Fruit Company in Guatemala

One of the key culprits in meddling with Latin American government affairs in the first half of the 20th century was United Fruit Company. They were a US corporation founded in 1899 off the back of a railroad venture in Costa Rica. An important part of United Fruit Company's strategy was to gain control of the distribution of banana growing land. It did this through convincing governments that reserve land was needed to protect against the possibility of crop destruction from natural disasters or diseases. Because such huge percentages of land were owned by United Fruit Company, land ownership legislation was often breached and concessions were required from the government. This lead to political involvement, even though United Fruit Company was a foreign corporation operating overseas.

United Fruit Company
The 'Banana Republics' that grew from these situations often saw strong investment in infrastructure from corporations like United Fruit Company. Railroads, ports and transportation systems were put in place, and extensive employment was created. United Fruit Company also established many schools in the countries in which it operated. However, the Company often left vast tracts of land uncultivated and worked hard to block infrastructure development beyond its own operations, establishing its own network as a strong monopoly. Employment under United Fruit Company also wasn't much fun, testament to the extensive and often violent strikes that took place amongst its workforce over issues such as rates of pay and working conditions.

Guatemala
By the 1950's, things were looking promising for Guatemala. The dictator Jorge Ubico had been overthrown in 1944 and two administrations of democratically elected Presidents were leading Guatemala forwards. The President from the second administration, Jacobo Arbenz Guzman, was reforming the country extensively, including the permission of free expression, legalized unions, diverse political parties and basic socioeconomic reforms. One of these was a land reform aimed at reducing the suffering of the rural poor by redistributing unused land. The basis of this reform was that all such land would be purchased by the Government at the same value declared on the owners tax forms. The property could then be sold back to peasant cooperatives at low rates. Arbenz started by setting a strong personal example, selling his own land under the scheme.

Arbenz' land reform was ruffling a few feathers in United Fruit Company boardrooms. Of their 550,000 acres owned in Guatemala, 85% was uncultivated, which meant that the Company would lose a lot of leverage in Guatemala. Through the US Government, United Fruit Company asked for greater compensation than what was being offered by the Guatemalan Government.

Source : articlesbase