An Episode in the Life of a Banana Republic Quiz

Answer: Honduras - fleeing the law

In his eventful life William Porter (he adopted the pseudonym O. Henry later) was a journalist, writer, pharmacist and bank teller, but never an ambassador. He was obviously a good writer since there is a prestigious award named after him, but apparently not as good a bank teller as it was his problems with book-keeping that got him into trouble. He was indicted for embezzlement and jumped bail to Honduras, returning after a year because of his wife's bad health. She died soon afterwards and he went to jail, where he had plenty of time to write in peace. Most of his writing inspiration came by watching and listening to people in hotel lobbies, not secluding himself.

All four countries qualify as banana republics, with sizeable banana exports and a solid history of military dictatorships.

Answer: A railroad company in Costa Rica

Almost all banana republics owe their status to the arrival of the railroad. Costa Rica is just one example demonstrating a sequence of events that happened very similarly in Guatemala, Honduras, Panama and Colombia.

Minor C. Keith was the son of a lumber merchant and owner of a Texas cattle ranch when in 1871 he accepted his uncle's invitation to help build a railroad in Costa Rica. The government needed one to transport coffee from the central highlands to the Caribbean coast. With immense difficulties, it was built, but the government couldn't pay Keith. It offered to compensate him with a 99 year lease on the railroad and giving the land along the line.
To increase revenue from his railroad, Keith started planting bananas on the given land. In 1899 he merged his business with the Boston Fruit Company to form the United Fruit Company.

Answer: Highways to the Caribbean coast

The UFC used their political and economic muscle to make sure no highways were built that could threaten their transport monopoly.

In fairness, Guatemala only had one Caribbean port facility (Puerto Barrios).

Answer: el Pulpo - the Octopus

In O. Henry's time, Central American exports consisted mainly of agricultural products (like coffee, sugar and bananas) and a few large companies dominated the export of the goods, thus being responsible for most of a country's income. United Fruit Company and Standard Fruit Company were two of these companies, and they vehemently defended their monopolistic positions (buying, transporting and exporting the harvest, but also railroads, electricity, telegraph, housing, postal services, schools etc). The United Fruit Company was called "El Pulpo" by the locals for their involvement in every facet of life.

Other names of the United Fruit Company were "La Frutera" ("The Fruit Shop") or Mamita Yunay ("Mommy United").

Answer: It was the first peaceful transfer of power in Guatemala's history

Born in 1913 as the son of a Swiss immigrant, Arbenz had a career with the Guatemalan army when in 1944 he helped overthrow the dictatorship of Jorge Ubico.

In 1944 Juan José Arevalo became the first democratically elected president of the country and the following election of Jacobo Arbenz was the first time power was handed over without violence since the country had gained independence from Spain 130 years earlier.

Answer: setting up plans to replace him with a dictator

The US already was not happy with Arbenz' predecessor Arévalo, whose philosophy of "spiritual socialism" was regarded as Communism. Arévalo was politically smart enough to keep the Communist Party outlawed, Arbenz wasn't. Early in 1952 the CIA set up a list with names of people they wanted to have assassinated in the event of an anti-communist coup. Coincidentally, Nicaraguan president/dictator Anastasio Somoza visited the USA for the first time in April of 1952, telling them about Carlos Castillo Armas (the incompetent dictator mentioned in the question), a disgruntled Guatemalan general who fled the country after staging an unsuccessful coup. Given proper military support, Armas would rid the country of communists.

As history shows, he also got rid of presidential elections, denied half the country of the right to vote, outlawed all political parties except his own, and instituted Latin America's first official death squad.

This did not keep Vice-President Nixon on his 1955 visit to Guatemala from proudly declaring that "This is the first instance in history where a Communist government has been replaced by a free one".

After declaring himself president for another four years, he was shot dead in July 1957.

Answer: about 15%

Here are some figures:

It is estimated that in 1945, 2.2% of the country's population controlled 70% of all arable land, but with only 12% of it being utilised.
Holding about 42% of all arable land, United Fruit was Guatemala's largest landowner, with 85% of its holdings uncultivated.
The numbers from different sources vary somewhat, but the bottom line is the same: The UFC was a more than significant land owner and a lot of it was unused.

Answer: $3 an acre

Among the land reforms, which were modeled on the US 1862 Homestead Act, was the infamous decree 900. The Guatemalan government could, under certain very specific circumstances, expropriate unused land, compensating the owners through government bonds.

On their 1952 tax statement, UFC stated the worth of their land as $3 an acre, totalling $627,572, and paid taxes accordingly. When the Guatemalan government offered to pay that sum, the price went up a whopping 2200 %.
(I found no online sources for this, but I assume they had their lands valued at $75 an acre on the balance sheets provided to the shareholders. Investors are not happy with shares that lose 96 % of asset value.)

Answer: The US State Department

It is safe to say that the number one concern of the US government at the time was the signs of Communism emerging from Guatemala and many historians argue that the events that followed would have taken place without lobbying from the UFC. It is also safe to say that it is still very unusual for a government department to send bills in the name of a private enterprise.

Answer: All of them

The Secretary of State at the time was John Foster Dulles. His hatred of Communism is legendary and he could be called the 'godfather' of the Cold War.

Twenty years earlier he and the law firm he worked for prepared the contracts for UFC with the Ubico dictatorship in Guatemala.

His brother Allen Dulles was CIA Director at the time. He was on the board of UFC and its president.

The Undersecretary of State Walter Bedell Smith was a stockholder and was CIA director before Allen Dulles.

Note: Online sources do not all agree on who had exactly which function; some sites seem to confuse the Dulleses, sometimes "the board" means "board of directors" sometimes "board of trustees", some sites put Allen Dulles' presidency before the coup, some after, some not at all. However, all sites agree that they all were stockholders and were at some point in time paid by the UFC.

At best, it was a huge conflict of interest, at worst, it was abusing the power of office for personal gain.

Answer: Iran - oil

In 1952 the plans for a staged coup were ready under the name PBFORTUNE. But when knowledge of it leaked out (read: Somoza was bragging about it to his colleagues), PBFORTUNE was cancelled in October 1952. After a poorly planned rebellion by Castillo Armas sympathisers led to a crackdown on anti-Communist forces in early 1953, the idea of a planned coup was put to rest.

However, in August 1953 the CIA scored a huge success when Operation Ajax ended the democratically elected government of Iranian Prime Minister Mohammad Mossadegh. The success of this coup (maximum result with minimum use of money and manpower) brought new confidence that a similar strategy would work in Guatemala too and thus a new plan, operation PBFORTUNE, was made.

The similarities with the Guatemalan situation are notable:
The point of conflict was nationalisation (in Iran it was the nationalisation of the oil industry, breaking the power of Anglo-Iranian Oil).
It was a national government that defended the interests of a private company (it was the British government pleading AIOC's case at the International Court of Justice).
After the nationalisation, it was not difficult to convince the US government that Iran was coming under communist influence. The US agreed to stage a coup, under the condition that afterwards, AIOC would have to share the oil industry with seven other companies. To the more cynical among us, it will come to no surprise that five of those companies were American.

Answer: They were the only ones willing to sell him anything

The Guatemalan government already had tried to buy weapons from more 'respectable' sources like Canada and West Germany, but these deals were called off at the request of the US. In essence, it was made clear that a friend of Guatemala was an enemy of the US. Czechoslovakia had a lot of leftover (captured German) WWII material which they were willing to sell for cash on handover. No political deal was involved, and no bananas.

When the shipment was discovered on a Swedish vessel in May 1954 it was welcome 'proof' that Arbenz was in league with the communists.

Answer: The rebel army overwhelmed the regular forces and made rapid progress

The actual invasion force was a farce. One "army group" of 120 rebels was annihilated by 28 Guatemalan soldiers, another group of 170 men, assigned to capture the harbor of Puerto Barrios, was crushed by an armed gang of dock workers lead by the local police chief.

However, it is all about perception. The radio made every military engagement into a heroic battle, low flying aircraft over the capital made it look as if the whole country was at war. Fear of an imminent American invasion fueled by radio broadcasts was widespread. In the end, president Arbenz resigned when a whole garrison decided to surrender to Armas and his 'army' of 200.

Answer: False

It is impossible to describe the chaos that was Guatemala for the next three decades, but it included coups, countercoups, autocoups, dissolved legislatures, suspended constitutions, a president chosen by God, and more than 100,000 civilians killed by death squads from every side of the political spectrum. 1951 was the first peaceful transfer of power, Guatemala had to wait until 1991 for the second.

Answer: It became part of Chiquita Brands International

Things didn't go well for the UFC, either. After a long decline, the business was taken over by Eli M. Black in 1970, merged with Black's company AMK, and continued under the name United Brands.

Black famously jumped off the Pan Am Building on February 3, 1975, when it was discovered he had tried to bribe Honduran President Oswaldo López Arellano to lower export taxes (later dubbed "bananagate" of course).

Billionaire Carl Lindner, Jr. then took over, renaming it Chiquita Brands International (the Chiquita logo had been around since 1944). Dole Food Company is the successor of United's nemesis, Standard Fruit.

Disclaimer: This is a quiz, not a history lesson, it can't contain all of the relevant background information. There is a lot of it on the web, though most sites are more concerned making their political case than sharing the knowledge. Feel free to comment.