Colonial exploitation subjected Central American and Caribbean states to centuries of oppression. The banana republic period is defined by multinational corporations extracting a resource from these nations for their own profit. This occurs at the expense of the country’s citizens, who often labor under unfair conditions. Analysis of this era reveals the justifications behind American imperialism and the intersection between big business and the armed forces.
1. The Term “Banana Republic” is Actually Offensive
“Banana Republic” is an outdated term that originated from colonizing forces. It was first used by O. Henry, an American author of short stories, in 1901. This label referred to countries whose economy was reliant on the exportation of a single crop, the production and distribution of which was often controlled by outside corporations. Politically, they were ruled by a corrupt authoritarian government beholden to the interests of international companies and a small circle of wealthy elite. Extreme inequality marred their development. Foreign industries owned much of their land and infrastructure. Citizens had few opportunities to attain political autonomy or wealth of their own.
In the early 1900s, the term applied sinister undertones to the Caribbean and Central American countries it labeled. It underscored the agency and identity of people by characterizing them as a powerless, monolithic body useful only for their labor. This often manifested in racist imagery of Indigenous and African diaspora communities subservient to white business owners. The caricature downplayed the countries’ industriousness and their economies, which were diversified beyond products sought by international merchants.
The name gave credence to American interests to continue exploiting foreign people and lands through a vicious system of control to reap material wealth. Its existence allowed leaders in business, government, and the military to reduce independent countries to a single characteristic output to be harvested. This attitude spawned justifications for imperialist expansion and control, as well as military interventions. Mass media and educational material distributed tropes assigned to the banana republic label among the American public. Despite the origins of the phrase, it is important to note that the term is used here not as a reduction of the nations it describes but as an illustration of the unfortunate outcomes suffered under colonialism.
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2. Other Countries Participated As Well
World powers continued to hold and expand imperial possessions elsewhere. Britain exerted control over India, Australia, and Hong Kong. The Berlin Conference of 1884 saw fourteen Western countries draft claims over Africa with no native representation present. They drew borders arbitrarily with no respect for existing inhabitants, then conquered and exploited their holdings similar to other colonial territories.
In the Americas, the United States does not bear all the blame for the banana republic system. Honduras was a British colony, and its authorities played a role in the dominance of the fruit companies at the expense of their constituents. British timber companies practiced a system of debt trapping, where workers were kept laboring to pay off debt that was passed down through generations.
British officials in the 1900s looked to develop Honduras and saw cooperation with the United Fruit Company as the most efficient method. They allowed the company to operate in the colony and advocated for its continued expansion. Integration came at the expense of harming the local small growers and agricultural industry while leaving many residents vulnerable to exploitation by United Fruit.
3. Samuel Zemurray Made United Fruit Powerful
Samuel Zemurray was a Russian immigrant who started a business in 1899, buying cheap ripe bananas and quickly selling them to vendors before they spoiled. United Fruit awarded him a contract the following year in Mobile, Alabama to continue with inventory brought from their ships. Zemurray collaborated with Ashbell Hubbard, who had the largest contract in Mobile, to purchase two steamships of their own. In 1910, they created a plantation in Honduras and founded the Cuyamel Fruit Company.
Zemurray wished to avoid existing agreements between the US and Honduras on customs taxes. He paid mercenaries to overthrow the Honduran government and return former president Manuel Bonilla to power. After the success of this operation, Bonilla’s administration granted Zemurray a large plot of land and freedom from Honduran taxes for twenty-five years. Cuyamel Fruit Company expanded enough to be a significant competitor to United Fruit by 1929. The following year, United Fruit acquired Cuyamel in a deal that made Zemurray the largest stockholder.
United Fruit stock declined in the 1930s until Zemurray staged a “coup” within the company itself. He was elected president in 1938, and under his leadership, the company returned to its position as the chief provider of bananas. Ownership of sixty-one ships made United Fruit’s Great White Fleet the largest private fleet in the world. The corporation continued to make deals with Central American countries and preserved their system of plantation labor.
4. Cuba Was the Most Alluring Prize
Thomas Jefferson wrote to James Monroe in 1823, claiming, “I candidly confess, I have ever looked on Cuba as the most interesting addition which could ever be made to our system of states.”
Jefferson cited the island’s strategic location, which offered control of the Caribbean and Gulf of Mexico. He correctly predicted in the letter that America could not have control over Cuba without war.
After the Spanish-American War, Cuba exercised relative autonomy until 1902’s Platt Amendment to its Constitution. This act, passed by the US Congress, authorized the United States to construct a base at Guantanamo Bay and preserve Cuba’s independence with military force. It also restricted Cuba’s ability to enter treaties with other nations and validated all existing laws issued during American occupation.
Nearly every Caribbean island produced sugar, but Cuba was the largest and had exclusive trade agreements with the US. American speculators purchased land in Cuba to secure their piece in the lucrative business. The Treaty of Relations dissolved the Platt Amendment in 1934, and Cuba became one of America’s strongest allies. Cuba continued intensive domestic production of sugar, and the US instituted tariffs and quotas to protect its own cultivation in the 1950s. A 1956 quota on sugar imported from Cuba may have been a contributing factor to the Cuban Revolution in 1959.
After Fidel Castro became the Cuban head of state, US-Cuban relations were hostile for decades. Castro nationalized the island’s industries and redistributed the land. Much of both were American-owned. President Eisenhower and the CIA started a plot to invade Cuba, overthrow Castro, and install a president friendly to the US. The United Fruit Company contributed two ships in the resulting 1961 Bay of Pigs invasion, which failed and became an American embarrassment.
5. The Panama Canal Was an Exercise in Imperialism
France first saw an opportunity to construct a channel linking the Atlantic and Pacific through a narrow isthmus in what was then Colombia. Ferdinand de Lesseps, engineer of the Suez Canal, supervised the ill-fated effort. Tropical diseases claimed 20,000 lives, and the project ran out of funds in 1889. In 1902, US Congress authorized the canal’s completion and negotiated a treaty with a Colombian diplomat. However, Colombia’s legislature blocked this agreement.
President Theodore Roosevelt responded by sending naval vessels to support separatists, and Panama declared its independence in 1903. A new agreement granted the US a ten-mile-wide stretch of territory to complete the canal. In return, Panama received ten million dollars and an annual payment of 250,000 dollars. The US completed the canal in 1914, allowing ships to navigate between the two oceans and cutting six to ten months off the voyage.
Panamanians felt that the US was not conducting the deal equitably. They argued America was purposefully misinterpreting the treaty to exclude Panama from exercising its rights over the Canal Zone. US military presence and discrimination against Panamanian laborers heightened tensions between the two countries. Riots erupted in 1964, leading to the deaths of twenty people.
The issue became a major talking point in Panama’s elections and contributed to a period of internal strife. Gradually, the US granted concessions to Panama, which restored an uneasy peace. It was not until 1999 that control of the canal was fully ceded to Panama. The canal is now operated under permanent neutrality, yet America still provides aid to Panama because of its strategic importance.
6. Racial Discrimination Mirrored American Practices
The exploitation of material wealth and labor coincided with race-based hierarchies enforced and encouraged by corporations. Relations between the often white company representatives and often Indigenous or Afro-Caribbean workforce were similar to those in the US.
United Fruit transplanted racial policies from the US across their territory. They relegated employees of African descent to manual labor regardless of qualifications. These workers were paid far less and sometimes were paid in currency only valid at company stores.
Tensions existed before the presence of multinational corporations. Guatemala passed laws in the 1870s designed to keep its indigenous population toiling on farmland in a debt trap system similar to sharecropping in the Southern US. They expanded upon this practice in the 1880s when an American firm constructing a railroad brought in African-American laborers. Despite promises of better treatment, workers were misled about pay and labor conditions and were targets of violence from white overseers. Black immigrants were also targets of an unfair law enforcement system already used to oppress native people in favor of Latinos.
The United Fruit Company fostered divisions among its workforce as a means of control. Black and Latino employees were intentionally segregated in their living quarters, tasks, and pay. This practice of encouraging ethnic tensions meant organized resistance against the company was difficult as the employees found difficulty uniting.
7. Covert Interventions in Banana Republics Continued
Overthrowing governments was not always practiced through overt war. The Central Intelligence Agency, or CIA, was founded in 1947 to conduct intelligence related to national security. The CIA sometimes acted to protect American commerce abroad. Guatemala elected Jacobo Arbenz as president in 1951. Arbenz vowed to seize United Fruit Company land to give to poor residents. United Fruit spent three years and an equivalent of five million dollars to lobby the American government to intervene. Believing that Arbenz’s actions were communist, the CIA conducted a coup, which led to decades of tyrannical martial law for the people of Guatemala.
Regime changes spread beyond Central America and the Caribbean under the guise of preventing the spread of communism. In 1973, the US supported the ousting of democratically elected Chilean president Salvador Allende. A military junta governed the country until they were succeeded by the dictator Augusto Pinochet, who ruled through terror until 1990. Between 1947 and 1989, America attempted seventy-two foreign regime changes, with sixty-six covert efforts and only six overt ones. Whether to guard against communism or to protect commercial interests, interventions under the auspices of maintaining stability may destabilize targeted nations instead.
