- United Fruit Company
The United Fruit Company was a major
United States corporation that traded tropicalfruit (primarilybanana s andpineapple s) grown inThird World plantation s and sold in theUnited States andEurope . The company was formed in 1899 from the merger ofMinor C. Keith 's banana-trading concerns withAndrew W. Preston 'sBoston Fruit Company . It flourished in the early and mid-20th century and came to control vast territories and transportation networks inCentral America , the Caribbean coast ofColombia ,Ecuador , and the West Indies. Though it competed with theStandard Fruit Company for dominance in the international banana trade, it maintained a virtualmonopoly in certain regions.The Company had a deep and long-lasting impact in the economic and political development of several
Latin America n countries. Critics often accused it of exploitativeneocolonialism and described it as the archetypal example of the influence of amultinational corporation on the internalpolitics of the so-called "banana republic s." (A term coined byO. Henry ). After a period of financial decline, United Fruit was merged withEli M. Black 's AMK in 1970 to become the United Brands Company. In 1984Carl Lindner, Jr. transformed United Brands into the present-dayChiquita Brands International .Corporate history
In 1871, U.S. railroad entrepreneur
Henry Meiggs signed a contract with the government ofCosta Rica to build a railroad connecting the capital city of San José to the port ofLimón in the Caribbean. Meiggs was assisted in the project by his young nephewMinor C. Keith , who took over Meiggs's business concerns in Costa Rica after Meiggs's death in 1877. As an experiment, Keith had begun planting bananas along the train route in 1873.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 in order to continue the difficult engineering project. In 1884, the government of PresidentPróspero Fernández Oreamuno agreed to give Keith 800,000 acres (3,200 square kilometers) 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 and then by ship to the United States proved very lucrative. Keith soon came to dominate the banana trade in Central America and along the Caribbean coast ofColombia .In 1899, Keith lost $1.5 million when the
New York City brokerHoadley and Co. went bankrupt. He then traveled toBoston, Massachusetts , where he arranged the merger of his banana trading concerns with the rival Boston Fruit Company. Boston Fruit had been established byLorenzo Dow Baker , a sailor who, in 1870, had bought his first bananas inJamaica , and byAndrew W. Preston . The merger formed the United Fruit Company, based in Boston, with Preston as president and Keith as vice-president. Preston brought to the partnership his plantations in theWest 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.In 1901, the government of
Guatemala hired the United Fruit Company to manage the country's postal service. By 1930, the Company 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 Co. to United Fruit and retired from the fruit business. In 1933, concerned that the company was mismanaged and that its market value had plunged, he staged a hostiletakeover . Zemurray moved the company's headquarters toNew 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.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 packerJohn Morrel ), 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 byHurricane Fifi in 1974, which destroyed many banana plantations inHonduras . OnFebruary 3 ,1975 , Black committedsuicide by jumping out of his office on the 44th floor of thePan Am Building in New York City. Later that year, theU.S. Securities and Exchange Commission exposed a scheme by United Brands to bribe Honduran PresidentOswaldo López Arellano with $1.25 million, and the promise of another $1.25 million upon the reduction of certain export taxes. Trading in United Brands stock was halted and Lopez was ousted in a military coup.After Black's suicide,
Cincinnati -based American Financial, one of billionaire Carl H. Lindner, Jr.'s companies, bought into United Brands. In August 1984, Lindner took control of the company and renamed itChiquita 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 theDole Food Company .Ships of United Fruit Company's Great White Fleet
* "Admiral Dewey ", "Admiral Schley ", "Admiral Sampson " & "Admiral Farragut " (1899) U.S. Navy surplus after
Spanish-American War - Each carried 53 passengers & 35000 bunches of bananas.Carl, Robert, CAPT USNR "The Banana Navy" "United States Naval Institute Proceedings" December 1976 pp. 50-56]
* "Venus" (1903) United Fruit Company's first refrigerated banana reefer ship
* "San Jose", "Limon" & "Esparta" (1904) first banana reefers built to United Fruit design - "San Jose" & "Esparta" were sunk by "U-boats" duringWorld War II .
* "Atenas" (1909) class of thirteen 5000-ton banana reefers built in Ireland
* "Pastores" (1912) 7241-ton cruise liner becameUSS Pastores (AF-16) Silverstone, Paul H., "U. S. Warships of World War II" Doubleday and Company (1968) p.329]
* "Calamares" (1913) 7622-ton banana reefer becameUSS Calamares (AF-18)
* "Toloa" (1917) 6494-ton banana reefer
* "Ulua" (1917) 6494-ton banana reefer becameUSS Octans (AF-26)
* "San Benito" (1921) 3724-ton banana reefer becameUSS Taurus (AF-25)
* "Mayari" & "Choluteca" (1921) 3724-ton banana reefers
* "La Playa" (1923) banana reefer
* "Telda", "Iriona", "Castilla" & "Tela" (1927) banana reefers
* "Aztec" (1929) banana reefer
* "Platano" & "Musa" (1930) banana reefers
* "Chiriqui" (1932) 6963-ton turbo-electric cruise liner becameUSS Tarazed (AF-13)
* "Jamaica" (1932) 6968-ton turbo-electric cruise liner becameUSS Ariel (AF-22)
* "Veraqua" (1932) 6982-ton turbo-electric cruise liner becameUSS Merak (AF-21)
* "Talamanca" (1932) 6963-ton turbo-electric cruise liner becameUSS Talamanca (AF-15)
* "Quiriqua" (1932) 6982-ton turbo-electric cruise liner becameUSS Mizar (AF-12)
* "Antigua" (1932) Turbo-electric cruise liner providing 2-week cruises ofCuba ,Jamaica ,Colombia ,Honduras and thePanama Canal Zone .
* "Oratava" (1936) banana reefer
* "Comayagua", "Junior", "Metapan", "Yaque" & "Fra Berlanga" (1946) banana reefers
* "Manaqui" (1946) bulk sugar shipHistory in Central America
The United Fruit Company (UFCO) owned vast 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. 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 manipulation of land use rights in order 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 governments which often were or became corrupt created the term "
Banana republic " representing a "servile dictatorship"."Big-business greed killing the banana" - "Independent", via "The New Zealand Herald ", Saturday 24 May 2008, Page A19]UFCO had a mixed record on promoting the development of the nations in which 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
highway s, which would lessen the profitabletransport ationmonopoly of the railroads under its control.In 1954, the democratically elected Guatemalan government of Colonel
Jacobo Arbenz Guzmán was toppled by U.S.- backed forces lead by Colonel Carlos Castillo Armas [Shoultz, Lars: "Beneath the United States", page 343. Harvard University Press, 1998. ] who invaded fromHonduras . Assigned by the Eisenhower administration, this Arbenz government’s military opposition was armed, trained and organized by the U.S.Central Intelligence Agency [Shoultz, Lars: "Beneath the United States", page 340. Harvard University Press, 1998. ] (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 toCommunism , UFCO was being threatened by the Arbenz government’s agrarian reform legislation and new Labor Code. [Shoultz, Lars: "Beneath the United States", page 337. Harvard University Press, 1998. ] UFCO was the largest Guatemalan landowner and employer, and the Arbenz government’s land reform included the expropriation of 40% of UFCO land. [Shoultz, Lars: "Beneath the United States", page 337 Harvard University Press, 1998. ] U.S. officials had little proof to back their claims of a growing communist threat in Guatemala [Shoultz, Lars: "Beneath the United States", page 342. Harvard University Press, 1998. ] , however the relationship between the Eisenhower administration and UFCO demonstrated the influence of corporate interest on U.S. foreign policy. [Shoultz, Lars: "Beneath the United States", page 340. Harvard University Press, 1998. ] The American Secretary of StateJohn Foster Dulles was an avowed opponent of Communism whoselaw firm of Sullivan and Cromwell [Shoultz, Lars: "Beneath the United States", page 338. Harvard University Press, 1998. ] had represented United Fruit. His brotherAllen Dulles was the director of the CIA. The brother of the Assistant Secretary of State for InterAmerican AffairsJohn Moors Cabot had once been president of United Fruit. Ed Whitman who was United Fruit’s principal lobbyist was married to President Eisenhowers personal secretary, Ann Whitman. [Shoultz, Lars: "Beneath the United States", page 338. Harvard University Press, 1998. ] Many individuals who directly influenced U.S. policy towards Guatemala in the 1950s also had direct ties to UFCO. [Shoultz, Lars: "Beneath the United States", page 337. Harvard University Press, 1998. ] The overthrow of Arbenz, however, failed to benefit the Company. Its stock market value declined along with its profit margin. The Eisenhower administration proceeded withantitrust 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.Company holdings in
Cuba , which included sugar mills in the Oriente region of the island, were expropriated by the 1959 revolutionary government led byFidel Castro . By April 1960 Castro was accusing the company of aidingCuban exile s and supporters of former leaderFulgencio Batista in initiating a seaborn invasion of Cuba directed from the United States.Thomas, "Cuba: The Pursuit of Freedom", 867] Castro warned the U.S. that "Cuba is not another Guatemala" in one of many combative diplomatic exchanges before the failedBay of Pigs invasion of 1961. Despite significant economic pressure on Cuba, the company was unable to recoup cost and compensation from the Cuban government.Reputation
The United Fruit Company was frequently accused of bribing government officials in exchange for preferential treatment, exploiting its workers, contributing little by way of taxes to the countries in which 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 Lenin's theory of capitalist
imperialism . Major Latin American writers sympathetic to more independence from foreign governments and corporations, such asCarlos Luis Fallas of Costa Rica,Ramón Amaya Amador of Honduras,Miguel Ángel Asturias of Guatemala,Gabriel García Márquez of Colombia, andPablo Neruda of Chile, denounced the Company in their literature.The business practices of United Fruit were also frequently criticized by journalists, politicians, and artists in the United States. Little Steven released a song called "Bitter Fruit" about the company's misdeeds. In 1950,
Gore Vidal published a novel ("Dark Green, Bright Red"), in which a thinly fictionalized version of United Fruit supports a military coup in a thinly fictionalized Guatemala. This reputation for malfeasance, however, was somewhat offset among those who worked for it or in the regions it controlled by the Company's later efforts to provide its employees with reasonable salaries, adequate medical care, and free private schooling. In the 1960s and 1970s, the Company and its successor, United Brands, created an Associated Producers Program that sought to transfer some of its land holdings to private growers whose produce it commercialized. As the Company gradually lost its land and transportation monopolies, its status as a capitalist "bête noire" declined.Fact|date=August 2007Diane K. Stanley, a former U.S. diplomat and the daughter of a Welsh-born employee of the United Fruit Co. in Guatemala, argues in the book "For the Record: The United Fruit Company's Sixty-six Years in Guatemala," published in 1994, that the negative perception of the company's influence in Guatemala is largely undeserved, and could be due in part to the unwillingness of left-wing journalists and writers to critically examine the legacy of the administrations of Presidents Arévalo and Arbenz. According to her:
Stanley also argues that while the company did orchestrate "an effective media campaign against the Arbenz government, it is clear that the Eisenhower administration was intent on ousting what it considered to be a Communist beachhead that threatened U.S. national security. Spurred on by
John Foster Dulles , his vehemently anti-Communist secretary of state, President Eisenhower would have moved to depose Arbenz even if the United Fruit Company had never operated in Guatemala." [ See [http://www.macaw.com/products/preface.htm Preface] to Stanley, "Op. cit."]Banana massacre
One of the most notorious strikes by United Fruit workers broke out on
12 November 1928 on the Caribbean coast of Colombia, nearSanta Marta . Historical estimates place the number of strikers somewhere between 11,000 and 30,000. On6 December ,Colombian Army troops under the command of GeneralCortés Vargas opened fire on a crowd of strikers gathered in the central square of the town ofCiénaga . The military justified this action by claiming that the strike was subversive and its organizers were Communist revolutionaries. CongressmanJorge Eliécer Gaitán claimed that the army had acted under instructions from the United Fruit Company. The ensuing scandal contributed to PresidentMiguel 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 ofÁlvaro Cepeda Samudio , "La Casa Grande", focuses on this event, and the author himself grew up in close proximity to the incident. The climax ofGarcía Márquez 's novel "One Hundred Years of Solitude " is based on the events in Ciénaga, though the author himself has acknowledged that the death toll of 3,000 that he gives there is greatly inflated. [Bucheli, "Bananas and Business: The United Fruit Company in Colombia, 1899-2000", 132]General Cortés Vargas, who issued the order to shoot, argued later that he had issued the order because he had information that U.S. 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 US 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.fact|date=May 2008The 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.” [ [http://www.icdc.com/~paulwolf/colombia/caffery5dec1928.jpgTelegram from Bogotá Embassy to the U.S. Secretary of State, dated December 5, 1928] ]
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.” [ [http://www.icdc.com/~paulwolf/colombia/caffery7dec1928.jpgTelegram from Bogotá Embassy to Secretary of State, date December 7, 1928] ]
The Dispatch from US Bogotá Embassy to the US 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.” [ [http://www.icdc.com/~paulwolf/colombia/caffery29dec1928.htm Dispatch from US Bogotá Embassy to the US Secretary of State, dated December 29, 1928] ]
The Dispatch from US Bogotá Embassy to the US 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.” [ [http://www.icdc.com/~paulwolf/colombia/caffery16jan1929.jpgDispatch from US Bogotá Embassy to the US Secretary of State, dated January 16, 1929] ]
Guerrilla movements in Colombia like the Revolutionary Armed Forces of Colombia argued that one of the consequences for the development of communism in Colombia was triggered by events like these and called it state terrorism. 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 that developed during the bipartisan National Front to created the ongoing Colombian armed conflict.fact|date=May 2008
The "banana massacre" was second only to the destruction wrought in the late 1980s by the United Fruit Company. Money funneled through the industries of the United States was used to fund a private militia, designed to protect the interests of UFCO. Efforts to nationalize UFCO dominated areas were met with guerilla warefare, a very effective means. Though the militia could not be directly linked UFCO, the purpose of the attacks was in UFCO's interests.
Footnotes
References
*cite book
last = Bucheli
first = Marcelo
authorlink =
coauthors =
year =2005
url =http://books.google.com/books?id=kUfnWhn6H7gC
title =Bananas and Business: The United Fruit Company in Colombia: 1899-2000
publisher =New York University Press
location =New York
id =
*cite book
last = Stanley
first = Diane K.
authorlink =
coauthors =
year = 1994
title = For the Record: The United Fruit Company's Sixty-six Years in Guatemala
publisher = Editorial Antigua
location = Guatemala City
id = ISBN 99922-722-0-1
*cite book
last = Thomas
first = Hugh
authorlink =Hugh Thomas
coauthors =
year = 1971
title = Cuba: The Pursuit of Freedom
publisher = Harper & Row
location = New York
id =ee also
*
Chiquita Brands International
*One Hundred Years of Solitude Further reading
*cite book
last = Bucheli
first = Marcelo
authorlink =
coauthors =
year =2005
url =http://books.google.com/books?id=kUfnWhn6H7gC
title =Bananas and Business: The United Fruit Company in Colombia: 1899-2000
publisher =New York University Press
location =New York
id =*cite journal
first = Marcelo
last = Bucheli
authorlink =
coauthors =
year =2008
month =July
title =Multinational Corporations, Totalitarian Regimes, and Economic Nationalism: United Fruit Company in Central America, 1899-1975
journal =Business History
volume =50
issue =4
pages =433–454
id =
url =
doi =10.1080/00076790802106315*cite journal
first = Marcelo
last = Bucheli
authorlink =
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year =2005
month =November
title =Banana Wars Maneuvers
journal =Harvard Business Review
volume =83
issue =11
pages =22–24
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url =*cite journal
first = Marcelo
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year =2004
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title =Enforcing Business Contracts in South America: The United Fruit Company and the Colombian Banana Planters in the Twentieth-Century
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volume =78
issue =2
pages =181–212
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*cite book
last = Striffler
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id = ISBN 0-935038-96-XExternal links
* [http://www.unitedfruit.org United Fruit Historical Society] Chronology of United Fruit by Marcelo Bucheli
* [http://www.chiquita.com/chiquitacr1/6backgrnd/crp92.asp "Our Complex History"] , from theChiquita Brands International 2000 Corporate Responsibility Report
* [http://www.mayaparadise.com/ufc1e.htm Banana Republic: The United Fruit Company]
* [http://www.ft.com/cms/s/778739c4-f869-11db-a940-000b5df10621.html Financial Times Article on United Fruit's legacy in Latin America: "Rotten Fruit"]
* [http://www.unitedfruit.org/biblio.htm Bibliography on United Fruit] extensive biography from the United Fruit Historical Society, Inc.
* [http://thehistorymovies.blogspot.com/2008/09/journey-to-banana-land.html Documentary Propaganda on United Fruit]
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