United Fruit Owned a Country — Then Lost It in a Lawsuit

By 1950, United Fruit Company held title to approximately 42 percent of Guatemala's land, used about 15 percent of it for banana cultivation, and kept the rest as a reserve — idle, but unavailable. The company owned the country's only Atlantic railroad, its primary telegraph network, and the port at Puerto Barrios. The Guatemalan government's share of United Fruit's export revenues was a fixed sum negotiated decades earlier.

When Jacobo Arbenz won the Guatemalan presidency in 1950 and passed Decree 900 in June 1952, the law authorized the expropriation of uncultivated land above a certain size threshold, compensated at the land's declared tax value. United Fruit's idle holdings were the obvious target. The government offered $1.2 million in compensation; United Fruit claimed the land was worth $16 million and lobbied the U.S. State Department aggressively. The company's executives had direct access: Thomas Dudley Cabot, a former United Fruit president, served as Director of International Security Affairs at the State Department.

The CIA operation to overthrow Arbenz, codenamed PBSUCCESS, succeeded in June 1954. A U.S.-backed military government replaced him. United Fruit recovered its land. The company's relationship with the U.S. government did not protect it forever, though. In 1958, the Department of Justice filed an antitrust complaint against United Fruit, and a 1958 consent decree required it to divest the Guatemalan railroad, create a competitor banana company, and reduce market share. By 1970, United Fruit had been acquired by AMK Corporation and renamed Chiquita Brands.