by Alan McPherson
On the evening of 16 December 1953, the newly-appointed American Ambassador to Guatemala, John Peurifoy, held a dinner at the Embassy. He wished to greet Jacobo Arbenz Guzmán, President of Guatemala since 1951, and his wife Maria. The following day, in the telegraphic style of prose he shared with many of his colleagues, Peurifoy related that in their six-hour talk,[Arbenz] began by saying problem here is one between United Fruit Company and his government. He spoke at length and bitterly on Fruit Company's history since 1904, complaining especially that now his government has a $70 million budget to meet and collects only $150,000 in taxes. . . . I interrupted here to say I thought we should put first things first, that as long as the Communists exerted their present influence in Guatemalan government I did not see real hope of better relations. . . . I came away definitely convinced that if President is not a Communist he will surely do until one comes along and that normal approaches will not work in Guatemala.[1]These words contain the seeds of discord that led Peurifoy's superiors, barely half a year later, to overthrow Arbenz.The contention between the two governments, in which foreign capital acted as an intermediary, has been characterized as a polarity. Apologists for United States intervention have justified overthrowing Arbenz on the basis that his government was riddled with Communists enjoying international ties, and that the presence of the United Fruit Company (UFCO) proved benign, if not beneficial. Historians sympathetic to Arbenz or outright Guatemalan nationalists have argued that, on the contrary, United States officials exaggerated the limited influence of Communists in order to legitimate their real goal, maintaining and reinforcing exploitation of Guatemala.[2]
Peurifoy's aphorism, "first things first," reveals a more complex dynamic. By juxtapos-ing the Cold War ideology of United States politicians in the early 1950s with the economic relationship of foreign capital to Guatemala as seen in a dependency framework, it can be shown how both countries engaged in an ominous dialogue of the deaf.[3] To most Guatemalans the problem was economic, but to Americans it was political, and the evidence shows little sign of hypocrisy-on either side. The logic of United States priorities, however, implies "second things second." Peurifoy and many other United States diplomats before and after him admitted that Guatemala suffered from a dependence on the United States, and that the Guatemalan economy needed to be restored to a state propitious for business, if not necessarily to one of autonomy.
This article will argue that the massive aid provided by the United States to Guatemala in the few years following the coup-an aid embodied in five agreements signed between 27 July and 13 December 1954-served mainly as a cosmetic device to conceal that United States-based investors and diplomats never hesitated before reintegrating Guatemala into the world economy as a dependency after Arbenz tried to give it partial independence. Certainly, North American diplomats and businessmen renewed their alliance with a repressive military regime in Guatemala chiefly to dismantle the land reform of Arbenz. An important method of accomplishing this was to pour over $100 million into areas that effected some modernization but mainly spurred a greater dependence by Guatemala on the world economy. Although the will to fight communism permeated United States motives, this was no Marshall Plan. In the first few years following the coup, the capriciousness of world prices showed how economically fragile and politically intractable Guatemala had become.
The five agreements have proved more symbolic than substantive. They contained no specifics about aid, only general principles such as the will for "economic development" or "technical assis-tance." Their timing, however, is telling, in that they were signed almost immediately after the United States had repeated over and over that the problem in Guatemala was rooted in international communism. United States diplomats were in a way admitting that communism itself had roots, roots which could not be dug up in Moscow. More openly, they were admitting that Guatemala needed foreign aid to restore its economy and reopen channels for foreign investment. In short, it was obvious to all that Guatemala was dependent.
Several theories can be called on to explain Guatemala's dependence, the main one being the place of "tropical" countries in the world economy. André Gunder Frank argues that an accumulation of capital in favor of the export of raw materials predisposes countries with tropical climates toward the "development of underdevelopment." In this case, the first result is that investment usually comes from foreigners primarily interested in extracting resources from the host country and exporting them to their own, where value is added through transformation. Like most countries, those fitting the tropical pattern are helpless to influence world prices, so whether those prices rise, fall, or remain steady, their governments find themselves unable to diversify or modernize production. A temporary surplus or favorable terms of trade, therefore, can conceal potential overnight inversions in the balance of trade. A second result is that because a tropical country is unable to accumulate enough capital to "take-off" into industrialization, it falls into a peripheral-but necessary-role in the international division of labor. As E. J. Hobsbawm and Gunder Frank explain, since Western European and North American countries already possess industrial capacities and large enough markets, the only role left to countries integrated later into the world economy is to provide low-wage agricultural or manufacturing labor.[4] Arbenz's will to develop Guatemala challenged this system.
Guatemala also presented an acute case of cultural divide reinforced by imperialism. In the last few centuries, says John Isbister with slight exaggeration, Europeans "stole ways of thinking from Third World people and replaced them with their own." He is correct, however, in explaining how foreign capital developed ties with an elite bourgeoisie, often creoles, who became merchants, learned the proper European language of commerce, and often took over political as well as military functions. In Latin America, adds Gunder Frank, local creoles, despite having fought for independence in the early nineteenth century, were comfortable with the privileges that accompanied the role of intermediary.[5] In Guatemala, the economy exacerbated differences in living standards between the Indians who were largely non-Spanish speaking, rural, and agricultural, and the ladinos (mestizos) and whites who spoke Spanish, lived in cities, and worked in a more modern setting. In this situation, formal political and military imperialism would have seemed superfluous.
Therefore, understanding why the United States in the end deemed it necessary to intervene calls for a political theory of dependency, one that explains how foreign capital reacts when it is forced to divide its loyalty between two states. Chris Harman argues that the state still matters greatly to "productive" capital since it protects investments, promotes free trade, assures access to resources, controls labor, and sanctifies private property, generally "provid[ing] conditions which will encourage capital accumulation." In such a system, government officials often develop close ties with business leaders and depend on them for revenue. In Guatemala, it was the United States government that provided these services, and as long as the Guatemalan government played a minimal role as "nightwatchman," dependency developed smoothly. Arbenz's government, however, took over productive capital and redistributed it. Harman notes the inevitable defeat of "capitals that temporarily escape from the control of national states or . . . national states that temporarily act against the interests of nationally based capitals." The United Fruit Company, the main target of Arbenz's reform, chose to remain loyal to the United States government and called on it to provide "military might as a last resort protector of interests."[6]
Moreover, the larger context of the Cold War helps to explain the zeal of United States diplomats in collaborating so openly with UFCO. Arbenz had the misfortune of being elected just as the insecurity of the confrontation with communism on an international scale climaxed into a McCarthyism that ignored nuances along the socialist-communist axis, resulting in zero tolerance for any antagonism expressed against capitalism, at home or abroad. As a consequence for the United States government, which enjoyed ties to much of Guatemala's capital, dependency could be an issue, but a secondary one. The Eisenhower Administration would have overthrown Arbenz simply on the grounds of avoiding even the appearance of a socialist regime within its sphere of influence. But both countries did recognize a relationship of dependency, and the story of how these economic, cultural, and political links were renewed by United States capital begins with the dictatorship of Jorge Ubico.
Although Ubico's rule from 1931 to 1944 was certainly a de facto dictatorship, Ubico enacted policies liberal enough to ensure the sanctity of foreign capital and to avoid raising eyebrows north of the Rio Grande. In many ways, he was the type of dictator for which Franklin Roosevelt and his "good neighbor" policy settled in the 1930s: politically oppressive but economically stable and willing to modernize. Backed by the military and by multinational corporations, Ubico also tried to win the support of Indians in Guatemala by canceling their debts and repealing debt peonage. He prevented inflation, created a surplus, paid debts, and built roads, bus lines, and sewers.[7] He tightened government with the Law of Probity, an audit on his subordinates, and tried to weaken the ladino governing class by centralizing power via the intendente system, whereby all local government administrators came to be directly appointed by, and accountable to, Ubico himself.[8]
True to his primary loyalties, however, Ubico made certain that foreign and domestic landowning capital could operate cheaply and peacefully in his country. Evocative of colonial repartimiento practices, vagrancy laws compelled all males to work a minimum of 150 days per year, with two additional weeks of free labor. Ubico also enforced censorship and outlawed political parties and labor unions. The Ley Fuga even gave plantation owners the right to torture or execute laborers.[9]
The United Fruit Company, meanwhile, benefited from Ubico's cooperation. Back in 1930, UFCO had signed a contract expiring in 1937 in which it promised to build a port on Guatemala's Pacific coast. With Ubico in power, the contract was annulled by a new 1935 extension of land concessions to UFCO. In a particularly glaring instance of the mingling of state and capital, John Foster Dulles, while senior partner at the New York law firm of Sullivan and Cromwell and holder of UFCO stock, drafted both the 1930 and 1935 contracts. Dulles later became secretary of state in the Eisenhower Administration, which oversaw the coup against Arbenz.[10] To Dulles, prior connections to the fruit company were not hypocritical. He firmly believed that the purpose of his government was to promote and protect United States property abroad, no matter who benefited (or suffered). UFCO's growing power in Guatemala was therefore no accident. Under the terms of the 1935 Agreement, the company continued to export unlimited quantities of bananas duty free, and acquired control of the ports, the railroads, and a sizable land and water concession.[11] Vertical and horizontal integration continued after the 1935 Agreement. The following year, UFCO acquired 42.68 percent of International Railways of Central America (IRCA), and by the end of Ubico's rule had controlling or substantial interests also in the Companía Agrícola de Guatemala (CAG), the Tropical Radio Telegraph Company, and the Great White Fleet. Two other American multinationals, W.R. Grace and Empresa Eléctrica de Guatemala, S.A., a subsidiary of American Foreign Power Company, respectively controlled much of the coffee plantation land and electric power in Guatemala.[12] The United States reinforced its authority when Guatemala canceled trade agreements with Germany, Great Britain, and Italy. Germany, however, remained the most influential outside force between 1918 and 1936. As late as 1940, five thousand Germans still lived in Guatemala and owned 109 coffee plantations (during World War II, however, their lands were confiscated).[13]
Many have argued that UFCO's presence was not entirely exploitative. Richard LaBarge's findings, shown in Table 1, indicate the ambivalent policies of UFCO before the overthrow of Arbenz. On one hand, the company consistently took care of its workers by offering them substantial health facilities and services. On the other, it imitated the United States government (or vice versa) by reducing investment as soon as Arbenz came to power, thereby undermining the regime's credibility in the world economy. In the same period, UFCO also paid an average of nearly $100,000 per year for fifty-one schools to educate almost three thousand pupils. LaBarge argues that, notably, UFCO had not enough of a monopoly to change the price of bananas in the United States. A 1952 National Intelligence Estimate also praised the company while observing its power. While its wages and benefits were "superior to any others in the country," the report noted, UFCO held a "virtual monopoly of Guatemalan overseas shipping. It owns and leases large tracts of land in Guatemala and is second only to the [Guatemalan] government as an employer of Guatemalan labor." UFCO, "dominat[ing] Guatemalan banana production," was becoming a state within a state, a position it would exploit in time of need.[14]
ASCII tables rather than HTML 3 tables have been used throughout this document to accomodate text-only browsers. _______________________________________________________ Table 1. Selected UFCO Expenses in Guatemala (in Quetzales: Q1 = US$1) _______________________________________________________ Year Gross New Hospital Public Health Investment Expenses Investment _______________________________________________________ 1945 2,333,487.71 1946 3,676,087.13 353,138.37 117,836.05 1947 3,377,487.92 551,257.48 171,701.73 1948 3,584,240.84 597,382.67 208,160.71 1949 1,711,723.02 652,676.17 241,730.58 1950 2,072,942.50 657,915.90 197,306.59 1951 485,754.96 718,192.12 213,273.67 1952 295,687.66 742,777.10 219,375.21 1953 366,619.72 744,320.97 193,780.45 1954 119,175.61 815,132.17 181,942.70 _______________________________________________________Source: Richard Allen LaBarge, "Impact of the United Fruit Company on the Economic Development of Guatemala, 1946-1954," in Wayne M. Clegern, Richard Allen LaBarge, and Oriol Pi-Sunyer, Studies in Middle American Economics (New Orleans: Middle American Research Institute, 1968), 30, 3.
The need did not arise, even as criticism of Ubico mounted. The dictator intended to retire, as the United States had asked him to, when students at the University of San Carlos called a strike in 1944. Joined by army officers, the strike spread throughout the country, forcing Ubico's replacement by Juan Frederico Ponce, whose dismal record of one thousand deaths while in office ended when he in turn resigned on 20 October 1944.[15]What Guatemalans call the October Revolution began the moment Juan José Arévalo garnered eighty-five percent of votes in what has been described as "probably the most democratic elections ever held in Guatemala."[16] Arévalo ran on a platform that presaged mild reforms. An intellectual long expatriated, he came back to preach "spiritual socialism," an attempt to restore the dignity of the individual over materialism. Surviving thirty-two attempted coups d'état, Arévalo drew up a new constitution in 1945 and implemented much of the groundwork for Arbenz's later, bolder edifice.[17] First, the Literacy Law of March 1945 aimed to increase the number of Indian males required to vote. In addition, Arévalo abolished the Ley Fuga and assured minimal rights for urban and rural labor through the Labor Code of 1947. Attracting further hostility from landowners was the growing activism of the Confederación General de Trabajadores (CGT), the future hobgoblin of the United States. Having done much of the research for later land reform, the Arévalo government acquiesced to labor demands in enacting Decree 529, or the Law of Expropriation, in July 1948. Based on taxes, the law expropriated lands with compensation. Decree 712, or the Law of Forced Rentals, in turn reduced profits for landowners and increased the amount of cultivated land. Fincas Nacionales sprang up in the countryside: state-owned farms and plantations, they were mostly German lands confiscated during the war. Soon the Fincas were employing 21,278 to 29,925 people on 110 coffee plantations and producing twenty percent of the nation's coffee crop. Although "the governmental leadership was pragmatically cognizant that economic independence was a utopian ideal," as Aybar de Soto says, landowners foresaw in Arévalo's social security and expropriation laws an abolition of private property. They feared a class war.[18] However, for lack of a sweeping reform, and because the international political climate in the late forties was not yet rabidly anti-Communist, the United States expressed little concern for the changes obtaining under Arévalo.
Under the nationalist administration of Jacobo Arbenz, however, the stakes were raised in defiance of Guatemala's political and economic dependency status. Running as a reformer for his country, Arbenz won sixty-five percent of the popular vote to become president in 1951. Up to this time, agrarian reform had been a recurring promise in Guatemalan electoral rituals-swiftly made and invariably broken. But Arbenz vowed he would keep the promise, because he believed the government needed economic control to match its legal authority. Moreover, Article 91 of the 1945 Constitution prohibited latifundios (large estates) in the belief that property should serve a social purpose.[19] Recognizing such idealism, Arbenz stated clearly capitalistic goals in his inaugural address. He wanted, he said,
to transform Guatemala from a dependent nation with a semi-colonial economy into a country that is economically independent; to transform Guatemala from a backward country with a semi-feudal economy into a modern capitalist country; to proceed in a way that will ensure the greatest possible improvement in the standard of living of the great masses of our people.[20]Nevertheless, while he sincerely called for a strong capitalist Guatemala, Arbenz grew convinced that one day communism would come. For now he simply asserted, "I grant great importance to economic policy, but only as a means to achieve our social goals."[21]The issue of communism was a dilemma: Arbenz could not proceed without cooperating with Communists, but his flirts with them would inevitably clash with United States ideology. On one hand, the president was personally interested in the promise of communism. Three of his closest friends and advisers were from the Partido Guatemalteco de Trabajadores (PGT), newly formed out of the CGT labor union. From them and from his wife Arbenz learned the basics of Marxism, but especially the importance of land reform. The government did make strategic diplomatic mistakes: it honored Stalin following his death in 1953, the only country in the Americas to do so, and sent letters of solidarity to North Korea during the war. A United States government report in 1970 concluded that "by 1950 all the major unions were completely dominated by Communists."[22]
There is no clear evidence, however, that Guatemala enjoyed any ties with international communism, the accusation that formed the rhetorical basis of the 1954 intervention. The PGT, by far the most ardently Communist entity in the country, was isolated, regardless of its direct access to Arbenz. The military for its part remained fiercely anti-Communist, and Guatemala had not taken part in the Caribbean Legion, a socialistic gathering of Latin American nations. A single Soviet citizen visited the country during Arbenz's tenure. He wanted to buy bananas, and when it availed that Guatemala had no vessels to ship them, he went home.[23]
Nevertheless, the United States stoked its own diplomatic fires upon hearing of such rumors. Despite assessing in 1952 that the PGT "has no more than 500 members," the State Department declared, "it is in open communication with international communism."[24] In May 1953 the number had climbed to "no more than 1,000 members," in addition to four out of fifty-six seats in Congress and international links through trade unions. In August, only "a few hundred" militant Communists were supposedly left, but in April 1954, two months before the coup, a senior official wrote that "[PGT] Party membership is now estimated at between 2,000 and 3,000."[25] To an extent, diplomats recognized the pressures on Arbenz. Toward the end of the Truman Administration, Secretary of State Dean Acheson commented that Guatemala's Ambassador to the United States, Guillermo Toriello, was himself very much opposed to communism, and that the Guatemalan government "was not approaching the Communist question from the point of view of suppression because that would easily lead to dictatorship."[26] By the time Eisenhower and Secretary Dulles took over, however, a State Department memorandum emerged with a different tone: "The Secretary [Dulles] said that we must realize that it will be impossible to produce evidence clearly tying the Guatemalan Government to Moscow; that the decision must be a political one and based on our conviction that such a tie must exist" (emphasis mine).[27]
The conviction of Arbenz, meanwhile, was that agrarian reform had to go through. While his non-Communist friends proved quarrelsome and indecisive, he found that only the Communists showed "honesty and discipline."[28] And they, at least, had a plan.
It was a costly plan, politically and economically, but one that would redistribute land to hundreds of thousands and even garner international recognition. Passed unanimously by the Guatemalan Congress on 17 June 1952 (ironically, exactly two years and one day before the invasion), Decree 900, as it was known, planned to redistribute only lands categorized as fallow, unimproved, or leased, as well as Fincas Nacionales. Decree 900 enlisted the cooperation of two banking institutions to approve almost $12 million in loans and disburse $9 million from March 1953 to June 1954. Each of the 53,829 applicants thus received an average of $220, compared to a per capita annual income in 1950 of $137, or $89 in the countryside.[29] The total number of recipients varies depending on historians, from 54,000 to half a million (Table 2 presents a moderate accounting).[30]
______________________________________________________________________ Table 2. Distribution of Public and Private Lands Under the Provisions of Decree 900 ______________________________________________________________________ Nature of Number Division of Property Recipients Ownership of Farms According to Title Granted (in Manzanas) ______________________________________________________________________ Private 1,287 628,845 LO** Property 238,506 FO*** 100,225 State Lands 23 14,872 LO 2,694 State Farms 245 177,681 LO 35,148 Parcels 142 106,685 LO 16,824 Cooperatives 41 25,527 LO 6,398 Municipal 62 45,469 LO 11,926 Total 1,555 1,059,904 138,067 _______________________________________________________________________Source: José M. Aybar de Soto, Dependency and Intervention: The Case of Guatemala in 1954 (Boulder, CO: Westview Press, 1978), 181.*1 manzana = 1.75 acres
**LO: Lifetime ownership
***FO: Full ownership
According to Piero Gleijeses, perhaps the most diligent of students of the agrarian reform, most loans were repaid rapidly, and production decreased much less than in usual cases of reform. Arbenz made his only illegal move when he impeached judges on the Supreme Court who declared the reform unconstitutional. However, Arbenz also tried to modernize the country with public works, and with a fair amount of luck in sustaining a high price for coffee, the nation's largest export, the all-around success of reform policies was confirmed by the backing of United Nations General Assembly Resolution 401.[31]To be sure, Arbenz encountered the strongest resistance from UFCO officials, who immediately understood that the president was out to break their control of productive capital. Accusations of wastefulness and monopolization were implicit against UFCO for cultivating bananas on less than five percent of its land and for leaving almost three quarters of it fallow, as Table 3 demonstrates.
______________________________________________________________________ Table 3. Distribution of CAG (Companía Agrícola de Guatemala) and UFCO Property According to Use ______________________________________________________________________ Type of Use Area (in manzanas) Percent ______________________________________________________________________ Area for Bananas 13,534.20 4.53 Other Cultivation 19,098.94 6.40 Infrastructure 10,312.05 3.45 Wood 34,809.16 11.65 Fallow Land 220,858.89 73.96 Total 298,613.24 100.00 ______________________________________________________________________Source: José M. Aybar de Soto, Dependency and Intervention: The Case of Guatemala in 1954 (Boulder, CO: Westview Press, 1978), 200.
Although UFCO land did count for more than a quarter of expropriations, Decree 900 only targeted unused land, and offered compensation of $1,185,000 based on UFCO's tax value. UFCO "revised" its figures and demanded $19,355,000, more than sixteen times that amount.[32] Only Arbenz's overthrow settled the controversy. Again, however, the United States government grew concerned that "the [Agrarian] Law has strong political motivation and significance."[33] Convinced by UFCO that Guatemala would serve as an example for other Latin American nations, the Office of Intelligence Research expressed concern that the reform would extend the influence of the Guatemalan government and of the Communists into the countryside.[34]In fact, Arbenz was unfortunate enough to undertake major reform when everyone in the United States was seeing red. The last years of Truman's presidency had been plagued by the "loss" of China, the Soviet development of the atomic bomb, and the outbreak of the Korean War, which signaled the globalization of the Cold War. The administration that succeeded Truman's was led by the former supreme commander of the Allied Forces and filled with militant anti-Communists who pursued every McCarthyist accusation with utmost ideological rigor. The links between state and capital were also shortened. Not only could UFCO count of the loyalty of one of its former lawyers, Secretary of State John Foster Dulles, but also on that of Dulles' younger brother Allen, director of the CIA and also a shareholder. A few other friends completed the link from capital to state to military might: General Robert Cutler, head of Eisenhower's National Security Council, was a UFCO director; Thomas G. Corcoran could be found simultaneously on the payroll of the CIA and UFCO; and Spruille Branden, secretary for Latin American affairs, later took a director's seat with the fruit company.[35] When Guatemalan Ambassador to the United States Guillermo Toriello met President Eisenhower in January 1954, he confronted him with the knowledge that the Sullivan and Cromwell law firm was representing UFCO. "The President by this point," notes a State Department memo, "had risen to indicate the interview was ended."[36]
Admitting that Guatemala's role in the Western Hemisphere was "of negligible value," United States diplomats still grew infuriated at the mere possibility of Communist power in Latin America, which prodded them to begin destroying Arbenz's international reputation.[37] Diplomatic opinion never strayed far from the belief that "Guatemala is of special impor-tance to the U.S. primarily for having provided the leading example of Communist penetration in the American Republics." Some comments were aimed more directly at Arbenz, calling him "essentially an opportunist, whose politics are largely a matter of historical accident." "President Arbenz, who is half Swiss," went another memo, "has a granite streak of stubbornness in addition to his volatility and [is] firmly convinced that he can deal with the Communists whenever he has to."[38] The Administration grew visibly alarmed at Arbenz's openings to communism, as it described how
a gigantic May Day celebration was used as a commie display of strength, and the Communist labor leader Gutierrez made a rabid speech . . . . President Arbenz . . . warmly embraced Gutierrez. The Administration . . . ma[de] a prolonged tirade on the "vast international conspiracy against Guatemala".[39]While decrying what it saw as Arbenz's paranoid delusions, the Eisenhower Administration deliberately-and secretly-hindered economic aid to Guatemala. Holding off Ambassador Toriello's demands to finish building the Inter-American Highway, Edward Clark of the Office of Middle American Affairs early in 1952 instructed his colleagues that "our objective should be to see to it that Guatemala obtained as little of this [road building] equipment as possible. We should be careful, however, not to reveal this fact to the Guatemalans." Later in the year, when Guatemala was denied military assistance and F-51 fighter planes, Clark rejoiced: "We were able successfully to block their efforts on technical grounds without having to do so on grounds of political considerations."[40] This reversal of economic aid signaled that the United States was acutely aware of Guatemala's dependence and was using it as a weapon. Clark even remarked that Ambassador Schoenfeld, later replaced by Peurifoy, had told him how their "restrictive policy" toward Guatemalahad been effective so far. The objective had been to bring the Guatemalans to a realization that they were dependent upon the United States and that if they expected assistance or consideration from the U.S. it behooved them to adjust their actions vis-à-vis the U.S. accordingly (emphasis mine).[41]When agrarian reform threatened to break that dependence, UFCO capital marshaled all the resources of its metropolis state against the runaway leaders of its host state.Frustrated by the refusal of the international community to condemn the democratically-elected Guatemalan president's land reform, the United States secured dim but flickering diplomatic green lights in its own hemisphere. First, it entrusted the ambassadorship to John Peurifoy, a man who knew only two words in Spanish, "muchos [sic] gracias," but who would embody the switch in early 1954 from passivity to aggression.[42] More important was John Foster Dulles' success, via the Organization of American States (OAS), in passing the Declaration of Caracas, which affirmed "the inalienable right of each American state to choose freely its own institutions" but condemned "any form of totalitarianism."[43]
Kept in the dark about United States plans, many in international politics were finally convinced that Arbenz had to go when the Swedish ship Alfhelm arrived in May and started unloading thousands of tons of military equipment purchased from inside the Soviet bloc. Arbenz had unwisely gambled that he could smuggle weapons into his own country. He was reacting to the United States' refusal since 1949 to sell weapons to Guatemala, to its 1951 frustration of Guatemal-an attempts to buy elsewhere in the Western Hemisphere, and especially to rumors of a CIA plot to overthrow him.[44] The rumors were true. Even in the State Department, only a few knew about the CIA-coordinated operation "PBSUCCESS" hatched in the late summer of 1953. The invasion was supposed to have occurred in May 1954, but was in fact delayed by the arrival of the Alfhelm. A Honduran strike by banana workers against UFCO further convinced the United States that this was the time to act.[45]
The invasion was over quickly, and the United States covered its tracks successfully. Formerly ousted General Castillo Armas, backed by CIA-recruited pilots bombing Guatemala City from Nicaragua, crossed the border into Guatemala on 18 June with forces from neighboring Honduras and, in a matter of days, overthrew Arbenz and the few followers he had left.[46] On 19 June, the Minister for External Relations of Guatemala sent the United Nations Security Council an alert signal "that open aggression has been perpetrated by the Governments of Honduras and Nicaragua at the instigation of certain foreign monopolies whose interests have been affected by the progressive policy of my Government." The same day, the State Department stated it had "no evidence that indicates that this is anything other than a revolt of Guatemalans against their Government."[47] In spite of the charade, it was clear to all that the invasion infringed upon Guatemala's international rights, according to the United Nations Charter. Nevertheless, with the help of the British government, which abstained from voting in the Security Council on the grounds that it was waiting for an OAS investigation, the United States delayed international condemnation of its acts long enough to force Jacobo Arbenz to resign.[48]
Immediately after the coup against communism, diplomats concurred that what Guatemala needed was an economic boost. Anticipating massive aid, proposals poured in, most having to do with structural improvements that would expand opportunities for foreign capital. In the absence of clear evidence for the destination of the millions of dollars made in grants and loans, historians must reconstruct economic aid partly from these proposals. From August 1954 to March 1955, several areas suddenly became priorities. The United States Embassy recommended opening up channels through the Export-Import Bank and the International Bank for Reconstruction and Development to fund the Roosevelt Hospital and the American School in Guatemala, as well as agriculture, health and sanitation, and the school system, "formerly riddled with Communists."[49] Ambassador Peurifoy was partial to finishing the Highway and revising the contracts of UFCO and IRCA, the UFCO-controlled railway company, "to give greater benefits to government."[50] Some called for $10 million in public works for the unemployed, others for $3 million to uphold the currency and $27 million for the Highway. Transfers of corn, valued at $750,000, were also sent about one year after the coup. John Foster Dulles reported that Castillo Armas even complained of UFCO's refusal to give up Guatemala's principal port and of its denial of aid "in order to improve [the] company's position in contract negotiations."[51] Still others stressed that "the economic assistance being provided makes no direct contribution to winning and maintaining the support of Guatemalan Armed Forces."[52] Emergency relief, military assistance, and new infrastructures for commerce: these would be the cornerstones of United States aid to Guatemala after the coup.
The five agreements signed between 27 July and 13 December 1954 reflected these limited priorities. To reiterate, in and of themselves, these agreements contain little substance. None specifies any amount or any timetable for the transfer of funds or supplies. But taken together, they illustrate that the United States recognized an economic crisis in Guatemala, moved to correct it to avoid further communism, but ultimately failed to address the problem of dependency. The first agreement concerned the transfer of military equipment, for which Guatemala had to pay. The second assured the completion of the Inter-American Highway, without tolls or taxes, as long as Guatemala paid for at least one-third. The United States promised in the third agreement to provide technicians and specialists, exempt from income and social security taxes. The fourth was a formality, facilitating visas for Guatemalans and Americans visiting the other country. And the fifth was a more general agreement on "development assistance," to address Guatemala's "urgent need for extraordinary economic assistance," a need to be determined by the United States.[53] Cold War logic had been followed: because, "first things first," the problem of communism had been eradicated, other, "lesser" concerns could now be addressed, but only on the terms of the state that was providing aid.
Under such circumstances, aid was massive but became largely a matter of appearance, as investors were mainly interested in further integrating Guatemala as a tropical producer in a world economy by now largely dominated by the United States. United States diplomats elaborated no monolithic, coherent policy toward Guatemala during the late 1950s, but when the evidence is pieced together, certain patterns of thought become apparent. One pattern was the recognition of an economic cause for the success of communism in Guatemala and an awareness that aid would hopefully contribute to its downfall and its prevention. In 1952, security officials warned that "any deterioration in the economic and political situations would tend to increase the [Arbenz] Administration's dependence on and favor toward organized labor, with a consequent increase in Communist influence." Merely one year after the coup, however, the minimal influence of communism was revealed when the same officials concluded that "Communist and Arbencista subversive activity-both domestic and foreign-has not been a serious threat to the Castillo government."[54] Indeed, aid continued after 1955 because anti-communism was only part of the motivation. A top secret National Security Council document in the summer of 1954 stated three objectives: protecting United States access to raw materials, stopping communism and other anti-United States subversion, and promoting an export-oriented capitalism. Gordon Bowen, in an article generally sympathetic to these aims, concluded that "extensive U.S. support" from 1954 to 1963, which he correctly estimated at around $90 million, "did not stabilize the situation."[55]
Actual stabilization, however dear to the United States, was less important than the appearance of it. Another State Department memo is worth quoting at length to show how cynical planning for economic assistance could be:
The amount of the aid, whether it is $10 million or $500 million is not as important as showing the poor people that the United States is helping Guatemala, if the Indian population is to comprehend the difference between the Soviet [Union] (which gave not a ruble) and the United States (which has contributed millions). . . . An example of this aid visible to the people would be six ambulances for the Social Security hospitals, marked as a gift from the United States to the Guatemalan people and placed in towns such as Esquintla where there was Communist strength. The opening of the stretch of the Inter-American Highway (even though built entirely by Guatemala) with a ceremony attended by Senator Spessard Holland and a group of Senators and Congressmen, is the kind of public demonstration of cooperation needed to show how much the United States is doing for Guatemala.[56]This statement also reveals diplomats' understanding of how the gap between rich and poor was by this time equal to that between ladinos and Indians. However, while Indians were to witness parades of assistance without much substance, the bulk of the aid was funneled generally into more modern, urban areas.Although the United States acknowledged dependence and its effect on politics, aid between 1955 and 1957 only attempted to modernize Guatemala if it served the interests of foreign capital. First, it must be admitted, the amounts were generous. Table 4 indicates the dramatic increase in authorized aid, as well as the maintenance of substantial assistance above $10 million per year, after the spurt of 1955 to 1958 during which Guatemala received about $100 million.
____________________________________________________________________ Table 4. Authorized U.S. Assistance to Guatemala, 1946-1965 (in Millions U.S.) _____________________________________________________________________ Year Economic Military Total Nominal/Deflated Nominal/Deflated Nominal/Deflated _____________________________________________________________________ 1948 1.7/2.3 0.0/0.0 1.7/ 2.3 1949 2.9/4.2 0.0/0.0 2.9/ 4.2 1950 1.7/2.5 0.0/0.0 1.7/ 2.5 1951 0.7/0.9 0.0/0.0 0.7/ 0.9 1952 1.1/1.4 0.0/0.0 1.1/ 1.4 1953 0.2/0.3 0.0/0.0 0.2/ 0.3 1954 0.2/0.3 0.0/0.0 0.2/ 0.3 1955 10.1/13.2 0.0/0.0 10.1/13.2 1956 34.4/43.0 0.0/0.0 34.4/43.0 1957 19.1/23.2 0.0/0.0 19.1/23.2 1958 17.5/21.5 0.0/0.0 17.5/21.5 1959 11.8/14.5 0.1/0.1 11.9/14.6 1960 11.9/14.5 0.2/0.2 12.1/14.8 1961 31.9/38.2 0.4/0.5 32.3/38.7 1962 9.3/11.2 1.3/1.6 10.6/12.8 1963 13.1/15.8 2.6/3.1 15.7/18.9 1964 13.7/16.3 1.4/1.7 15.1/18.0 1965 12.9/14.9 1.5/1.7 14.4/16.7 _____________________________________________________________________Source: James Wilkie, ed. Statistical Abstract of Latin America, vol. 30, part 1, 540.
Most analysts have also estimated from $80 to $90 million in aid in the years following the coup, some even noting that Guatemala received more than any other Central American country.[57] In grants and credits, however, the aid was dwarfed by that received by faraway countries like Morocco, Jordan, even Laos.[58] More important, however, is that the funds did not aid the "poor people" to whom diplomats tried to project an altruistic image. For instance, "the bulk" of the aid in 1955, wrote the State Department, "has been devoted to the road-building program." Rather than "roads," these were highways to be used by export industries to transport goods for shipping at ports. One of these, of course, was the Inter-American Highway; another the Pacific Slope Highway, completed at a cost of $3 million. Twenty million dollars were further earmarked for the 193-mile Atlantic Highway, whose completion was in fact delayed by the overthrow of Arbenz. The Atlantic would lead to the Port of San Tomás, which a subsidiary of the Morrison-Knudsen Company of San Francisco had contracted to build. Even Westinghouse had secured a contract for a hydroelectric plant.[59] Diplomats clearly did not see a contradiction between giving or lending with one hand and allowing foreign capital to exploit resources in a tropical country with the other. "Although over-dependence on coffee remains a basic weakness of the economy," said one in 1957 without a hint of irony, "diversification of agricultural production, establishment of new industries, mounting production of lead and zinc mines, and above all, the fact that 22 companies, mostly American, have been authorized to explore for petroleum, are optimistic signs for the future."[60] No one noted the significant fact that Arbenz would have allowed much of this aid, even this investment, to develop his vision of a capitalist country.
_________________________________________________________ Table 5. Comparison Between the Agrarian Reforms of 1952-1954 and 1955-1958* _________________________________________________________ Factors 1952-1954 1955-1958 _________________________________________________________ Hectares distributed 584,558 111,531 Number of beneficiaries 54,000 17,466 Average distributed per capita 10.8 6.4 _________________________________________________________* Up to 30 June 1958Source: Mario Monteforte Toledo, Guatemala. Monografía sociológica (México: Universidad Nacional Autónoma de México, 1959), 443.
The self-congratulatory effervescence of aid evaluations obscured the reality that Arbenz's true intention, to break dependence through land reform, had been obliterated. Although Table 5 shows that the second land reform of 1955-58 brought a sharp decrease in land distribution to about one-fifth of Arbencista ambitions, its results contradict even lower figures arrived at by historians. Stephen Schlesinger and Stephen Kinzer, for example, state that Castillo Armas drove out all but 1.5 percent of peasants who received plots under Arbenz's reform, "abruptly reversing the industrialization and land reform policies." Piero Gleijeses adds that by 1957, when Castillo Armas died, all but two hundred recipients had been chased off their land, setting the stage for "a land tenure that is the most skewed in Latin America, a fiscal system that is among the most regressive in the hemisphere, [and] a labor force that suffers from illiteracy, malnutrition, and ill health."[61] As a consequence, while in 1950 small farms made up eighty-eight percent of farms and occupied fourteen percent of the land, in 1964, with the same proportion, they now covered nineteen percent of lands, an insignificant increase. More revealing is that eighty-nine percent of the new agricultural population in the same period was unemployed.[62]Macroeconomic indicators also can reveal how United States assistance, despite steady growth and industrialization in Guatemala, did not address the issue of dependency. To be sure, Guatemala as whole showed signs of following what Carol Smith calls "a general global trend, that toward diversification of capitalist enterprise and import substitution industrialization, following World War II."[63] Most sources indicate an increase in the rate of growth of real gross domestic product from two or three percent in Arbenz's administration, to nine percent in 1956 when aid poured in, and to a subsequent leveling at around four percent for the rest of the 1950s. This parallels a rate of growth for developing countries of 4.6 percent from 1955 to 1960.[64] The branches of economic activity in Table 6 show almost no variation in proportions, indicating that, while all sectors of the economy grew, industrialization was not changing Guatemala's main function in the international economy as a provider of agricultural goods.
________________________________________________________ Table 6. Selected Branches of Activity (in Percentage of GDP) ________________________________________________________ Year Agriculture Manufacturing Construction Commerce ________________________________________________________ 1950 33 12 3 27 1954 32 12 2 27 1958 29 13 3 27 1962 30 13 2 26 _________________________________________________________Source: Guatemala. Situación del desarollo económico y social de Guatemala (Diagnóstico general). Secretaria general del Consejo nacional de planificación económica, Guatemala, junio de 1965, cuadro no. 8.
Meanwhile, financial indicators, perhaps more sensitive to monetary inflow of aid, show a sudden burst of activity limited to the few years following the coup. Gross fixed capital formation jumped from $60 million in 1954 to $150 million in 1957, only to taper off at about $110 million by the end of the fifties. Reserves of hard currency also reflected the new aid, climbing from $45 million in 1954 to $153 million in 1957, and back to a low of $70 million in 1962. Inflation barely budged, mainly because the quetzal was pegged to the United States dollar until 1971. Perhaps most important, as Table 7 shows, foreign assets enjoyed the same temporary boost, from $40 million in 1954 to $75 million three years later, down to a low of $47 million in 1962.[65]
_____________________________________________________ Table 7. Foreign Assets and Liabilities, Bank of Guatemala 1950-1965 (in Millions Quetzales) _____________________________________________________ Year Foreign Assets Foreign Liabilities _____________________________________________________ 1950 38.6 0.5 1951 41.1 0.7 1952 44.4 0.3 1953 42.5 0.2 1954 40.0 0.2 1955 55.6 0.2 1956 71.2 0.6 1957 75.1 2.9 1958 49.1 1.3 1959 44.0 2.5 1960 54.7 5.6 1961 56.4 10.3 1962 47.1 10.3 1963 60.6 12.0 1964 61.7 15.8 1965 70.1 25.1 ______________________________________________________Source: International Monetary Fund, International Financial Statistics, 1979 Yearbook, 202-3.
Added to what is known about United States aid going to finance emergency relief and structural improvements for further export, these figures show that aid from 1955 to 1958 did not translate into long-lasting changes in the modernization of Guatemala. The balloon-like pattern of growth might indicate that investors quickly became aware that, beyond building roads and ports, there was not much potential for industrialization in a tropical country. In fact, enemies of UFCO felt some sort of vindication when the company was sued under antitrust laws by the Justice Department of the United States and in 1958 surrendered some of its trade to locals. Later, another suit forced UFCO to give up its ownership of IRCA, the railroad company. And in 1972, UFCO sold its remaining holdings to Del Monte, ending its own reign in Guatemala but leaving almost intact the control of Guatemalan bananas by foreign capital.[66]
__________________________________________________________ Table 8. Unit Value of Exports, 1950-1965 (1975=100) __________________________________________________________ Year Coffee Coffee Cotton Sugar Fresh Meat Bananas (Whsl Price) __________________________________________________________ 1950 80 82 1951 97 80 1952 97 88 1953 100 95 1954 118 90 93 1955 106 90 88 1956 122 82 84 1957 110 80 24 78 1958 90 72 21 79 1959 76 69 18 30 77 1960 81 47 65 19 27 64 1961 72 44 73 22 53 62 1962 69 43 73 15 57 79 1963 65 46 69 23 53 66 1964 77 60 67 27 56 69 1965 80 57 69 23 57 71 __________________________________________________________Source: International Monetary Fund, International Financial Statistics, 1979 Yearbook, 202-3.
"As long as coffee prices hold up," estimated the State Department one year before the coup, "the general economy of Guatemala will not be vitally affected."[67] Indeed, what did change drastically after 1954 was the balance of trade, due not to events in Guatemala, but to Guatemala's dependence on the international market-which certainly did depend on events at home. Arbenz had relied on strong coffee prices and owed much of the success of his land reform to customs revenues. But, like United States diplomats, Arbenz knew that knocking on proverbial wood could not last forever, that the most dangerous aspect of Guatemala's dependency was its reliance on an uncontrollable, unpredictable world price for its exports. "Since the major direct tax is on business profits," the State Department wrote in 1957, looking back on the previous two years, "and since domestic prosperity depends mainly on the coffee trade, a drop in coffee prices has a multiple deteriorating effect on government revenue."[68] Coffee prices happened to dive just as Arbenz was being overthrown. As Table 8 demonstrates, with 1953 meeting the base price of 100, coffee was sold at 118 in 1954 but plummeted to 106 one year later, and to less than one hundred by 1959, to remain around there for the remainder of the sixties. Tables 8 and 9 also indicate how the drop in prices of a single export, added to a massive increase in imports, transformed Guatemala's balance from black to red. One can also see that an effort was made to diversify the narrow options in agricultural export crops by adding cotton, fresh meat, and sugar. The balance of trade did not recover until 1966, however, and more frequently than not stayed negative. Even in 1970, agricultural products still made up ninety percent of all exports, and ninety percent of those in turn were coffee, cotton, sugar, bananas, and beef.[69]
___________________________________________________________________________
Table 9. Exports and Imports, 1950-1965
(in Millions Quetzales)
___________________________________________________________________________
Year Exports Coffee Cotton Fresh Meat Bananas Sugar Imports Balance
___________________________________________________________________________
1950 78.9 52.8 19.0 71.2 7.7
1951 84.3 58.5 14.2 80.9 7.4
1952 94.7 71.6 12.0 75.7 19.0
1953 99.5 68.2 23.1 79.5 20.0
1954 104.8 74.2 3.7 20.3 86.3 18.5
1955 106.3 75.5 4.5 17.0 104.3 2.0
1956 122.0 91.9 5.0 15.0 137.7 (15.7)
1957 113.9 82.2 4.2 14.5 0.2 134.2 (20.3)
1958 107.0 77.7 5.4 13.1 132.9 (25.9)
1959 106.9 78.3 4.1 14.8 0.1 117.9 (11.0)
1960 116.5 82.6 5.8 0.2 17.3 0.1 121.2 (4.7)
1961 112.7 71.2 10.2 0.8 13.9 0.9 120.6 (8.1)
1962 112.5 69.3 15.5 3.8 9.5 3.0 119.9 (7.4)
1963 154.0 78.1 24.7 4.4 11.6 6.1 171.1 (17.1)
1964 167.0 72.3 32.1 3.7 9.4 8.5 202.1 (35.1)
1965 186.9 91.7 34.4 4.6 3.5 4.2 229.3 (42.4)
___________________________________________________________________________
Source: International Monetary Fund, International Financial Statistics, 1979 Yearbook, 202-3.
But aggregate figures cannot convey the discrepancy between country and city, between ladinos and Indians, between Spanish-speakers and non-Spanish speakers that resulted from cultural imperialism. The continuity in the polarity between these two groups, each of which comprise about half of Guatemala's population to this day, was evident in almost every quality-of-life indicator. Housing in 1965, for example, was found to be substandard by the National Housing Institute at a rate of fifty-five percent in urban areas and eighty percent in the countryside. In 1964, ninety-two percent of these rural dwellings had no access to piped water. Contributing to this backwardness was another great disparity, this one in health, evidenced in Table 10.
______________________________________________________________ Table 10. Health Indicators, Guatemala ______________________________________________________________ Indicator Urban* Rural** Total ______________________________________________________________ Doctors per population* 1:1065 1:120000 1:5365 Clean drinking water (%) 71 12 -- Latrines (%) 44 2 -- ______________________________________________________________*Urban: Department of Guatemala
**Rural: Department of Quiché.Source: Guatemala. Situación del desarollo económico y social de Guatemala (Diagnóstico general). Secretaria general del Consejo nacional de planificación económica, Guatemala, junio de 1965, 101-2.
Education in the 1960s also became a matter of concern, in a country that was supposedly undergoing a process of industrialization. Rates of school absenteeism among seven- to eighteen-year-olds hovered at seventy-four percent nationally and eighty-one percent among children of campesinos. Literacy in 1964 was down to sixty-three percent from seventy-two percent in 1950. Finally, death was still a large part of life in Guatemala, as life expectancy in 1960 stood at forty-three to forty-seven years, and the rate of death among Latin American countries from 1960 to 1965 was higher only in Haiti and Bolivia.[70]Death, in fact, to many opponents of brutal military regimes, has been the most important consequence of the overthrow of 1954. Just as an economic analysis must take account of the politics of Cold War dependency, so it must at least survey the human damage done by Castillo Armas and his successors, who have, unhindered by the United States, tortured and killed their opponents or those of foreign capital in what has been called "the worst blood bath in the hemisphere."[71] The tens of thousands who died, whether fighting Castillo Armas in the fifties or the Coca-Cola Bottling Company in the eighties, understood better than anyone that stability did not equal democracy. In the fifties, the United States for the first time helped organize Guatemalan armed forces to withstand further assaults on its legitimacy. Between 1954 and 1963, writes Gordon Bowen, "forces and doctrine were standardized on U.S. lines; officer and NCO [non-commissioned officer] training was expanded; and sales of U.S. armaments were made easier." Also, a National Committee of Defense Against Communism put 72,000 suspects on file.[72] It seems, therefore, that military suppression of opposition was a necessary element in the maintenance of loyalties, whether economic or political, to the international system led by the United States.
Theonio dos Santos defines dependency broadly as "a conditioning situation that undermines the limits and possibilities for human action and conduct." In this light, dependency can be political as well as economic. The United States and UFCO overthrew Arbenz because Guatemala was dependent on the outside world, namely the United States, for its economic as well as its political orientation. On one hand, these dependencies can be separated. "They would have overthrown us even if we had grown no bananas," said José Manuel Fortuny, Communist Party leader close to Arbenz, almost forty years after the coup. Fortuny understood that fear of Communist infiltration in Latin America alone, even fear of mere rumors, would have pushed the Eisenhower Administration to overthrow his friend.[73] On the other hand, Guatemalans did grow bananas, and they grew bananas long before communism grew in Tsarist Russia. Moreover, workers in Guatemala and diplomats in Washington understood that communism sprang from discontent due to dependency more than from Soviet influence. In this sense, communism was not the "first thing" the United States should have aimed to eradicate with its aid. Guatemala's role in the world economy was the underlying cause of discord, and United States diplomats made sure it stayed that way. Today, at the end of the Cold War, Guatemala is still ruled by a military regime in which elections are sparse and spurious. Its population is still divided along ethnic lines. And Guatemala is still a poor, tropical neighbor that attracts attention only when the blood of its workers is shed. In 1980, after surveying the legacy of resistance and repression resulting from the 1954 coup, a United States official said, "What we'd give to have an Arbenz now."[74]
Endnotes
1 "The Ambassador in Guatemala (Peurifoy) to the Department of State," (17 December 1953), in U.S. Government, Foreign Relations of the United States (hereafter cited as FRUS) 1952-1954, vol. 4: 1091, 1093. Return to essay.2 For the former interpretation, see John E. Peurifoy, "Whose Intervention in Guatemala, Whose Conspiracy?" and John Foster Dulles, "The Kremlin Out to Destroy the Inter-American System," in Guatemala in Rebellion: Unfinished History, eds. Jonathan L. Fried, Marvin E. Gettelman, Deborah T. Levenson, and Nancy Peckenham (New York: Grove Press, 1983), 66-76, 77-80; for the latter, see José M. Aybar de Soto, Dependency and Intervention. The Case of Guatemala in 1954 (hereafter cited as Intervention), (Boulder, CO: Westview Press, 1978), and Stephen Schlesinger and Stephen Kinzer, Bitter Fruit: The Untold Story of the American Coup in Guatemala (hereafter cited as Fruit), (Garden City, NY: Doubleday & Company, Inc., 1982). Return to essay.
3 This article uses the word "dependency" to designate a relation of informal imperialism between rich and poor nations. The original use of this word in this context denoted territories which legally lost their sovereignty. At the closing of the Spanish-American War, for example, Cuba, Puerto Rico, and other former colonies became United States dependencies. For a further explanation of the concept and the literature of dependency, see Louis A. Pérez. Jr. "Dependency" in explaining the History of American Foreign Relations, ed. Michael J. Hogan and Thomas G. Patterson (Cambridge: Cambridge University Press, 1991), 99-110. Return to essay.
4 André Gunder Frank, Dependent Accumulation and Underdevelopment (New York: Monthly Review Press, 1979), 2-7, 10-12, 92-139, 164-77; E.J. Hobsbawm, Industry and Empire, From 1750 to the Present Day (New York: Penguin Books, 1969), 134-153. Return to essay.
5 John Isbister, Promises Not Kept: The Betrayal of Social Change in the Third World 2nd ed. (West Hartford, CT: Kumarian Press, 1991), 68-95, quote is from 82. Return to essay.
6 Chris Harman, "The State and Capitalism Today," International Socialism 51 (Exeter, England: BPCC, 1994): 3-54, quotes are from 6, 18, 34. The other two forms of capital are commodity and money capital, which were also supervised by the United States, but with less controversy. Return to essay.
7 John Dombrowski, Elinor C. Betters, Howard Blustein, Lynne E. Cox, and Elery M. Zehner, Area Handbook for Guatemala (hereafter cited as Handbook), (Washington, D.C.: U.S. Government Printing Office, 1970), 31. Return to essay.
8 Ibid., 31; Aybar de Soto, Intervention, 86, 89. Return to essay.
9 Ibid., 89; Dombrowski et al., Handbook, 31. Return to essay.
10 Aybar de Soto, Intervention, 91. Return to essay.
11 Ibid., 95. Return to essay.
12 Richard Allen LaBarge, "Impact of the United Fruit Company on the Economic Development of Guatemala, 1946-1954," in Wayne M. Clegern, Richard Allen LaBarge and Oriol Pi-Sunyer, Studies in Middle American Economics (New Orleans: Middle American Research Institute, 1968),14; Aybar de Soto, Intervention, 197, 198. Return to essay.
13 Ibid., 84, 92, 97. Return to essay.
14 Richard Allen LaBarge, "Impact of the United Fruit Company on the Economic Development of Guatemala, 1946-1954," in Wayne M. Clegern, Richard Allen LaBarge, and Oriol Pi-Sunyer, Studies in Middle American Economics (New Orleans : Middle American Research Institute, 1968), 13, 30; NIE 62: "Present political situation in Guatemala and possible developments during 1952," (11 March 1952), FRUS, 1952-54, vol. 4: 1035. Return to essay.
15 Aybar de Soto, Intervention, 97; Dombrowski et al., Handbook, 32. Return to essay.
16 Aybar de Soto, Intervention, 114. Return to essay.
17 Ibid., 114, 115; Dombrowski et al., Handbook, 32, 33. Return to essay.
18 Aybar de Soto, Intervention, 118-28, quote is from 124; Dombrowski et al., Handbook, 34. Return to essay.
19 Aybar de Soto, Intervention, 144, 145, 166. Return to essay.
20 Quoted in Piero Gleijeses, Shattered Hope: The Guatemalan Revolution and the United States, 1944-1954 (hereafter cited as Hope), (Princeton: Princeton University Press, 1991), 149. Return to essay.
21 Jacobo Arbenz quoted in Ibid., 150. Return to essay.
22 "Memorandum by the Officer in Charge of Central America and Panama (Leddy) to the Assistant Secretary of State for International Affairs (Cabot)," (21 May 1953), FRUS 1952-54, vol. 4: 1071; Dombrowski et al., Handbook, 35. Return to essay.
23 Gleijeses, Hope, 187-89, 197, 224. Return to essay.
24 NIE 62: "Present political situation in Guatemala and possible developments during 1952," (11 March 1952), in FRUS 1952-54, vol. 4: 1033. Return to essay.
25 NIE 84, (19 May 1953), FRUS 1952-54, vol. 4: 1065; "Draft Policy Paper Prepared in the Bureau of Inter-American Affairs," (19 August 1953), FRUS, 1952-54, vol. 4: 1080; "Memo by John W. Fisher of the Office of Middle American Affairs to the Assistant Secretary of State for Inter-American Affairs (Holland)," (19 April 1954), FRUS 1952-54, vol. 4: 1099. Return to essay.
26 "Memorandum of Conversation, by the Secretary of State," (17 November 1952), FRUS 1952-54, vol. 4: 1051. Return to essay.
27 "Memorandum of Conversation, by the Secretary of State," (11 May 1954), FRUS 1952-54, vol. 4: 1106. Return to essay.
28 Piero Gleijeses, "The Agrarian Reform of Jacobo Arbenz," Journal of Latin American Studies 21 (October 1989): 455. Return to essay.
29 Gleijeses, Hope, 150, 157; Piero Gleijeses, "The Agrarian Reform of Jacobo Arbenz," Journal of Latin American Studies 21 (October 1989): 466; Aybar de Soto, Intervention, 171, 182-4. Return to essay.
30 Mario Monteforte Toledo, Guatemala. Monografía sociológica (México: Universidad nacional autónoma de México, 1959), has the figure of 54,000 (see Table 4), 443; Piero Gleijeses, in Hope, contradicts himself on the figures, citing that the reform only managed to give land to 100,000 people before June 1954, and then concluding that after eighteen months, 500,000 had received land, the halfway mark, 156, 381. Return to essay.
31 Piero Gleijeses, "The Agrarian Reform of Jacobo Arbenz," Journal of Latin American Studies 21 (October 1989): 467-8, 473, 453; Gleijeses, Hope, 163; Aybar de Soto, Intervention, 170. Return to essay.
32 Gleijeses, Hope, 164; Aybar de Soto, Intervention, 201. Return to essay.
33 NIE 84, (19 May 1953), FRUS 1952-54, vol. 4: 1064. Return to essay.
34 Aybar de Soto, Intervention, 243; Piero Gleijeses, "The Agrarian Reform of Jacobo Arbenz," Journal of Latin American Studies 21 (October 1989): 462. Return to essay.
35 Leonard Mosley, Dulles, (New York: Dell, 1978), 376. Return to essay.
36 "Memorandum of Conversation, by the Assistant Secretary of State for Inter-American Affairs (Cabot)," (16 January 1954), FRUS 1952-54, vol. 4: 1097. Return to essay.
37 "Letter from the Assistant Secretary of Defense for International Security Affairs (Hensel) to the Secretary of State," (12 January 1955), FRUS 1955-57, vol. 7: 47; "The contribution that Guatemala can make toward U.S. security is slight," claims a "Draft Policy Paper Prepared in the Bureau of Inter-American Affairs," (19 August 1953), FRUS 1952-54, vol. 4: 1075-76. Return to essay.
38 Ibid., 1075-76; NIE 62: "Present political situation in Guatemala and possible developments during 1952," (11 March 1952), FRUS 1952-54, vol. 4: 1033; "Memorandum for the Record, by Richard Hirsh of the Operations Coordinating Board," (29 October 1953), FRUS 1952-54, vol. 4: 1087. Return to essay.
39 "Memorandum by the Officer in Charge of Central America and Panama (Leddy) to the Assistant Secretary of State for International Affairs (Cabot)," (21 May 1953), FRUS 1952-54, vol. 4: 1071; In all fairness, a more nuanced view is expressed in the following statement: "The International Communist movement is certainly not the cause of the social revolution in Guatemala, but it has made the same effort there that it has made everywhere else to harness the revolutionary impulses-nationalism and social reform alike-and exploit them for its own purposes," in "Memorandum by Louis J. Halle, Jr. of the Policy Planning Staff to the Director of the PPS (Bowie)," (28 May 1954), FRUS 1952-54, vol. 4: 1140. Return to essay.
40 "Memorandum of Converstion, by Edward W. Clark of the Office of Middle American Affairs," (5 February 1952), FRUS 1952-54, vol. 4: 1029; "Edward W. Clark of the Office of Middle American Affairs to the First Secretary of the Embassy of Guatemala (Krieg)," (5 September 1952), FRUS 1952-54, vol. 4: 1037; see also "Memorandum of Conversation by the Acting Officer in Charge of Central America and Panama Affairs (Clark)," (6 October and 12 November 1952), FRUS 1952-54, vol. 4. Return to essay.
41 "Memorandum of Conversation, by the Acting Officer in Charge of Central America and Panama Affairs (Clark)," (14 October 1952), FRUS 1952-54, vol. 4: 1047. Return to essay.
42 Gleijeses, Hope, 253-5, 270-4. Return to essay.
43 U.S. Department of State, "Declaration of Caracas," Bulletin, (28 April 1954): 981-982. Return to essay.
44 Gleijeses, Hope, 279. Return to essay.
45 Ibid., 245, 296, 300-2. Return to essay.
46 Sharon Meers, "The British Connection: How the United States Covered Its Tracks in the 1954 Coup in Guatemala," Diplomatic History 16 (Summer 1992): 417-9. Return to essay.
47 United Nations, "Cablegram dated 19 June 1954 from the Minister for External Relations of Guatemala to the President of the Security Council," Offical Records of the Security Council, 9th year, supplement (April-June 1954), UN document S/3232: 13; U.S. Department of State, "Department Statement, June 19," Bulletin, (28 June 1954): 982. Return to essay.
48 Aybar de Soto, Intervention, 314; Sharon Meers, "The British Connection: How the United States Covered Its Tracks in the 1954 Coup in Guatemala," Diplomatic History 16 (Summer 1992): 420-21. Return to essay.
49 "Minutes of a Meeting, Held at the Department of State, August 8, 1954," FRUS 1952-54, vol. 4: 1221. Return to essay.
50 "The Ambassador in Guatemala (Peurifoy) to the Department of State," (2 September 1954), FRUS 1952-54, vol. 4: 1225-6. Return to essay.
51 "The Acting Secretary of State to the Director of the Foreign Operations Administration (Stassen)," (30 September 1954), FRUS 1952-54, vol. 4; "Telegram from the Ambassador in Guatemala (Armour) to the Department of State," (15 February 1955), FRUS 1955-57, vol. 7; "Memorandum of Conversation, Department of State, Washington," (31 May 1955), FRUS 1955-57, vol. 7: 86; "Telegram from the Secretary of State to the Embassy in Guatemala," (22 January 1955), FRUS 1955-57, vol. 7. Return to essay.
52 "Letter from the Deputy Under Secretary of State for Political Affairs (Murphy) to the Director of the FOA (Stassen)," (4 March 1955), FRUS 1955-57, vol. 7: 68. Return to essay.
53 U.S. Government, U.S. Treaties and Other International Agreements, 3059, 3084, 3068, 3154, 3155. Return to essay.
54 NIE 62: "Present political situation in Guatemala and possible developments during 1952," (11 March 1952), FRUS 1952-54, vol. 4: 1032; "National Intelligence Estimate 82-55," (26 July 1955), FRUS 1955-57, vol. 7: 89. Return to essay.
55 Gordon L. Bowen, "U.S. Policy Toward Guatemala, 1954 to 1963," Armed Forces & Society 10 (Winter 1984): 172-4. Return to essay.
56 "Memorandum of Conversation, Department of State, Washington," (31 May 1955), FRUS 1955-57, vol. 7: 85. Return to essay.
57 Dombrowski et al., Handbook, 259. The authors write that, from 1941 to 1966, the United States lent or granted $151 million, $88 million or which were in economic grants; Stephen Schlesinger and Stephen Kinzer give a total of $80 million in the three years following the coup, as compared to $600,000 during the revolutionary era, Fruit, 232-3. Return to essay.
58 U.S. Bureau of the Census, The Statistical History of the United States, from the Colonial Times to the Present, (New York: Basic Books, Inc., 1976): Series U 75-186. Return to essay.
59 U.S. Department of State, "Development Assistance Agreement Signed by U.S. and Guatemala," in Bulletin, 27 December 1954: 985; FRUS 1955-57, vol. 7: 103; Gleijeses, Hope, 166. Return to essay.
60 "Memorandum by the Officer in Charge of Guatemalan Affairs (King)," (13 March 1957), FRUS 1955-57, vol. 7: 132. Return to essay.
61 Schlesinger and Kinzer, Fruit, 233; Gleijeses, Hope, 381, 384. Return to essay.
62 James W. Willkie, ed., Statistical Abstract of Latin America vol. 31 Parts 1 and 2 (UCLA Latin American Publications, UCLA), 41; Alfredo Guerra Borges, Geografía econónica de Guatemala (Guatemala: Editorial universitaria, 1969), 237. Return to essay.
63 Carol A. Smith, Labor and International Capital in the Making of a Peripheral Social Formation: Economic Transformations of Guatemala, 1850-1980, Working Paper no. 138 (The Wilson Center, Washington, D.C., 1984); another author confirms that the fifties in Central America meant industrialization, "some diversification," and "prosperity and increasing inequality." This upward trend broke in the seventies, Hector Perez Brignoli, "Growth and Crisis in the Central American Economies, 1950-1980," Journal of Latin American Studies 15 (November 1983): 365. Return to essay.
64 James W. Willkie, ed., Statistical Abstract of Latin America vol. 31 Parts 1 and 2 (UCLA Latin American Publications, UCLA), 1227; A.G. Kenwood and A. Lougheed, The Growth of the International Economy, 1820-1990, 3rd. ed., (New York: Routledge, 1992), 301. Return to essay.
65 IMF, IFS, 1979 Yearbook, also 205, and Supplement to 1965/66, vol. 18, pt. 5: 106. ; James W. Willkie, ed., Statistical Abstract of Latin America vol. 31 Parts 1 and 2 (UCLA Latin American Publications, UCLA), 970. Return to essay.
66 Schlesinger and Kinzer, Fruit, 229. Return to essay.
67 NIE 84, (19 May 1953), FRUS 1952-54, vol. 4: 1061. Return to essay.
68 FRUS 1955-57, vol. 7: 100. Return to essay.
69 Dombrowski et al., Handbook, 253; see also Direccion General de Estadistica, Ministerio de Economia. Indice de precios al por menor de 15 articulos y geografico en la Republica. Republica de Guatemala, 1970, for a list of prices for specific items. Return to essay.
70 Ibid., 103; Dombrowski et al., Handbook, 192; James W. Willkie, ed., Statistical Abstract of Latin America vol. 31 Parts 1 and 2 (UCLA Latin American Publications, UCLA), 161. Return to essay.
71 Jennifer Harbury, speech given at a meeting of Juventud por la paz, San Francisco State University, San Francisco, 4 December 1995. Return to essay.
72 Gordon L. Bowen, "U.S. Policy Toward Guatemala, 1954 to 1963," Armed Forces & Society 10 (Winter 1984): 172, 173. Return to essay.
73 Santos quoted in Aybar de Soto, Intervention, 32; Fortuny quoted in Gleijeses, Hope, 366. Return to essay.
74 Alan Riding quoted in Walter LaFeber, Inevitable Revolutions: The United States in Central America 2nd ed. (New York: W.W. Norton & Company, Inc., 1993), 9. Return to essay.