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United Fruit Company

From Academic Kids

The United Fruit Company (18991970) was a corporation prominent in the import-export trade of tropical fruit (notably bananas and pineapples) coming from Third World plantations and sent to the United States and Europe. The company is notorious as an archetypal example of multinational influence extending deeply into the internal politics of so-called banana republics and is frequently cited as an example of exploitative neocolonialism.

The United Fruit Company was known as la frutera (the fruit company) or Mamá Yunay ( "Mommy United") in Central America. It established a monopoly on the production and distribution of bananas in Latin America in the early 20th century, a monopoly which lasted until the end of the company in 1970, and arguably, through the company's sucessors, during the rest of the 1970s had long lasting ramifications for the economic and political development for the region. This monopoly was predicated on the fact that between 1920 and 1994 the United States purchased 60-90 percent of the region's exports, thereby ensuring the ongoing dependence on the United States. In turn this enabled the UFCO to penetrate the political and economic fabric of Central American societies and influence economic and political outcomes for its own gain.

Contents

Corporate history

United Fruit was established on March 30, 1899 in Boston, Massachusetts, by the merger of two banana companies. The Boston Fruit Company was established by Lorenzo Dow Baker, a sailor who in 1870 had bought his first bananas in Jamaica, and Andrew W. Preston. The other company was founded by Minor C. Keith, who had built railroads in Costa Rica and then went into the fruit business.

In 1899 railroad entrepreneur Henry Meiggs won a contract in Costa Rica to lay track along the Caribbean coast in exchange for land. Meiggs had two nephews, Minor Keith and Henry Keith. Minor Keith had already begun his own business shipping bananas to New Orleans in 1878, so when Meiggs decided to give his nephews the railroad contract the decision was made to make one company out of the two ventures and call it the United Fruit Company.

In 1930, Sam Zemurray (nicknamed "Sam the Banana Man") sold his Cuyamel Fuit Company company to United and retired. But in 1932, he returned because he felt the company was mismanaged. In June 1970, it merged with AMK Corporation, which owned the John Morrell meat company and was controlled by Eli H. Black, to become the United Brands Company. After Black's spectacular suicide on February 3, 1975 – he jumped out of the window of his New York City office on the forty-fourth floor of the Pan Am BuildingCincinnati-based American Financial, one of millionarie Carl H. Lindner, Jr.'s companies, bought into United Fruit. In August 1984, Lindner took control of the company and renamed it Chiquita Brands International. The headquarters was moved to Cincinnati in 1985.

History in Central America

The United Fruit Company owned vast tracts of land in the Caribbean lowlands. It also dominated regional transportation networks and owned a major railroad corporation called International Railways of Central America. In addition, UFCO branched out in 1913 by creating the Tropical Radio and Telegraph Company. By the end of the decade there would be virtually no aspect of the economic infrastructure of Latin American banana production untouched by the UFCO. The UFCO was so large that at the time of World War I it had no serious challengers or competiton for control of the banana trade. The huge number of ships that it used for transportation were referred to as the "great white fleet".

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. But 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 had to have 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.

If a particular government or a particular leader disagreed with UFCO tactics and refused to give them what they wanted, UFCO usually took steps to have the government undermined, discredited, or removed altogether. As a result, the UFCO became a political force opposing democratic social and political reform whenever and wherever it developed in order to preserve its dominant place in the banana trade.

The Company several times overthrew governments which they considered insufficiently compliant to Company will. For example, in 1910 a group of armed toughs were sent from New Orleans to Honduras to install a new president by force when the incumbent failed to grant the Fruit Company tax breaks. The newly installed Honduran president granted the Company a waiver from paying any taxes for 25 years.

The Company had a mixed record of encouraging and discouraging development in the nations it was involved in. For example, in Guatemala the Company built schools for the people who lived and worked on Company land, while at the same time for many years prevented the Guatemalan government from building highways, because this would lessen the profitable transportation monopoly of the railroads, which were owned by United Fruit.

The Guatemalan government of Colonel Jacobo Arbenz Guzmán was toppled by covert action by the United States government in 1954 at the behest of United Fruit because of Arbenz Guzman's plans to redistribute uncultivated land owned by the United Fruit Company among Native American peasants. The UFC and the bankers that supported it convinced the CIA and President Dwight Eisenhower that this was the first sign of a Communist takeover in Central America. The American Secretary of State, John Foster Dulles, was an avowed opponent of Communism whose law firm had represented United Fruit. His brother Allen Dulles was the director of the CIA. The brother of the Assistant Secretary of State for InterAmerican Affairs, John Moors Cabot, had once been president of United Fruit. Guzman's government was overthrown by Guatemalan army officers invading from Honduras. As many as 100,000 people may have died in the ensuing civil war.

Today, successor companies of United Fruit have interests in:

The impact of the United Fruit Company has inspired the poet Pablo Neruda to write a poem (in Spanish) with the company's name as the title. The 1929 strike of Colombian banana workers against United Fruit also inspired part of Gabriel García Márquez' One Hundred Years of Solitude. Little Steven released a song called "Bitter Fruit" about the company's misdeeds.

Further reading

External links

eo:United Fruit Company fr:United Fruit Company de:United Fruit Company

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