Continuing our look at Latin American history, I want to touch on a period that didn’t directly involve the United States, except through companies like United Fruit Company. The half-century from 1880 until 1930 was what was known as the neocolonial period in Latin America. As the industrial revolution transformed Europe and the United States, the new Latin American countries chose not to industrialize. At least, those governing made such choices. There was far more money to be made by selling goods to the industrialized countries: coffee, sugar, rubber, wheat, beef, minerals, and, of course, bananas.

Who benefitted from this practice? Large landowners and urban merchants. The average person gained nothing from this “progress.” As we saw in the article “Why Can’t People Feed Themselves,” colonialism destroyed the means by which native populations could sustain themselves. Neocolonialism followed the same path. Railroads displaced small farmers, who found themselves forced to work for the large landowners. Governments supported and subsidized the growing of “cash crops,” rather than the production of food for the people. Large corporations kept wages low and working conditions inhumane. The rich grew richer and the poor grew poorer.

As large landowners made their money via exports, they spent that money in the cities. Latin America’s population began to move to the cities; there just wasn’t a way to make a living in rural areas. The only way to survive was to work on one of the large plantations, but that was subsistence level at best.

For those in power, the neocolonial period was a wonderful time. For the bulk of the population, it meant a new form of servitude. Instead of serving foreign powers, they were now under the rich and powerful from their own country.

Part of United Fruit’s “Great White Fleet”

Bananas. People (and many animals) love bananas. In the United States, we eat about 26 pounds of bananas per person per year; that’s half a pound of bananas each, every week. We grow very few bananas here, which makes us almost as dependent on foreign bananas as we are on foreign oil. Fortunately, we’ve had the United Fruit Company to look after our interests.

United Fruit Company dates back to 1871, when Henry Meiggs signed a contract with the Costa Rican government to build and exploit a railroad in that company. He was also given land, about 800,000 square kilometers. When Meigg’s nephew Minor Keith took over the operation in 1877, he began experimenting with growing bananas, at first to feed his workers, later as a source of income. Soon the profits from bananas far outstripped those obtained via the railroad. The railroad became a means of getting the bananas to market (it connected San José with the port city of Limón).

Keith merged his company with the Boston Fruit Company in 1899 to form the United Fruit Company. United Fruit grew to be the largest employer in Central America. Using political pressures to obtain favorable rights in different countries (that is, monopolies), United Fruit became the poster child for the goods and ills of capitalism. Their influence in the region led to the creation of the term “banana republics.”

As the Wikipedia article states, “It [United Fruit] had a deep and long-lasting impact on the economic and political development of several Latin American countries.” Two examples stand out among many:

• The Guatemalan coup of 1954: Colonel Jacobo Arbenz was elected president of Guatemala on a platform of land reform and economic change. Neither of those terms appealed to the United Fruit Company, who saw its business interests in Guatemala threatened. The U.S. Secretary of State, John Foster Dulles, worked for a law firm that represented United Fruit Company. His brother, Allen Dulles, was not only director of the C.I.A. but was also a board member of United Fruit. Accusing Arbenz of communism, the C.I.A. armed and trained a military force of Guatemalans who invaded Guatemala from Honduras, toppling Arbenz and ensuring the continuation of the United Fruit Company’s business in that country. (After the Castro revolution in Cuba, Castro warned the United States: “Cuba is not another Guatemala.”)
• The Colombian Banana Massacre: During a strike by United Fruit Company workers, Colombian troops opened fire on the strikers, killing hundreds. Two dispatches from the United States Embassy in Bogotápaint a chilling picture of the involvement and ruthlessness of United Fruit, as well as the influence that United Fruit had with the U.S. government (the entire set of dispatches paint a fascinating picture of the incident:
  • The Dispatch from US Bogotá Embassy to the US Secretary of State, dated December 29, 1928, stated: “I have the honor to report that the legal advisor of the United Fruit Company here in Bogotá stated yesterday that the total number of strikers killed by the Colombian military authorities during the recent disturbance reached between five and six hundred; while the number of soldiers killed was one.”
  • The Dispatch from US Bogotá Embassy to the US Secretary of State, dated January 16, 1929, stated: “I have the honor to report that the Bogotá representative of the United Fruit Company told me yesterday that the total number of strikers killed by the Colombian military exceeded one thousand.”

It’s amazing that a privately-held company could have such a major impact on the politics of numerous nations, but such is the case of the United Fruit Company. Think of that as you peel open your next banana.

When we hear of filibusters, we tend to think of the political process used to stall legislation. The term is also used to describe individuals who take it upon themselves to wage war against other nations, outside of the activity of their own nation. Such a man was William Walker.

Walker began his filibustering career with an invasion of Baja California with an army of 45 men in 1853. Walker had negotiated unsuccessfully with the Mexican government to allow him to establish a military outpost to protect the southern border of California from Indian raids. The Mexican government, having recently lost California to the U.S., was in no mood to be cooperative. Walker’s invasion was initially successful, though with no official U.S. support, Walker was forced to retreat when the Mexican government responded with force.

In 1855, Nicaragua was embroiled in a civil war. Recognizing the commercial possibilities of the building of a canal in the area, Walker moved in. Receiving support from Francisco Castellón, leader of the Democratic party based in León, Walker took his “army” to Nicaragua. With support from other Americans in the area, Walker helped the Democrats when the war. He was eventually named president of Nicaragua. Walker dreamed of uniting all of Central America into one English-speaking nation.

Cornelius Vanderbilt, whose commercial interests were threatened by Walker’s work, helped mobilize the other Central American nations against Walker. He was ousted as Nicaraguan president in 1857 and was eventually executed in Honduras in 1860.

Walker’s work, especially the Mexican invasion, was completely against U.S. law, particularly the Neutrality Act of 1794 (forbidding U.S. citizens from waging war against a nation the U.S. was not at war with). Walker was tried for his crimes, but acquitted.

It’s easy to argue that no person better personified the doctrine of Manifest Destiny than Mr. William Walker.

Having obtained the necessary land, equipment and strategy, the United States set out to build the Panama Canal. Initial progress was slow. The French operation which the Americans bought had been stripped down to minimal operations. The infrastructure around the project was insufficient for the scale of what needed to be done. Disease took a heavy toll on workers. Bureaucratic oversight made ordinary operations almost impossible.

But the canal was built, at great cost of time, effort, and even lives. The U.S. obtained the land in 1903 and the first ship passed through the canal in 1914. The actual expense was much less than original estimates.

One player in the operation that was never happy about its role was Panama. From the time that the U.S. signed the treaty with a French citizen that gave them the rights to build the canal, Panama had sought to negotiate a legitimate treaty. In 1964, protests around the canal resulted in the deaths of 20 Panamanians and injuries to 500 others, mostly at the hands of U.S. troops protecting the canal. Negotiations began on a canal treaty, but were not completed until 1977, with the signing of the Torrijos–Carter Treaties.

The Torrijos–Carter Treaties consisted of two main agreements. The first treaty established the permanent right of the United States to protect the canal’s neutral service to ships of all nations. The second treaty guaranteed that Panama would assume full control of the canal beginning at the end of the day on December 31, 1999.

Opponents of the agreements claimed that the U.S. had given a vital asset to a hostile government. There was also claims that the Panamanians would allow the canal to fall into disrepair. None of the fears proved to have a basis. Since the handover, traffic is up, revenues are up, accidents are down, and Panama is looking to expand the canal.

Hopefully, the handover of the canal will mark a new trend in United States’ relations with neighbors to the south: less paternalism, more partnerships.

Phillipe Bunau-Varilla, mastermind behind the Panama canal

[With the shift in focus of this series, it seemed right to adapt the name to reflect what’s being discussed. Rather than discussing all history of Latin America, we’ll now look at U.S.-Latin relations] As U.S. naval power grew in the 19th century, the desire for a canal across Central America grew along with it. The California gold rush heightened the demand for such a canal.

In 1849, Cornelius Vanderbilt signed an agreement with the Nicaraguan government to operate a combined water-land crossing from the Atlantic to the Pacific. This quickly became one of the principal trade routes between New York and San Francisco, until civil war and social instability made the passage unsafe.

Plans continued for the construction of a canal across Nicaragua. A treaty was signed between Nicaragua and the U.S., providing for the construction of this canal. This treaty was later rejected by the U.S. when the decision was made to build in Panama.

Meanwhile, the French backed construction of a canal across the Colombian province of Panama; the construction was being carried out by the same group that had built the Suez Canal. Funding for the project proved insufficient, and the French canal company sought to cover their losses. The United States was a logical buyer, and negotiations began.

The U.S. also negotiated with the Colombian government for the rights to the land, signing a treaty that would have granted the U.S. a renewable lease in perpetuity. The chief engineer of the French project, Phillipe Bunau-Varilla, had a better idea. If the U.S. would help Panama obtain its independence, the rights could be obtained much more easily and with better terms. The U.S. agreed. When Panama declared independence, U.S. warships blocked Colombian troops from responding to the revolt. Well-placed bribes reduced the fighting in Panama itself, and the deed was done.

(To help the cause along, Bunau-Varilla hired William Nelson Cromwell as a lobbyist for the Panama canal. Cromwell was able to place a story in the New York Sun that falsely reported a volcanic eruption in Nicaragua that would have threatened the proposed canal zone. An actual volcanic eruption in the Caribbean helped sway Congress to approve the Panama canal… by four votes. Cromwell was paid $800 thousand for his efforts.)

Bunau-Varilla was able to get himself named as Panamanian ambassador to the U.S., despite the fact that he was a French citizen. He signed the treaty that gave the U.S. the right to build the canal, also giving his company a $40 million dollar sale. Panama received $10 million, and Colombia eventually received $10 million in exchange for their recognition of Panama.

Lots of dirty deals, but the road was now clear for the construction of the canal. We’ll look at that tomorrow.