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Central America, 1929-35


In 1929, United Fruit of Boston bought out its major competitor in Honduras, Cuyamel Fruit, which had been owned by a former fruit jobber in New Orleans, Samuel Zemurry. The price was 25 million dollars – five times what the former owner had paid for it eighteen years before. Zemurry had been a hands-on operator and well-liked by the Hondurans. He had been generous with his growers, providing local people with interest-free loans and gifts. He had been a financial supporter of the Liberals and opposed to the leader of the National Party: General Carías Andino. With Zemurry not around to help them, by 1932 the Liberals were low on funds, and that year they lost the presidency to General Carías.

United Fruit befriended General Carías. Carías had a paramilitary force that moved like Mussolini's fascist squads against dissidents. Labor leaders and social activists were killed. And all opposition was branded as foreign-inspired subversion. In crushing his opposition, Carías claimed to have brought Honduras a "blessed peace." Carías' National Party newspaper, La Epoca, adulated him. His birthday became a national "day of peace and thanksgiving to God." When election-time rolled around in 1936, Carías abrogated the constitution to extend his term in office. And in 1939 the legislature in Honduras authorized him to remain in power six more years.


In Guatemala, United Fruit was involved in banana growing. Dictators there had been in charge through most of its history as an independent nation. In the early thirties, the US was second to Germany in investments in Guatemala's coffee industry. Britain, the US and Germany were Guatemala's primary sources of investment, the German investments dispersed also in small enterprises including retail establishments. The largest of these enterprises were devoted to finance, among them Banco Aleman.

In 1930 the depression arrived in Guatemala. In February 1931 a single candidate from the landowning oligarchy ran unopposed for the presidency. This was General Jorge Ubico. He was popular and a man with ideas, an energetic man who appeared honest. He spoke of corruption as having caused the government's inadequate response to the economic crisis and as having used up resources needed by the government. He pointed out that he was wealthy, that he had his "own resources" to sustain him and was in no need to accumulate wealth that belonged to the government.

Ubico made economic development the primary objective of his government. Guatemala had little to sell abroad but agricultural products, and Ubico wanted increased sales abroad for the purpose of acquiring foreign exchange. He encouraged investment from the United States and Europe. Only from 15 to 20 percent of Guatemala's land was under cultivation, and he wanted to increase that acreage and production. Ubico was frugal, and in the US he was described as a progressive. With US aid Ubico pursued public works, including the building of a network of roads, and he improved health and school facilities.

Ubico traveled about Guatemala, inspecting and visiting schools. He exhibited concern for the masses and was committed to acting on complaints, such as that of a mother deserted by her husband. Guatemala was 54 percent Indian in population, and Ubico wanted to help the nation's Indians – who furnished most of the labor in agriculture. He hoped that improved roads and transportation would join Indians in the nation's commercial production. He wanted Indians to give up subsistence agriculture and become commercial farmers.

From colonial times, Indians had been on large estates (the haciendas), exchanging their labor for a small dwelling and a bit of land to farm. They had been furnished with food on credit, always in debt and in effect bound to the estate – debt peonage, equivalent to serfdom. An Indian leaving the estate without permission was treated as a criminal according to law favored by the landed oligarchy. Ubico abolished debt peonage while preserving incentives to encourage Indians to work. In 1934 he signed a "vagrancy law." Indians were to enter a transitional phase of two years labor for the state, and all Guatemalans were to maintain a means of supporting themselves and their families. This meant working on a plot of land of at least 1.6 acres. If one worked on a smaller plot he was required to do additional work elsewhere for at least 100 days of a year; or if one cultivated no land he was obliged to be employed for a least 150 days of a year – a span of time that assured labor for the growing seasons. Indians were now free to seek work where they wished, which was supposed to result in employers competing for labor and paying the Indians higher wages.

The US had been invited into Central America as the arbiter of disputes, a recent arbitration resulting in a 1930 protocol signed by Guatemala and Honduras regarding a long-standing boundary dispute – arbitrated by the Chief Justice of the United States. When Ubico took office in 1931 he spoke openly about Guatemala's interests being in harmony with US interests. Ubico's desire for peace and stability in the Central America region matched that of the United States. US naval forces often sailed by, to Nicaragua where Marines were stationed or to the Panama Canal. And occasionally US aircraft flew by, giving a picture of US power. And occasionally the US naval officers came ashore for courtesy calls.

Guatemalan landowners and businessmen during the 1930s had, in general, a favorable impression of US businessmen. United Fruit and Ubico got along. Investments from the United States were welcome for the jobs they were creating, while some were calling United Fruit Company El Pulpo (the Octopus) because of its domination of the nation's railway. But the Ubico regime wanted to please The United Fruit Company and encourage its business. It left United Fruit in control of Guatemala's Atlantic Coast port, Puerto Barrios, and from Ubico's government the United Fruit Company received real estate tax exemptions.

Rather than fear of control by US businessmen, it was Communism that concerned Ubico, including an uprising in El Salvador in 1931 purported to have been led by Communists. Ubico believed that Communists were evil and beyond the law. He considered anybody opposing his regime as probably a Communist. Dissenters were therefore treated harshly. Under Ubico, the press was closely watched for articles unfriendly to the government. There was government censorship and some of what is called self-censorship, also called intimidation.

In September 1934 an anti-Ubico plot is said to have been uncovered by police. The election of a new president was scheduled for February, 1935, which may have had something to do with the event. Police tortured prisoners, and the torture produced information implicating prominent politicians, some military officers and members of Ubico's dominant political party, the Liberal Progressive Party. The conspirators were said to have been Communists planning to assassinate Ubico, to set fires, loot, bomb indiscriminately and spread chaos in an effort to disrupt society through terror. Sixteen accused plotters were executed.

Guatemala's constitution barred an incumbent president from re-election, but it had been common for Guatemalan presidents to defy this. It was called continualismo. Ubico's successes were cited: his restoration of vigor to the government; his stabilization of the nation's finances; and his elimination of corruption. He was portrayed as necessary for Guatemala. By "plebiscite" Ubico's presidency was extended to 1943.

Elsewhere in Central America

Unlike Guatemala, Costa Rica was a nation with a tradition in democracy. It had few Indians with whom landowners could be in conflict, and it was progressive in education, civil rights and good government. But the depression hit Costa Rica hard, and trying to take advantage of the depression, Rightists attempted a coup – to no avail. Tradition accounted for something. The coup was easily suppressed and civilian rule and Costa Rica's constitutional democracy maintained.

Unlike Costa Rica, neighboring El Salvador had a past of political unrest and military coups. The depression crippled El Salvador's coffee growing industry. In January 1931, El Salvador had its first free elections in twenty years. A new president was elected, but in December the new government was overthrown by General Maximiliano Hernandez Martínez. He made decisions in consultation with occult powers and had all streetlights painted blue to cure an epidemic. Those peasants who protested against his rule he labeled Communists – despite peasants by nature being wedded to private property. A peasant rebellion in 1932 was indeed led by a Communist, Farabundo Martí. El Salvador's army crushed the revolt and massacred thousands of peasants and Indians.

In Nicaragua, the United States had been withdrawing its Navy, including Marines. From 5,673 sailors and Marines in 1928, their total number was down to about 1,000 in 1932. And the withdrawal of these was delayed by an earthquake, as the Marines were used in disaster work.

The US and Nicaragua agreed that elections would be held in 1932 and supervised by the United States. Emerging as president from these elections was Juan B. Sacasa, the leader of Nicaragua's Liberal Party. With the withdrawal of the US Navy and Marines, Nicaragua's national guard came under the authority of General Anastasio Somoza, who was Minister of War. Augusto Sandino, the general who had fought on the side of the Liberals in the recent civil war and who had refused to bring his men out of the jungle, signed an agreement with the new president in early 1933. Upon leaving the presidential palace, Sandino was shot and killed by members of the National Guard. Anastasio Somoza, was accused of having ordered the killing, but these accusations were denied.

The troubled economy in Nicaragua worked against President Sacasa. Somoza used his power as head of the National Guard to force Sacasa, his wife's uncle, to resign on 9 June 1936. On 16 June the Liberal Party held its convention to name its candidate for the presidency. The old party leadership has been described as "swept aside in favor of a new group of younger, more dynamic and ambitious men." note40   Somoza was elected president and took office on January 1st. As president he initiated public works and established friendly relations with the United States. According to UNC Press, Knut Walter has described Somoza as having built his government on "agreements negotiated with the country's principal political actors, labor groups, and business organizations." note41   Somoza drew from both of Nicaragua's political parties, the Conservatives and Liberals. With the help of go-along allies he would remain in office until 1947. While in office he became the largest landowner in Nicaragua, owning fifty-one cattle ranches and forty-six coffee plantations – much of it confiscated by the government from German owners and sold to Somoza for little. Somoza passed his rule to his sons, and Sandino became a legend and national hero for Nicaraguans opposed to Somoza family rule.


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