From Robert Sherrill’s “100 (Plus) Years of Regime Change” (The Texas Observer: 14 July 2006):
At roughly the same time Secretary of State Dulles was destroying democracy in Iran, he was also busy destroying democracy in Central America, and once again it was on behalf of a renegade industry: United Fruit Co. …
“Few private companies have ever been as closely interwoven with the United States government as United Fruit was during the mid-1950s,†writes Kinzer. For decades, Dulles had been one of its principal legal counselors. (At one time Dulles negotiated an agreement with Guatemala that gave United Fruit a 99-year lease on a vast tract of land, tax free.) Dulles’ brother – Allen, the CIA Director – had also done legal work for the company and owned a big block of its stock. So did other top officials at State; one had previously been president of United Fruit. The head of our National Security Council was United Fruit’s former chairman of the board, and the president of the International Bank for Reconstruction and Development was a former board member.
These fine chaps and their numerous colleagues in our government were, not surprisingly, very upset when between 1944 and 1954, Guatemala entered what would be known as its “democratic spring,†denoting the presidencies of Juan José Arevalo and – after the first peaceful transfer of power in Guatemalan history – Jacobo Arbenz.
What those two did was nothing less than breathtaking. Under Arevalo, the National Assembly was persuaded to establish the first social security system, guarantee the rights of trade unions, fix a 48-hour workweek, and even slap a modest tax on the big landholders – meaning three American companies: a huge electric monopoly, a rail monopoly, and, of course, United Fruit, which controlled the other two.
Arbenz was even bolder. He persuaded the National Assembly to pass the Agrarian Reform Law, which gave the government the power to seize and redistribute uncultivated land on estates larger than 672 acres. United Fruit owned more than 550,000 acres, about one-fifth of the country’s arable land, but cultivated less than 15 percent – while many thousands of Guatemalans were starving for land. So in 1953, Arbenz’s government seized 234,000 uncultivated acres of United Fruit’s land, for which the government offered in compensation (one can imagine the vengeful hilarity this must have stirred in Arbenz’s circle) a paltry $1.185 million – the value United Fruit had declared each year for tax purposes. …
Arbenz was forced into exile and replaced by Col. Carlos Armas, who promptly canceled reforms and established a police state.