History

The Eisenhower Era – Coup in Guatemala

Background Information

I wrote this background based on information from Stephen G. Rabe, The Killing Zone:

The United States Wages Cold War in Latin America (New York: Oxford University

Press, 2016), 36-38.

Guatemala in the Cold War era (and well before that) had a significant racial

hierarchy. On top were the “westernized, Spanish-speaking groups.” On the bottom were

indigenous people descended from the Mayans. The elite owned the vast majority of

land, while those on the bottom were effectively forced to work on plantations. As

Stephen Rabe puts it, “Terms like “serfdom,” “debt peonage,” and even “slavery”

accurately characterized the socioeconomic conditions of Guatemala’s indigenous

population.” Some 90% of laborers were illiterate, they lived in dire poverty, and had a

life expectancy that was less than 40 years.

The Guatemalan Revolution of 1944, Reforms, and the CIA Led Coup of 1954

The following section comes from the Baltimore County History Labs Program

(supported by the University of Maryland, Baltimore County) and is copied verbatim with

added comments from me. You can find the original source at:

https://www.umbc.edu/che/tahlessons/pdf/historylabs/Guatemalan_Coup_student:RS01.p

df

In the late 19th and early 20th centuries, Latin American governments were

characterized by economic policies that allowed for liberal foreign investments from

wealthy countries like the United States. Military dictators led a number of these Latin

American governments. The United Fruit Company (UFCO), an extremely successful

American owned and run company, profited greatly from investments it made in

Guatemala. The business of United Fruit was bananas, and from bananas it had built a

business empire in the Central American nations of Guatemala, El Salvador, Honduras,

Nicaragua, Costa Rica and Panama.

The United States government was also interested in bananas, and had sponsored

initiatives to promote the fruit in the American diet. Guatemala became known as a

“banana republic,” a disdainful term for poor, developing countries that relied on a single

cash crop, such as bananas, and were ruled by corrupt governments. Under the

Guatemalan dictator Jorge Ubico, the United Fruit Company gained control of 42% of

Guatemala’s land, and was exempted from paying taxes and import duties. Seventy-seven

percent of all Guatemalan exports went to the United States; and 65% of imports to the

country came from the United States. The United Fruit Company was, essentially, a state

within the Guatemalan state. It not only owned all of Guatemala's banana production and

monopolized banana exports, it also owned the country's telephone and telegraph system,

and almost all of its railroad track.

The United Fruit Company was well connected to the Eisenhower administration.

Secretary of State John Foster Dulles and his New York law firm, Sullivan and

Cromwell, represented the company. Allen Dulles, the director of the Central Intelligence

Agency (CIA) and brother of John Foster Dulles, had served on UFCO's Board of

Trustees and owned shares of the company. Ed Whitman, the company's top public

relations officer, was the husband of Ann Whitman, President Eisenhower's private

secretary. Ed Whitman produced a film, Why the Kremlin Hates Bananas, which

depicted UFCO fighting on the front line of the Cold War. The company’s efforts paid

off. It picked up the expenses of journalists who traveled to Guatemala to learn its side of

the crisis, and some of the most respected North American publications, including the

New York Times, Christian Science Monitor, New York Herald Tribune, and New

Leader, ran stories that pleased the company.

The Guatemalan Revolution of 1944 forced the resignation of the right-wing

dictator, Ubico, who by then had ruled the nation for 13 years. The country held what

many believed was the first true election in its history, popularly electing Dr. Juan Jose

Arévalo to the presidency. A new constitution, based on that of the United States, was

adopted. Arévalo, a liberal politician and educator, built over 6,000 schools and made

great progress in education and health care. Arévalo was followed by Colonel Jacobo

Arbenz, who became president in democratic elections in 1951. After Arbenz came to

power, he extended political freedoms, allowing Communists in Guatemala to participate

in politics. In a country of three million people, only 4,000 were registered as

Communists; however, with the Cold War in full force, the United States was extremely

concerned with the decision so close to home in the Western Hemisphere. (Comment

from DN: One key reform was a 1947 law that allowed workers to form labor unions and

launch strikes against companies like United Fruit. Historian Stephen Rabe compares

these laws to FDR’s New Deal laws that protected the rights of workers to form unions.)

The United States became further alarmed after President Arbenz proposed

“Decree 900,” to redistribute undeveloped lands held by large property owners to

landless farmers, which constituted 90% of the population. The United States likened this

land reform policy to that enacted by Communist regimes. By 1952, Arbenz had

expropriated (taken from its owners) 225,000 acres and made them available to rural

workers and farmers. At the time, just two percent of landowners owned 70% of useable

agrarian lands, and farm laborers were kept in a form of debt slavery. The biggest

obstacle to land reform in Guatemala was the United Fruit Company. While the

government compensated property owners for the expropriated lands, United Fruit

believed the compensation was not enough. The company demanded to be reimbursed for

the full market value of the land, while the Guatemalan government was only willing to

pay according to the worth of the land claimed in May 1952 tax assessments. This was

problematic because United Fruit, like other big companies, had understated the value of

the land to reduce its tax burden. The Guatemalan government was able to seize 40% of

the land held by the giant corporation at little cost. (Comment from DN: This part isn’t

well written as key points can be missed. Let me emphasize that the government of

Guatemala didn’t just take land from companies and the wealthy. It’s more accurate to

say that large landholders were forced to sell land that they were not using. As noted,

United Fruit claimed their land wasn’t worth much to avoid taxes for years. That came

back to haunt them when Decree 900 came out. Notably, Arbenz himself was wealthy

and had to give up 1,700 acres.)

United Fruit felt that Arbenz was challenging it politically and financially. The

company began a massive anti-communist propaganda effort against Guatemala in the

U.S. press. The Eisenhower administration was also alarmed by the policy direction of

the Arbenz government. Eisenhower did not want to intervene directly in Guatemala,

however, to avoid the impression that the United States would attack a Western

Hemisphere ally. Additionally, Eisenhower had vowed to reduce Cold War military

spending. Instead, the United States utilized the newly created Central Intelligence

Agency to launch a covert operation to remove Arbenz. The CIA was created, in part, to

conduct espionage missions around the world. The Guatemalan operation was known as

“Operation PBSUCCESS.” In 1952, two years after the election of Jacobo Arbenz, the

CIA began recruiting an opposition force to overthrow him. Looking to the Guatemalan

military, the CIA chose a disgruntled, anti-Arbenz officer, named Carlos Castillo Armas,

to lead the operation.

On June 17, 1954, with the support of the U.S. government and the CIA, Armas launched

an invasion. The invading forces numbered only 150 men, but the CIA had convinced the

Guatemalan public and Arbenz that a major invasion was underway. The CIA set up a

clandestine (secret) radio station to broadcast propaganda messages, jamming

Guatemalan radio signals. Skilled American pilots were hired to bomb strategic points in

Guatemala City. U.S. personnel flew the invasion aircrafts and filled the airways with

bogus transmissions, adding to the impression. The CIA used spies within the

Guatemalan military and government to actively undermine President Arbenz's authority,

demoralize his supporters, and block efforts to defeat Armas.

Unaware that the CIA was orchestrating the military coup against him, Arbenz

turned to the U.S. government for help, placing his faith in a so-called ally that stated it

was committed to advancing and spreading democracy. On Sunday, June 27, 1954,

President Jacobo Arbenz resigned from office and fled Guatemala. The CIA replaced him

with a military dictator, Colonel Carlos Castillo Armas, whom the CIA designated the

“liberator” of the Guatemalan people.

Aftermath This section is from me based on Stephen G. Rabe, The Killing Zone: The United States

Wages Cold War in Latin America (New York: Oxford University Press, 2016), 36-38.

Following the coup, the CIA launched Operation PBHISTORY. They scoured

through some 500,000 documents in an effort to link the Arbenz government to the

Soviet Union and international communism. They, essentially, found nothing. The

Guatemalan Revolution of 1944 was launched by workers unhappy with the oppressive

conditions they faced. The Arbenz government implemented reforms that can be

compared to New Deal era policies. Despite that, Arbenz’s policies looked communistic

to the Eisenhower administration. That was unacceptable during the Cold War, and

Eisenhower used the CIA to replace the democratically elected government (Arbenz)

with a brutal dictatorship.

There are historical debates about the motives behind the 1954 coup. Some

historians suggest that fears of communism alone explain the decision to overthrow the

government. Others (like the above piece) place more emphasis on economic motives and

suggest the coup was partially or largely driven by efforts to support the United Fruit

Company.

Following the coup, Armas, the new dictator, murdered some 3,000-5,000 Arbenz

supporters. His “disposal list” was written with assistance from the CIA. The government

crushed all political opposition, revoked Decree 900 and restored land to the elite, and

eliminated labor rights established in 1947. Guatemala plunged into a bloody civil war

that lasted from 1960 to 1996. The U.S. government supported the Guatemalan

government in that conflict despite many human rights abuses carried out by the

government, because the dictatorial government of Guatemala was a Cold War ally. We

can draw connections between the civil war, current crises in Guatemala, and the plight

of Guatemalans who are trying to enter the U.S. as refugees in our current era to the CIA

coup of 1954.