jamaica, Haiti, and the Dominican Republic. Colombia is a unitary, constitutional republic comprising thirty-two departments, with the capital in Bogotá.
In 1899, Keith lost $1.5 million when Hoadley and Co., a New York City broker, went bankrupt.He then traveled to Boston, Massachusetts, to participate in the merger of his banana trading company, Tropical Trading and Transport Company, with the rival Boston Fruit Company. Boston Fruit had been established by Lorenzo Dow Baker, a sailor who, in 1870, had bought his first bananas in Jamaica, and by Andrew W. Preston. Preston's lawyer, Bradley Palmer, had devised a scheme for the solution of the participants' cash flow problems and was in the process of implementing it. The merger formed the United Fruit Company, based in Boston, with Preston as president and Keith as vice-president. Palmer became a permanent member of the executive committee and for long periods of time the director. From a business point of view, Bradley Palmer was United Fruit. Preston brought to the partnership his plantations in the West Indies, a fleet of steamships, and his market in the U.S. Northeast. Keith brought his plantations and railroads in Central America and his market in the U.S. South and Southeast. At its founding, United Fruit was capitalized at $11,230,000. The company at Palmer's direction proceeded to buy, or buy a share in, 14 competitors, assuring them of 80% of the banana import business in the United States, then their main source of income. The company catapulted into financial success. Bradley Palmer overnight became a much-sought-after expert in business law, as well as a wealthy man. He later became a consultant to presidents and an adviser to Congress.
The United States dollar is the official currency of the United States and its territories per the United States Constitution since 1792. In practice, the dollar is divided into 100 smaller cent (¢) units, but is occasionally divided into 1000 mills (₥) for accounting. The circulating paper money consists of Federal Reserve Notes that are denominated in United States dollars.
Massachusetts, officially the Commonwealth of Massachusetts, is the most populous state in the New England region of the northeastern United States. It borders on the Atlantic Ocean to the east, the states of Connecticut and Rhode Island to the south, New Hampshire and Vermont to the north, and New York to the west. The state is named after the Massachusett tribe, which once inhabited the east side of the area, and is one of the original thirteen states. The capital of Massachusetts is Boston, which is also the most populous city in New England. Over 80% of Massachusetts's population lives in the Greater Boston metropolitan area, a region influential upon American history, academia, and industry. Originally dependent on agriculture, fishing and trade, Massachusetts was transformed into a manufacturing center during the Industrial Revolution. During the 20th century, Massachusetts's economy shifted from manufacturing to services. Modern Massachusetts is a global leader in biotechnology, engineering, higher education, finance, and maritime trade.
Lorenzo Dow Baker was an American sailor, ship's captain and businessman whose 1870 voyage from the Orinoco to Jamaica and then to Philadelphia launched the modern banana production industry. In 1881 he partnered with his brother-in-law Elisha Hopkins to form L.D. Baker & Co. In 1885 he joined forces with Andrew W. Preston and eight others to form the Boston Fruit Company, which led to several successive partnerships, ending in the 1899 formation of the United Fruit Company, now Chiquita Brands International.
In 1900, the United Fruit Company produced The Golden Caribbean: A Winter Visit to the Republics of Colombia, Costa Rica, Spanish Honduras, Belize and the Spanish Main - via Boston and New Orleans written and illustrated by Henry R. Blaney. The travel book featured landscapes and portraits of the inhabitants pertaining to the regions where the United Fruit Company possessed land. It also described the voyage of the United Fruit Company's steamer, and Blaney's descriptions and encounters of his travels.
In 1901, the government of Guatemala hired the United Fruit Company to manage the country's postal service and in 1913 the United Fruit Company created the Tropical Radio and Telegraph Company. By 1930 it had absorbed more than 20 rival firms, acquiring a capital of $215,000,000 and becoming the largest employer in Central America. In 1930, Sam Zemurray (nicknamed "Sam the Banana Man") sold his Cuyamel Fruit Company to United Fruit and retired from the fruit business. By then, the company held a major role in the national economy and eventually became a symbol of the exploitative export economy. This led to serious labor disputes by the Costa Rican peasants, involving more than 30 separate unions and 100,000 workers, in The Great Banana Strike of 1934, one of the most significant actions of the era by trade unions in Costa Rica.
By the 1930s the company owned 3.5 million acres of land in Central America and the Caribbean and was the single largest land owner in Guatemala. Such holdings gave it great power over the governments of small countries. That was one of the factors that led to the coining of the phrase "banana republic".
In 1933, concerned that the company was mismanaged and that its market value had plunged, Zemurray staged a hostile takeover. Zemurray moved the company's headquarters to New Orleans, Louisiana, where he was based. United Fruit went on to prosper under Zemurray's management;Zemurray resigned as president of the company in 1951.
In addition to many other labor actions, the company faced two major strikes of workers in Central America, in Colombia in 1928 and the Great Banana Strike of 1934 in Costa Rica.The latter was an important step that would eventually lead to the formation of effective Trade unions in Costa Rica since the company was required to sign a collective agreement with its workers in 1938. Labor laws in most banana production countries began to be tightened in the 1930s. In 1954, the company experienced a major strike in the Honduras.
Corporate raider Eli M. Black bought 733,000 shares of United Fruit in 1968, becoming the company's largest shareholder. In June 1970, Black merged United Fruit with his own public company, AMK (owner of meat packer John Morrell), to create the United Brands Company. United Fruit had far less cash than Black had counted on and Black's mismanagement led to United Brands becoming crippled with debt. The company's losses were exacerbated by Hurricane Fifi in 1974, which destroyed many banana plantations in Honduras. On February 3, 1975, Black committed suicide by jumping out of his office on the 44th floor of the Pan Am Building in New York City. Later that year, the U.S. Securities and Exchange Commission exposed a scheme by United Brands (dubbed Bananagate) to bribe Honduran President Oswaldo López Arellano with $1.25 million, plus the promise of another $1.25 million upon the reduction of certain export taxes. Trading in United Brands stock was halted and López was ousted in a military coup.
After Black's suicide, Cincinnati-based American Financial Group, one of billionaire Carl Lindner, Jr.'s companies, bought into United Brands. In August 1984, Lindner took control of the company and renamed it Chiquita Brands International. The headquarters was moved to Cincinnati in 1985.
Throughout most of its history, United Fruit's main competitor was the Standard Fruit Company, now the Dole Food Company.
The United Fruit Company was frequently accused of bribing government officials in exchange for preferential treatment, exploiting its workers, paying little by way of taxes to the governments of the countries where it operated, and working ruthlessly to consolidate monopolies. Latin American journalists sometimes referred to the company as el pulpo ("the octopus"), and leftist parties in Central and South America encouraged the company's workers to strike. Criticism of the United Fruit Company became a staple of the discourse of the communist parties in several Latin American countries, where its activities were often interpreted as illustrating Vladimir Lenin's theory of capitalist imperialism. Major left-wing writers in Latin America, such as Carlos Luis Fallas of Costa Rica, Ramón Amaya Amador of Honduras, Miguel Ángel Asturias and Augusto Monterroso of Guatemala, Gabriel García Márquez of Colombia, Carmen Lyra of Costa Rica, and Pablo Neruda of Chile, denounced the company in their literature.
The Fruit Company, Inc. reserved for itself the most succulent, the central coast of my own land, the delicate waist of America. 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 the comic opera...
The business practices of United Fruit were also frequently criticized by journalists, politicians, and artists in the United States. Little Steven released a song in 1987 called Bitter Fruit with lyrics that referred to a hard life for a company "far away," and whose accompanying video depicted orange groves worked by peasants overseen by wealthy managers. The lyrics and scenery are generic, but United Fruit (or its successor Chiquita) was reputedly the target.
The integrity of John Foster Dulles' "anti-Communist" motives has been discredited, since Dulles and his law firm of Sullivan & Cromwell negotiated the land giveaways to the United Fruit Company in Guatemala and Honduras. John Foster Dulles' brother, Allen Dulles, also did legal work for United Fruit and sat on its board of directors. Allen Dulles was the head of the CIA under Eisenhower. In a flagrant conflict of interest, the Dulles brothers and Sullivan & Cromwell were on the United Fruit payroll for thirty-eight years.Recent research has uncovered the names of multiple other government officials who received benefits from United Fruit:
John Foster Dulles, who represented United Fruit while he was a law partner at Sullivan & Cromwell – he negotiated that crucial United Fruit deal with Guatemalan officials in the 1930s – was Secretary of State under Eisenhower; his brother Allen, who did legal work for the company and sat on its board of directors, was head of the CIA under Eisenhower; Henry Cabot Lodge, who was America's ambassador to the UN, was a large owner of United Fruit stock; Ed Whitman, the United Fruit PR man, was married to Ann Whitman, Dwight Eisenhower's personal secretary. You could not see these connections until you could – and then you could not stop seeing them.
The United Fruit Company (UFCO) owned huge tracts of land in the Caribbean lowlands. It also dominated regional transportation networks through its International Railways of Central America and its Great White Fleet of steamships. In addition, UFCO branched out in 1913 by creating the Tropical Radio and Telegraph Company. UFCO's policies of acquiring tax breaks and other benefits from host governments led to it building enclave economies in the regions, in which a company's investment is largely self-contained for its employees and overseas investors and the benefits of the export earnings are not shared with the host country.
One of the company's primary tactics for maintaining market dominance was to control the distribution of banana lands. UFCO claimed that hurricanes, blight and other natural threats required them to hold extra land or reserve land. In practice, what this meant was that UFCO was able to prevent the government from distributing banana lands to peasants who wanted a share of the banana trade. The fact that the UFCO relied so heavily on manipulating land use rights to maintain their market dominance had a number of long-term consequences for the region. For the company to maintain its unequal land holdings it often required government concessions. And this in turn meant that the company had to be politically involved in the region even though it was an American company. In fact, the heavy-handed involvement of the company in often-corrupt governments created the term "banana republic", which represents a servile dictatorship.The term "Banana Republic" was coined by American writer O. Henry.
The United Fruit Company's entire process of creating a plantation to farming the banana and the effects of these practices created noticeable environmental degradation when it was a thriving company. Infrastructure built by the company was constructed by clearing out forests, filling in low, swampy areas, and installing sewage, drainage, and water systems. Ecosystems that existed on these lands were destroyed, devastating biodiversity.With a loss in biodiversity, other natural processes within nature necessary for plant and animal survival are shut down.
Techniques used for farming were at fault for loss of biodiversity and harm to the land as well. To create farm land, the United Fruit Company would either clear forests (as mentioned) or would drain marshlands to reduce avian habitats and to create "good" soil for banana plant growth. [ dubious ]The most common practice in farming was called the "shifting plantation agriculture". This is done by using produced soil fertility and hydrological resources in the most intense manner, then relocating when yields fell and pathogens followed banana plants. Techniques like this destroy land and when the land is unusable for the company, then they move to other regions.
UFCO had a mixed record on promoting the development of the nations where it operated. In Central America, the Company built extensive railroads and ports and provided employment and transportation. UFCO also created numerous schools for the people who lived and worked on Company land. On the other hand, it allowed vast tracts of land under its ownership to remain uncultivated and, in Guatemala and elsewhere, it discouraged the government from building highways, which would lessen the profitable transportation monopoly of the railroads under its control. UFCO had also destroyed at least one of those railroads upon leaving its area of operation.
In 1954, the democratically elected Guatemalan government of Colonel Jacobo Arbenz Guzmán was toppled by U.S.-backed forces led by Colonel Carlos Castillo Armaswho invaded from Honduras. Assigned by the Eisenhower administration, this military opposition was armed, trained and organized by the U.S. Central Intelligence Agency (see Operation PBSUCCESS ). The directors of United Fruit Company (UFCO) had lobbied to convince the Truman and Eisenhower administrations that Colonel Arbenz intended to align Guatemala with the Soviet Bloc. Besides the disputed issue of Arbenz's allegiance to Communism, UFCO was being threatened by the Arbenz government’s agrarian reform legislation and new Labor Code. UFCO was the largest Guatemalan landowner and employer, and the Arbenz government’s land reform included the expropriation of 40% of UFCO land. U.S. officials had little proof to back their claims of a growing communist threat in Guatemala; however, the relationship between the Eisenhower administration and UFCO demonstrated the influence of corporate interest on U.S. foreign policy. United States Secretary of State John Foster Dulles was an avowed opponent of Communism, and his law firm, Sullivan and Cromwell, had represented United Fruit. His brother Allen Dulles was the director of the CIA and a board member of United Fruit. United Fruit Company is the only company known to have a CIA cryptonym. The brother of the Assistant Secretary of State for InterAmerican Affairs, John Moors Cabot, had once been president of United Fruit. Ed Whitman, who was United Fruit’s principal lobbyist, was married to President Eisenhower's personal secretary, Ann C. Whitman. Many individuals who directly influenced U.S. policy towards Guatemala in the 1950s also had direct ties to UFCO. The overthrow of Arbenz, however, failed to benefit the Company. Its stock market value declined along with its profit margin. The Eisenhower administration proceeded with antitrust action against the company, which forced it to divest in 1958. In 1972, the company sold off the last of their Guatemalan holdings after over a decade of decline.
Even as the Arbenz government was being overthrown, in 1954 a general strike against the company organized by workers in Honduras rapidly paralyzed the country and thanks to the United States' concern about the events in Guatemala, was settled more favorably for the workers to gain leverage for the Guatemala operation.
Company holdings in Cuba, which included sugar mills in the Oriente region of the island, were expropriated by the 1959 revolutionary government led by Fidel Castro. By April 1960 Castro was accusing the company of aiding Cuban exiles and supporters of former leader Fulgencio Batista in initiating a seaborne invasion of Cuba directed from the United States.Castro warned the U.S. that "Cuba is not another Guatemala" in one of many combative diplomatic exchanges before the failed Bay of Pigs Invasion of 1961.
One of the most notorious strikes by United Fruit workers broke out on 12 November 1928 near Santa Marta on the Caribbean coast of Colombia. On December 6, Colombian Army troops allegedly under the command of General Cortés Vargas, opened fire on a crowd of strikers in the central square of Ciénaga. Estimates of the number of casualties vary from 47 to 3000.[ clarification needed ] The military justified this action by claiming that the strike was subversive and its organizers were Communist revolutionaries. Congressman Jorge Eliécer Gaitán claimed that the army had acted under instructions from the United Fruit Company. The ensuing scandal contributed to President Miguel Abadía Méndez's Conservative Party being voted out of office in 1930, putting an end to 44 years of Conservative rule in Colombia. The first novel of Álvaro Cepeda Samudio, La Casa Grande, focuses on this event, and the author himself grew up in close proximity to the incident. The climax of García Márquez's novel One Hundred Years of Solitude is based on the events in Ciénaga.
General Cortés Vargas issued the order to shoot, arguing later that he had done so because of information that US boats were poised to land troops on Colombian coasts to defend American personnel and the interests of the United Fruit Company. Vargas issued the order so the United States would not invade Colombia. This position was strongly criticized in the Senate, especially by Jorge Eliécer Gaitán, who argued that those same bullets should have been used to stop the foreign invader.[ citation needed ]
The telegram from Bogotá Embassy to the U.S. Secretary of State, dated December 5, 1928, stated: "I have been following Santa Marta fruit strike through United Fruit Company representative here; also through Minister of Foreign Affairs who on Saturday told me government would send additional troops and would arrest all strike leaders and transport them to prison at Cartagena; that government would give adequate protection to American interests involved."
The telegram from Bogotá Embassy to Secretary of State, date December 7, 1928, stated: "Situation outside Santa Marta City unquestionably very serious: outside zone is in revolt; military who have orders 'not to spare ammunition' have already killed and wounded about fifty strikers. Government now talks of general offensive against strikers as soon as all troopships now on the way arrive early next week."
The dispatch from U.S. Bogotá Embassy to the U.S. Secretary of State, dated December 29, 1928, stated: "I have the honor to report that the legal advisor of the United Fruit Company here in Bogotá stated yesterday that the total number of strikers killed by the Colombian military authorities during the recent disturbance reached between five and six hundred; while the number of soldiers killed was one."
The dispatch from the U.S. embassy to the U.S. Secretary of State, dated January 16, 1929, stated: "I have the honor to report that the Bogotá representative of the United Fruit Company told me yesterday that the total number of strikers killed by the Colombian military exceeded one thousand."
The Banana massacre is said to be one of the main events that preceded the Bogotazo, the subsequent era of violence known as La Violencia, and the guerrillas who developed in the bipartisan National Front period, creating the ongoing armed conflict in Colombia.[ citation needed ]
Following the Honduran declaration of independence in 1838 from the Central American Federation, Honduras was in a state of economic and political strife due to constant conflict with neighboring countries for territorial expansion[ clarification needed ] and control. Liberal President Marco Aurelio Soto (1876-1883) saw instating the Agrarian Law of 1877 as a way to make Honduras more appealing to international companies looking to invest capital into a promising host export-driven economy. The Agrarian Law would grant international, multinational companies leniency in tax regulations along with other financial incentives. Acquiring the first railroad concession from liberal President Miguel R. Davila in 1910, the Vaccaro brothers and Company, helped set the foundation on which the banana republic would struggle to balance and regulate the relationships between American capitalism and Honduran politics.
Samuel Zemurray, a small-sized American entrepreneur, rose to be another contender looking to invest in the Honduran agricultural trade. In New Orleans, LA Zemurray found himself in cahoots with the newly exiled General Manuel Bonilla (nationalist ex-president of Honduras 1903-1907, 1912-1913) and strategized a coup d'tat against President Miguel R. Davilia. On Christmas Eve December 1910, in clear opposition of the Davila administration, Samuel Zemurray, U.S. General Lee Christmas, and Honduran General Manuel Bonilla boarded the "Hornet" and sailed to Roatan to attack, then seize the northern Honduran ports of Trujillo and Le Ceiba.Thus forcing President Davila to step down and Francisco Bertrand to become interim president until General Bonilla won the Honduran November 1911 presidential elections.
In 1912, General Bonilla took no time in granting the second railroad concession to the newly incorporated Cuyamel Fruit Company owned by Zemurray. The time frame for some of these exclusive land, railroad concessions would last up to 99 years. The 1st railroad concession leased the National railroad of Honduras to the Vaccaro Bros. and Co. (once Standard Fruit Company and currently Dole Food Company). Zemurray granted his concession to the Tela Railroad Company—another division within his own company. Cuyamel Fruit Company's (bought by United Fruit Company in 1929) concession would also be awarded to the Tela Railroad Company. United Fruit Company (currently Chiquita Brands International) would partner with the President Bonilla in the exchange of access and control to Honduras' natural resources plus tax and financial incentives. In return, President Bonilla would receive cooperation, protection, along with a substantial amount of U.S. capital to build a progressive infrastructure in Honduras.
The granting of land ownership in exchange for the railroad concession started the first official competitive market for bananas and giving birth to the banana republic. Cuyamel Fruit Company and the Vaccaro Bros. and Co. would become known as being multinational enterprises. Bringing western modernization and industrialization to the welcoming Honduran nation. All the while Honduran bureaucrats would continue to take away the indigenous communal lands to trade for capital investment contracts as well as neglect the fair rights of Honduran laborers. After the peak of the banana republic era, resistance eventually began to grown between small-scale producers and production laborers because the exponential rate in growth of the wealth gap and extreme collusion between the Honduran working and poor class versus the profiting Honduran government officials and the U.S. fruit companies (United Fruit Co., Standard Fruit Co., Cuyamel Fruit Co.).
Due to the exclusivity of the land concessions and lack of official ownership documentation, Honduran producers and experienced laborers were left with two options to regain these lands—dominio util or dominio pleno. Dominio util—meaning the land was intended to be developed for the greater good of the public with a possibility of being the granted "full private ownership" versus dominio pleno was the immediate granting of full private ownership with the right to sell.Based on the 1898 Honduran agrarian law, without being sanctioned the right their communal lands, Honduran villages and towns could only regain these lands if granted by the Honduran government or in some cases it was permitted by U.S. companies, such as United Fruit Co., to create long-term contracts with independent producers on devastatingly diseased infested districts. Even once granted land concessions, many were so severely contaminated with either the Panaman, moko, or sigatoka, that it would have to reduce the acreage used and the amount produced or changed the crop being produced. Additionally, accusations were reported of the Tela Railroad Company placing intense requirements, demanding exclusivity in distribution, and unjustly denying crops produced by small-scale farmers because they were deemed "inadequate". Compromise was attempted between small-scale fruit producers and the multinationals enterprises, but were never reached and resulted in local resistance.
The U.S. fruit corporations were choosing rural agriculture lands in Northern Honduras, specifically using the new railroad system for their proximity to major port cities of Puerto Cortes, Tela, La Ceiba, and Trujillo as the main access points of transport for shipments designated back to the United States and Europe. To get an understanding of the dramatic increase in amount of bananas being exported, firstly "in the Atlantida, the Vaccaro Brothers (Standard Fruit) oversaw the construction of 155 kilometers of railroad between 1910 and 1915...the expansion of the railroad led to a concomitant rise exports, from 2.7 million bunches in 1913 to 5.5 million in 1919."Standard Fruit, Cuyamel, and the United Fruit Co. combined surpassed past profit performances, "In 1929 a record 29 million bunches left Honduran shores, a volume that exceeded the combined exports of Colombia, Costa Rica, Guatemala, and Panama."
U.S. food corporations, such as United Fruit established community services and facilitates for mass headquartered (production) divisions, settlements of banana plantations throughout their partnered host countries such in the Honduran cities of Puerto Cortes, El Progreso, La Ceiba, San Pedro Sula, Tela, and Trujillo. Because of the strong likelihood of these communities being in extremely isolated rural agricultural areas, both American and Honduran workers were offered on-site community services such as free, furnished housing (similar to barracks) for workers and their immediate family members, health care via hospitals/clinics/health units, education (2–6 years) for children/younger dependents/ other laborers, commissaries (grocery/retail), religious (United Fruit built on-site churches) and social activities, agricultural training at the Zamorano Pan-American Agricultural School, and cultural contributions such as the restoration of the Mayan city Zaculeu in Guatemala.Establishing these communal services and amenities would attempt to better the living conditions of laborers as well as create windows of opportunity for employment (i.e. teachers, doctors, nurses,etc.), and help lay down the foundation for the demand of national progress.
While these communal services and amenities were offered to both American and Latin American laborers along with their families, they were not equally created, distributed, nor monitored. Americans living in these host countries received much more modernized and above the sub-standardized living conditions that were offered to the Hondurans for housing. One way this could be observed would be how the Hondurans were given the communal, primitive, but functional means of sanitation for the disposal of human excrement in outhouses or the usage of a single outdoor faucet designated for a unit(s). This is compared to the housing of Americans, which had indoor lavatories and running water. However, newer housing was eventually built that did have significant improvements such as electricity, running water (kitchens), "toilet-bath" houses with running water.
United Fruit took the first step to control one major factor that could heavily influence the efficiency of each plantation—preventative medicine. The first United Fruit healthcare facility was built in Bocas Del Toro, Panama in 1899. Taking into consideration that without good health of their work force-production would suffer, United Fruit continued to fund and construct health facilities in every host country and their services. Healthcare, for some laborers and their families would be free of charge, while others would be deducted from their wages. Healthcare services would include treatments for tropical diseases and illnesses (i.e. tuberculosis, malaria, yellow fever, etc.), common viral infections (colds, fever, etc.), plus pre-employment/periodical physical examinations. However laborers would be need of these services with the increased exposure to toxic, deadly exposure of chemicals via pesticides, insecticides, fungicide applications, and even the cleaning solutions (removal of residue from fungicide applications).
Education played another important role within each settlement because it helped create windows of opportunity for children and laborers to expound in subjects and training that majority of host countries could not afford or offer. While the education for adult laborers would be more vocational, there would be private efforts for education, especially in literacy. Each nation varied in the requirements for the elementary schools such as the length of education offered would range from a minimum of 2 years and a max of 6 years.Specifically United Fruit was faced with a large and imposing threat that was used as an opportunity to incorporate education, vocational training, and the horticulture of their banana enterprise.
Samuel Zemurray employed agronomists, botanists, and horticulturists to aid in research studies for United Fruit in their time of crisis, as early as 1915 when the Panama disease first inhabited crops. Funding specialized studies to treat Panama disease and supporting the publishing of such findings throughout the 1920s-1930s, Zemurray has consistently been an advocate for agricultural research and education. This was first observed when Zemurray funded the first research station of Lancetilla in Tela, Honduras in 1926 and led by Dr. Wilson Popenoe.
Zemurray also founded the Zamorano Pan-American Agricultural School (Escuela Agricola Panamericana) in 1941 with Dr. Popenoe as the head agronomist. There were certain requirements before a student could be accepted into the fully paid for 3-year program including additional expenses (room and board, clothing, food, stc), a few being a male between the ages of 18-21, 6 years of elementary education, plus an additional 2 years of secondary.Zemurray, established a policy where, "The School is not for the training or improvement of the company's own personnel, but represents an outright and disinterested contribution to the improvement of agriculture in Spanish America...This was one way in which the United Fruit Company undertook to discharge its obligation of social responsibility in those countries in which it operates-and even to help others." Zemurray was so intensely adamant in his policy that students were not allowed to become employees at the United Fruit Company post graduation.
Epidemic diseases would cyclically strike the banana enterprise in the form of Panama disease, black sigatoka, and Moko ( Ralstonia solanacearum ). Large investments of capital, resources, time, tactical practices, and extensive research would be necessary in search for a solution. The agriculture research facilities employed by United Fruit pioneered in the field of treatment with physical solutions such as Fusarium wilt ("flood fallowing") and chemical creations such as the Bordeaux mixture spray.
These forms of treatment and control would be rigorously applied by laborers on a daily basis and for long periods of time so that they would be as effective as possible. Potentially toxic chemicals were constantly exposed to workers such as copper(II) sulfate in Bordeaux spray (which is still used intensively today in organic and "bio" agriculture), 1,2-dibromo-3-chloropropane in Nemagon the treatment for Moko, or the sigatoka control process that began a chemical spray followed by an acid wash of bananas post-harvesting. The fungicidal treatments would cause workers to inhale fungicidal dust and come into direct skin contact with the chemicals without means of decontamination until the end of their workday.These chemicals would be studied and proven to carry their own negative repercussions towards the laborers and land of these host nations.
While the Panama disease was the first major challenging and aggressive epidemic, again United Fruit would be faced with an even more combative fungal disease, Black sigatoka, in 1935. Within a year, sigatoka plagued 80% of their Honduran crop and once again scientists would begin a search in a solution to this new epidemic.By the end of 1937 production resumed to its normal complicity for United Fruit after the application of Bordeaux spray, but not without creating devastating blows to the banana production. "Between 1936-1937, the Tela Railroad Company banana output fell from 5.8 to 3.7 million bunches" and this did not include independent farmers who also suffered from the same epidemics, "export figures confirm the devastating effect of the pathogen on non-company growers: between 1937-1939 their exports plummeted from 1.7 million bunches to a mere 122,000 bunches". Without any positive eradication of sigatoka from banana farms due to the tropical environment, the permanent fungicidal treatment was incorporated and expounded upon in every major banana enterprise, which would be reflective in the time, resources, labor, and allocation of expenses needed for rehabilitation.
Both United Fruit Company production laborers and their fellow railroad workers from the Tela Railroad Company were not only at constant risk from long periods of chemical exposure in the intense tropical environment, but there was a possibility of contracting malaria/ yellow fever from mosquito bites, or inhale the airborne bacteria of tuberculosis from infected victims.
In 1950, El Prision Verde ("The Green Prison"), written by Ramon Amaya Amador, a leading member of the Honduran Communist Party, exposed the injustices of working and living conditions on banana plantations with the story of Martin Samayoa, a former Bordeaux spray applicator. This literary piece is the personal account of everyday life, as an applicator, and the experienced as well as witnessed injustices pre/post-exposure to the toxic chemicals within these fungicidal treatments and insecticides. The Bordeaux spray in particular is a blue-green color and many sources referring to its usage usually bring to light the apparent identification of those susceptible to copper toxicity based on their appearance after working. For example, Pericos ("parakeets") was the nickname given to spray workers in Puerto Rico because of the blue-green coloring left on their clothing after a full day of spraying.In 1969, there was only one documented case of vineyard workers being studied in Portugal as they worked with the Bordeaux spray whom all suffered similar health symptoms and biopsied to find blue-green residue within the victim's lungs.
Little evidence was collected in the 1930s-1960s by neither the American nor Honduran officials to address these acute, chronic, and deadly effects and illnesses warranted from the chemical exposure such as tuberculosis, long-term respiratory problems, weight loss, infertility, cancer, and death. Many laborers were discouraged to voice the pain caused from physical injustices that occurred from the chemicals penetrating their skin or by inhalation from fungicide fumes in long labor-intensive hours spraying the applications. Without any specialized health care[ clarification needed ][ citation needed ] targeted to cure these unabating ailments and little to no compensation of workers who did become gravely ill. Bringing awareness to such matters especially against major powers such as United Fruit Co. amongst other multinational companies and the involved national governments would be feat for any single man/ woman to prove and demand for change. That is until the legalization of labor unionization and organized resistance.
Labor resistance, although was most progressive in the 1950s to the 1960s, there has been a consistent presence of abrasiveness towards multinational enterprises such as United Fruit. General Bonilla's choice to approve the concessions without demanding the establishment of fair labor rights and market price, nor enforce a comprise between small-scale fruit producers and the conglomerate of U.S. fruit enterprises would create the foundation in which strife would ensue from political, economic, and natural challenges.The first push for resistance began from the labor movement, leading into the Honduran government's turn towards nationalism, compliance with Honduran land and labor reformations (1954-1974)*, and the severance of U.S. multinational support in all host countries' governmental affairs (1974-1976)*.As United Fruit battles with Honduran oppositions, they also fight similar battles with the other host Central American nations, let alone their own Great Depression and the rising threat of communism.
From 1900 to 1945, the power and economic hegemony allotted to the American multinational corporations by host countries was designed to bring nations such as Honduras out of foreign debt and economic turmoil all the while decreasing the expenses of production, increasing the levels of efficiency and profit, and thriving in a tariff-free economic system. However, the growing demand for bananas surpassed the supply because of challenges such as invasive fruit diseases (Panama, sigtaoka, and moko) plus human illnesses from extreme working conditions (chemical toxicity and transferable diseases).
Laborers began to organize, protest, and expose the conditions in what they were suffering from at the location of their division. Small-scale fruit producers would also join the opposition to regain equality in the market economy and push for the redistribution of the taken communal lands sold to American multinational corporations. Referencing to the Honduran administrations from 1945-1954, Marcelo Bucheli interpreted their acts of collusion and stated "The dictators helped United Fruit's business by creating a system with little or no social reform, and in return United Fruit helped them remain in power".As the rise of dictatorship flourished under the Tiburcio Andino's national administration (1933- 1949) and prevailed for 16 years until it was passed onto nationalist President Juan Manuel Galvez (a former lawyer for the United Fruit Company).
The General Strike of 1954 in Tela, Honduras was largest organized labor opposition against the United Fruit company. However, it did involve the laborers from United Fruit, Standard Fruit, along with industrial workers from San Pedro Sula. Honduran laborers were demanding fair pay, economic rights, checked national authority, and eradication of imperialist capitalism.The total number of protesters was estimated at greater than 40,000. On the 69th day, an agreement was made between United Fruit and the mass of protesters leading to the end of the General Strike. Under the administration of Galvez (1949–1954) strides were taken to put into effect the negotiated improvements of workers rights. Honduran laborers gained the right for shorter work days, paid holidays, limited employee responsibility for injuries, the improvement of employment regulation over women and children, and the legalization of unionization. In the summer of 1954 the strike ended, yet the demand for economic nationalism and social reform was just beginning to gain even more momentum going into the 1960s–1970s.
By legalizing unionization, the large mass of laborers were able to organize and act on the influences of nationalist movement, communist ideology, and becomes allies of the communist party As like in the neighboring nation of Cuba and the rise communism led by Fidel Castro, the fight for nationalism spread to other Latin American nations and ultimately led to a regional revolution. Aid was given to these oppressed Latin American nations by the Communist Party of the Soviet Union. Americans struggled to maintain control and protect their capital investment while building tensions grew between America, the communist, and nationalist parties.
The 1970s energy crisis was a period where petroleum production reached its peak, causing an inflation in price, leading to petroleum shortages, and a 10-year economic battle. Ultimately the United Fruit Company, among other multinational fruit enterprises, would attempt to recover capital lost due to the oil crisis through the Latin American nations. The United Fruit's plan for recovery would ensue by increasing taxation and reestablishing exclusivity contracts with small-scale farmers."The crisis forced local governments to realign themselves and follow protectionist policies" (Bulmer-Thomas, 1987).The fight to not lose their control over Honduras and other sister host nations to communism failed, yet the nature of their relationship did change to where the national government had the higher authority and control.
At the end of the 1970s energy crisis, Honduras was under the administration of Oswaldo Lopez Arellano after he seized control from President Ramon Villeda Morales. Trying to redistribute the taken lands of Honduras, President Arellano attempted to aid the Honduran people in regaining their economic independence but unfortunately stopped by President Ramon Ernesto Cruz in 1971. In 1974, the Organisation of Oil Exporting Countries (OPEC) was created and involved Costa Rica, Guatemala, Honduras, Panama, and Colombia. Designed to safeguard the same nations that experienced extreme economic turmoil due to the stronghold on dependent capitalism, the authority and control of foreign multinational companies, 1970s energy crisis, and the inflation of trade tariffs.Through nullification of the concession contracts originally granted to the U.S. multinational companies, Latin American countries were able to further their plan for progress but were met with hostility from the U.S. companies. Later in 1974, President Arellano approved a new agrarian reform granting thousands of acres of expropriated lands from the United Fruit Company back to Honduran people. The worsened relations between the U.S. and the newly affirmed powers of the Latin American countries would bring all parties into the 1974 'Banana War'.
In March 2007 Chiquita Brands pleaded guilty in a United States Federal court to aiding and abetting a terrorist organization, when it admitted to the payment of more than $1.7 million to the United Self-Defense Forces of Colombia (AUC), a group that the United States has labeled a terrorist organization since 2001. Under a plea agreement, Chiquita Brands agreed to pay $25 million in restitution and damages to the families of victims of the AUC. The AUC had been paid to protect the company's interest in the region.
In addition to monetary payments, Chiquita has also been accused of smuggling weapons (3,000 AK-47's) to the AUC and in assisting the AUC in smuggling drugs to Europe.Chiquita Brands admitted that they paid AUC operatives to silence union organizers and intimidate farmers into selling only to Chiquita. In the plea agreement, the Colombian government let Chiquita Brands keep the names of U.S Citizens who brokered this agreement with the AUC secret, in exchange for relief to 390 families.
Despite calls from Colombian authorities and human rights organizations to extradite the U.S. Citizens responsible for war crimes and aiding a terrorist organization, the U.S. Department of Justice has refused to grant the request citing 'conflicts of law'. As with other high-profile cases involving wrongdoing by American companies abroad, the U.S. State Department and the U.S. Department of Justice are very careful to hand over any American citizen to be tried under another country's legal system, so for the time being Chiquita Brands International avoided a catastrophic scandal, and instead walked away with a humiliating defeat in court and eight of its employees fired.
Central America is located on the southern tip of North America, or is sometimes defined as a subcontinent of the Americas, bordered by Mexico to the north, Colombia to the southeast, the Caribbean Sea to the east, and the Pacific Ocean to the west and south. Central America consists of seven countries: Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama. The combined population of Central America has been estimated to be 41,739,000 and 42,688,190.
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.
Puerto Barrios is a city in Guatemala, located within the Gulf of Honduras. The bay in which the harbour is located is called Bahia de Amatique. Puerto Barrios is the departmental seat of Izabal department and is the administrative seat of Puerto Barrios municipality.
Jorge Ubico Castañeda, nicknamed Number Five or also Central America's Napoleon, was a Guatemalan dictator. A general in the Guatemalan army, he was elected to the presidency in 1931, in an election where he was the only candidate. He continued his predecessors' policies of giving massive concessions to the United Fruit Company and wealthy landowners, as well as supporting their harsh labor practices. Ubico has been described as "one of the most oppressive tyrants Guatemala has ever known" who compared himself to Adolf Hitler. He was removed by a pro-democracy uprising in 1944, which led to the ten-year Guatemalan Revolution.
Chiquita Brands International Sàrl, formerly known as Chiquita Brands International Inc., is a Swiss producer and distributor of bananas and other produce. The company operates under a number of subsidiary brand names, including the flagship Chiquita brand and Fresh Express salads. Chiquita is the leading distributor of bananas in the United States.
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.
Dulce River is a river in Guatemala, completely contained within the department of Izabal. It is part of a lake and river system that has become a popular cruising sailboat destination.
The history of communism in Colombia goes back as far as the 1920s and has its roots in the idealism of the Russian October Revolution. Today guerrilla groups, self-proclaimed communists, state that they want to seize state power in Colombia by violent means, and organizations such as the National Liberation Army (ELN) continue their four decades old war with the United States-backed Colombian government.
Fyffes plc is a Japanese-owned fruit and fresh produce company headquartered in Dublin, Ireland. The Fyffes brand is most closely associated with the banana industry, although it is applied to a wide range of fruits, including the Fyffes Gold Pineapples and Fyffes melons.
The Banana Massacre was a massacre of as many as 3,000 United Fruit Company workers that occurred between December 5 and 6, 1928 in the town of Ciénaga near Santa Marta, Colombia. The strike began on November 12, 1928, when the workers ceased to work until the company would reach an agreement with them to grant them dignified working conditions. After several weeks with no agreement and no work, costing the company severe financial losses, the conservative government of Miguel Abadía Méndez sent the army in against the strikers, resulting in the massacre.
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.
Puerto Armuelles is a city and corregimiento on Panama's Pacific coast in western Chiriquí Province next to Costa Rica. It is the seat of Barú District. Puerto Armuelles is the second largest city in Chiriqui province with a population near 25,000, and has two different type of deep-water ports, one for bananas and one for oil.
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.
Rail transport in Central America consists of several isolated railroad lines with freight or passenger service. The most famous one is the Panama Canal Railway, the oldest transcontinental railroad in the world, connecting Panama City with Colón since 1855. Other railroads in Belize, Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica and Panama were built by private and public investors mainly to facilitate the transport of local agricultural produce to export markets and harbors. Their market share and profitability went into decline in the second half of the twentieth century and most lines have been decommissioned by the end of the 1990s. As of 2018, railroads operate locally in Honduras, Costa Rica and Panama only; all rail transport has been suspended in Belize, El Salvador, Guatemala and Nicaragua. None of the operating railways crosses national borders.
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. Such a ruling-class oligarchy control 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.
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.
The Western Caribbean Zone is a region consisting of the Caribbean coasts of Central America, from Yucatán in Mexico to northern Colombia, and also the islands west of Jamaica. The zone emerged in the late sixteenth century as the Spanish failed to completely conquer many sections of the coast, and northern European powers supported opposition to Spain, sometimes through alliances with local powers.
Although bananas have been planted for thousands of years, the development of an intercontinental trade in bananas had to wait for the convergence of three things: modern rapid shipping (steamships), refrigeration, and railroads. These three factors converged in the Caribbean in the 1870s, and would lead to the development of large-scale banana plantations, usually owned and operated by highly integrated large corporations such as Dole and Chiquita Brands International.
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.