Neo-Colonialism in Latin America

The United Fruit Company was a corporation in the United States that was mostly involved in the selling of tropical fruits primarily bananas, that were largely grown on plantations in third world countries by then, and sold in the US market and Europe. It was formed in 1899 from a merger of Keith's businesses and the Boston fruit company. The company had very deep and long lasting impacts on the political and economic development of many Latin American countries. This research is going to explore these impacts on Central American countries.

Central America has had a history of banana growing that dates back to the 1880's. This is closely related to the political implications in this area within this period. Before 1870, the United State knew nothing about bananas. Bananas were first brought to America in this same year and quickly became a favorite delicacy to many Americans. The whole banana issue began in 1871 with the putting up of a railway line in Costa Rica by Keith, a 23 year old who was very industrious in his efforts. This project cost many lives among them Keith's two brothers, it is said that he was a man who would go for what he wanted at all costs. Keith went a head to marry the Costa Rican's daughter, this plus other efforts earned him the title "the uncrowned king of Central America."  As the railroad work was going on, Keith was hatching a much bigger plan. He had bananas planted on either sides of the road that flourished making it easier to transport them to ready markets in the United States and also in Europe. In a span of ten years, Keith owned three banana companies. He later formed a partnership with Captain Lorenzo, a Cape Cod sailor, and Andrew Preston, a businessman from Boston. This three contributed enough capital to form the Boston Fruit Company. The Boston Fruit Company and the United Fruit Company formed a merger in 1899, coming up with the biggest banana company in the whole world with plantations in many countries such as Colombia, Cuba, Costa Rica, Nicaragua, Jamaica, Santa Domingo, and Panama. These three also owned steamships that were known as the Great White Fleet together with 30 other ships that were rented out or leased. This was in addition to the 112 miles of railroad that linked the ports and the plantations (Landmeier P. p1).

One of the biggest strategies of the United Fruit Company was to gain control in the distribution of banana growing land. It ensured that this was a success by convincing many of the governments of the Latin American countries that there was need for reserve land to protect against the possibility of destruction of crops from disease and natural calamities. This resulted in huge tracts of land being owned by the United Fruit Company, this lead to cases of breaching of land ownership legislation and the need for concessions from the government. This then necessitated political involvement although the United Fruit Company was just but a foreign corporation operating overseas. The economic power of the United Fruit Company saw many governments create close economic relationships with it. One such relationship was what happened in 1901, when Manuel Estrada Cabrera, the then Guatemalan dictator, granted the United Fruit Company exclusive rights to oversee the transit of mail between the United States and Guatemala. Having gained the friendship of a right wing dictator, the United Fruit  Company saw this as a very ideal climate for investment. Keith seized this opportunity by forming the Guatemalan Railroad Company as a branch of the United Fruits Company costing him around $40 million. In contract with Cabrera, Keith built a railroad between the city of Guatemala and Puerto Barrios. The company also managed to get permission to buy lots in Puerto Barrios at nominal prices and also was given a grant of land 1 mile long and 500 yards wide on both sides of the municipal pier. Keith also saw his negotiations to build telegraph lines from Puerto Barrios to the capital bear fruit (Landmeier p1).

These advances by the United Fruit Company saw many Central and South American countries fall under its thrall, but Guatemala remained the most influenced and controlled by the company. It was estimated that the Guatemalan operations of the United Fruit Company generated 25% of the total production of the company. The company gained control of almost all the means of transport and communications in Guatemala. It charged tariffs on all freight items moving in or out of the country through Puerto Barrios. This saw many Guatemalan coffee growers pay high tariffs for many years, a consequence that translated in high prices of Guatemalan coffee on the world market. The company's headquarters was based in Guatemala in Bananera town. It is from here that the company masterminded its economic empire corrupting every niche of the government and Guatemalan politics. With this power and influence, the company exempted itself from the mandatory obligation of paying taxes for 99 good years. This company had an influence in almost everything that happened in Guatemala. It had an unconditional support from the right wing dictators who made sure that they remained in power by terrorizing those who opposed them and also arresting prominent persons, some of which were killed on the spot and others tortured to death in prisons. It is recorded that hundreds of Guatemalans were killed just in two days during the reign of Jorge Ubico.  This dictator was later on, in 1944, overthrown by the Guatemalan people. This saw the country hold its first true election in history (Landmeier p1).

After the overthrow, there followed a period of calm but the problem of land ownership was still at large whereby just 2.2 percent of the Guatemalan population, owned more than 70% of the land and just 10% was available for 90% of the population, most of them being the indigenous Indians. It should also be noted that most of these lands that was owned by the few was not in use at all. The next government that came into power promised to redistribute some of the land to the 90 percent of the population. This posed a threat to the interests of the company because it was among the biggest holders of unused land in Guatemala. The mounting pressure saw the company seek intervention from the US government alleging that Guatemala had turned communist. Through newspaper publications and media efforts, the company managed to win the support from the American people; leading to the orchestration of a coup by the US CIA. The US then replaced the freely elected government with another right wing dictatorship that could bow to the United Fruit Company's demands (Landmeier p1).

In Nicaragua things were similar to Guatemala; here the US maintained armed forces in the country for 21 years from 1912 to 1933, the country was more or less an American protectorate with just a nominal independence. This protectorate was basically supported by the American elites most of them having interest in the United Fruit Company, people who did everything just to realize their ambitions, including killing the helpless, persecuting and exploiting the poor.  The United States was also involved in peace efforts in Nicaragua by helping in the establishment a truce between the liberal and conservative parties. The early twentieth century saw the involvement of the US in the affairs of Nicaragua. There was a full scale US intervention in Nicaragua in 1926 when it realized that its assets in that country were under threat from the left wingers. Together with the incumbent leadership, many of the Nicaraguans were arrested and others killed by the US military. The situation in Honduras was not different, the United Fruit controlled railway continued to serve its parent companies. The company controlled most of the coastline. Most of the coastal cities become company towns where the companies had more power exceeding that of the local authorities. Many Hondurans faced the challenges of the Great Depression whereby many lost their jobs or were just paid meager wages. Those who attempted to go on strike to protest against the injustices were dealt with military force, something that had become a common place habit in many of the Latin American countries. In 1907 the US government became concerned with the then Nicaraguan president who was liberal, Jose Santos Zelaya. Because of the fear that Zelaya might take over Honduras and use the resources there for his own good, the US intervened by stopping the deployment of Nicaraguan troops to Honduras to overthrow Bonila,  Honduras dictator. As it was in other countries, this intervention was for the benefit of the United States because it held a very prosperous banana trade in Honduras. The US then succeeded in inaugurating another president in Nicaragua, one who could stoop to their demands (Nosotro p1).

The creation of Panama as an independent country from Columbia is said to have been the purest case of US intervention. Many clamed that Panama would have eventually gained independence on its own, without the help of the US, but because the US had a vested interest to build a canal across the isthmus, a projected that had been started by the French, they saw this as the opportune moment. The Americans prevented the Columbians from crossing the border into the Panama district by supporting a junta of prominent Panamanian families. The country was immediately recognized by the US as soon as it declared itself independent; this led to the signing of a treaty with America that saw the country given the Canal Zone and also made a protectorate of the United States. There came a time when the banana plantations of the United Fruit Company were affected by the Panama disease that was named because of its origin in Panama. This was just a highlight of the dangers that monocrop farming had on agriculture. This led to reshaping of major parts of the Central American landscape, where forests were cleared to pave way for projects of drainage, irrigation, and flooding of many acres of land that was infected. These agricultural practices diminished the natural diversity and crop resistance, bringing about a climate that did not favor subsistence farming. This made many people to be dependent on the few who were able to produce on large plantations. These problems still exist in many Latin American countries where landlords owning large banana plantations still face resistance from the landless (Imperial perspectives p1).

As it has been shown, the United Fruit Company enjoyed a lot of benefits from Latin American countries with support from the US government. It benefited immensely from land concessions, privileges, exemptions from tax, and also from cheap labor. Its influence was largely exercised in four major Latin countries, these are; Honduras, Guatemala, Panama, and Costa Rica. The social relationships of many workers greatly changed during this period. Although it can be argued by some people that the company brought jobs and higher wages when compared to other companies, it is established that in the end, the damages it caused outweighed these benefits in those countries that the company had its interests. The revenue generated from the companies businesses did not end up in those countries, the pay that workers received ended up in the company's stores and shops that were located in the plantations. The lucrative privileges the company received were not compensated or if compensated, then it was just partially done. The company was given the freedom to move from one piece of land to other once its fertility was depleted. The less productive land was then left bare impacting negatively on the livelihood of the locals (Munoz p1).

The banana plantations also brought new social problems with such as prostitution, alcoholism, and ethnic clashes. The company found a way to worsen the differences between white and black workers as a strategy to prevent formation of union movements or prevent the existing ones from taking a common stand. Despite of these, strong trade unions and political movements emerged. Expressing their discontent over the living and working conditions, workers carried out a number of strikes, the most memorable was the one that occurred in Costa Rica in 1934 and in Honduras in 1954. The contract laws went on to protect the banana companies, but in 1974 a war broke out that was called the banana war between the Fruit Company and the local governments. The bone of contention was the low prices that the company paid the local producers and also the exemption from paying taxes. The led to the formation of the Banana Exporting Countries in 1974 that included Columbia, Costa Rica, Guatemala, the Dominican Republic, Nicaragua, Honduras, Venezuela, and Panama. This ensured that working conditions were improved and also that the Fruit companies paid tax. The shifting of banana companies to places with better ports and also to look for fertile lands, and sometimes to flea the threat posed by unions, left behind towns that had depended completely on the plantations for jobs. The companies would tear down facilities that they had put in place such as schools and houses, living the local destitute. The companies practiced institutionalized racism where non whites had to give way to the whites. This idea of the banana republic was illustrated by the conditions in the Latin American countries especially those witnessed in Guatemala where the government aided in the creation of the social structure that existed. The Fruits Company changed its name to United Brands and later ran in financial problems in the 1970s. Its lands were sold to Del Monte Corporation that now caries on the operations of the former holdings of the United Fruits Company. Del Monte Corporations does not engage in social and political manipulations that were there in the past (Munoz p1).

It is said that Central American politics are still being shaped by the banana issue. Corporations are still dealing with problems that were instigated by the original banana companies. The control of land and the rights of the natives to own land are persistent problems in most of the Latin American countries. Child and indentured labor in unregulated conditions that includes exposure to harmful chemicals have become realities of the fourth world generations in Latin America. The control of large operations on the offshore by large corporations that enjoy the support from financial institutions, the owning of large pieces of land, enjoying transport monopolies, and using US military power to further their interests, are common issues in the American history. The banana republics therefore served as the next frontier for corporate control and military and political interventions for the creation of wealth and the availing of cheap products for the Americans to consume (Imperial perspectives p1).

As stated in the beginning, the history of bananas goes hand in hand with the political history of many Latin American countries. It's a history of military intervention, colonization practices whereby large land grants are given. This case involved issuing of grants for banana plantations and construction of the railway to aid in the transportation of the same to the US markets, getting exclusive rights and privileges for other business initiatives, and political manipulations that favored the colonial powers. Any socialist movements that come about to try and fight for the rights of the majority that included land reforms, the rights of workers and exclusive control of their own destiny, was quickly terminated by governments with aid from the United States in the name of protecting their foreign interests. This left a history of dictatorial and corrupt governments. On most of the occasions where Americans intervened, the interventions were dictated by their corporate demands. Many Latin American countries were virtually under the control of America, whereby governments that posed a threat to their economic interests were toppled and others installed.