Social Aspects of the Banana Industry 9780231890670

Table of contents :
Preface
Table of Contents
Chapter I. Introduction
Chapter II. Backgrounds and Pioneers
Chapter III. A Generation of Expansion
Chapter IV. Land Acquisition and Social Change
Chapter V. The Planters’ Profits and Status
Chapter VI. Sanitation and Health
Chapter VII. Sanitation and Health
Chapter VIII. Social Security
Chapter IX. Social and Economic Conflicts
Chapter X. The Role of Organized Labor
Chapter XI. Summary And Conclusion
Bibliography
Index

Citation preview

S T U D I E S IN HISTORY, ECONOMICS A N D PUBLIC LAW Edited by the FACULTY OF POLITICAL SCIENCE OF COLUMBIA UNIVERSITY

NUMBER 414

SOCIAL ASPECTS OF THE BANANA INDUSTRY BT

CHARLES DAVID KEPNER, J r .

SOCIAL ASPECTS OF THE BANANA INDUSTRY

BY

CHARLES DAVID KEPNER, JR., PH.D.

NEW

YORK

COLUMBIA UNIVERSITY PRESS LONDON : P. S. KINC & SON, LTD.

1936

COPYRIGHT,

1936

BY COLUMBIA U N I V E R S I T Y

PRESS

PRINTED IN T H E UNITED STATES OF AMERICA

PREFACE

THE focusing of my attention upon the banana industry resulted from the knowledge that international complications have important economic roots; from a sense of the importance of the relations of our country with the neighboring republics to the south; and from a hope that interAmerican relations might be clarified and improved by a study of the economic enterprise which touches these republics most intimately. T o a life-long interest in world affairs was added a special interest in these republics acquired at the seminar of the Committee on Cultural Relations with Latin America held in Mexico City during the summer of 1928. Late the following year the committee on studies in American investments abroad of the American Fund for Public Service agreed to pay the traveling expenses of a trip to Central America and to arrange for the publication of a book on the banana industry, which at that time I expected to submit to The University of Chicago as a master's thesis. In the summer of 1930 I traveled in Panama, Costa Rica, Honduras and Guatemala, visiting banana plantations and interviewing fruit company officials, planters, political leaders and other observers of fruit company activities. Since that time I have had many interviews in this country and have found further valuable material. During these years the work has expanded much beyond the scope originally planned. Recently it has seemed advisable to divide the material into two books, The Banana Empire, a Case Study in Economic Imperialism, lately published by The Vanguard 7

8

PREFACE

Press, and this dissertation, prepared in connection with Professor Samuel McCune Lindsay's seminar and with his constant guidance and help. The sources of this study include many interviews both in the tropics and in this country with persons holding diverse points of view, reports of the United Fruit Company and of Caribbean governments, contracts, concessions and laws, Latin American official gazettes and unofficial newspapers, English books, magazines and newspapers, Spanish books, periodicals and pamphlets, letters and written interviews, statistical works and publications of the United States departments of Commerce and of Labor, publications of the International Labor Office and reports of the PanAmerican Federation of Labor, and miscellaneous materials touching upon different phases of the study. Where Spanish sources are quoted directly in the dissertation they are translated into English without special comment. I am indebted to so many people both in this country and in Central America for information, suggestions and aid that it is impossible to include them all by name. Specifically I would record my debt to the American Fund for Public Service for the trip to Central America, to Professors Ellsworth Faris and Paul H. Douglas of The University of Chicago for their interest and for permission to change the original plans, to officials of the United Fruit Company for their courtesy and hospitality, and to scores of Central Americans and citizens of our own country who have given time and effort to make this study a success. In particular I would include Jay H. Soothill, a former employee of the United Fruit Company, with whom I collaborated on The Banana Empire. I am very grateful to Professor Parker Thomas Moon for his careful reading of the manuscripts of both books and for his valuable suggestions. I am indebted to Professor Robert E. Chaddock for

PREFACE

9

advice on certain statistical matters.

Especially I desire to

express m y profound gratitude to Professor Samuel M c C u n e Lindsay, without whose advice, encouragement and help this dissertation would have been impossible.

H e has given most

generously of his time in reading the manuscript and in otherwise facilitating this work.

I hesitate to express in

this formal document the full measure of my appreciation of his kindness and friendly interest. T h e banana industry, in spite of its importance, has been subjected to very little critical analysis in the English language.

Hence it seems desirable that an introductory study

in this field should survey a large area, leaving to subsequent studies by other investigators more exhaustive treatment of many of the issues raised.

A s such an introductory

survey this dissertation will deal briefly with the historical backgroundn, origin, territorial acquisitions, expansion and various social aspects of the banana industry.

TABLE OF CONTENTS PACK C H A P T E R

I

INTRODUCTION

1. 2. 3. 4. 5.

The Transformation of the Jungle The Visible Domain of the Banana Reversion to the Jungle The Profits of the United Fruit Company The Purpose of this Study C H A P T E R BACKGROUNDS AND

1. 2. 3. 4. 5.

II PIONEERS

Potential Banana Lands Central American Backgrounds . Banana and Railroad Pioneers The Origin of the United Fruit Company The United's Strangle Hold C H A P T E R A

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

15 17 19 21 23

GENERATION

OF

27 29 35 39 42

III EXPANSION

The Passing Shadow of the Banana Industry Banana and Sugar Islands Continental Lands Lashed by the Caribbean Monopoly in Costa Rica The Banana Industry of Eastern Guatemala Honduras' Recently Acquired Banana Supremacy The Chaotic Banana Industry of Nicaragua Mexico's Potential Banana Supremacy The Trend Towards the Pacific The Shores of Two Oceans Sources of Banana Supply C H A P T E R LAND

ACQUISITION

45 46 48 50 52 53 55 57 60 63 65

IV

AND SOCIAL

CHANGE

1. General Implications 2. Land Acquired Through Railroad Concessions 3. Denouncement Proceedings and the Application of Gracias. . II

70 70 77

12

TABLE

OF

CONTENTS

4. 5. 6. 7. 8.

The Purchase and Leasing oi Land Intermediaries and Pressore Purposes of Land Acquisition Some Social Effects of Land Policies The Transitoriness of Banana Communities

FACI

C H A P T E R THE

1. 2. 3. 4. 5. 6. 7.

PLANTERS'

C H A P T E R

HEALTH

SOCIAL

109 no 114 116 119 122

VII HOURS

Classifications of Banana Workers Wages of Banana Workers Wages of Other Agricultural Laborers The Cost of Living and Real W a g e s Recent W a g e Reductions The Eight Hour Day One Day of Rest in Seven The United Exempted from Protective L a w s C H A P T E R

92 95 98 100 102 104 106

VI

From Laissez Faire to Social Legislation Problems and Methods of Sanitation . The Housing of Banana Workers Results of a Generation of Health Work The Baffling Problem of Malaria The Cost of the Campaign for Health

W A G E S AND

1. 2. 3. 4. 5. 6.

STATUS

Receipts from Banana Sales Production Costs Planters in the Red The Unique Position of Jamaica Pioneer versus Modern Conditions The Changing Status of Banana Growers The Cooperative Movement A m o n g Banana Planters C H A P T E R

1. 2. 3. 4. 5. 6. 7. 8.

V

PROFITS AND

S A N I T A T I O N AND

1. 2. 3. 4. 5. 6.

80 83 86 87 89

124 126 129 133 136 138 140 141

VIII

SECURITY

Unemployment Old A g e Sickness and Accidents Comparison of W o r k m e n ' s Compensation L a w s The United and Its Injured Workers Collective Life Insurance in Colombia

143 145 145 147 151 155

TABLE

OF

CONTENTS

13 FACI

CHAPTER

IX

S O C I A L AND E C O N O M I C

1. 2. 3. 4. 5. 6.

CONFLICTS

Transplanted W o r k e r s Collapse of Social Controls Violent and Sympathetic Contacts Education and Language Race Relations and Restrictions National versus Foreign W o r k e r s CHAPTER

157 160 164 166 168 173 X

T H E R O L E OF O R G A N I Z E D

1. 2. 3. 4. 5. 6. 7. 8. 9.

LABOR

Early Banana Strikes Labor Organization T h e Legality of Strikes Causes of Banana Strikes T h e Double Role of Private Planters Strike Leadership Conciliation and Suppression Results of Banana Strikes T h e Mexican Government and Banana W o r k e r s CHAPTER

180 181 184 187 190 192 195 199 201

XI

SUMMARY AND C O N C L U S I O N

I . Summary

207

a. Conclusion

213

BIBLIOGRAPHY

219

INDEX

225

C H A P T E R

I

INTRODUCTION I . T H E T R A N S F O R M A T I O N OF T H E J U N G L E N A T U R E and man alternate in ruling the tropical lowlands bordering the Caribbean Sea. From time immemorial the jungle has held undisputed sway. Here insects and reptiles, birds and beasts have preyed upon each other and lived upon the fruit, foliage and bark of dwarf plants and giant trees. Chattering monkeys swinging from vines of Spanish moss, poisonous snakes crawling over and under mats of decaying leaves and rotting stumps, gorgeously plumed birds shuttling back and forth between bamboo thickets and ceiba trees—these and other wild creatures have contributed to the dazzling riot of jungle life, but man has seldom challenged nature's supremacy. Sporadically men in isolated groups have intruded, seeking food and defying dangers, both of which abound in the jungle. But civilization and complex social relationships have been almost unknown in this arena of vegetal and animal life. Suddenly, however, sweeping changes take place in many sections of the vine-snarled jungle. Dauntless surveyors penetrate the seemingly impenetrable undergrowth. They are followed by swarthy half-breeds, who with keen-edged machetes clear out the twisted masses of rank vegetation. After this underbrushing is completed the plot is lined and staked at even intervals. Beside each stake a rhizome, or piece of rootstock, is planted about a foot underground. 15

!Ö

SOCIAL

ASPECTS

OF THE BAUANA

INDUSTRY

When thus a degree of order has appeared, strong-armed Nicaraguan axmen fell the great trees, so that the area appears a s 1 a heavy forest shorn off at the ground and laid flat in a confused mass, giving the impression that one is in the wake of devastation instead of in the midst of a banana farm in the making. This confusion does not last long. Through the debris laborers clear roads, build bridges and lay tramway tracks, while between the branches of decaying trees banana sprouts shoot upward. They grow very fast, fertilized by the alluvial deposit left by overflowing rivers and by the humus formed from the quickly decomposing vegetation. Not infrequently, however, a hurricane, drought or cloudburst destroys the maturing plants, or a spark ignites the mass of dead vines and fallen timber. A s a result of clearing the land three or four times annually, pruning suckers from the roots, and supplying new rhizomes where the earlier ones have died, an orderly grove of plants emerges. When a stem, or bunch, of bananas is ready to be harvested, three men and a mule arrive at the spot. The cutter, using a knife on the end of a long pole, makes a deep gash in the stalk of the banana plant, about two-thirds the way up, thus letting the heavy fruit break the plant slowly and hang suspended within reach of the backer. The latter carries the stem to the muleman, who places it with several other stems on the mule's back, after padding them with leaves. Through the vaulted arch of the plantation the mule carries the fruit to a tramway, which in turn conveys it to a platform beside the railway track. Later from this platform the fruit is stowed away in the train, if it has been passed by the company's inspector. 1

Reynolds, The Banana [Boston, 1927], p. 75.

INTRODUCTION

17

2 . T H E VISIBLE DOMAIN OF T H E B A N A N A

In 1930, prior to the retrenchment which followed the world economic crisis, the United Fruit Company, chief of the banana purveyors, had 189,165 acres, or 295 square miles, cultivated in bananas. From its stately plantations and those of innumerable private planters it exported to the United States 65,000,000 bunches of bananas in that year alone. Other private companies and a cooperative association transported the rest of 1930's total banana shipments of 103,000,000 bunches.2 The producing banana farms represent a relatively small portion of the territorial domain of the large fruit companies. In 1930 the United's land empire totaled 3,482,042 acres, thus constituting an international farm equal to the combined area of Connecticut and Rhode Island. Although 8 5 % of this land was unimproved, still a part of the primeval jungle, other sections were covered with various works of modern material civilization. In Cuba, Honduras and Jamaica 1 0 5 , 1 2 5 acres were devoted to sugar cane. In Costa Rica, Panama and Jamaica 4 1 , 6 1 8 acres were shaded by dark, cool cacao groves. On other plots of land active centers of human habitation had sprung up, not Caribbean towns, but bits of New England and Jamaica, transplanted to Central American shores. Near the seaports many acres were cleared for the company's headquarters. In such localities one can see substantial office buildings and, under palms along the water front, attractive, well-screened homes of the aristocracy of the company's employees. Less pretentious cottages are variously located, some in sightly residential sections, others facing sooty railroad yards. Railroad shops, roundhouses, freight yards, wharves, lighthouses, water works, sewerage 2

1930 exports from Cutter, Statement to Stockholders, Feb. 18, 1931. Most of the statistics in this chapter are from annual reports of the United Fruit Company or Moody's Industrials.

jg

SOCIAL ASPECTS

OF THE BANANA

INDUSTRY

systems, commissary stores, storehouses, electric light plants, bakeries, laundries, schools and churches, hotels, clubhouses and athletic fields are included in the physical outlay of these mushroom towns. Most conspicuous and appealing in the division headquarters are the eleven hospitals, some of which are plain wooden buildings, but others of which compare favorably in architecture with medical centers in the United States and Europe. Behind the larger buildings are long lines of stereotyped labor camps, small, plain and solid, which, like most of the company's establishments, are painted yellow. Throughout the banana districts are farms each of which contains a similar long line of connected labor camps and an individual camp for the foreman. Separated from these camps by green screens of tropical foliage is the bungalow where the mandador (overseer) and his timekeeper reside. The fruit companies are not only producers of bananas and builders of cities but also operators of transportation and communication systems. Their railroad trains carry bananas and other company products and also, on the main lines and important branches, passengers and commercial freight. The United's Great White Fleet, comprising approximately one hundred small, graceful ships, links the United States and Europe with the Caribbean region, where the company owns or controls the docks and other transportation facilities. Twenty-four radio stations unite the tropics with the temperate zone, five of them transmitting company messages only, the others providing in addition commercial service for governments and the general public. The accompanying table gives an indication of the extent of the United Fruit Company's major undertakings during two of its peak years and also its more restricted activities following retrenchments made during the depression.

INTRODUCTION TABLE

I.

LANDS,

RAILROADS

AND S T E A M S H I P S

19 O W N E D AND

OPERATED

BY T H E U N I T E D F R U I T C O M P A N Y

WS 172,262 Banana Cultivations, acres Sugar Cultivations, acres 89,896 50,108 Cacao Cultivations, acres Total Lands, Owned & Leased, acres . . . 1,834.453 Railroad Lines Owned, miles 1,352 Other Lines Operated, miles 189 Tramway Lines Owned, miles 723 187 No. of Locomotives, Owned & Operated 5,320 No. of Railway Cars, Owned & Operated 61 Steamships Owned Steamships Chartered 18 308,243 Total Gross Shipping Tonnage

mo 189,165 105,125 41,618 3,482,042 1,533 227 642 207 6,598 90 25 445,286

1934 114,920 99,991 38,769 3,579,273 1,509 304 498 216 7.269 92 6 444,001

3 . REVERSION TO T H E J U N G L E

The stage of industrialized agriculture presents a striking contrast to the earlier stage of the wild jungle. In many places, however, it is but temporary; there follows a third stage, that of reversion to the jungle. As a rule banana cultivations are short-lived, estimates of their life ranging from eight to ten years. 3 After this period they succumb to soil exhaustion, destructive rodents or the Panama disease. The United Fruit Company has struggled to combat this retrogression. In a small but well-equipped laboratory at Tela, Honduras, pathologists and entomologists conduct intensive researches on the Fusarium fungus, carrier of the Panama disease, and study other problems of tropical agriculture. Thus far, however, they have not been able to outwit this baffling fungus. At Lancetilla, a few miles inland from Tela, the company has a meteorological station, an arboretum, nurseries and land for experimentation. Including twenty acres at Progreso, where different climatic and soil conditions prevail, this experiment station had eighty » Eight years : Vice Consul Maleady in unofficial, voluntary report. State of the Banana Industry in Costa Rica, Sept., 1929; ten years given by Victor M Cutter, at that time president of the United Fruit Co., in Economic Geography, 1926, p. 495.

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

acres under cultivation at the end of 1929. Here the company seeks to develop other commercial crops which may be grown on land that is of no more use for bananas. On an experimental farm in Panama some hundred varieties of banana are grown. Thus far, however, nothing superior to the Gros Michel has been found. Lacatans, which are less susceptible to the Panama disease, are sold in England, but they have not proved popular in the North American market. The only commercial crop grown extensively on lands which have been exhausted as far as the king fruit is concerned, is cacao. In 1 9 3 2 the United devoted 24,809 acres in Costa Rica and 14,277 acres in Panama to cacao. Cacao trees are often interplanted with diseased banana plants which offer temporary shade. The 17,504,662 pounds of cacao produced by the United in 1 9 3 1 constituted an infinitesimal proportion of the world's supply. Cacao production in Central America, however, has not been very profitable. Moreover, the Caribbean region is not ideal for cacao growing, as the abundance of rainfall produces various fungi and other destructive agents. In 1932, 7,655 acres produced cocoanuts, but they too have failed to prove a really profitable crop. Field rats and rhinoceros beetles are among their enemies. Various attempts to raise pineapples in the foothills and highlands have demonstrated that the soil is well suited to them, but trouble in transit to foreign markets has thus f a r wrecked endeavors to export fresh pineapples of good flavor on a commercial scale from Central America. In many ways the most desirable banana substitute is balsa, a tropical wood, half as heavy as cork, and about half as strong as spruce.4 It is used for making life * According to Prof. W. S. Leland of Massachusetts Institute of Technology, as quoted by R. C. Carpenter in a paper, The Properties of Balsa Wood, written for the meeting of the American Society of Civil Engineers on June 7, 1916.

INTRODUCTION

r a f t s and

preservers,

mine

21

buoys,

hydroplane

pontoons,

shipping containers and pads to prevent damage, aeroplane cabins, and r e f r i g e r a t i n g systems.

M a t u r e trees are f r o m

f o r t y to eighty feet in height and one to three feet in diameter.

Balsa thrives on sandy loam and g r o w s exceedingly

fast, sometimes attaining a trunk twelve to eighteen inches in thickness within f o u r or five years.

Besides being light,

it is resilient, durable, a non-conductor of heat and cold, and when properly handled it is not apt to check, split, w a r p or shrink unduly.

Recently it has suffered in competition

with celotex ; it is not being extensively developed in spite of the many uses f o r which it is admirably suited. A s a result of intensive research the company has been able in many phases of its w o r k to develop more efficient techniques which have reduced its unit costs.

T h r o u g h its

experimental w o r k at Lancetilla and the Technical Service f o r A g r i c u l t u r a l Cooperation, which it conducts in Guatemala with the International R a i l w a y s of Central A m e r i c a , it has made available to Central A m e r i c a n f a r m e r s i n f o r mation concerning modern agricultural methods.

B u t the

destructive P a n a m a disease is still to be conquered.

On

many a deserted f a r m the f e w remaining stunted and bedraggled plants are almost choked by the luxuriant g r o w t h of new tropical vegetation.

In other places all signs o f a

momentary civilization have disappeared.

In many C a r i b -

bean regions the banana industry is merely a brief interlude in the age-long struggle of the jungle. 4.

T H E PROFITS OF T H E U N I T E D F R U I T

COMPANY

T h i s interlude is exceedingly profitable f o r those have invested money in the U n i t e d

Fruit Company.

who In

1930 this company's lands, cultivations, buildings, ships and other fixed assets were valued at $ 1 7 1 , 1 5 4 , 5 8 8 . 9 5 . same

time

its total

assets

were

worth

A t the

$242,398,163.69,

SOCIAL

ASPECTS

OF THE BANANA

INDUSTRY

which was over fourteen times its total assets of $ 1 6 , 9 4 9 , 7 5 3 . 5 8 in 1900.

In 1 9 3 2 , however, with the price levels of

nearly all kinds of properties the world over greatly reduced, the directors decided to reduce the book value of the United's fixed properties by over fifty million dollars.

A f t e r the re-

valuation, the fixed assets stood at $ 1 1 4 , 5 1 3 , 7 0 4 . 7 9 and the total assets at $ 1 7 7 . 3 7 4 . 5 4 8 · 1 5 · The company was incorporated in 1 8 9 9 with an authorized capital stock of $20,000,000, of which over eleven million was subscribed for during the first year.

Twenty years

later the capital stock outstanding amounted to $ 5 0 , 3 1 6 , 5 0 0 , represented by 5 0 3 , 1 6 5 shares of $ 1 0 0 par value stock.

Of

this amount $ 4 1 , 0 7 6 , 8 0 0 had been issued for cash or used for the acquisition of tropical properties and the redemption of bonds of the company.

On the other hand, $ 9 , 2 3 9 , 7 0 0

of the capitalization in 1 9 1 9 was the result of four 1 0 % stock dividends. During its first two decades the company was able to accumulate $ 7 1 , 5 9 9 , 0 4 0 . 2 1 , after paying dividends averaging over 8 % per year.

In 1 9 2 1 , after buying back 3 , 1 6 5

shares, it issued a 1 0 0 % stock dividend, thus raising the capital stock to $100,000,000.

In 1 9 2 6 the capitalization

was changed from one million shares of stock of $ 1 0 0 par value to 2,500,000 shares of stock of no par value, each holder of a share of the old stock being permitted to exchange it for 2 λ /ί shares of the new stock.

Subsequently,

the shares outstanding have been increased to 2,925,000 by the declaration of a 5 %

stock dividend in 1 9 2 9 and the

issuing in 1 9 3 0 of 300,000 shares, valued at $ 2 3 , 2 8 8 , 6 1 9 . 3 1 , for the net assets of the Cuyamel Fruit Company and surplus accruing therefrom.

This transaction raised the

United's capital stock and surplus to $ 2 0 5 , 9 4 2 , 5 8 1 . 2 9 , all of which, except $ 4 1 , 0 7 6 , 8 0 0 and $ 2 3 , 2 8 8 , 6 1 9 , had been accumulated from the earnings of the business.

INTRODUCTION

23

The United Fruit Company has never issued preferred stock. It paid off its funded debt over ten years ago. Its only long-term debt a few years ago was the United States Government loan f o r the construction of ships, on which it owed $12,542,062.50 in 1933. 6 Its annual depreciation charges have been large, averaging 8 % on tropical lands and cultivations, 2^4 to 1 0 % on buildings and equipment, and 5 % on steamships. Some of its fixed assets, such as wireless plants originally costing $500,000, have been completely charged off the books, while still in use. Although dividends amounted to merely $2.00 per share in 1933, and averaged but $ 3 . 3 0 during the past five years, this average is the equivalent of a dividend of over 1 0 % per share on the stock outstanding in 1925 and of over 20% on the stock outstanding in 1920. Stock dividends have multiplied by about 7^2 the original investments of all who owned ten or more shares in 1900. Each holder of one hundred shares in 1899, thus accumulating new stock without additional outlay on his part, should have received $58,959 in 3 3 / 4 years, or an average income of approximately ι p e r annum on his investment of $10,000.· (See Table 2 . ) 5 . T H E P U R P O S E OF T H I S S T U D Y

Whether we survey the extensive properties of the United Fruit Company or study its financial condition year by year, we are impressed by its size and the size of its profits. Within a third of a century it has acquired control over many activities in the Caribbean region and accumulated much wealth f o r its stockholders. What has made possible the acquisition of this power and the accumulation of this wealth ? 5 Cf. Kepner and Soothill, The Banana Empire, pp. 191-208, for account of the loan and the company's ocean mail contracts. • Computation made from dividends as given in Moody's Industrials.

SOCIAL TABLE 2.

ASPECTS

OF THE

BANANA

INDUSTRY

INCOME FROM O N E HUNDRED SHARES OF UNITED FRUIT $IOO

PAR V A L U E STOCK, PURCHASED IN 1899, RECEIVED DURING 33%

Year

Regular and extra cash dividends

1899 1900 1901 1902 1903 1904

$2.50 10.00 8.00 7.00 7.00 7.00

100 100 100 100 100 100

$250.00 1,000.00 800.00 700.00 700.00 700.00

1905 1906 1907 1908 1909 1910 1911 1912 1913 1914

7.00 7.00 7-75 8.00 8.00 8.00 8.00 8.00 10.00 8.00

100 100 100 100 NO 121 133 146 146 146

700.00 700.00 775-00 800.00 880.00 968.00 1,064.00 1,168.00 1,460.00 1,168.00

1915 191 6 1917 1918 191 9

8.00 8.00 8.00 8.00 10.00

146 146 146 146 146

1,168.00 1,168.00 1,168.00 1,168.00 1,460.00

1920 1921 1922 1923 1924 1925 1926

11.50 12.00 8.00 10.00 u so 10.00 7.00

146 146 292 292 292 292 292

1,679.00 1,752.00 2,336.00 2,920.00 3.358.00 2,920.00 2,044.00

1926

2.00

730

1,460.00

1927

5-50

730

4.015 00

1928 1929 193 0 1931 1932 1933

5.50 4.00 4.00 4.00 2.50 2.00

730 730 766 766 766 766

4,015.00 2,920.00 3,064.00 3,064.00 1,915.00 1,532.00

Total

Average

Stock dividends and split-up

10% 10% 10% 10%

100%

2V1 ( n o p a r ) f o r ι ($100)

5%

Shares accumulated and paying

YEARS

Dividends received

58,959.00

1,773.20*

* This is an average annual income of 17^4% on the investment.

Representatives of the company answer that power and wealth have been obtained as a result of the rendering of real service to consumers, producers and the general public.

INTRODUCTION

25

The banana is a wholesome food. The United Fruit Company has in most instances developed efficient techniques for the production and transportation of this food. Therefore, they contend, its income is the result of its legitimate and useful function of delivering bananas from the tropics to the homes of North America and Europe. Such an explanation contains elements of truth, but it omits very important considerations. Intrenched behind monopolistic concessions, holding in the same hand control of transportation facilities and banana production, being able to a large extent to dictate terms to planters and laborers, having greater income, influence and power than many governments, the United Fruit Company is able to amass larger profits than it could were it operating under either genuine competition or governmental regulation. Various types of books can be written regarding the banana industry. Some writers, like Reynolds and Fawcett. have discussed with knowledge and ability its botanical and technical aspects. Others, notably Frederick U. Adams and Samuel Crowther, have presented the impact of the banana companies on the regions in which they operate, emphasizing—or rather greatly over-emphasizing — service rendered as the source of their prosperity and power. 7 The Banana Empire, a Case Study in Economic Imperialism,8 which has been written contemporaneously with this study, seeks to discover what other factors, less obvious but none the less real than service rendered, contribute to the United's power and prosperity. It illustrates the development of a highly organized industry, largely monopolistic, operating in foreign lands. 7 Reynolds, op. cit.; Fawcett, The Banana: Its Cultivation, Distribution, and Commercial Uses; Adams, Conquest of the Tropics [New York, 1914] ; Crowther, The Romance and Rise of the American Tropics [New York, 1929].

• Kepner and Soothill, The Banana

Empire

[New York, 1936].

26

SOCIAL ASPECTS

OF THE BANANA

INDUSTRY

The present volume seeks to clarify the process by which the jungle has been converted into banana farms, to outline the expansion of the United Fruit Company, to examine in detail the methods by which millions of acres of land have been acquired, and then to appraise the company's activities from the point of view of the welfare of those who toil to produce the bananas. Such an investigation raises the important issue of the impact of the company's attitudes and acts upon the national policies and social legislation of the banana-producing countries.

CHAPTER BACKGROUNDS I.

AND

II PIONEERS

POTENTIAL B A N A N A

LANDS

T H E United Fruit Company attained its present size and power in a little over a generation. Other fruit companies also have expanded rapidly. A m o n g the factors contributing to this growth are the fecundity of the banana plant, geographical and historical conditions in the Caribbean, and North American capital and initiative. T h e natural productivity of the banana is largely responsible for the fact that in the American tropics this fruit produces many times as much wealth per acre as any other known crop could yield on the same lands. T h e banana does not g r o w on a tree but on a huge plant whose " trunk " is merely a closely-wrapped bundle of leaf sheaths which sprout directly from " eyes " on the underground root. In twelve to fifteen months this plant may reach a height of fifteen, twenty or more feet and produce a bunch of bananas. F o r this phenomenal growth extreme fertility of soil, scorching sun and abundant water are essential. The banana thrives best on bottom lands, where rivers overflow during torrential downpours, and, on subsiding, leave behind rich alluvial deposits. Under very exceptional conditions 300 bunches of bananas can be produced on an acre of land, but a fair average for Central America is 125 to 150, and for Jamaica, where intense cultivation is practiced, 200 to 250. 1 Although each plant is cut down after it has pro1

A v e r a g e s from Reynolds, op. cil., p. 69. 27

28

SOCIAL

ASPECTS

OF THE BANANA

INDUSTRY

duced one stem, ordinarily no further planting is necessary because suckers sprout from the rootstock. Under ideal conditions banana farms need no great amount of attention other than occasional cleaning and pruning. Where, however, the land is swampy or in danger of constant inundation as on the Caribbean coast of Central America, expensive systems of drainage must be constructed. Especially favorable conditions for banana cultivation prevail in Jamaica, northern Colombia, and Central America. The backbone of Central America is a range of mountains, largely volcanic, which parallels the southwestern coast. On the plateaus and in the highlands the climate is pleasant for habitation and favorable for raising coffee, wheat and semi-tropical products. The Pacific coast is hot, but healthier than the Caribbean coast. In fact, in the Republic of Costa Rica the Pacific coast is a vacation spot favored by people from the interior. The much more extensive hot Caribbean littoral, drenched by frequent rainfall, was until recently very unhealthy, and hence avoided by most of the residents of Central America. Ancient Trujillo and other ports flourished languidly, picturesque Carib villages dotted parts of the coast, and a few tribes of uncivilized Indians inhabited other areas. Otherwise, the Caribbean plain was little used by man. It contained, however, much potentially excellent banana land, of great fertility, nourished by abundant rainfall, enriched and drained by natural rivers, and very cheap. The availability and cheapness of the lands resulted from scarcity of demand for them and also indirectly from the weakness and lack of unity of Central America. What the development of the fruit industry would have been had these rich lands belonged to a strong unified nation no one knows, but the history of the fruit industry in the British colony of Jamaica suggests that there would have been important dif-

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ferences. 2 At any rate the political and economic conditions of Central America have been important factors in the development of the banana industry. 2. CENTRAL AMERICAN

BACKGROUNDS

Even before the coming of the Spanish conquistadores this midland between North and South America lacked unity. It was inhabited, not by people of one nationality, but by various Indian tribes, separated from each other by many cultural differences, each living under its own more or less powerful cacique. A f t e r the Spanish conquest the land was nominally unified, all of it except Panama being included under the captaincy-general of Guatemala. The power and influence of the luxurious capital of Guatemala failed, however, to weld into organic unity diverse peoples who lacked communications and cultural bonds. Independence from Spain was accomplished in 1 8 2 1 practically without bloodshed under the impetus of the more vigorous movements in Mexico and Colombia. Internal strife developed at once between the conservatives or serviles, who favored a centralized government with special privileges for the clergy and lay propertied classes, and the liberals, who were influenced by French revolutionary philosophy, opposed to the power of the Church, and in favor of federation. The stronghold of the conservative party was Guatemala, and that of the liberal party, supported especially by the creole mercantile and professional element, Salvador and Honduras. At the outset the conservative ruling junta at Guatemala City declared the land united to the new empire of Iturbide in Mexico. This act stimulated the liberals of Salvador to petition the United States, without avail, for admission to the Federal Union. A f t e r the downfall of the Emperor 2

Cf. infra, pp. 47, 48, ιοο, ι ο ί , 107.

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Iturbide, an assembly of the various provinces declared the old captaincy-general of Guatemala the free and independent " United Provinces of Central America." The liberal party then in power improved education and secured the adoption of a constitution which included among other progressive provisions the prohibition of Negro slavery. The new federation, however, was constantly torn by friction as the first president, General Manuel José Arce, withdrew his influence from the liberals who had elected him and gave it to the conservatives. Finally in 1829 General Francisco Morazán, a creole of Honduras with more than average character and ability, entered Guatemala City. Under his dictatorial but in many ways progressive leadership the federation flourished for a while ; but it was in time completely overthrown by the first of the three great dictators of Guatemala, the former pig driver, Rafael Carrera. Since the downfall of the federation many attempts have been made to revive it, some of them by conference and some by force of arms. Between 1842 and 1862, eight different movements, each representing two or more of the republics, sought some kind of federation or union. A f t e r Morazán of Honduras, another dictator, Justo Rufino Barrios of Guatemala, was the leading champion of federation, attempting to secure it first by persuasion and later by the sword. The latter method was employed by another dictator, Zelaya, of Nicaragua, and by the North American filibusterer, William Walker. 3 In 1895 the states of Salvador, Honduras and Nicaragua banded together under Zelaya's leadership in the Greater 8 The struggle for federation is the subject of Slade, The Federation of Central America; for general historical background, see Robertson, History of the Latin American Nations; Munro, The Five Republics of Central America ; James and Martin, The Republics of Latin America ; and other histories.

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Republic of Central America. But almost immediately after the federal constitution went into effect a revolution in Salvador gave a mortal blow to the new federation. For a brief period in 1921, Salvador, Honduras and Guatemala were federated, but in December President Carlos Herrera of the latter country was overthrown, and the provisional council of the new federation refused to accept representatives from the new Guatemalan government, which it considered illegal. Despite the failure of many attempts at actual federation there have been a number of conferences and other gatherings in which the republics of Central America have cooperated in regard to matters of common concern. The two best known were the conferences in Washington in 1907 and 1922-23. The former provided among other matters for compulsory arbitration and the establishment of a Central American Court of Justice. The short-lived career of this court was terminated in 1917, after the United States and Nicaragua had disregarded its decision that the BryanChamorro treaty violated rights of Costa Rica and Salvador and was contrary to the 1907 treaty.4 The conference of 1922-23 substituted an arbitration panel for the court, strengthened the provisions against the recognition of revolutionary governments, and formulated plans for Central American cooperation. Feeling that the United States has been arbitrary, sometimes following and sometimes not following the provisions regarding the non-recognition of revolutionary governments, many Latin Americans have become hostile to this treaty. Costa Rica and Salvador denounced it officially in December, 1932, and August, 1933, respectively. William F. Slade, in his monograph entitled The Federation of Central America, states that the following eight * Cf. Buell, The United States and Central American Stability, p. 177.

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obstacles have blocked the achievement of federation: the jealousy of the states of each other ; the revolutionary habit ; the corruption of political life; the heterogeneity of population; the sparseness of population; the opposition of Great Britain, desiring to maintain its power in the Mosquito Coast, British Honduras and the Bay Islands; the ambition of Mexico, especially under the empire; and the lukewarm policy of the United States. Without attempting to weigh the respective importance of each of these factors, or to determine which are primary and which are secondary, we recognize that their combination has been a great impediment to Central American unity, practically and ideologically. The policy of the United States has been characterized by a lack of definiteness resulting from change of administrations, and featured by various statements favorable to the ideal of federation which were vitiated by failure to support these movements on the occasions when opportunities arose. Illustrations of this are seen in the failure of the United States to provide proper diplomatic representatives to the United Provinces of Central America in 1 8 2 3 and to the Greater Republic of Central America in 1895. Moreover, the Bryan-Chamorro treaty and the intervention in Nicaragua have driven the wedge of discord further into the heart of Central American life. Although as a result of internal discord and external influence the dream of one united Central American nation has failed to materialize, it has not faded away entirely and is still a potent force in political life. One of the chief needs and ambitions of the various countries has been railroad construction, including especially the connecting of the Pacific and Caribbean coasts. National assets which could be exchanged f o r loans, railroads and general economic development have included primarily the vast expanse of jungle lands on the Caribbean coast, which,

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as has been pointed out, are excellent for the cultivation of bananas. Under unstable governments economic development has been retarded. Both national treasuries and the average citizen have been poor. Hence governments have been peculiarly receptive to proposals for the introduction of foreign capital, the development of agriculture and industry, and the material advancement of the several republics. Foreign capitalists, stressing the lack of transportation and other facilities and emphasizing the risks involved because of the frequency of political upheavals, have insisted upon securing excessive concessions before undertaking operations in this region. Each of the several Central American countries, being weak both in authority and in bargaining power, has readily granted such considerations as the price to be paid for its economic development. Frequently politicians who have determined national policies have been short-sighted or corrupt. Anxious for the enhancement of party or personal prestige to be gained by securing a loan to balance the year's budget, by launching a spectacular railway project, or by introducing a promising industry, they have given little consideration to the effects of sweeping long-term concessions upon the political, economic and social conditions of the future, as is shown in detail in The Banana Empire Thus far we have considered the several Central American nations as if they closely resembled each other. As a matter of fact important causes of their failure to federate have been the many differences between them. This is especially marked in regard to population, democracy, and order. The Spanish and Indian bloods are mixed in different degrees in the several countries. In Guatemala sixty per • K e p n e r and Soothill, op. ext., cc. ii-vi, viii.

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cent of the population is pure Indian, little influenced for the most part by modern civilization. In Costa Rica, on the other hand, less than one per cent is Indian, while eighty per cent is pure white. In Nicaragua, Honduras and Salvador the mestizo (mixed) groups predominate. T h e latter republic has a density of population of 124 to the square mile, while thinly-settled Honduras and Nicaragua have only 13. Panama, which we are considering as a part of Central America since its independence from Colombia, has a considerable proportion of Negroes in its population. In Guatemala many of the Indians are held almost in a state of peonage on the large coffee fincas. O n the other hand, Costa Rica is a nation of small land holders. Considering these differences in racial stock and economic procedure, it is not surprising that Guatemala has been a conservative stronghold, often lacking freedom of speech, while Costa Rica has enjoyed free speech and democratic government. The latter progressive little nation has long been proud of the fact that it provides more school teachers than soldiers. In the 1931 budget 4,259,665 colones were allotted to education and only 2,528,873 to the Department of Public Safety for army, navy and police combined. As a result of popular education, illiteracy in Costa Rica has been reduced to 23%, while it is 7 5 % in Nicaragua, and 80% in Guatemala. Although Costa Ricans have evinced keen interest in national problems, they have been on the whole sceptical of plans for Central American federation. The current idea that Central American nations are given to revolution is justified in most of the countries. Following 1920 Honduras had twenty-seven revolutions in three years.® Nicaragua's revolutionary propensities are well known; they have been further aggravated by the intervention of the United States. Except for the Tinoco coup in • Mario Ribas in Current History Magazine, Sept., 1927, p. 922.

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1917 and Manuel Castro Quesada's three-day rebellion in 1932, 7 there have been no revolutions in Costa Rica for over sixty years. 3 . B A N A N A A N D RAILROAD PIONEERS

Opinions differ concerning the introduction of the banana into the western hemisphere. It seems probable, however, that the edible banana with which we are familiar came originally from the tropical regions of southern Asia, one variety of it being introduced to the new world in 1516 by Friar Tomás de Berlanga, who carried it from the Canary Islands to Santo Domingo. The Gros Michel, the banana which is to-day grown for export, was imported into Jamaica about 1836 by Jean Francois Pouyat, a French botanist and chemist. Although prior to 1850 small lots of red bananas had been brought on " pineapple " schooners to the Atlantic Coast ports of the United States from Cuba and the Bahamas, yellow bananas were first carried to northern markets from Central America. Toward the close of the Civil W a r schooner owners sold at auction on the levees of New Orleans small lots of yellow bananas which had been grown in the Bay Islands, little islands off the coast of Honduras which had been settled by British subjects. In 1866, Carl August Franc, a steward on one of the Pacific Mail steamships, carried several bunches of bananas from Aspinwall, Panama, then a part of Colombia, to the United States. Discovering the possibilities of a market for such fruit, he formed the firm of Frank Brothers for the importation of bananas from Aspinwall to New Y o r k . 7 In Feb., 1932, from the 15th to the 18th, a small revolution was headed by Manuel Castro Quesada, defeated candidate for the presidency. The Bella Vista barracks were occupied. Peace was arranged at the United States Legation, across the street from the barracks, on Feb. 18, with the understanding that the rebels should be permitted to leave the country [Boston Herald, Feb. 19, 1932].

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In 1870 Captain Lorenzo D. Baker of Wellfleet, Cape Cod, stopping his 85-ton schooner for a load of bamboo at Port Morant, Jamaica, picked up also a small quantity of yellow bananas. The following year he carried a full cargo of cocoanuts and bananas from Port Antonio, Jamaica, to Boston. Thereupon he interested Captain Jesse Freeman, another Cape Cod skipper, in the scheme of operating a fleet of schooners in the banana trade between Jamaica and Boston. A s fruit was cut when very " thin," that is, immature, the venture was successful, except on delayed voyages when the fruit ripened too much. A f t e r various losses, Captain Baker succeeded in establishing in Jamaica an organization for loading other vessels besides his own, and later formed with his brother-in-law, Ε . B. Hopkins, the firm of L . D. Baker and Company. Baker's fruit was sold in Boston by the commission house of Seaverns and Company, with which Andrew W . Preston was associated. In 1885, seeing the possibilities of selling larger supplies of bananas, Captain Baker, Captain Freeman, Andrew W . Preston and seven other men formed the partnership of the Boston Fruit Company, each member contributing $2,000 to the enterprise. Later the partners subscribed an additional $100,000. So successful was this total investment of $120,000 that by 1890 the property was valued conservatively at $531,000. This phenomenal financial growth resulted from successful undertakings, the waiving of dividends and the reinvestment of the profits. In 1890 the Boston Fruit Company was incorporated under the laws of Massachusetts with a capital stock of $500,000 and a surplus of $31,000.® During the following decade it developed seven subsidiaries. Three of these were steamship companies, the American Fruit Company sailing to New Y o r k , the Buckman Fruit Company to Baltimore, and the Quaker 8

Adams, op. cit., p. 45.

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City Fruit Company to Philadelphia. Three of the subsidiaries were concerned with the growing of fruit in the islands of the Caribbean. The seventh was the Fruit Dispatch Company, the selling agent in the United States. Considering the present ramifications of the banana empire, it is significant that of the three men who were most responsible for laying the foundations of the United Fruit Company, one, L . D. Baker, was a sea captain, another, Andrew W . Preston, was a fruit merchant, and the third, Minor C. Keith, was a railroad builder and international financier. While the two former were organizing the Boston Fruit Company f o r trade with the islands of Cuba, Jamaica, and Santo Domingo, the latter was building a railway on the mainland of Central America. In 1870 one of the great figures in Central American history, General Tomás Guardia, was president of Costa Rica. Although this delightful country covers 59,570 square miles, about the size of the state of Georgia, the center of the life of its halfmillion people is largely confined to a small area on the central plateau around the four chief cities of San José, Cartago, Alajuela, and Heredia. T o connect these cities with the Pacific coast and ultimately to carry the railroad to an eastern port, was a project in which the president was greatly interested. Although two previous concessions for an interoceanic railroad had lapsed for lack of construction, President Guardia in 1 8 7 1 authorized his minister of public works, Manuel Alvarado, to execute with Henry Meiggs a contract for building a railway from Puerto Limon to San José and Alajuela. Meiggs, who had been a lumberman in the United States, had migrated west as a forty-niner, then south to Peru, where he combined political activity with building railways in the Andes. The noted railway builder turned the contract over to his nephew, Henry Meiggs Keith, who

38

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in turn asked his younger brother, Minor Cooper Keith, then in Texas, to join him. Thus was started one of the most colorful careers in Central America. A f t e r mules had hauled a locomotive laboriously up the hills from the Pacific coast to Alajuela, at a cost of 400,000 colones, the first rails were laid on March 1 , 1872. Twenty months later the twenty-seven mile portion connecting the four principal cities, then known as the Central Railway, was completed. The railroad was also started at Limon on the Caribbean coast and brought twenty-one and one-half miles inland to Matina. The work was greatly handicapped by lack of funds owing chiefly to fraud connected with the railroad loans which the government floated abroad." A f t e r the suspension of building for a while, other contractors carried the road ten and one-half miles further inland to Pacuare. In 1879 Minor C. Keith, who previously had been in charge of commissaries, received his first railroad contracts, 10 in accordance with which he continued the line to Carillo, seventy-one miles from the coast. Finally on April 2 1 , 1884, the national congress approved the famous Soto-Keith contract. 11 This granted Keith generous terms for connecting this railroad with the line on the central plateau and arranging for the refunding of the foreign debt which was being defaulted. 9

T. S. Güell, Historia Monetaria de Costa Rica, pp. 63-66. In La Tribuna of San José, C. R-, Sept 12, 1929, Víctor Guardia Quirós, the son of President Tomás Guardia, shows the exaggeration of the popular myth which attributes the building of the railroad to the Caribbean and the creation of the banana industry entirely to Keith's initiative and energy. This writer contends that prior to the completion of the small section from Madre de Dios to Pacuare, Minor C. Keith did not have charge of any railroad building and that he was not acquainted with President Guardia until, as the former was about to return to the United States, General Juan Bautista Quirós, superintendent of the railway from Limon to Pacuare, urged him to remain, and introduced him to the chief executive. 10

11

Cf. infra, ch. iv, sec. 2, p. 71.

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The railroad needed more freight, in hope of securing which Keith experimented with banana cultivation. Some of his early lands were so well chosen that they are still bearing. President Guardia and others also planted bananas near the railway. In 1879 Keith shipped small cargoes of bananas to New York in joint account with the Atlas Line of steamers. T w o years later he sent his first full cargo to New Orleans. In two more years the annual exportation of bananas from Costa Rica amounted to 110,801 stems. The following year it jumped to 420,000, after which it rose to 1,034,765 in 1890 and 3,420,166 in 1900. For the cultivation and export of bananas from Costa Rica Keith organized The Tropical Trading and Transport Company. But he did not limit his interests to this one country. The Snyder Banana Company of New Jersey, in which he owned half interest, acquired holdings in the Bocas del Toro district of Panama. Banana production in the Santa Marta district of Colombia was carried on by the Colombian Land Company, a British corporation, of which Keith became general manager and the controlling factor. 4. T H E ORIGIN OF T H E UNITED FRUIT C O M P A N Y

The end of the century was the turning point in the banana industry in several important respects. In the first place there was an increased tendency on the part of North American interests to raise bananas upon plantations of their own. The earliest pioneers restricted their activities in the tropics almost entirely to the purchase of fruit from local planters. Hence they entered but slightly into national affairs. Frequently, also, their activities were temporary. When, however, foreign companies, such as those directed by Andrew W . Preston and Minor C. Keith, secured vast tropical possessions, the banana enterprise became closely intertwined with political, economic and social activities of

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INDUSTRY

Caribbean countries. A s rulers of extended domains, not as mere purchasers of fruit, the banana lords laid the foundations of their empire. In the second place the transition between the centuries marked the change from freedom of competition to monopolistic control. One who was active in the banana trade, both before and after this change, testified in a court proceeding that in the nineteenth century no limitation was put upon the quantity of fruit which each importer could handle, and that the quantity of fruit thus placed upon the market and natural competition determined prices in the United States. A s far as conditions in the tropics were concerned, he averred : There was great competition between the several parties engaged in the purchase of said fruit, and they were obliged, on account of such competition, to pay fair and reasonable prices for the same.12 There were a number of outstanding influences leading to the consolidation of the banana industry. The first was the matter of climatic conditions. Banana production is subject to many natural disasters, such as hurricanes, floods, droughts and plant disease. These disasters frequently ruin both private planters and small companies whose holdings are restricted to single localities. On the other hand organizations with holdings far removed from each other may recoup part of the losses sustained in a stricken area by fruit from better favored regions. By thus distributing their properties over widely scattered areas, they insure themselves against disaster. The mass production of bananas and their transportation from the tropics to far distant markets require much capital. 12McConnell v. Camors-McConnell Co. [Circuit Court of Appeals, F i f t h Circuit, Mar. 5, 1907. O n rehearing April 15, 1907]. is?. Fed. Rep. 321.

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Efficiency and economy may be increased by a corporation which has sufficient funds to develop extensive drainage and irrigation works, to conduct intensive research in tropical agriculture, to carry on projects of sanitation over large districts, to utilize mechanical conveyors for the loading and unloading of vessels, and to operate regular services of refrigerator steamships. A s the prompt delivery of perishable fruit from the farms to the coast is important, companies prefer to control railroad and docking facilities. On the sales end regularity of supply and a far-flung marketing organization favor the extension of the banana trade. Finally the desire to monopolize the production, transportation and selling of bananas appears to be a special incentive for the consolidation of the banana enterprise. Prior to the organization of the United Fruit Company, the Boston Fruit Company interests and those of Minor C. Keith were the largest in the banana industry. T o a remarkable extent the diversified holdings of the two groups complemented each other—those of the Boston Fruit Company being in three islands of the Caribbean Sea and those of Keith in Central America and Colombia. With these and other considerations favoring consolidation of fruit interests, a particular event gave a definite impetus to the organization of the United Fruit Company. Near the end of the nineteenth century Hoadley and Company, which had been selling Keith's fruit in New Orleans, went bankrupt. The government and banking interests of Costa Rica backed Keith, helping him to meet his obligations. Nevertheless, it was necessary for him to make other arrangements for marketing his fruit. In 1899 Preston and Keith joined forces. On March 3 0 the United Fruit Company was incorporated under the laws of New Jersey, with an authorized capital of $20,000,000. It then proceeded to buy the properties of the Boston Fruit

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Company, including its seven subsidiaries, f o r $5,200,000. It also arranged to purchase from Keith and his associates the three companies doing business in Costa Rica, Panama and Colombia, respectively, for about $4,000,000. 5 . T H E U N I T E D ' S S T R A N G L E HOLD

Friends of the company have denied that the purpose of the consolidation of the Boston and Keith interests was the prevention of competition. If so, the United Fruit Company completely departed from the intentions of its organizers by proceeding at once to secure controlling interests in the other chief importers of bananas into the United States. Thus the company, or Keith or Preston in their own names, purchased at least half of the stock of the Bluefields Steamship Company, the Orr - Laubenheimer Company, the Camors-McConnell Company, the CamorsWeinberger Banana Company, the Thacker Brothers Steamship Company and the Belize Royal Mail and Central American Steamship Company. Thereafter in at least four of these companies half or more of the directors were officers or other representatives of the United Fruit Company." Some independent operators were put out of business. Thus Henry Bayer and Company, for thirty years engaged in importing fruit into Charleston, South Carolina, was conquered. Jobbers were warned that the United's marketing subsidiary, the Fruit Dispatch Company, would not tolerate purchases from Bayer. At times when one of Bayer's ships arrived, the Fruit Dispatch Company dropped its prices far below the margin of profit, making Bayer sell at a loss. When the latter had disposed of his cargo, however, the Fruit Dispatch Company's prices rose to a high figure. M

The principal source for the material in this section is : Wheeler, Curtis & Haight, attorneys, New York City, Statement Relating to the Fruit Industry in the United States, printed in the Congressional Record, March 31, 1908, pp. 4149, et seq.

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The United Fruit Company, having consolidated the Boston Fruit Company and the three Keith concerns, having secured a controlling interest in the other principal importers, having arranged with most of these for the marketing of their bananas through the Fruit Dispatch Company, and having secured from others agreements to stay out of business, controlled most of the banana importations into the United States. The technique by which it regulated supplies and prices was explained in the following statement by Wheeler, Curtis and Haight, attorneys of the American Banana Company : During its existence since 1899 it has had full control of the sales and prices of the fruit imported by all the corporations named, which comprised altogether some 80% to 90% of the importations into the entire country. The Fruit Dispatch Company has two main divisions, the eastern division and the southern division. Prices are fixed for the eastern division by a committee which meets every Friday in New York, and the prices thus fixed are communicated to the various branch offices in New York, Boston, Philadelphia and Baltimore. The prices for the southern division were formerly fixed by a committee meeting similarly each week in New Orleans and consisting of representatives from each of the allied companies. It is understood, however, that latterly the prices for the southern division have been fixed by the New Orleans manager of the Fruit Dispatch Company in consultation with the New Orleans manager of the United Fruit Company. These prices govern sales in New Orleans, Mobile, etc. From time to time since the existence of the United Fruit Company, the Fruit Dispatch Company has deliberately destroyed fruit for the avowed purpose of maintaining the market price which it desired to establish. This has been done even when the fruit destroyed has been in good condition and saleable at a profit, although at a price less than that fixed by the Fruit Dispatch Company's pricing committee. From time to

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time too the amount of fruit to be imported by subsidiary companies has been restricted at the direction of the United Fruit Company in order to avoid overstocking the market and preventing the competition which ensues from such a condition. . . . There have been many instances where jobbers were threatened with loss of their business if they continued to deal with independent importers, and accordingly such independent importers have been forced to lose their fruit f o r lack of a purchaser. There have also been instances where fruit has been given away by the Fruit Dispatch Company, in order to prevent the independents from selling what they had imported. 1 * T h e situation which thus prevailed at the opening of the twentieth century w a s summed up in the opinion of

the

court, delivered by Circuit Justice M c C o r m i c k in the case o f McConnell vs. C a m o r s - M c C o n n e l l C o m p a n y . 1 5 The averments of the answer show that the United Fruit Company has combined and dominates substantially all of the other persons, individuals, firms, or corporations engaged in the trade of importing tropical fruits from Central and South America and the Antilles; that there are twenty-five or more constituent agencies in this combine to monopolize the procuring by production and purchase, and the carriage and distribution to consumers, of these articles in universal use. " Ibid. 15

McConnell v. Camors-McConnell Co., 152 Fed. Rep. 3 2 1 .

CHAPTER A I.

GENERATION

OF

III EXPANSION

T H E P A S S I N G S H A D O W OF T H E B A N A N A

INDUSTRY

THE observer from a hilltop is entranced by the changing aspect of the jungle as a momentary cloud suddenly intercepts the violent rays of the tropical sun and a cool, refreshing shadow settles upon a section of the dazzling landscape. T h e shadow does not remain stationary ; it moves ever onward, covering new areas of the jungle growth in one direction and at the same time abandoning other areas to the scorching heat of the sun. T h e size and shape of the moving shadow constantly changes also. T h e banana industry may be likened to the shadow of a fleeting Protean cloud passing over the lands of the Caribbean in a generally westerly course. When it has passed by, the chaotic jungle again rules all. T h e consolidation of the Boston Fruit Company and the Keith interests in 1899 combined vast areas of land in widely separated areas under one control. The United Fruit Company at the end of its first year at the dawn of the century possessed an international farm of 212,394 acres, of which over 61,363 were improved. F r o m the start this new company emphasized the principle which had led to its birth—expansion. V e r y soon, too, it was forced to combine this with another principle—contraction. T h e policy of expansion was from the start made possible by the continuation of the practice which had been established by the old Boston Fruit Company of reinvesting part 45

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of the profits in new developments. In 1901 the company's shadow stretched over parts of Cuba, Santo Domingo and Jamaica. Thereafter it tended to glide westward over Central America rather than to expand further over these Caribbean isles. 2 . B A N A N A AND SUGAR ISLANDS

Santo Domingo, in which the Boston Fruit Company had developed three thousand acres of banana plantations, was abandoned soon because of unfavorable weather conditions. With storms taking such a heavy toll that banana cultivation was unprofitable, the lands were sold in 1909. Climatic conditions were not as unfavorable in Cuba as in Santo Domingo. The company's plantations about Nipe Bay produced good bananas. Nevertheless, it became apparent that better bananas could be produced more cheaply on the Caribbean littoral of Central America and Colombia than on the United's Cuban plantations. These latter were therefore discontinued in 1905, and the area was replanted with sugar cane. A s a result sugar was the one important agricultural interest of the company in Cuba from that time until 1 9 3 1 , when the company acquired about 6,700 acres near Bayamo, province of Oriente, on which it intended to start banana cultivation at once. 1 By 1925, with approximately 90,000 acres planted to sugar, the book value of the company's Cuban lands and equipment amounted to nearly $46,000,000, while the corresponding figure for all of the banana-producing countries together amounted to but $61,500,000. Nevertheless, the significance of the United's operations in the entire Cuban sugar industry is slight. Out of Cuba's crop of approximately 31,000,000 bags of sugar in 1926-7, 19,375,000, or 62^2%, were manufactured by mills owned by citizens of 1

New York Times, Nov. ι, 1931.

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47

the United States, but only 968,00x3 bags were produced by the United Fruit Company. 2 Obviously the United Fruit Company, handling 3 1 / 1 0 % of Cuban sugar exports, cannot dominate that industry nor the country as it can the banana industry and Costa Rica where it handles about 99% of the banana exports. In this study we shall pay but slight attention to the Cuban sugar interests of the United Fruit Company. Suffice it to remark that great fluctuations of prices in the sugar market have resulted at times in a loss in sugar which the company has covered by larger profits in bananas. T w o of the three fields of operation of the Boston Fruit Company, Cuba and Santo Domingo, were soon abandoned by the United Fruit Company as f a r as the banana industry was concerned. The third and most important field was Jamaica. The banana industry of Jamaica has always differed in many respects from the banana empire which has existed on the mainland of Central America and Colombia. On this island, the density of whose population is 204 per square mile or nearly 16 times that of Honduras and Nicaragua, much of the jungle had been cleared years, and in some cases centuries, before the great exporting companies appeared on the scene. Moreover, in Jamaica the United Fruit Company has concentrated chiefly on buying bananas from private planters, thus producing relatively few bananas on its own lands and obtaining, to a f a r less extent than in Central America, the domination of railroads and other economic activities. In 1900 the United Fruit Company had 5,749 acres of banana cultivations in Jamaica. In 1 9 1 4 its banana acreage increased to 1 0 , 5 2 1 , but by 1925 the acreage had dwindled to 6,108. In 1 9 1 3 when the total Jamaican banana exports amounted to 1 1 , 4 1 9 , 2 8 1 stems, as compared with 8,238,726 stems exported from Honduras, a

Jenks, Our Cuban Colony, pp. 284-287.

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OF THE BANANA

INDUSTRY

Jamaica's closest rival, the United Fruit Company produced bananas on but 8,767 acres of its own lands, although it had 4 7 , 7 2 3 acres under banana cultivation in Costa Rica. These 8,767 acres constituted only about 1 0 % of Jamaica's total banana acreage. The entire commercial banana production of Jamaica during the fiscal year 1 9 1 1 - 1 2 was approximately 14,770,000 bunches. Of this amount the United Fruit Company produced about 1,502,000 bunches on its own lands and purchased 5,986,665 bunches f r o m local producers, while its competitors exported 7 , 2 8 1 , 3 4 5 bunches.* BANANA

CULTIVATIONS IN

Total Acreage 1900 1910 1920 1932 • F i g u r e for 1931-2

JAMAICA

United Fruit Company Acreage Percentage of Total

27,543 5,749 21 69,066 7,151 10 63,168 8,050 13 67,055 * 4,487 7 given in the official list of the dominions office.

Although f o r a while the United and Atlantic fruit companies controlled three-quarters of the Jamaican banana industry through a compact, 4 much of the time genuine competition has prevailed on this island. 3.

C O N T I N E N T A L LANDS LASHED BY T H E CARIBBEAN

During the early years of the century, while the shadow of the United Fruit Company was withdrawing from Cuba and Santo Domingo and hovering without much change over parts of Jamaica, this shadow stretched out further and further over Colombia and Central America. The banana cultivations early acquired in Colombia were slight, and the company's productions were insignificant until the year 1 9 1 2 , * Adams, op. cit., pp. 134-136. From United Fruit Company annual reports and Cundall, The Handbook of Jamaica, 1915 and 1922, these statistics were obtained. * Bitter, Die Eroberung

Mittelamerikas

durch den Bananen-Trust,

p. 1 3 1 .

A GENERATION

OF

EXPANSION

49

when its banana cultivations increased from 3,915 acres to 19,516. Since that time its Colombian cultivations have expanded steadily in size and increased greatly in value. In Colombia where banana lands must be irrigated, the ravages of the Panama disease have not been experienced as in Jamaica and Central America, with the result that improvements assume a relatively more permanent aspect in this South American country than in Central America. Banana developments around Almirante Bay, Panama, shared with those of the Limon province of Costa Rica in being the United's most extensive and important accretions from the Keith interests. Although the company has purchased some fruit from independent farmers it has raised a much larger percent of fruit on its own lands in Panama than it has in Jamaica. A t the outset, however, the Snyder Banana Company, and later the United Fruit Company, purchased a considerable supply of fruit from independent banana farmers. 6 Rival companies did the same, but with greater economic strength the United during periods of severe competition was able to offer higher prices for bananas in the tropics as well as to undersell its competitors in northern markets. It also benefited when a rival promoter after entering land claimed by Costa Rica was ousted by the soldiers of that republic.8 During recent years the Almirante division has suffered so much from the ravages of the Panama disease that the economic life of the region has dwindled and it is probable that eventually the division will be abandoned. The company's own banana cultivations in Panama were reduced from 34,949 acres in 1912 to 13,771 acres in 1925, and to ' Adams, op. cit., pp. 287, 290. • T h e American Banana Company. op. cit., pp. 53-63.

Details in Kepner and Soothill,

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

12,446 acres in 1933 in spite of extensive new developments on the Pacific coast. 4 . MONOPOLY IN COSTA RICA

A t the time of the incorporation of the United Fruit Company Keith's chief railroad and banana interests were in Costa Rica. In 1900 this republic exported 3,420,166 bunches of bananas, all of them going to the United States. F r o m that time on Costa Rican banana production increased steadily until 1907, when the total bananas exported amounted to 10,166,551 bunches. Thereafter banana exportation declined slightly for a few years but reached its peak of 11,117,833 bunches in 1913. 7 During that year the United Fruit Company had in Costa Rica 47,723 acres of banana cultivations in contrast to 34,903 acres in Panama, 27,122 acres in Guatemala, 22,790 acres in Colombia and less than 10,000 acres in any other country. In Costa Rica and Panama were the United's most extensive banana cultivations during the first half of its history. Costa Rica also afforded the company the latter's most complete grip upon the banana industry. T h i s domination was made possible to a large extent by the control of wharves and railroads. The United Fruit Company's propaganda and political influence, its struggle for tax exemptions and special privileges, its leasing of the main railroad line from an English company without governmental approval, and its construction of railroad branches without legal authority are related in The Banana Empire,8 By means of its hold upon the transportation system, the United has been able to throttle competitors who had the 1 Sáenz, Contratos y Actuaciones de las Compañías del Ferrocarril de Costa Rica, la Northern Railway Co. y la United Fruit Co., en Costa Rica [San José, C. R., 1929], pp. 364, 365, gives banana exports, 1883-

1927. •Kepner and Soothill, op. cit., pp. 49-51, 77-82, 209-225, 236-250.

A GENERATION

OF

EXPANSION

51

temerity to hazard entrance into its private preserve. The two outstanding banana wars occurred in 1 9 1 2 , when the United blocked the attempted entrance of the Atlantic Fruit Company into Costa Rica, and in 1928, when it staved off the attempt of the Cuyamel and Atlantic companies to purchase fruit from a national cooperative organization.* The United Fruit Company has buttressed its position in Costa Rica, as well as in other countries, by governmental concessions. When in 1930 its twenty-year concession was about to terminate, it secured, in spite of violent opposition in the legislature and throughout the republic, another twenty-year concession enabling it both to increase its hold upon the Caribbean coast and to exploit much of the Pacific coast as well. Although for a while the government took steps to annul this concession on the grounds of non-fulfilment of terms, eventually in December, 1934, after protracted negotiations, the legislature approved the Cortés-Chittenden agreement, exonerating the company and continuing this 1930 concession. 10 From the peak of 47,723 acres in banana production in 1 9 1 3 the United's banana cultivations declined to 7,958 acres in 1 9 3 0 and to 4,609 acres in 1933. With the increasing exhaustion of the land and the terrific ravages of the Panama disease in recent years, each acre cultivated has tended to produce fewer and smaller-sized stems. Nevertheless this great contrast in the company's own cultivations does not indicate an equal decline in its exports, since, with the deterioration of the land, it has purchased an increasing portion of its fruit from private planters, letting them bear the burden of the decreasing returns and increasing costs. Thus, while the United purchased 71.8 per cent of the bananas which it exported in 1926, it purchased 75 per cent 9 10

For detailed accounts of these conflicts see ibid., ρρ· 64-76. Ibid., pp. 77-82, 275-283.

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

of its 1929 banana exports. 11 The company broadcasted propaganda envisaging a stimulated banana industry, should the 1930 concession be approved. The results have failed to fulfill this entrancing prospect. Similar propaganda issued in 1934 is likely to prove equally unjustified. The banana industry of the Limon region of Costa Rica is permanently relegated to a minor position. 5 . T H E B A N A N A INDUSTRY OF EASTERN G U A T E M A L A

In 1904 Minor C. Keith obtained personally a concession from Guatemala to complete the railroad from Puerto Barrios on the Caribbean Sea to Guatemala City." Two years later the United Fruit Company acquired 50,000 acres of land along the Motagua River. These lands were developed on a large scale and furnished much fruit for the next twenty years. In 1 9 1 7 the United's Guatemalan cultivations surpassed by one acre those in Costa Rica. From 1 9 1 5 to 1918 the United had approximately an equal amount of land producing bananas in Costa Rica, Panama nnd Guatemala, with Panama slightly in the lead ; subsequently Guatemala's cultivations fluctuated for a decade between 22,000 and 28,000 acres. Of the United's total banana exports from Guatemala prior to 1930 only 20J/2% was purchased from private planters. In 1924 the United Fruit Company sought to lease another large section of land from Guatemala. Three years later, in spite of violent protests from Honduras, from which country the Cuyamel Fruit Company had obtained the use of some of this land, the Guatemalan congress granted the United the concession which it so greatly de11 la

Costa Rica, La Caceta, June i6, 1928; and infra, p. 66.

Contract of January 12, 1904, outlined in Guatemala, publicacién oficial del ministerio de fomento, Documentos Relativos a¡ Ferrocarril del Norie [Guatemala, 1912], pp. 22, 23.

A GENERATION

OF

EXPANSION

53

sired. Small armed conflicts and much hostility developed as a result of this politico-economic feud until in January, 1 9 3 3 , Chief Justice Hughes handed down an award settling the ancient boundary dispute between the two republics." Although throughout the rest of Central America and in Colombia the United operates the railroads which transport its fruit, it is served in Guatemala by the International Railways of Central America. This system, controlled for many years by Keith, who died in 1929, has been declared to be independent of the United Fruit Company. The latter, however, has owned much of the I. R . C. A.'s stock, and, as is shown elsewhere, 14 there are numerous grounds f o r assuming very close connection between these two corporations and at times actual control of the I. R. C. A . by the United Fruit Company. 6. HONDURAS' R E C E N T L Y ACQUIRED B A N A N A SUPREMACY

Although most Honduran citizens have been loath to settle upon the fever-infested North (Caribbean) Coast, some courageous adventurers have raised bananas on certain sections of this coast for the last ninety years. Long before the days of the United Fruit Company, or even of its predecessor, the Boston Fruit Company, Honduran planters sold bananas to Italian steamship companies sailing to New Orleans and Mobile. Early in the twentieth century Samuel Zemurray and the Vaccaro brothers of New Orleans added to the exportation of bananas the raising of fruit on their own lands. The former's interests were in 1 9 1 1 incorporated in the Cuyamel Fruit Company, which long developed vast properties east of the Guatemalan border near Omoa and Puerto Cortes, and the Vaccaros' interests were 18

Kepner and Soothill, op. cit., pp. 1 1 7 - 1 2 1 . Ibid., ch. vi, secs. 2, 3.

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

finally incorporated in the Standard Fruit and Steamship Corporation, which has extensive holdings around L a Ceiba, more than seventy miles further to the east. 1 * It was not until 1912 that the United Fruit Company began raising bananas in Honduras. T h e following year, through two subsidiaries, the Tela Railroad Company and the Truxillo Railroad Company, it took over t w o very favorable concessions, on the basis of which it has developed its large Tela division between the Cuyamel and Vaccaro spheres of influence and its large Truxillo division about sixty miles east of L a Ceiba. 14 F o r a decade and a half the rival companies exported bananas, a very considerable proportion of which each raised on its own property, built railroads and dominated their respective regions. Between them there has existed competition of a kind; not competition for the fruit of private planters, since each can purchase only the fruit available along its own railway line, but competition for favors from the government of Honduras and for buyers in northern markets. O w i n g to the high quality of the Cuyamel's fruit, Zemurray's organization offered a real challenge to the United. The eventual result was that in December, 1929, the United Fruit Company purchased its ambitious rival for 300,000 shares of its own stock, worth at the time about $32,000,000. During the depression Zemurray, through the acquisition of United Fruit stock and proxies, obtained control of his erstwhile competitor, which he now guides as Managing Director in Charge of Operations." T h e United's banana cultivations in Honduras have extended by leaps and bounds. Although they covered but 14,081 acres in 1918, they reached out over 26,178 acres in 15

Ibid., ch. i ν, secs. 1-3.

14

Ibid., ch. ¡v, secs. 6, 7.

" Fortune, March, 1933, p. 29.

A GENERATION

OF

EXPANSION

55

1919, 41,675 in 1920, 60,729 acres in 1922, and 87,808 acres in 1924. A f t e r a slight decline they reached a new high mark of 95,300 acres after the purchase of the C u y amel in 1929. T h u s to-day Honduras is both the American tropics' chief source of banana supply and the site of the United's most extensive farms. It should be noted, however, that in 1929 the United purchased less than 1 5 % of the fruit it exported from Honduras, in contrast to 5 7 % of the fruit it exported from Colombia, 7 5 % of the fruit it exported from Costa Rica, 8 3 % of the fruit it exported from Jamaica, and 5 1 % of the fruit it exported from all divisions combined. 1 * A t times the United Fruit Company has secured a small amount of fruit from British Honduras. 7. T H E CHAOTIC B A N A N A INDUSTRY IN NICARAGUA

Nicaragua has played a minor role as far as the banana industry is concerned. In 1923, its banner year up to that time, its total exports amounted to about 3,500,000 bunches. 1 " During the next five years the exportations fell considerably below that amount, but in 1929 they amounted to over four million stems. A t the time of its organization, when the United gathered to itself various potential rivals in various lands, this " fruit trust " secured contracts f r o m nearly all of the substantial planters in the Bluefields district/ 0 Its purpose was to control all of the banana trade of Nicaragua. Rather than exploit this field directly it turned the busi1 8 From an official report of the company, see Kepner and Soothill, op. cit., p. 273.

Council of the Corporation of Foreign Bondholders, Annual

Report,

1929. 2 0 Statement of U. S. Consul Sorsby on May 10, 1899, given in the Bulletin of the Pan American Union, 1899, p. 35.

56

SOCIAL

ASPECTS

OF THE BANANA

INDUSTRY

ness over to a subsidiary, the Bluefields Steamship Company, which it later tried to destroy.®1 In 1911 the United Fruit Company secured in Nicaragua nearly 200,000 acres of unimproved lands. This vast domain appears to have been a white elephant; its valuation on the company's books in 1925 was about seven cents an acre. The failure to develop this land was due, in the opinion of a financial expert formerly stationed in Nicaragua, to the company's inability to secure the conditions which it wanted from the Nicaraguan government. Besides operating through the Bluefields company, the United at one time backed A . B. Orr to launch a flank attack of competitive activity against its chief rival, Zemurray's Cuyamel." The latter company, owning 150,000 acres in Nicaragua, has both raised bananas on its property and purchased bananas from planters along Nicaragua's Rio Grande. In this locality various small companies owned by North American absentee investors have developed plantations for the raising of bananas. The Atlantic Fruit Company has also owned 132,000 acres in Nicaragua and engaged in the banana trade, especially in competition with the United's Bluefields company. Prior to the world war it was reported to have contracted for six new steamers, but these contracts were canceled and the company's sailings reduced,23 whether as a result of the war or of competition from the United is not certain. The forests of Nicaragua are valuable. In 1923, the Bragman's Bluff Lumber Company, a subsidiary of the Standard Fruit and Steamship Company, obtained a permit to purchase some 50,000 acres of national lands behind 21

Kepner and Soothill, op. cit., pp. 179, 180.

" Interview with Gen. Francisco Altschul, formerly Nicaraguan consul at New Orleans. M

Miner, The Story of a Trip to the Tropics.

A GENERATION

OF

EXPANSION

57

Puerto Cabezas in the northern part of Nicaragua for the cutting of pine timber. It also has planted bananas, having 12,672 acres devoted to this fruit in 1931. O f late its cultivations around Puerto Cabezas, infected by the Panama disease, have proved disappointing." Some competition has existed between the various exporting companies in Nicaragua. O n the other hand, in parts of this country, as in Honduras, there are spheres of influence where one company alone is exclusively intrenched because of concessionary privileges. One concession grants the exclusive right to navigate the Escondido River and its tributaries which flow through fertile banana regions." Although Nicaragua's banana exportations have not been large, the total area of lands, both improved and wild, which has been owned by North American fruit companies amounts to over 600,000 acres.4® 8. MEXICO'S POTENTIAL BANANA SUPREMACY

Although bananas have been grown in Mexico since colonial times the banana export trade was unimportant until recently. Mexican banana exports into the United States rose from 120,219 bunches in 1908 to 2,697,272 bunches six years later, only to languish during the world war and cease entirely in 1918. In 1922 a healthy recovery of the trade took place, 739,186 bunches being exported. Over " See note 19 above. 2 i Message of President Diego Manuel Chamorro on Dec. 15, 1922, printed in Cox, Nicaragua and the United States, pp. 847, 848. 2 9 Lands, both improved and unimproved, owned by fruit companies in Nicaragua : Acres

United Fruit Company [Annuel Report, 1912] Atlantic Fruit Company [Dunn, American Foreign Investments] Cuyamel Fruit Company [Dunn, American Foreign Investments] Standard Fruit & S. S. Corp. [ΛΓ. Y. Times, Apr. 27, 1931] Total

193,000 132,000 150,000 180,000 655.000

58

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

two million bunches were shipped northward the following year. Subsequently the volume increased each year up to 1927 when 5,680,896 stems were sent to the United States." Although the Roatan banana is grown in many widely scattered parts of Mexico, it has been developed as a commodity for export almost exclusively in the four states around the Isthmus of Tehuantepec, near the southeastern extremity of the country. These are Oaxaca and Chiapas on the Pacific Coast, and Vera Cruz and Tabasco on the Gulf of Mexico. The relative present commercial importance to the banana industry of these four states and the entire republic is indicated by the following figures :, : 28 TABLE 3.

BANANA

PRODUCTION I N M E X I C O FKOM 1 9 2 7 ΤΟ 1 9 3 0

(Kilograms) Zones and States Vera Cruz Oaxaca Tabasco Chiapas

1927 53.401,770 60,753,100 48,568,800 6,646,110

1928 52,253,068 65,823,400 64,388,800 7,513,920

1929 54,219,025 69,243,000 67,032,000 8,157,750

1930 50,263,790 56,108,440 70,057,600 11,524,200

Total for Mex. . . . 179,417,460

200,024,048

210,117,335

198,284,890

The products of Tabasco are shipped abroad by sea; a government bulletin announced in 1928 that freight rates and marketing costs were too high to make it worth while for products to be sent from this state into the interior." On the other hand, the Oaxaca-Vera Cruz zone is tapped easily by either rail and sea or direct rail communications to the interior and to the United States. 27 Jones, Caribbean p. 136.

Backgrounds

and Prospects

[New York, 1931J,

M Mexico, secretaría de agricultura y fomento, dept. de economía y estadística, Boletín Mensual, no. 54, p. 509 and no. 70, p. 96. 29

Ibid., Boletín, no. 24 of May 15, 1928.

A GENERATION

OF

EXPANSION

59

Although the prospects for the industry in the future are bright, up to the present moment bananas have figured but slightly in Mexico's national life. On the other hand, in Central America they constitute the export second in importance — coffee alone taking precedence. Moreover, in Honduras, where coffee production is very slight, bananas constitute the chief export, accounting for 9 1 % of the value of exports to the United States in 1928. In contrast with this figure for Honduras - United States trade in bananas, banana exports from Mexico to the United States in the same year amounted to less than 2 % of the total trade. It is, therefore, not surprising that the king of tropical fruits plays a relatively unimportant role in the land which is much better known for its gold, silver and oil exports. All of the leading exporters of bananas, the Standard Fruit and Steamship Corporation, the DiGiorgio Fruit Corporation (Joseph DiGiorgio was formerly president of the Atlantic), the Cuyamel Fruit Company and the United Fruit Company have engaged to a small extent in the Mexican banana industry. Previous to its acquisition of the Cuyamel the United's activities in Mexico were limited to the comparatively small operations of the Transcontinental Export Company over which it had obtained control. A f t e r the acquisition of the Cuyamel, the United appeared to be more interested in the Mexican banana trade, but it soon turned over its Mexican interests to the Standard, supposedly in exchange for considerations of one kind or another elsewhere.' 0 It has been alleged that the United's only interest in the Mexican banana industry was to destroy it, since it cannot control the banana trade in this country.* 1 The Mexican government is a more vigilant guardian of the interests of i0

December, 1932, see Kepner and Soothill, op. cit., pp. 301-311.

al

Contention of Walter Schwuchow, see ibid, for quotations, etc.

6o

SOCIAL

ASPECTS

OF THE BANANA

INDUSTRY

national planters and workers than are Central American governments. Moreover, with direct connections to the United States over the nationally operated railroads, competing exporters are not dependent upon sea and land transportation systems controlled by the United. With extensive markets in Mexico City and other municipalities able to absorb fruit of inferior quality, exports can be limited to fruit of the best quality. Tabasco and Chiapas alone are said to have over 10,000,000 acres of potential banana land.32 Considering all the factors involved, the prospects of the Mexican banana industry are indeed alluring. The lay investor, however, may be easily hoodwinked by such fantastic schemes as that outlined by the Jantha Plantations Company.33 9. T H E TREND TOWARDS T H E PACIFIC

The ever-changing banana cloud which has drifted away from Cuba and Santo Domingo has spread over increasingly larger areas of the north coast of Colombia and the Caribbean coast of Central America. Since, however, the Pan82

Jones, op. cit., p. 136.

T h e company makes extravagant statements, including " L A N D F R E E if planted to bananas." B u t five acre plots cost $2,000, or $2,500 in installments of f r o m 5 to 10 years. N o guarantee all land will be contiguous, nor that it will be suitable f o r bananas, nor how planting will be done, etc., etc. A l l planting to be " in bulk " f o r entire plantation. National Better Business Bureau, Inc., 383 Madison Ave., Ν . Y . City, financial section, reported in bulletin no. 24 of July 21, 1927, revised A u g . 27, 1928 : " Purchasers get no deed until the price is paid in full. . . . Development has been inconstant and interrupted by financial difficulties, changes in management, hurricanes, and political upheavals. . . . U p to Jan. ι, 1924, 865 5-acre plots had been sold, a total of 4,325 acres. Authentic reports stated that only 3,000 acres are at present fit f o r cultivation. T h e first buyers took first choice; purchasers in 1928 must take what is left. . . . Again, before clear title to this land or parts thereof is obtainable, Americans, under present Mexican laws, must renounce their United States citizenship." 88

A GENERATION

OF

EXPANSION

61

ama disease has wrought great havoc in the latter region, it is not surprising that the cloud is floating away from many formerly rich and populous Caribbean localities and is now hovering over undeveloped parts of the Pacific coast. In its search for potential substitutes for diseased and exhausted plantations, the company has had its eyes upon western Panama, Costa Rica and Guatemala. In fact, there are indications that this westward trend will be accelerated greatly in the future. The Company's first selection of 16,000 hectares in the Tonosi region southeast of the Panama Canal has not been as fruitful of results as has been its subsequent acquisition of lands to the northwest of the canal near the Costa Rican boundary. In 1916 some Mormons from the United States established the Panama Sugar Company, planted cane and erected a mill at Progreso, Panama, thirteen and one-half miles from the Pacific Ocean. Ten years later this property, which had passed through the hands of various North American and Panamanian owners, was purchased by the Chiriqui Land Company, a subsidiary of the United. Here at first irrigation was contemplated. Consequently, the company obtained from the government the right to develop an irrigating system through canals, control walls and the rivers and ponds.34 In this region rapid progress has been made of late, proving that the Pacific coast is exceptionally favorable for the raising of bananas. More important from the point of view of national welfare is the fact that, as the west coast is naturally more healthful than the Caribbean littoral, and is capable of producing a greater variety of crops, development on the west coast should continue to be of value even after banana culti31 Contract no. 13, of July 19, 1927. See Panama, Gaceta Oficial, July 20, 1927, or Saenz, op. cit., pp. 371-376; comments m Kepner and Soothill, op. cit., pp. 168, 169.

62

SOCIAL

ASPECTS

OF THE BANANA

vations become exhausted.

INDUSTRY

T h i s o u t c o m e w i l l be j e o p a r -

dized, h o w e v e r , if the c o m p a n y is a l l o w e d t o take u p i t s r a i l r o a d tracks, a s it h a s d o n e in C o s t a R i c a , and to d e m o l i s h its i r r i g a t i o n systems, a s several 1 9 3 2 concessions p e r m i t it t o d o in H o n d u r a s . 3 " S o m e y e a r s a g o the U n i t e d F r u i t C o m p a n y , t h r o u g h its s u b s i d i a r y , the G u l f o f D u l c e L a n d C o m p a n y , obtained e x tensive lands o n the P a c i f i c coast o f C o s t a R i c a .

Although

the 1 9 3 0 concession facilitated the establishment o f a p o r t a n d the d e v e l o p m e n t o f these lands, such activities h a v e been postponed.

T h e C o r t é s - C h i t t e n d e n a g r e e m e n t of 1 9 3 4 obli-

g a t e s the U n i t e d to a w a r d t o p r i v a t e planters o f its o w n choice b a n a n a purchase c o n t r a c t s c o v e r i n g 3,000 h e c t a r e s (7,410 acres) Railway.

in the r e g i o n served b y the national P a c i f i c

A l t h o u g h this a g r e e m e n t contemplated the trans-

p o r t i n g o f P a c i f i c f r u i t a c r o s s the c o u n t r y to L i m o n , recent reports are that the U n i t e d

Fruit Company

m a y build

a

small w h a r f near the national pier at P u n t a r e n a s , preparatory to shipping f r u i t f r o m the w e s t coast o f C o s t a R i c a . A l t h o u g h in 1930, a f t e r several y e a r s o f n e g o t i a t i o n s inv o l v i n g political i n t r i g u e a n d p r o p a g a n d a o f v a r i o u s k i n d s , a subsidiary o f the U n i t e d F r u i t C o m p a n y obtained a concession to build a port o n the w e s t coast o f this p r o j e c t h a s not yet been carried out.

Guatemala,"

Some fruit has

been purchased f r o m p r i v a t e planters a n d raised on the c o m pany's

experimental

farms,

but o n l y

in

small

quantities.

T h e probability is, h o w e v e r , that in the f u t u r e banana production will s h i f t f r o m the C a r i b b e a n to the Pacific coast o f P a n a m a , C o s t a R i c a a n d G u a t e m a l a alike. , 5 See ibid, p. 239, and infra, pp. go, 91, for abandonment of railroads; and see Honduras, Boletín Legislativo, series ii, nos. 16, 17 and 18 of Nov. II, 16 and 21, 1932, for contracts to the United's three subsidiaries approved by leg. decrees 114, 115, and 116 of March 12, 1932. These contracts discussed in Kepner and Soothill, op. cit., pp. 140-142. se

Cf. Kepner and Soothill, op. cit., pp. 225-235.

A GENERATION

OF

EXPANSION

63

IO. T H E S H O R E S OF TWO O C E A N S

Before terminating this brief historical survey we should note the interest of the United Fruit Company in other parts of the world. F o r years the company has had property in the Canary Islands. Here it produces a limited quantity of small Cavendish bananas for the European market. Owing to intense cultivation the yield is very high, amounting to as much as 625 bunches per acre per year. These are shipped in crates. The investments of the company in the islands are worth about a million dollars. Surveys have been made by the United Fruit Company of potential banana lands in Venezuela and other parts of South America, and in various sections of Africa. Apprehension lest cheap labor in the latter continent might eventually compete with the workers and planters of the Caribbean is indicated by the following excerpt from an article which appeared in La Tribuna of San José, Costa Rica, on December 27, 1 9 3 1 : We read in the December 3rd issue of the Christian Science Monitor that Italian exporters of bananas unloaded in Boston, Massachusetts, the first shipment of fruit from the Italian Colonial possession of Somali, East Africa. This first shipment comprised 40,000 bunches and the fact that these bananas can be transported thousands of miles and sold in the United States signifies that the fruit can be produced at very low cost in these regions. The port of delivery being Boston, it is almost certain that the shipment was consigned to the United Fruit Company. Although the advice does not mention anything about the quality, class, or size of the fruit, it is plain to be seen that an endeavor is being made to compete with fruit from the Caribbean. Independently of the United Fruit Company small quantities of bananas are exported from some of the Caribbean

64

SOCIAL

ASPECTS

OF THE BANANA

INDUSTRY

islands, especially Santo Domingo, Haiti, Guadeloupe and Porto Rico. Quite apart from the Caribbean banana industry, certain South American countries have shown marked interest in this fruit during the last few years. The state of Sâo Paulo, Brazil, has been developing an expanding industry which is aided by the state department of industry and a cooperative FIGUBE 1.

ACREAGE OF U N I T E D F R U I T CULTIVATION IN

SIX

COMPANY'S

BANANA

COUNTRIES

organization of Brazilian planters. Although some of these bananas are sent to Uruguay, Sâo Paulo's chief market is the Argentine, which consumed between three and four million bunches per year during the half-decade before the depression. In 1928 Brazil's total exports were over six

A GENERATION

OF

EXPANSION

65

million bunches." A year ago a Chilean company attempted to sell bananas in New Y o r k but experienced difficulty in getting auctioneers to dispose of the fruit. A b o u t the same time the United contracted for cargo space on ships sailing from Valparaiso to New Y o r k , stopping at Ecuador. Ecuador exported over a million bunches of bananas in 1930 but only 324,338 bunches in 1932. In 1934 the United Fruit Company opened an office in Guayaquil, dispatched one of its ships to Ecuador and commenced purchasing bananas in the country. Although in Costa Rica and Panama the United has raised cacao on lands abandoned for banana cultivations, in Ecuador planters are trying to utilize lands abandoned because of cacao pests for the production of bananas. Enthusiastic Ecuadorians, w h o evidently are not familiar with the experiences of Caribbean governments and planters, expect the company's activities to pull their country out of its economic crisis.' 8 II.

T H E SOURCES OF B A N A N A S U P P L Y

The expansion and contraction of the United Fruit Company's banana cultivations is shown by Figure 1, p. 64. The slight rise in acreage in Panama since 1926 is explained by the fact that the developments of the new Chiriqui division on the Pacific coast more than compensate for the decline of the Almirante division on the Caribbean coast. The relative importance of the United's operations in the several banana-producing countries is not as extreme as these curves seem to indicate. In Jamaica, where the bunches are relatively small and where the land is cultivated intensely, the annual production per acre is between 200 and 250 bunches in contrast to an annual production of 125 to 150 bunches in Central America. Moreover, in Jamaica and * T Jones, op. cit., p. 136. *·£/ Ecuador

Comercial, no. 125, May, 1934, p. 16.

66

SOCIAL

ASPECTS

OF

THE

BANANA

INDUSTRY

Costa Rica and on the Caribbean coast of Panama the company buys much more fruit than it raises on its own farms, as is shown by Table 4, which gives the percentages of bananas produced and purchased in the various divisions in 1929 during the heyday of the banana industry before the world economic crisis.88 TABLE 4.

PERCENTAGE DISTRIBUTION OF BANANAS PRODUCED BY THE UNITED FRUIT COMPANY AND PURCHASED FROM PRIVATE PLANTERS, 1929

Country

Jamaica

Colombia

Panama

Costa Rica

'.S3 »s ε (ο Ο Produced on Company Farms Purchased from Private Planters

Guatemala

Honduras

lì β tq

S κ κ

-a S ^ 6—ι t—ι

Mexico

All Divisioni

17

43

29 94 10

25

66

17

81

91

26

49

83

57

71

75

34

83

19

9

74

5i

6 90

Since Figure 1 and Table 4 refer only to bananas transported and sold by the United Fruit Company, they should be compared with Table 5 which indicates the total commercial production of the main banana-producing countries of the western hemisphere.40 89

Compiled from a report of the United Fruit Co. made in 1929. First three years from Jones, Caribbean Backgrounds and Prospects, p. 139, to which is appended following note : " These figures are compiled from a large number of sources. In a number of cases conflicting figures are found. The table is therefore one in which errors may be entered but it may be accepted as indicating general course of development with a fair degree of accuracy." Prof. Jones also includes four lesser sources of supply which in 1929 were as follows: Guadeloupe (24,400) ; Porto Rico (1,800) and St. Lucia (1,800) ; and in 1928 Dominican Republic (25,138). 1932 totals from Foreign Commerce Year40

book, 1933; International Yearbook of Agricultural Statistics, 1932-1933 [ R o m e ] a n d The Import and Industrial Record of Cuba, M a y , 1933, t h e

figures f o r Colombia and Cuba being converted from quintals at approxi-

A GENERATION T A B L E 5.

TOTAL B A N A N A

OF

EXPANSION

E X P O R T S FROM B R A Z I L , M E X I C O AND C H I E F

A R E A S , COMPARED WITH E X P O R T S OF U N I T E D F R U I T C O M P A N Y STANDARD F R U I T AND S T E A M S H I P

J900

Country Brazil Colombia Costa Rica Cuba Guatemala Honduras Jamaica Mexico Nicaragua Panama

273,882

. ,

3,332,125 845,942

. .

Total

•

4,7/2,417 7,173.890

1.324,727 , 2,125,709 , 19,848,692

..

67 CARIBBEAN AND

CORPORATION

(in Bunches) Total Exports United F. C. 1Ç2Ç 1932 1913 6,192,667 * 6,873,000 7,363,000 6,900,000 6,277,540 10,300,021 4,313,000 4,100,000 9,366,485 5,784,724 3,682,900 4,651,000 2,327,536 5,300,000 5,248,000 3,444,036 6,545.695 20,200,000 8,238,726 28,221,463 27,896,000 11,419,281 22,020,877 20,360,600 10,500,000 5,602,499 500,000 2,213,510 4,205,600 1,100,000 1,639,120 4,160,700 3,378,000 3,600,000 3,000,000 4,722,426 5,185,530 50,111,764 97,233,972 87,888,200 51,600,000 * This figure as reported for 1928.

Standard F. C. m*

2,210,929 5,076,920 3,582,866 2,521,563 1,621440 546,269

15.559.887

In 1932 the United Fruit Company also exported about 1,700,000 bunches of bananas from the Canary Islands and about 600,000 bunches from other regions. The total figures for Costa Rica and Panama are somewhat misleading, since fruit grown in the Sixaola district of Costa Rica is exported through Panama and therefore is credited to the latter country. In 1 9 1 3 the Sixaola district raised about 1,850,000 bunches; 4 1 since 1925 its production has been greatly curtailed on account of the inroads of the Panama disease. Of Jamaica's large exportation of 20,360,000 bunches in 1932 the United carried a little over half, the bulk of the remainder having been grown by the recently incorporated Jamaica Banana Producers' Association, Ltd., which in 1 9 3 1 had handled over 7,600,000 bunches, or 3 5 % of Jamaica's total banana production.42 This association sends bananas mate rate of 40 pounds per bunch. The total for Panama is an approximation based on exportations by the Standard and the United. The United's approximate exportations are from Fortune, March, 1933; the Standard's exportations are from Moody's Industrials, 1934. 41 42

Sociedad Económica de Amigos del País, Estudio, p. 20.

The Yearbook of the Bermudas, the Bahamas, British Guiana, Honduras and the British IVest Indies, 1933, p. 136.

British

68

SOCIAL ASPECTS

OF THE BANANA

INDUSTRY

to the British Isles and continental Europe on ships which it owns jointly with the DiGiorgio Fruit Corporation. In the United States its bananas are marketed by the Standard. In 1929 the United shipped 61 l/t% of the approximately 91,000,000 bunches exported from Mexico and the Caribbean region. 41 The rest of the fruit was shipped chiefly by the Cuyamel Fruit Company, the Atlantic Fruit and Sugar Company (a reorganization of the Atlantic Fruit Company), the Standard Fruit and Steamship Corporation and the American Fruit and Steamship Corporation, the bananaexporting subsidiary of the DiGiorgio Fruit Corporation. A t the end of 1929 the United purchased its most vigorous competitor, the Cuyamel, which had handled 8,868,000 bunches the previous year. In 1 9 3 1 the Atlantic, after turning its Jamaican and Cuban properties over to the Standard, went into receivership. In the same year the Standard took over the American Fruit and Steamship Corporation. Between 1929 and 1 9 3 2 banana exportations generally were much reduced. In the latter year the United shipped 643/2% and the Standard shipped 1 9 % of the total banana exports from Mexico and the Caribbean region. During 1 9 3 2 the United transferred its own interests in Mexico and the Canal Zone to the Standard. Nevertheless in 1 9 3 3 the Standard's total shipments fell to 1 4 , 1 4 6 , 3 3 9 bunches, of which 3,788,023 came from Honduras and 1,706,917 f r o m Nicaragua, almost entirely from the Standard's own farms. The rest of the fruit was for the most part purchased from private planters—4,499,195 bunches in Mexico, 1,840,406 bunches in Jamaica, 1,254,023 bunches in Panama, 1,052,032 bunches in Cuba and 5,743 bunches in 44

The United Fruit Co. handled 58,121,054 bunches in 1929 and 54,034,329 bunches in 1932. In 1929 about 2,000,000 bunches and in 1932 about 1,700,00 bunches were from the Canary Islands.

A GENERATION

OF

EXPANSION

69

H a i t i . " In 1932, of the approximately 81,000,000 bunches of bananas exported from Caribbean countries and Mexico, the United handled approximately 52,300,000 and its nominal competitor, the Standard, another 14,000,000. Brazil alone of the major banana-producing countries appears to be independent of the great North American companies. In 1926 the United States and Canada consumed about 53,500,000 bunches of bananas, while Great Britain and the rest of Europe consumed about 25,000,000 bunches, approximately 7,000,000 of which were of the dwarf Cavendish variety from the Canary Islands.4® To-day North America uses approximately three-quarters of the Caribbean banana exports, the British Isles and Europe taking the remainder. The United Fruit Company's grip upon the banana industry affects North American consumers as well as Caribbean producers. Banana imports into the United States fell from 65,134,000 bunches in 1929 to 49,457,000 bunches in 1932 and to 39,613,000 bunches in 1 9 3 3 . " In the latter year when the index numbers of the United States Bureau of Labor Statistics ( 1 9 2 6 base) were 65.9 for all commodities, 60.5 f o r foods, and 5 1 . 4 for farm products, the index for Honduras " nines " (full-sized bunches) was 85.7? the average wholesale price being $2.64. 44

Moody's Industrials, 1934.

45

Reynolds, op. cit., p. 66.

*·Statistical

Abstract of the U. S., 1934, p. 493.

CHAPTER LAND

ACQUISITION

IV

AND SOCIAL

CHANGE

I. G E N E R A L I M P L I C A T I O N S

T H I S extension of the United Fruit Company's domain aver more than three million acres of tropical lowlands w a s made possible by the availability of vast areas of land " f o r trifling amounts of money or for nothing." 1 The social implications of such territorial acquisitions are numerous. Social conditions and policies and the company's activities are mutually interactive. In the first instance lands are acquired because of prevailing political, economic and social needs and policies. In the end the company's use of the land conditions social change. 2 . L A N D A C Q U I R E D T H R O U G H RAILROAD CONCESSIONS

Political unity, economic progress and social intercourse depend to a great extent upon efficient means of transportation. Hence for nearly a century national leaders have been anxious to connect their capital cities with the outside world. 2 Unable, however, to finance such railway construction out of ordinary revenues these countries have sought to fulfill their aspirations by floating loans and encouraging private companies to build railroads. In exchange for 1 This expression as to the cheapness of lands acquired by the large fruit companies used by Prof. C. L. Jones in a discussion before the seminar in Mexico, in the summer of 1929. See The Committee on Cultural Relations with Latin America report: The Seminar in Mexico. 2 Cf. supra, p. 37, for Costa Rica; for Honduras: Kepner and Soothill, op. cit., ch. iv, sec. 4 and ch. ν, secs, ι, 2, 6 and 7. For Guatemala, see ibid., eh. vi, sec. 2 ; ch. viii, sec. 7.

70

LAND

ACQUISITION

AND SOCIAL

CHANGE

71

promises of railroad construction politicians have given away vast expanses of coastal lands, which were of little immediate value to the nation, but which, as already noted, were excellent for the cultivation of bananas. Considerably over a million acres of Honduran and Costa Rican lands have been made available for exploitation through concessions for railroad construction. S o sweeping were some of these awards that much of the land offered was never appropriated by the companies. The earliest and most extensive land award was that of the Soto-Keith contract in 1884.* B y this historic document, Costa Rica granted to the company which Keith should organize 800,000 acres of uncultivated public lands together with the natural wealth upon them, located either on the borders of the railroad line or in any other part of the nation. It was provided, however, that after twenty years the lands which had not been used in any way should revert to the government without indemnification of any sort. A l though the company's property rights to the railroad and its accessories, including the land on which railroad buildings are located, was limited to ninety-nine years, no such time limit was imposed upon the lands used for other than railroad purposes during the first twenty years. Relatively little land came under the control of the United Fruit Company as a result of this concession. T h e Costa Rica Railway Company, Ltd., to which Keith turned over the concession, was not interested in raising bananas nor in real estate ventures. Hence it transferred its right to half of these lands to the River Plate Trust Land and Agency Company, Ltd., which eventually secured title to about 75,000 acres on the western edge of the banana zone. Most of the lands which this company secured were on the Pacific 1

T e x t in Sáenz, op. cit., pp. 3-11.

72

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

coast, where they did not affect the rise of the banana industry. 4 Whatever lands the Costa Rica Railway Company, Ltd., used for its right-of-way, freight yards and buildings, came under the control of the United in 1905 when the latter's subsidiary, the Northern Railway Company, leased the Costa Rica Railway. The Vargas-Schutt and Hoadley contracts of 1892 and 1894 respectively, which were ultimately transferred to the Northern Railway Company, granted free lands as subsidy for railroad construction. Under the former grant," which amounted to 5,000 acres, some of the United's most important banana farms have been obtained. They have been held for decades without any legal title because of the contention of the government's attorney that several clauses in the concession were not fulfilled. The Hoadley contract, which has functioned although never approved by the congress, granted the concessionaire 1,235 acres of free lands in alternate lots for every mile of railroad constructed.® It was provided, however, that should the company make use of an option not to continue the road to the Banana River it would pay for the lands occupied at the rate of three pesos per hectare. A s the company used this option, it incurred the obligation to pay for the lands taken up under this concession. In Honduras the fruit companies have acquired the most extensive and valuable lands through railroad concessions. B y this method the United Fruit Company's subsidiaries obtained over 175,000 acres of Honduran soil, and the Vaccaro brothers likewise gained much land. During colonial times the kings of Spain granted large areas of land to Spanish settlers. A s this interfered with *Ibid., pp. 31-33; 76-79 gives decrees concerning this company. » Ibid., pp. 28-30. • Ibid., pp. 35-38.

LAND

ACQUISITION

AND

SOCIAL

CHANGE

the rights of the Indians, various efforts were made to protect the latter. For example, in 1594 Philip II ordered that the awarding of lands to Spaniards should be without prejudice to the Indians, and that lands which had been transferred to the hurt of the Indians, should be returned to their original owners. A t an earlier date this king had declared that all lands not previously given to other owners, were retained as the property of the crown. 7 Since gaining independence the Republic of Honduras has possessed vast resources of unused national lands. T h e ley agraria of 1898 declared that the nation should retain the legal ownership of the national lands assigned to villages and towns, and prohibited the alienation of lands within eight kilometers of the sea and, unless authorized by a new law, of alternate lots surveyed in connection with land distributions and reserved to the state. 8 Subsequently attempts were made to protect the national patrimony further. Decree 36 of February 1902 prohibited the permanent alienation of national lands within the Tela district, and Decree 50 of the same month arranged for the division of these lands into lots, the dominium utile — but not the dominium directum—of which could be acquired by Hondurans or foreigners. N o t merely the Tela district, but all national lands within thirty miles of the coast were included under this ruling by decree of the Honduran congress on January 31, 1906. Finally on March 4, 1909, Congressional Decree 63 ordered that the state should give only the dominium utile to any unused national lands, reserving legal ownership to itself." 10ficina Internacional de Trabajo, Legislación Latina, vol. i.

Social

de

América

8 The ley agraria of March 12, 1898, is given in Leyes de Hacienda, VP· 907-925. and also in Ley Agraria y Sus Reformas. See especially arts, ι, 2, and 30. • T h e s e four laws are found in Leyes de Hacienda, pp. 1021 and 1024; Guia de Agrimensores, pp. 287 Mid 293.

74

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

In April 1 9 1 1 , however, the congress and Provisional President Bertrand revoked this sweeping decree, 10 thus making it possible for land to be sold or given away by the government. Seven months later the president approved the Tela concession, which Zemurray had arranged as an intermediary for the United Fruit Company; and on April 8 of the following year the congress ratified both the Tela and Truxillo concessions. Although the Vaccaros had received only the dominium utile of 250 hectares for every kilometer of railroad constructed, the Tela and Truxillo concessions granted full ownership of 500 hectares per kilometer constructed. T h e amount applied only to construction on the main line in the case of the Truxillo concession—one-half of this amount being offered for branch line construction. T h e Tela concession, however, made no distinction, granting the full amount of 500 hectares for all branch as well as main line construction. 11 Neither of these concessions granted permanent title to the lands at once, but each provided for provisional titles, exchangeable for permanent titles after certain sections of railroad should have been opened to public service. Special privileges are to cease within sixty years, but the companies may retain their railroads and accessories, unless these are bought by the government. Moreover, not only does each concession give permanent ownership of national lands to the company, but it also provides that, if sufficient national lands are not available along the railroad, the company can 10

Guia de Agrimensores,

p. 295: decree 86 of April 10, 1911.

These provisions are contained in leg. decrees nos. 113 of April 8, 191Z, approving contract to H. V . Rolston [later transferred to Tela Railroad Co.] ; 99 of April 2, 1912, approving contract with Victor Camors [later transferred to Truxillo Railroad Co.] ; and 117 of March 28, 1929, revising the Vaccaros' concession of 1910. The first of these contracts or concessions is printed in La Gaceta [of Honduras] no. 3 , 9 9 8 , July 2 9 , 1 9 1 2 and the second in ibid., no. 3 , 9 8 2 , July 10, 1 9 1 2 . 11

LAND

ACQUISITION

AND

SOCIAL

CHANGE

select and survey lands in alternate lots in other parts of the republic, unless this alienation of lands is prohibited by some existing law. O n November 20, 1924, the Honduran congress enacted a new agrarian law, prohibiting the alienation of lands within forty kilometers of the coast, except in family lots, and denying the right of foreign companies, not recognized in Honduras, to acquire national lands under any title. T h i s law is not retroactive. O n March 24, 1936, after various opponents of President Carias had been exiled, a new constitution was approved and the president's term of office extended. It is reported that the legislature is now revising the agrarian law. If ownership of coastal lands is permitted, the United's position will be further strengthened. W h e n the congress of Honduras promulgated an agricultural law in 1895 to aid homesteaders in securing land for their own use, it established the principle that for each lot awarded to a settler an alternate lot should be retained or sold by the government. 12 T h i s principle of checkerboarding lands was observed in these railroad concessions, thus supposedly preventing foreign companies f r o m exercising complete control over large contiguous areas of land. The companies, however, outwitted the national authority by acquiring intervening lots from intermediaries or from other Honduran citizens. T h i s procedure generated much friction between the companies and the government. Finally in 1930 the national congress disapproved seventy-four resolutions of the administration of General López Gutiérrez on the ground that they had not been properly signed by the president. T h e inference to be drawn f r o m this decree is that for a decade or more these companies had been exploit1 2 Decree no. 85 of August 24, 1895, published in Leyes de pp. 744 et seq., art. 8.

Hacienda,

Τ6

SOCIAL

ASPECTS

OF THE BANANA

INDUSTRY

ing illegally 1 1 9 , 7 7 8 hectares, or nearly 300,000 acres of national land. 11 Although large grants of land were made in concessions to railroad and fruit companies on the supposition that such subsidy would insure the nation much needed transportation facilities, this end has not been attained. Through the connivance of administrative officials and legislative decrees, the companies have been allowed to neglect constructional requirements or to change constructional plans. Consequently, service to Tegucigalpa, Juticalpa and Yoro, required by the national interest, has not been established. 14 Over a thousand miles of railroad lines have been laid by fruit companies through the Honduran banana regions, yet to-day " the highland capital must depend for transportation upon oxcart, automobile and the United's aeroplane." S1 Besides Costa Rica and Honduras, Guatemala has granted unused national lands by railroad concessions. In 1904 the Guatemalan government awarded Minor C. Keith a contract to complete the east coast railroad from E l Rancho to Guatemala City. Among the terms of this concession was the award of 1 5 0 0 caballerías of national lands. 1 " At the rough figure of 3 3 y i acres to the caballería, this grant amounted to 50,000 acres. Hence it appears significant that from 1906 to 1909 the United Fruit Company, of which Keith was vice-president, carried on its books 50,000 acres of land in Guatemala, with no valuation assigned. 18

Leg. decree of April 6, 1929, ratified March 24, 1930, and published in La Gaceta of Jan. 21, 1932. Digest in Latin American Official Gazettes Bulletin, 1932. 14 F o r failure to meet national expectations, see Kepaer and Soothill, op. cit., pp. 140-146. 15

Kepner, " The Banana Industry in the Caribbean," in Wilgus, Hispanic America [Washington, 1933], p. 174. 16

Documentos

Relativos

al Ferrocarril

del Norie, p. 22.

Modern

LAND

ACQUISITION

AND

SOCIAL

CHANGE

In spite of the extensive awards of lands made in the past ostensibly to subsidize railroad construction, the practice has been discontinued, presumably because of dissatisfaction on the part of both parties: of the nations because of their failure to benefit as much as expected through this construction, and of the company because of the annoyance due to conflicting claims of private parties to many parcels of these lands. In the Truxillo Railroad Company's new concession of 1933 it was declared that the company had obtained 53,0c» hectares of Honduran national lands for railroad construction, that it had a right to 87,000 more hectares, but that it renounced this further right and would no longer receive national lands on this basis. T h i s concession, however, confirmed its right to the lands which it then held, regardless of the fact that the railroad had not reached Juticalpa and probably never will reach it. 17 3 . DENOUNCEMENT PROCEEDINGS AND THE APPLICATION OF

gracias

Central American countries facilitate the settlement of their unused national lands by laws similar to the homestead laws in the United States. In Honduras and Costa Rica laws have provided that one desiring to secure land for development shall deposit a denouncement of the same with the proper official, that the latter shall publish a notice o f this denouncement giving an opportunity for objections to be heard, that an official surveyor shall mark out the land, that thereupon an auction sale shall be held with the denouncer being preferred in case of equal bids, and that finally, in the absence of conflicting claims or irregularities, 17

Supra, note 14.

78

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

a formal title shall be made out to the denouncer on payment of the price of the land. 1 * T h e United F r u i t Company has obtained much land f o r relatively small sums of money through denouncement proceedings, directly or indirectly. In some cases it or one of its subsidiaries has made the denouncement. In other cases it has induced nationals to act as intermediaries ; again it has purchased land f r o m denouncers, some of whom undoubtedly were speculators who had hoped thus to unload their holdings upon the company. W e have noticed the vacillation of H o n d u r a n land policy— the state at times retaining legal ownership of the land and at other times allowing this to pass to private parties. T h e conflict between historical, theoretical and psychological influences in Costa Rica is shown by the explanation of Attorney Manuel Saenz Cordero: " Recently the prevailing judgment has inclined to the system of leasing or Roman emphyteusis for the lands far from the centers of population. Notwithstanding, it is very difficult and even undesirable to banish from our legislation the policy of full ownership, which we have practiced. The idiosyncrasy of the Costa Rican people is indisputably opposed to leasing and partisan to full ownership. The Costa Rican wants to be the exclusive proprietor of his small property and to live on it with his family. . . . The legislation has been and is good,—for the nation has a low density of population and will have the same for many years more, — and has called forth discussion only when foreign capital and foreign speculators have wished to bind themselves upon our simple life and to dominate everything with their inhuman and egoistic procedures. 18 Ley agraria, mentioned in note 8 above, art. 13-30. Cf. summary of Costa Rican law given by Moorfield Storey in Hearing Before a Subcommittee on S. Res. No. ijç, April 22, 1908, series no. 8, pp. 28 et seq.

"Cooperativa Bananera Costarricense, Trabajos

y Opiniones,

p. 30.

LAND

ACQUISITION

AND

SOCIAL

CHANGE

During the past two decades the Costa Rican law for denouncing national lands has been revised. Three methods of obtaining national lands have remained. In the first place persons without legal rights have been able to obtain titles of possession on proof that they have occupied the lands for ten years. 20 A s a result in Costa Rica, as in Colombia and other countries, squatters have attempted to obtain lands owned by large landholders and companies. The United Fruit Company has obtained extensive Costa Rican national lands through the application of gracias. Costa Rica tried to help some of its municipalities to secure funds for public improvements by granting them rights to denounce large portions of the national lands. The decree of August I, 1907, popularly called the ley de gracias, permitted these municipalities to dispose of all or part of the rights to denounce national lands, which they had acquired or might acquire in the future. 21 This law provided that the municipality could sell these rights or gracias at public auction for not less than ten colonnes (or $4.60) per hectare. Each of the gracias conferred upon the holder the right to denounce one hectare on the Atlantic coast or two hectares on the Pacific coast. T w o groups of people, besides bona fide homesteaders, profited by the acquisition of these gracias. The first were the speculators, who, although not cornering the market, nevertheless could name their price for these paper rights. The second were officiais and intermediaries of the United Fruit Company, who through the application of gracias obtained some of the finest areas of potential banana land on both sides of the republic. In this way the United's Gulf of Dulce Land Company obtained much of its approximately 20 Information supplied by Luis D. Tinoco, formerly assistant secretary of the treasury of Costa Rica. 31

Leg. decree of Aug. 1, 1907, signed by the president, Aug. 2.

8o

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

175,000 acres in the neighborhood of the Rio Grande de Terraba on the Pacific coast. In 1926 the Costa Rican congress terminated the ley de gracias, allowing two more years for the adjudication of claims. This act, however, has been discussed as unconstitutional.12 More recently lands have been obtainable in Costa Rica under the Law of the Heads of Families, and the revision of October 26, 1926. Both of these laws have permitted the head of a family to denounce 50 hectares provided that he will occupy and improve them. In spite of the seemingly narrow limits of this law, Attorney General Vargas Quesada stated in La Tribuna of October 11, 1930, that this law and the antiquated practice of granting titles of possession helped the rich man more than they helped the poor man, and that if these practices should continue all available national lands would soon be exhausted. During the past decade various proposals have been made for reclaiming denounced lands no longer under cultivation and for preventing the alienation of national lands in the future. 1 ' It now is almost impossible for a company to obtain national lands unless through denouncement by the head of a family. 4 . T H E P U R C H A S E AND LEASING OF L A N D

Where lands desired by the fruit companies are inalienable from the state, the companies frequently are able to secure the use of them over a limited period of years. Thus Article 30 of the ley agraria of Honduras permits the rental of lands over which the state retains full ownership, 2 1 Cooperativa Bananera Costarricense, Trabajos y Opiniones, p. 29. M . Sáenz Cordero says : " The law of October 22, 1926, gave a term of two years for the application of gracias, but this order is discussed as unconstitutional." M See for example suggestions of Manuel Sáenz Cordero in ibid., pp. 31, 32, and of Ramón Bedoya in Sáenz, op. ext., p. 469.

LAND ACQUISITION

AND SOCIAL CHANGE

8l

such as the lands along the seacoast. Similarly in Costa Rica the United Fruit Company holds, in consideration of semi-annual payments, a number of concessions which grant it f o r fifty years the usufruct of lands lying within the maritime mile, a f t e r which the lands and everything upon them will revert to the nation or the municipality owning them. 24 Some of the large acquisitions of banana lands have been through leasehold. In this way Samuel Zemurray received a considerable portion of his lands. His first concession granted him the rental of 5,000 hectares on condition that he cultivate all of the land suitable for agriculture and maintain at least one-quarter of it under permanent cultivation. H e agreed to pay about five cents per acre for uncultivated land, and about two cents per acre for land under cultivation, annually f o r twenty-five years, after which time the rates would be quadrupled. B y Decree no. 78 of 1 9 1 1 the new Cuyamel Fruit Company leased 24,700 additional acres under the same conditions as the original lands. A s the required fourth of this leased land has not been permanently cultivated, the concessions have been liable to at least partial nullification. 25 The United's concession from Guatemala, which was so vigorously condemned by Honduras, gave the company a twenty-five year lease of all desirable unoccupied lands on both sides of the Motagua River for sixty miles inland. The nominal charge f o r this vast grant was first set at 24 Decree no. 33 of August 24, 1893, granted Keith for fifty years the usufruct of 401 hectares within the maritime mile on each side of the Banana River. Decree no. 29 of July 10, 1891, granted to Atilio Lazaro Riatti the usufruct for fifty years of 1,000 hectares on either side of the Matina River. Both of these contracts were finally passed on to the United Fruit Co. i5

Report on concessions and contracts of the Cuyamel Fruit Co.

82

SOCIAL

ASPECTS

OF

THE

BANANA

INDUSTRY

$6,000 a year, but was later raised to $14,000, plus $12 f o r every mahogany or cedar tree destroyed. 1 ' In addition to the extensive areas obtained through railroad concessions, denouncement proceedings and leasehold, the fruit companies have acquired much land by purchase from private owners. Thus the Cuyamel secured the lands in its third large area of influence—the zone of its Ulua or Mata de Guineo Branch. In Nicaragua, the Standard's subsidiary, the Bragman's Bluff Lumber Company, chose to purchase 20,000 hectares of land f r o m the government f o r $2 a hectare, rather than to denounce the land and pay $1 per hectare plus considerations to government officials." From the start the United Fruit Company has bought large areas of land. W i t h the cessation of the policy of awarding land for railroad construction and with the decrease in denouncement proceedings, the United is today acquiring more land by purchase. O n the west coast of Panama and Guatemala, the company made certain large purchases from companies, which it has followed by additional purchases from private owners. Verson W . Gooch in Uni fruite o of December, 1929, described the evolution of the western Panama division in part as follows : The size and scope of the Chiriqui development was determined by purchase of all available property from title holders, homesteaders and squatters. In case of no title, boundaries were run out from available records of adjoining properties. Andrew W . Preston once said of land, " It is acquired in every conceivable way." 28 One way in which it has been 24 Leyes Vigentes, pp. 608 et seq. and 618 et seq. f o r decree no. 1499 of M a y 2, 1927, and the convenio amending the contract of N o v . 7, 1924. 2 1 Long, Railways of Central America and the ¡Vest Indies [ W a s h i n g ton, 1925], p. 91, and interview with an official w h o formerly represented the United States in Nicaragua. 28

Hearing

on H. R. 5&7 on January 27, 1913.

LAND

ACQUISITION

AND

SOCIAL

CHANGE

83

obtained is illustrated by the drama of Guanacaste. In that province of northwestern Costa Rica Señora Clara Yateman Carranza owned a vast estate. Far to the south along the lower reaches of the Rio Grande de Terraba were potentially rich but undeveloped banana lands. Belligerent squatters encamped upon Señora Carranza's property. When the government at her request tried to eject them, they threatened such reprisals that she asked that in exchange for these disputed lands she be given property further south. In the summer of 1926 the exchange was made; soon thereafter about 50,000 acres of these erstwhile national lands were purchased from the widow by the Gulf of Dulce Land Company. These lands, plus those obtained in the same region through the application of gracias, constitute the foundation for the United's future west coast developments. The cost of land has varied tremendously according to conditions. When the Atlantic was trying to enter Costa Rica, the United was willing to pay about $400 an acre for strategic lands.29 Recently in western Guatemala, land has been bought from private parties at an average of $9 per acre. In earlier times, however, wild but potentially excellent lands were often secured for two or three dollars an acre. 5. INTERMEDIARIES AND PRESSURE

Superficially it would seem that if the fruit companies in general and the United Fruit Company in particular have bought much land in the Caribbean area they must have thereby contributed to the economic advance of the several countries. Whether or not this is the case depends upon various factors: the price paid by the companies, the pres28 In August 1930, Attorney Víctor Guardia Quirós, San José, Costa Rica, wrote that hardly had Lindo come to an understanding with the Atlantic Fruit Co. when the United "contrived to seduce Lindo, buying his properties for a thousand dollars per hectare [a price four times greater than the usual price]."

84

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

enee or absence of a genuine desire to sell on the part of the owners, and the conditions existing after the sale of these lands. The powerful company uses its influence to buy land on its own terms. Many a landowner realizing that a fruit company wants his property will take advantage of the situation to ask a good figure for it. T o avoid paying this the company frequently makes its purchases through intermediaries, who may be individuals or small companies not known to be connected with the fruit company. United States Vice Consul Maleady explained the company's technique in Costa Rica in the following words : 8 0 Although sub-rosa the company and the government endeavored to seek some satisfactory solution, on the surface neither appeared to be doing anything. The company maintained its exploring and investigating parties in different parts of the country and even after the withdrawal of its proposals it acquired large tracts of land which had been bought by individuals who undoubtedly were using company money. Through intermediaries the United Fruit Company was able to buy the coveted alternate lots in Honduras, which the government of that country had planned to keep from falling into foreign monopolistic control. Various forms of pressure have been used to induce landholders to sell out to the United Fruit Company. In La Tribuna of November 21, 1930, Rogelio Melendez reported meeting a Talamancan Indian who asked him to explain the meaning of two pieces of paper which he held in his possession. These turned out to be a check for fifteen dollars from the United Fruit Company and a record of the sale of the Indian's two-hectare farm, which up to the moment he did not realize he had sold to the United Fruit Company. 8 0 Unofficial, voluntary report of September 15, 1929: State Banana Industry in Costa Rica.

of the

LAND

ACQUISITION

AND

SOCIAL

CHANGE

85

Recently in buying lands to round out its estate in western Guatemala the United Fruit Company has been faced by many landowners who did not want to sell the lands which they had held for years and to which they were genuinely attached. In such situations the company's policy was to buy the surrounding cultivation plots, to fence them in, to take advantage of all local laws such as those regarding the wanderings of stray cattle, and in every possible way to molest the landowner until he was willing to get rid of his holdings. A s a rule it is not necessary for the covetous company to go to such an extreme. The commercial use of most land adjacent to the company's railroad is limited to the production of bananas or other products which can be sold at a profit to the company. When the company fails to pay the desired purchase price or rejects much of the fruit, planters become uneasy and are glad to dispose of their property rather than to speculate further on such unprofitable or uncertain sales. In some countries the company is able by its control of water for irrigation purposes to exert pressure upon landowners. The United Fruit Company has overflowed its legitimate possessions and occupied land not its o w n : in Costa Rica it has operated the two Barmouth farms, having a total acreage of 1353 hectares, under a concession from which it obtained right to 1000 hectares only. 81 From Crowther are obtained the following figures showing methods by which the United has acquired land in Honduras." 2 T A B L E 6.

METHODS OF L A N D A C Q U I S I T I O N I N HONDURAS

Tela Railroad Company Hectares (2.47 acres) For railroad construction . . Leased from government . . . Bought from private owners 31 31

15.000

7,000 46,000

For Riatti concession see supra, note 24. Op. cit., pp. 258, 259.

Truxillo Railroad Company Hectares (2.47 acres) 56,000 21,000

53>ooo

86

SOCIAL 6.

ASPECTS

OF

THE

P U R P O S E S OF L A N D

BANANA

INDUSTRY

ACQUISITION

The pace at which the United Fruit Company has been acquiring lands during recent years is shown by the following table. TABLE 7.

ACREAGE OF LANDS OWNED AND LEASED BY THE UNITED FRUIT COMPANY

B a n a n a cultivations T o t a l improved lands T o t a l , improved and unimproved lands . T o t a l lands

içiS 172,262 464,219 1,370,234 1,834,453

1930 189,165 523,034 2,959,008 3,482,042

1934 114,920 414,093 3,165,180 3,579,273

While the acreage used for banana cultivations and other purposes has been shrinking, the United Fruit Company has more than doubled its holdings of idle land. Why such zeal to expand when 88% of the land held in 1934 was not used and most of it never will be used? Frequently large acquisitions of land resemble the mining of precious metals : much worthless ore is dug up in order to obtain the silver or gold embedded within. Some land is acquired in order to control a right-of-way to more favored regions, or to make the entire area where planting takes place one vast plantation. Land of inferior grade or location is sometimes held for possible future use. Especially during recent years, owing to the increasing menace of soil exhaustion and the Panama disease, foresight has led to the accumulation of supplies of land for the future. Moreover, upwards of 250,000 acres, of which 34,599 were under cultivation, were added by the purchase of the Cuyamel Fruit Company in 1929. Nevertheless, the addition of over 1,400,000 acres between 1927 and 1 9 3 0 is excessive. Competition between the United and the Cuyamel was keen at that time; the United tried many methods to checkmate its rival. In Honduras the Cuyamel had blocked the United's advance to

LAND

ACQUISITION

AND

SOCIAL

CHANGE

gj

the lands of the upper Ulua. When in 1928 there were indications that Zemurray might undertake operations on the west coast of Guatemala, the United dispatched a surveying party to that region. The surveyors discovered exactly what lands the company would have to purchase in order to acquire sufficient water rights to prevent its competitor from obtaining water for irrigation and thus from entering these fertile valleys. Of the 13,459 strategic acres required by this dog-in-the-manger policy in one large section of Guatemala, one-third of the area was useless as f a r as banana production was concerned. Since, however, the Cuyamel did not challenge the United's supremacy in this region, this well-charted campaign was not carried out. Evidently in some cases at least the United Fruit expands its territorial domain not because it needs more land but in order to cripple its competitors. 7 . SOME SOCIAL E F F E C T S OF L A N D POLICIES

These various methods of acquiring land have made possible the development of mass agriculture in the American tropics. With initiative, careful planning, efficient techniques and modern mechanical equipment the United Fruit Company has built up an elaborate and effective organization, which during the last generation has supplied about two billion bunches of bananas to North America and Europe. The Cuyamel, Standard, Atlantic and other fruit companies have performed similar functions on a smaller scale. As a result consumers in temperate climes are supplied with an appetizing and healthful fruit at moderate cost— although not as cheaply as might be the case under less monopolistic conditions ; Caribbean nations receive increased income through taxes — although not proportionate to the companies' investments and profits; labor of various kinds

88

SOCIAL ASPECTS

OF THE BANANA

INDUSTRY

is given employment; and national products are purchased. In p e r f o r m i n g these economic functions the foreign corporations obtain control of

many other activities,

exert

strong political pressure and m o d i f y the social conditions of the region. 83 A s the banana industry expands new communities develop which are comparable in some respects to ancient feudal domains and in other respects to modern towns.

factory

Practically all of the inhabitants of a f o r m e r jungle

area, which is now an integrated part of the banana empire, are dependent in many w a y s upon the economic giant which hires laborers, buys fruit, regulates trains, operates docks, dispatches radio communications, exerts strong influence in national politics, and overshadows all businesses and other interests in the region.

M o s t of the people w h o are not

employed by the company directly are dependent upon it indirectly.

T h e impact of the United F r u i t Company upon

the entire life of its various spheres of influence is clarified when w e compare conditions to-day with conditions in the nineteenth century, when banana exporters activities to the purchase of

limited

their

fruit f r o m independent f a r -

mers, thus having little or no other influence upon the communities where they operated. L a n d laws, designed primarily to encourage the settlement of independent farmers throughout the national domain, have made possible the acquisition of much land by the fruit companies.

T h e resulting social relationships differ

profoundly f r o m those which were visualized when the laws were enacted.

In the instances where lands were obtained

through intermediaries, as especially in the case of the much discussed

" alternate

lots "

in

Honduras,

the

companies

tricked the public and frustrated a national policy designed 33

265.

Cf. Kepner and Soothill, op. cit., passim, especially pip. 209-228, 263-

LAND

ACQUISITION

AND

SOCIAL

CHANGE

89

to prevent large contiguous areas from falling into the hands of one powerful owner. A n d where pressure has been used to force owners to sell their property, these owners, whether rich or poor, have been injured. Although we have stressed the fact that bananas are grown on lands which were formerly uninhabited jungles, one must not assume that all of the clearing and improving has been done by the fruit companies. O n the contrary many jungle areas have been reclaimed by individual proprietors. The effect upon the status, and frequently also upon the occupation of these landowners and farmers, will be considered in the following chapter. 8. T H E TRANSITORI NESS OF B A N A N A

COMMUNITIES

The shadow of the banana industry has spread far and wide over Caribbean countries. It has transformed primeval jungles into thrifty plantations and active communities. It has erected many structures of modern civilization. The United Fruit Company has constructed sewerage systems, raised and paved streets and built sea walls. T o new developments fruit companies have drawn not only workers but also private planters, storekeepers, governmental officiais and other persons dependent upon the banana industry. Banana booms subside quickly, however. T h e contraction of banana cultivations is more acute than the curves in Fig. ι, p. 64 show, since in most regions old lands abandoned because of the Panama disease and soil exhaustion are offset by new lands planted. A s banana lands die, communities dependent upon them languish and in time die also. The large division headquarters continue to exist as long as fruitful lands abound somewhere in the hinterland. But when, as in Costa Rica, the total production of a division falls off, port cities like Limon are affected disastrously.

go

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

Among many illustrations of the decadence of banana districts several may be cited. In Honduras the section served by the Jilamo branch of the Standard Fruit and Steamship Corporation's railroad, once prosperous, is falling into ruin.34 In the summer of 1930 the Estrella Valley settlement in Costa Rica was reported as " about to disappear completely."®5 On February 1, 1930, La Tribuna reported an exodus of two thousand laborers from different parts of the Atlantic coast; the threat of bankruptcy to four or five important merchandise establishments in Siquirres; and the decadence of other former commercial centers. Talamanca, Costa Rica, near the Panamanian border, has so fallen from its former economic position that its residents have complained of the removal by the fruit company of the latter's telephones, rails and bridges, so that not even a roadbed remained by which they could occasionally hike out of the " highlands of weeds " into the neighboring municipality.38 The president of Costa Rica declared in December, 1929, concerning the Sixaola region, of which Talamanca is an extension : All the banana and cacao farms of the company have disappeared, and with them the edifices ; at the same time, and as a consequence, the territory has been depopulated to a large extent." In 1933 the congress of Honduras accepted the transitoriness of these communities and permitted the Truxillo Railroad to " change and remove its branches, sub-branches, 31

Deputy Williams in Honduras, Boletín Legislativo, Jan. 6, 1933.

35

La Tribuna, San José, Costa Rica, July 2, 1930.

ίβ

Ibid., April 30, 1930.

37

Ibid., December 6, 1929.

LAND

ACQUISITION

AND

SOCIAL

CHANGE

spurs, deviations and other similar works when and in the manner it desires," except on the Olanchito branch." F r o m the point of view of social welfare it should be noted that where cacao production intervenes between banana cultivation and complete demoralization, the labor force required is smaller and the payroll is less than when bananas held full sway. When the complete cessation of productive enterprise takes place, a f e w Negroes hang around eking out a miserable existence on abandoned farms. But most of the settlers, who had pulled up stakes in their old homes to establish themselves supposedly as permanent residents of new banana communities, face the prospect of the loss of their investments and the sacrifice of their new homes as they move elsewhere to seek new sources of livelihood. Central Americans who stay on the upland plateaus remain attached to the soil and to the customs of their fathers, but those who migrate to banana regions enter into occupations and social relationships which are temporary. T h e flame of economic activity burns brightly f o r a while but it soon dies down and a new jungle blots out the vestiges of an ephemeral civilization. si Honduras, Boletín Legislativo, no. 4 of April 28, 1933, art. viii.

of July 24, 1933, contains leg. decree

C H A P T E R THE I.

V

P L A N T E R S ' PROFITS AND

STATUS

RECEIPTS FROM B A N A N A SALES

THE United Fruit Company produces one-half of the bananas which it exports upon its own farms. It purchases the remainder from nominally independent farmers. T h e $13,500,000 1 expended by the company for banana purchases in 1929 was divided among planters differing widely from each other in race, nationality, wealth and social status. Politicians and other prominent citizens of Caribbean nations, living in the capital cities ; other nationals living on farms which are worked by hired labor ; poor peasants working their own small plots; West Indian Negroes raising bananas on their tiny lots, some of them working also at times on the company's farms ; and a great many citizens of the United States and European nations—all these are included in the composite " private planter ". A few years a & ° 589 of the 7 1 7 bananeros in the canton of Limon, Costa Rica, were reported as foreigners ; 2 a large proportion of these foreigners were W e s t Indian Negroes. H o w far do these heterogeneous banana growers, most of them acting alone, some of them combining in small companies or cooperative organizations, benefit from their contribution to the banana industry? 1 This given in as total $478,300 2

approximate figure obtained by subtracting f r o m $13,999,900, President Cutter's Letter to the Stockholders, of February, 1930, payments f o r purchased fruit and sugar cane, the payment of made for cane in Cuba.

Statement of Luis D. Tinoco, ass't. sec. of treasury. 92

THE PLANTERS'

PROFITS

AND

STATUS

93

The United Fruit Company buys some fruit in Jamaica and in Central America without contracts, frequently at reduced prices. Generally, however, it receives bananas at definite prices stipulated in banana purchase contracts, which run from one to five years, and occasionally, when the company wishes to forestall the sale of fruit to a competitor, for ten years. In Central America and Colombia bananas are purchased by the count bunch. According to this procedure a stem of nine or more hands brings the full count bunch price, and a stem of eight hands, considered ^ of a count, brings of the count bunch price. Similarly a 7-hand and a 6hand are reckoned as constituting and Y\ of a count respectively. During the years immediately preceding the depression the United Fruit Company paid for contract fruit sixty cents per count bunch in Costa Rica and Colombia, fifty cents in Guatemala and about forty-five cents in Honduras. On virgin soil a harvest of bananas contains almost entirely bunches of nine or more hands; in other words, its count bunch ratio approximates 100. A s the soil deteriorates, however, the proportion of large bunches decreases and the proportion of small bunches increases, this fact being one cause of the company's preference for growing bananas on virgin lands and buying bananas raised on old lands. For the year 1929 the count bunch ratio for purchased fruit was 74 in Costa Rica (compared to 79 for company-grown fruit) and was 81 in Honduras (compared to 88 for companygrown fruit). 3 Thus on the basis of sixty cents per count bunch in Costa Rica and forty-five cents in Honduras, the average price, bunches of all sizes considered, received by planters in Costa Rica was $.444, and the average price received by planters in Honduras was $.365. 3

See table in Kepner and Soothill, op. cit., p. 273.

94

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

Estimates of the annual production of bananas per acre vary astonishingly. Promoters of get-rich-quick schemes have painted alluring pictures of yields as high as 500 to ι,OCX) bunches per acre. 4 The facts, however, do not substantiate such advertisements. Although some of the United's best Honduran lands have produced 200 bunches per acre, the lands of private planters have not usually been so productive during recent years. A high estimate would set 1 2 5 bunches, the lower figure mentioned in the second chapter, as the average annual production on private farms in Costa Rica, and 1 5 0 bunches, the upper figure, as the average in Honduras. On this basis we estimate $55.50 as the planters' theoretical average annual return per acre prior to the depression in Costa Rica, and $54-75 as the corresponding figure in Honduras. These figures are theoretical because the fruit companies do not accept all the fruit which planters deliver to railroad platforms. The acceptance of six-hands is always optional with the purchaser. In its standard contract the United Fruit Company agrees to accept all bunches of seven, eight, nine or more hands which are found to be in good condition for export, that is: which are green and clean, which are not bruised, stained, dirty, scarred, sun-burned, or damaged by any other cause, which have been harvested after the hour specified in Article 3 of this contract, of the degree of maturity and in accordance with the conditions required by the company and provided for in this contract. * The Jantha Plantations Company quotes this figure in its booklet, Do You Want a Home and an Income for Life?, p. 16, as coming from a communication of the U. S. Dept. of Agriculture, Dept. of Plant Industries, dated June 29, 1925. In a letter of September 24, 1932, Wm. A. Taylor, chief of the Bureau of Plant Industry, explained that this estimate was quoted from a mimeographed circular relating to the cultivation of dwarf varieties of banana in Florida.

THE PLANTERS'

PROFITS

ANU

STATUS

It does not require much imagination to realize that practically any bunch of bananas might be discarded according to one of these criteria. Many are so rejected, especially when, because of lack of room in a ship or lack of demand in the market, the company does not wish to take them. During the depression, critics of the company have maintained, rejections have frequently amounted to fifty per cent of a lot delivered to the trackside. In normal times, although the average rejections over the period of a year were not great — 8 y 2 % being the proportion rejected in Costa Rica during 1927—rejections were often high on days when it was to the company's advantage to restrict the supply." Such situations have engendered much ill feeling toward the company. Other factors besides the company's rejection policy decrease or annihilate a planter's income. In the event of hurricanes, droughts, washouts, dislocation of the company's own railway system and other disasters, the planter suffers the entire loss. Moreover, when his contract expires he is not assured that it will be renewed, as many planters have discoverd to their ruin during the present economic crisis. Making no allowances for such disasters as are mentioned above, and deducting 8% for rejections during prosperous years, we reduce our estimates for Costa Rican and Honduran private production returns to $ 5 1 . 0 6 and $50.37 respectively, under normal conditions before the depression. 2.

PRODUCTION COSTS

It is even more difficult to estimate net returns than it is to estimate gross returns. The costs of the original investment and of the upkeep of banana farms vary greatly. In 1887 one could buy virgin land in Guatemala for the in5

Contracts, rejections and other factors affecting the planters' economic condition are discussed in more detail in Kepner and Soothill, op. cit., pp. 265-275·

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

conceivably small sum of thirty to thirty-five cents an acre.* On the other hand, forty years later the Colombia Yearbook announced the price of uncultivated land as two hundred dollars per hectare (about eighty dollars per acre), and the price of banana lands bearing fruit as about one thousand dollars per hectare. As a general rule, however, lands suitable for bananas have been secured cheaply. In Costa Rica much potential banana land has been purchased for from $3· 2 5 to $ 1 6 per acre. The cost of maintenance not only varies in accordance with the physical conditions of each plot—for example, the amount of draining and bridge building necessary—but also with the methods used to operate it. It is apparent that the costs are less for peasants who work their own farms than for planters using hired labor, but since these peasants' plots are very small their total returns are small also. Various estimates of production costs have been made, but none of them are satisfactory, considering the many variations in methods, the condition of the land, labor costs and other items.7 In 1922 a high official of the United Fruit Company in Costa Rica wrote an oil man, who wanted to make some banana money on the side, giving the following as a liberal estimate of costs : 8 4

U. S. Reports from Consuls, 1888, vol. 27, p. 421.

7

One estimate, however, may be given here. It was made contemporaneously with the estimate given in the text. W. S. Allen in the Journal of the American Chamber of Commerce of Mexico, Sept., 1922, estimated, exclusive of the cost of the land, the expense of clearing, planting, and care up to first production as $35 per acre, and the annual maintenance and delivery costs as $28, the latter making the cost the first year [at 280 bunches per acre] 10 cents per bunch, and the second and third years [about 400 bunches per acre] about 7 cents per bunch. No account was taken of depreciation. 8

Letter of the manager to H. G. Wilson, July 8, 1922.

THE

PLANTERS'

PROFITS

AND

STATUS

Uncultivated river bottom land $ao. per hectare [i hectare = 2.47 acres.] Preparing the land, building roads, drains, bridges, etc 65. per acre Geaning and pruning (necessary 3 or 4 times a year) 4.50 per hectare Cutting and delivering to railway 0575 per count bunch Administrative force on 100 hectares, not over : Overseer $100.00 Foreman, not always necessary 35-00 Cook 15.00 Combined stockman and general laborer . . . . 20.00

per month " " " " " "

U s i n g these figures, minus the cost of foreman, f o r which is substituted $ 2 5

to cover cost of

live-stock,

tramways,

equipment and buildings, we obtain the following

rough

estimates : The Original Cost Per Acre of a Banana Farm Land Preparation of land Material equipment Total

$8.00 65.00 25.00 $98.00

The Annual Maintenance Cost Per Acre of a Banana Farm Cleaning and pruning 3ι/ί times a year $6.40 Harvesting 125 bunches at $.045, assuming count bunch ratio of 78 5.60 Annual cost without supervisory force Supervisory force, without foreman Total Since the original costs are the chief items of

12.00 6.50 $18.50 expense

and the average life of banana lands in Costa R i c a is estimated as eight years, including the better lands owned by the company, it is plain that the last figures alone are as unsatisfactory as is estimating the expense of an automobile without including the original cost of the machine.

If we

depreciate the original investment over eight years we arrive

98

SOCIAL

ASPECTS

OF THE BANANA

INDUSTRY

at an estimated annual cost per acre of $30.50, if a supervisory force is utilized. This leaves a net annual return of about $20.50 per acre, where gross returns amount to $51. Although these estimates are based on figures given over a decade ago, they approximate costs in Costa Rica up to 1930. Estimates of the average cost under normal conditions of producing each stem of bananas and delivering it to the exporting company's railroad differ greatly. Most of them, however, range between 15 and 30 cents." 3.

P L A N T E R S I N T H E RED

In 1919, three years before these estimates were made, the United Fruit Company paid planters in Costa Rica 30 cents per count bunch. Prompted in part by pressure from a league of planters who had been suffering from such underpayment, the United Fruit Company raised the count bunch price to 40 cents in September of that year, to 50 cents shortly thereafter and, including a 10 cent bonus, to 60 cents in October, 1920. Although in our rough estimates we have made allowance for depreciation, it should be borne in mind that this refers only to the lands producing bananas and materials used upon them. It does not include the homes of planters or other investments which become of little or no value when banana cultivations die out or banana contracts expire. Under such conditions many planters have been ruined, while the rich corporation with sources of supply throughout the Caribbean region merely shifts its operations to more promising fields. Moreover, even while banana cultivations are still producing the planter's margin 8 Cf. the following cost estimates: depreciation plus 12-15 cents per count bunch [Consul S. T . Lee, Costa Rica, in Supplement to Commerce Reports, vol. ii, 1915, no. 24a, June 2, 1915] ; 20 cents [Colombia Yearbook, 1927, p. 160] ; 30 cents [Carlos Collado, former secretary C o operativa Bananera Costarricense] ; 25 cents f o r the United's own farms [Fortune, March, 1933].

THE

PLANTERS'

PROFITS

AND

STATUS

99

is so small and the possibilities of disaster are so numerous that " the small planter or trader, who must stake his all upon the fortunes of a single district, has at best a pure gamble," 1 0 and in that gamble many have lost heavily, even before the depression. During the past few years the plight of the planters has gone from bad to worse. In Costa Rica the company first removed the bonus, thus reducing the purchase price to 50 cents. On the fourth of July, 1932, it announced that under new contracts the purchase price would be 1.20 colones per count bunch, while bananas would be purchased, at the pleasure of the company, without contracts for .80 colon per count bunch. A t the then prevailing rate of exchange these prices were approximately 24 cents and 16 cents, a drop from the 1930 contract price of 60% and 7 3 % respectively. Although labor costs had fallen somewhat, they had not fallen to such an extent. Even these prices, apparently insufficient to cover operating costs, to say nothing of depreciating the original investment or making a profit, were not received by many whose contracts the company refused to renew, and whose bananas were allowed to rot. Prices now paid by the United Fruit Company under the Cortes-Chittenden agreement are as follows : 1 1 MINIMUM

COUNT B U N C H

Atlantic zone, new contracts (( " " , certain old contracts renewed . . . . Pacific zone, new contracts .

PRICES IN U . S .

Mature Fruit for U. S. A. $.50

CURRENCY

Thin Fruit for Europe

.40

•30

$•45 •35 •25

In Honduras the count bunch price was reduced to 30 cents in the winter of 1 9 3 1 - 1 9 3 2 : in 1933 it was increased by 5 cents. 10

Arnold W. Lahee, Our Competitors and Markets, ch. ix.

11

La Caceta, San José, Costa Rica, Dee. 15, 1934.

ΙΟΟ

SOCIAL ASPECTS

OF THE BANANA

INDUSTRY

A spokesman for the United Fruit Company has declared that Caribbean planters are benefited by being guaranteed the disposal of their fruit for a period of years at a fixed price. As has been suggested here, and as is shown in much more detail in The Banana Empire, the company has various loopholes through which it can escape responsibility for acceptance of undesired fruit. 12 Moreover the existence of these contracts prevents planters from dealing with competing exporters, who may offer more favorable terms, as the Cuyamel Fruit Company did in Costa Rica in 1928. When faced with the choice between renewing a contract on the basis of the old price or of going without a contract in the hope of selling fruit to a new company, most planters, realizing the established company's power over its rival through control of transportation facilities, renew their contracts on the familiar theory that a bird in the hand is worth two in the bush. 4 . T H E UNIQUE POSITION OF J A M A I C A

The Jamaican banana industry differs considerably from that of continental countries. Although the Panama disease exists in some localities, its effects on the whole are far less deleterious in Jamaica than they are in Central America. Many Jamaican lands have been producing bananas for thirty years or more and will probably continue to do so for a long time in the future. The government moreover has taken drastic steps to combat the spread of the disease. Under liberal land laws Jamaican citizens can obtain parcels of land for their homes and farms on easy terms. Owing to irrigation in some places, and the practice of intense cultivation, more work is required on banana farms in Jamaica than in Central America. 12 Chapter x, especially sections 5 and 6 ; and for the Cuyamel conflict : ch. ii, sec. 9.

THE

PLANTERS'

PROFITS

AND

STATUS

χοΐ

In Jamaica the company does not operate commissaries, planters and laborers alike making their personal purchases in local stores. Although the United Fruit Company has built railroads for its own use, it does not control commercial transportation on the island as it does on the mainland. Moreover the strong central government has prevented it from obtaining exclusive control of docks. 1 " Unable to secure certain of the concessionary privileges which it has in Central America, the United Fruit Company is not able to stifle competition as completely in Jamaica as it has in Central America. This is shown by the fact that in 1930 it handled only 54% of the island's banana exports. 14 Although during the first three decades of this century banana purchase prices remained fairly constant in Central America, they fluctuated widely in Jamaica because of competitive conditions. Sometimes, with the banana market glutted with fruit, prices fell low, with planters who lacked contracts unable to dispose of their fruit at all. Nevertheless, in 1907, when the price per count bunch was 3 1 cents in Costa Rica, the price was 47 cents in Jamaica; in 1 9 1 3 , with 30 cents still prevailing in Costa Rica, the approximate price range in Jamaica was from 35 to 45 cents; in 1 9 2 3 , when the price per count bunch was 60 cents in Costa Rica, the average price in Jamaica was about 84 cents; and in 1930, with 60 cents still prevailing in Costa Rica, the United Fruit Company paid 72 to 84 cents in Jamaica. 1 5 A t times Jamaican prices have been over a dollar; during a banana 18

Bitter, Die Eroberung des Mittelamerikas. Interview accorded to R. L. Buell in Jamaica, 1930, by an official of the company. 14

16

President Ricardo Jiménez, speech as deputy in 1907 [see Saenz, op. cit., p. 146] ; Adams, op. cit., p. 134; Imperial Institute, bulletin, The Banana and Its Cultivation with Special Reference to the British Empire, 1924, p. 327; and interview accorded R. L. Buell in 1930 [changed to U. S. Currency],

I02

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

war in which competitors were trying to annihilate each other, prices skyrocketed to five, six, seven and finally eleven shillings. 18 Taking the first two decades of the twentieth century as a whole, the value of bananas exported from Jamaica averaged about 40 cents per stem, 17 while in Costa Rica the count bunch price was 30 cents and the average price per bunch was less than 30 cents. 5 . PIONEER VERSUS MODERN CONDITIONS

Questions are sometimes raised regarding the planters' plight to-day compared with conditions existing under free competition in the latter part of the nineteenth century. Elsewhere it has been pointed out that competition in pioneer times was not as free as is generally supposed.18 At times exporters through individual contracts or otherwise monopolized certain regions. Frequently, however, genuine competition existed, with the result that prices fluctuated widely. In 1887, during seven months of the year, bananas were bought at the port of Livingston, Guatemala, for 50 cents a bunch, as high a price as was paid in boom times forty years later. During the remaining five months the price was 37^4 cents a bunch. Glowing accounts are given of the high prices which sometimes were paid in Honduras under competitive conditions in the nineteenth century—prices running up to 60 cents a bunch and, in times of exceptional demand, even to one dollar or more. The occasional figures which are quoted in such documents as the United States consular reports, indicate that early prices were frequently between 20 and 25 cents, although they sometimes ran up to about 34

Franck, Roaming Through the West Indies, p. 430.

11

is. 8d. according to bulletin in note 15, supra, p. 327.

18

Kepner and Soothill, op. cit., pp. 96-99.

THE

PLANTERS'

PROFITS

AND

STATUS

103

50 cents.1® One must take into account on the one hand far greater value of the dollar in the early days and on other hand the fact that frequently the planter had to the transportation expenses, which to-day are paid by purchasing companies.

the the pay the

One would assume that during recent years planters have been able to dispose of far larger quantities of fruit than they could sell before the establishment of the major fruit companies in the tropics. The contrast is not, however, as great as it appears. Practically all of the bananas constituting 2 3 % of Honduran exports in 1896 were raised by Honduran farmers, whereas only 5,265,312 bunches of the 28,960,948 bunches exported in 1931 were raised by private planters of Honduran and other nationalities. 20 Estimates 18

PURCHASE

PRICE

IN

UNITED

STATES

CONSULAR

Year 1886 1888

Vol.

No.

19 27

65 97

Page 219 422

1891

36

131

633

1893 1897 1899

42 53

152

61

199 229

105 499 336

CURRENCY

COMPILED

Locality Brit. Honduras Guatemala

Price per bunch of bananas

7 months 5 months San Pedro Stila, May-Sept. Honduras Oct.-April Honduras [3-12 reals] Bay Ids., Hond. Bay Ids., Hond.

The following is from the Bulletin of The Pan-American 1899

FROM

REPORTS

Omoa, Hond.

•37 •50 •375

.18 -23 • 19--75 •225 •25

Union: .34

Additional estimates from Rung, pp. 40-53: 1894 i8q7 1894 1896

Brit. Honduras Panama Nicaragua Nicaragua

.37 .27 .425 .34

Rung, Die Bananenkultur, gives various estimates of cost of production and prices prior to 1910. E. W . Perry's Study of Banana Statistics, quoted by Rung, p. 45, gives the high price range of 35 cents to $1.25 for Central America as a whole between 1887 and 1897. 20 1896 percentage from Williams, The Rise of the Banana Industry, p. 64. 1931 figures from Honduras, Boletín Legislativo, series iv, no. 31 of Jan. 23, 1933.

I04

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

of the costs of banana production and net profits in the nineteenth century vary as much as do similar estimates of later times. But it may be noted in passing that the few which are available indicate that, with costs formerly much less than in recent years, planters gained more in actual dollars and cents and much more in purchasing power in the chaotic times of the early industry than they gain now in the monopolistically organized period of the mature industry. 21 6.

T H E C H A N G I N G STATUS OF BANANA

GROWERS

The planters of the Bay Islands, Honduras, who in 1899 refused to sell their bananas to the fruit trust when it tried to depress prices, 22 were independent farmers, free to dispose of their products when and to whom they desired, free also to do as they pleased with their own property and to determine their daily conduct and the course of their lives. Many pioneer planters by their own labor and initiative have converted the primeval jungles into profitable banana cultivations. Not much freedom, however, is possessed by those who are under contract to the United Fruit Company. Moreover, these contractors f o r f e i t their property rights. 2 ' Anywhere upon their lands at any time the company can occupy a right-of-way for a tramway or railroad line without compensation. Moreover, should they sell portions of their property, the purchasers would still be held responsible for carrying out the obligations of the company's contracts. 21

Some estimates of profits per acre a generation or more ago are : Date

1895 1887

Country Honduras Honduras Nicaragua Guatemala

Net Profit $58 - $73 $39 - $49 $107 $75-$100

Authority Rung, p. 40

"

" U. S. Reports from the Consuls, vol. 61, 1899, p. 336. 23

Cf. Kepner and Soothill, op. cit., pp. 257-262.

P- 4J

" P· 44 U. S. Reports from Consuls, vol. 27, p. 422.

THE PLANTERS'

PROFITS

AND

STATUS

Although some individuals rebel, planters generally are prone to become subservient to the company, politically as well as economically, signing petitions for governmental favors for the latter, and otherwise using their influence to further the cause of the organization to which alone they are able to sell the products of their farms. Their economic dependence places them at a disadvantage whenever their desires run counter to the policies of the company. A man who must sell all of his produce to one company, from which too he may have leased his land or borrowed money, who must use this company's railroad when he travels or ships freight, who may be dependent upon this company's store for food and other supplies for his family, who realizes that the comandante and other local officials may be receiving part of their salaries from the same company, can hardly fail to sense his subordination to the dictatorial foreign corporation and to realize that he is but a cog within a mighty machine. Playing the game as one of the company's underlings, his status becomes more that of a dependent laborer than that of an independent farmer. Moreover, many of those who formerly held and worked their own farms have become laborers on the company's domain. Fruit companies desiring to control large areas have bought the farms of many planters. Many of these former owners have been obliged sooner or later to sell their services as well as their lands in order to earn their livelihood. Concerning this trend from farmer to laborer, nationalistic journalists and deputies, especially in Honduras, have raised ineffectual protests. " The national farmers are condemned to disappear," declared Deputy Reyes in the Honduran congress several years ago, for the fruit companies are becoming owners of the lands on the coast, including the alternate lots, which they now have almost

Ιθ6

SOCIAL

ASPECTS

OF

THE

BANANA

INDUSTRY

entirely in their possession, through transfers made by the Hondurans themselves. The villages, the small riverside farms disappear, and the depopulation of the region follows. 24 One reason for this trend, according to this speaker, is the planters' difficulty in marketing their fruit, with the result that they cannot afford to install irrigation systems and consequently the quality of their fruit deteriorates. If independent farmers are the mainstay of democracies and organized workers are the vanguard of socialistic governments, the transformation of Central American farmers into laborers is likely in time to affect the political complexion of their governments. Some Latin Americans shift from planter to worker and back again. A n d their attitudes alternate with their positions. A national conference of banana producers and workers held in Mexico in 1929 was confronted by the fact that some planters, who at times worked as laborers on the estates of large producers, were, while themselves producers, paying low wages to their own laborers. The mixed commission decided that these men might fulfill both functions on the condition that while assuming the role of employing producers they pay the approved scale of wages. The conference, recognizing some of the peculiar problems of these planter-workers, aided them in the organization of a " Union of Small Producers of Tropical Fruits 7.

T H E COOPERATIVE MOVEMENT AMONG BANANA PLANTERS

From time to time various cooperative organizations have been formed in the several banana producing countries of 2 * Honduras, Boletín Legislativo, series iv, no. 31 of Jan. 23, 1933. Cf. article by Raimundo Mendoza R. in El Nacional, San Pedro Sula, Honduras, Feb. 13, 1931. 2 5 Mexico, secretaria de industria, comercio y trabajo, departamento de trabajo, Convención de Factores del Cidtivo, Industria, Comercio y Transporte del Platano, June 3-July 6, 1929, pp. 52 et seq.

THE PLANTERS'

PROFITS

AND STATUS

107

the Caribbean region. Although some of them have been cooperative chiefly in name, the outstanding societies have been bona fide cooperatives, democratically controlled and genuinely concerned with advancing the interests of the producers. For the most part, however, they have been ineffectual when competing with the more powerful private corporations,2' except when aided or protected by strong governments, as in Jamaica and Mexico. Thus far the most successful cooperative enterprise is the Jamaica Banana Producers Association, Ltd., which has been sponsored by the more inclusive Jamaica Producers Association, Ltd., and aided by a loan from the government. The government of Mexico, which in October, 1934, called a meeting of banana cooperatives for the purpose of establishing a bank to finance the industry,27 has actively aided cooperative ventures for some time. Conspicuous among the banana cooperatives has been La Nacional Platanera, S. C. L. Among the facts which appear from an analysis of the activities and contracts of these associations in a study of " Cooperation versus Monopoly ", 28 are the following. The Jamaica Banana Producers Association, Ltd., makes a first payment to its members of 2s. per bunch, regardless of size, and later, after deducting 2d. to retire the governmental loan for the purchase of ships, makes further distributions on the basis of its earnings. (In 1930 the profit sharing amounted to 9d. per bunch.) La Nacional Platanera takes fruit on consignment, recompensing its members after sales have been made. Neither organization has become completely independent of private business, as the Mexican co2

* Kepner [Nicaragua] 2T Council a* Title of

and Soothill, op. cit., pp. 70-76 [Costa Rica] ; pp. 286, 287 ; pp. 287-294 [Colombia], on Inter-American Relations, bulletin no. 15, Oct. 19, 1934. ch. xi of The Banana Empire.

!O8

SOCIAL ASPECTS

OF THE BANANA

INDUSTRY

operative markets its fruit through Charles Weinberger, formerly vice-president of the United's marketing agency, the Fruit Dispatch Company, and the Jamaican cooperative markets fruit in the United States through the Standard Fruit and Steamship Corporation, although a cooperative subsidiary disposes of its fruit in Europe. The contracts of both organizations with their individual members, like the contracts of banana companies with private planters, permit the rejection of unexportable fruit. Each member of the cooperative associations can share in the determination of policies and the choice of officials. Jamaican planters have voting power in proportion to the quantity of fruit produced; Mexican planters vote on equal footing. Especially significant is the emphasis placed upon group loyalty. Through its official organ, Banana News, the Jamaican cooperative urges each member to join his district association in order to keep in close touch with his organization. Colombian producers' cooperatives have been concerned not only with the marketing of fruit but also with the problem of irrigation and the securing of loans. In 1932 the president of Colombia issued a decree establishing an agricultural credit institution for the purpose of making loans to farmers.

CHAPTER S A N I T A T I O N AND

VI HEALTH

I . FROM L A I S S E Z F A I R E TO SOCIAL LEGISLATION

FROM the preceding chapter it is evident that the situation of planters dependent upon the banana industry has been conditioned by various forces, such as the planters' individual or collective bargaining power, the authority of the nation, and the control of the fruit companies, with the latter almost always becoming the dominant factor. In this and the following chapters, which concern primarily the welfare of the banana workers, we shall examine similar parts played by these workers — both independently and through organization—by the governments, and by the fruit companies. Wherever Caribbean nations attempt to regulate the affairs of fruit companies in general, they rely more upon particular concessions than upon universal laws. Where, however, they determine labor policy they are more likely to do so through protective legislation than through the terms of concessions. The latter, formulated by fruit companies and politicians who accept the social philosophy of the fruit companies, tend to offset and at times to nullify what few gains have been made by social legislation. Mexico, since the inception of the new constitution in 1 9 1 7 , has enacted many laws regulating labor conditions. Colombia, which on June 20, 1 9 3 3 , ratified twenty-four international labor conventions, has for some time been the most progressive of Caribbean republics in the sphere of 109

HO

SOCIAL

ASPECTS

OF THE BANANA

INDUSTRY

social legislation. Central American republics, however, have lagged behind their northern and southern neighbors in improving social conditions by legislative action. In 1926 Guatemala enacted a labor law. Social principles were embodied in the Honduran Constitution, which was adopted in 1924. Eight years later the congress of Honduras set up a committee on social legislation, commissioned to consider the draft of a labor code submitted by the executive authority. In spite of complaints raised by deputies at the protracted delay, action on this matter appears to have been sidetracked in the interest of concessions desired by fruit companies and other issues of the moment. In July, 1934, draft labor codes were pending in the national legislatures of Colombia, Honduras, Nicaragua and Panama. A t the present time Caribbean governments are adopting progressive social policies and making them effective through legislation. Prior to the last decade, however, they did little to advance social welfare through laws. Governments of Central America in particular allowed individuals and corporations to bargain with their workers with very few restrictions. Since the development of effective labor unions is also a matter of recent date, labor conditions during the rise of the banana industry were but slightly influenced by either social legislation or labor organization. 2.

PROBLEMS A N D METHODS OF SANITATION

At the dawn of the banana industry the low-lying Caribbean jungles were so unhealthy that with the exception of certain courageous Honduran and Panamanian planters, few Central American nationals were willing to live and work in them. Hence the fruit companies introduced large numbers of West Indian Negroes, who were more immune to tropical fevers and more anxious for new opportunities for work. With the Negroes worked the Caribs, shore-

SANITATION

AND

HEALTH

III

dwellers in whose veins are mingled Indian and African blood. Being completely at home in the tropical lowlands, they have proved excellent banana workers. Keith and other pioneers in the banana industry also recruited workers from unemployed groups in the United States, including adventurers and ex-convicts. A f t e r the completion of the Panama Canal drifters from all corners of the globe turned up to try their luck in the banana regions. Even those who were most inured to tropical conditions paid a terrific toll. Over four thousand men, officials from temperate zones and West Indian laborers, died during the construction of the first twenty-five miles of the Costa Rica Railway. Among those who perished were three brothers of Minor C. Keith. Pioneer banana enterprises were carried on without adequate sanitation or medical care. In the United Fruit Company's earliest developments in Panama " field men and their workers plunged in first, and the medical department followed as best it could." 1 Very soon, however, the United Fruit Company sent its medical corps along with the front line of jungle conquerors. It recognized practically from the start what the late Dr. William E. Deeks, formerly head of its medical department, enunciated in his annual report for 1924: Agricultural development and commercial activity on a large scale are impossible until medical science brings tropical disease under control, and sanitation transforms pestilential areas into healthy localities. . . . The commercial success of the company is largely due to its accomplishments in reducing the prevalence of these diseases formerly responsible for an appalling morbidity and death rate. As early as 1873 some experiments in sanitation had been conducted by persons engaged in the banana industry. 1

Adams, op. cit., p. 290.

112

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

Owing to lack of experience in the western hemisphere in fighting tropical diseases, calls were sent to scientists and physicians who had achieved success in India, A f r i c a and Java. B y the time of the organization of the United Fruit Company in 1899 a considerable volume of experience was available. T w o kinds of mosquito had been found to be most dangerous, the stegomyia, now called aedes, carrier of yellow fever, and the anopheles, carrier of malaria. The extent of banana regions is so tremendous that no unified system of extirpating the anopheles has been undertaken. Methods of sanitation have varied from time to time and from place to place. In some cases spectacular progress has been achieved, such as the filling in of Bocas del Toro and other town sites. Especially valuable when tried has been the drainage of low-lying areas and the flushing of other pest holes with sea water. Owing to the high cost of drainage, however, many stagnant pools have been left untouched, while others have been covered at regular intervals with crude oil or Paris green mixed with sawdust. Other methods of sanitation sometimes adopted include the clearing away of refuse, grass and underbrush, the construction of sewers, the paving of streets, and the safeguarding of the water supply. Writing of their experiences in Honduras, Dr. R. B. Nutter and J . C. McDaniel declare that 2 attempts at mosquito control and intensive sanitary work alone will not reduce malaria, to an extent which will justify the expenditures involved to effectually control mosquito breeding, in the large areas of a banana division where the labor turn-over is large and the laborers are housed in unscreened quarters. * U. F. C., medical dept., Annual Report, 1930, p. 20. Unless otherwise stated, all of the statistics and quotations in this chapter, pertaining to the years 1930, 1931, were obtained from the reports for these years.

SANITATION

AND HEALTH

113

Hence greater emphasis is placed upon periodic blood surveys of all people in a given community ; those found to be infected are treated with quinine and plasmochin, the former drug long recognized for its efficacy in reducing the fever, and the latter recently proven of value in preventing human carriers from infecting mosquitoes who in turn would carry the disease further. In addition camp dispensers make daily rounds to detect obvious cases and to corral them for treatment or hospitalization. Workers have been induced to help themselves in preventing fever through hygienic instruction by local dispensers and school teachers. Even preachers have been secured with instructions to preach health along with salvation. In at least one of the United's banana divisions pressure is brought to bear upon uncooperative workers by the withholding of wages, and reproof is administered or fines are imposed upon careless non-employees by local magistrates. Although various measures of sanitation were practiced during the first two decades of the banana industry, these were to a large extent sporadic because of the great expense of truly effective control, and they were inadequate to meet the urgent demand. The foci of malarial infection were reduced but were not wiped out entirely. In 1 9 2 6 - 1 9 2 7 the company instituted a more vigorous campaign against the anopheles mosquito. Even this, however, has been f a r from complete. In 1 9 3 0 the medical department of the Preston division of Cuba reported : There are 182 miles of railroad lines, along which are located 170 switches. Most of these switches are cane-loading points, near which are situated the various bateys or groups of living quarters ; and it is at these points that we concentrate most intensively on breeding-control measures. Due to many more or less permanent areas of water throughout the Division, the control measures are applied only to those which are closest to habitations.

jI

4

SOCIAL ASPECTS

OF THE BANANA

INDUSTRY

Weather conditions are a factor in the routine of the control work, but an effort is made to treat each breeding area at intervals of not more than ten to fifteen days. To do so more often would be more effective, but the area to be covered will not permit. With the gradual elimination of certain water areas, the intervals between treatments of potential breeding places may be materially reduced. At present it is a question of " the greatest good to the greatest number." Considering that the anti-mosquito work of this 1 7 1 , 0 5 1 acre division is performed by one squad comprising an inspector, a motor-car chauffeur and four larvicide appliers, it does not entail a relatively great expenditure of money on the part of the company, and might be increased. 3 . T H E HOUSING OF B A N A N A WORKERS

Both for health reasons and because of lack of accommodations in new developments the providing of housing becomes an important element in the fruit company's activities. Laborers' camps are built of rough boards, generally with corrugated iron roofs having no ceiling under them, and are elevated on stilts. Some of them are one-room houses, many of them are two-room two-family houses, and others are long-drawn-out tenements, sliced off with partitions every twelve feet for each family. Although their solidity contrasts favorably with many of the ramshackle shanties inhabited by Jamaican immigrants, and their raised wooden floors are more hygienic than the dirt floors of adobe or monaca huts, they are, like these shanties and huts, decidedly overcrowded. Entire families occupy single rooms about twelve feet square. Some of these families, accustomed to living in close quarters, increase the congestion by taking boarders. Bachelor camps often have no partitions. The typical camps, short or long, have small unscreened front and back porches. The latter shelter char-

SANITATION

AND

HEALTH

coal stoves, or native ovens are set up under crude roofs raised by the occupants in the yard. Window facilities consist of three-foot-square holes and wooden shutters. The water supply is obtained from a nearby stream, caught in buckets under the tin roofs, or drawn from a pipe line, in which latter case one spigot may supply a long row of family camps. In theory, where rain water, collected on zinc roofs, is caught in barrels or tanks, the latter are screened, but this precaution is not always carried out. In contrast to the cottages of the higher grade of employees the camps of the United Fruit Company's laborers are hardly ever screened. Occasionally experiments have been made with screening such camps. Dr. Deeks and others have reported that the company has expended considerable money on screening, without being able to induce workers to use these protections against the menace of the mosquito. The typical laborer's camp, however, can hardly be made proof against mosquitoes, since there are many openings under the corrugated roofs, and between wall and floor boards, through which insects enter freely. These camps are far from the ideal set by Dr. Deeks in his pamphlet, Malaria—Its Cause, Prevention and Cure. A mosquito-proof house is one which no mosquitoes can enter except through the doors, and these should always be protected by porches screened separately from the veranda or main entrance to the house. The porches should be on the windward or exposed side of the house, whenever possible, and the doors must be constructed to swing outward. The windows should be solidly and securely screened—the screens immovable and flush with the outside walls of the house. The windows, moreover, should be of the French type, opening inward, so as to admit of being easily cleaned. Shades, shutters, etc., should be arranged on the inside of the screening.

u6

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

A ceiling is absolutely necessary. It is practically impossible to effectively screen a house that has no ceiling. Also, a ceiling prevents overhead heat-radiation, and consequent discomfort, particularly in houses with metal roofs. T h e United's failure to follow this advice of its leading medical authority has been poor economy, and is responsible for a great amount of malarial infection. Examination of 2,248 laborers in Honduras in 1930, conducted by the Cortes Development Company, revealed that the percentage of malarial infection of workers living in screened camps was 15.21, while that of those in unscreened camps was 31.81. This contrast would be more striking if entire divisions rather than limited experimental areas were screened, since workers living in unscreened camps may become infected and in turn infect mosquitoes who bite other workers when outside of their homes. 4. RESULTS OF A GENERATION OF H E A L T H WORK

The United Fruit Company has built nine modern hospitals, which it now operates in addition to the two acquired from the Cuyamel Fruit Company in 1929. In 1931 its total medical staff included 45 physicians and laboratory technicians, 39 registered and graduate nurses, 41 dispensers, 12 sanitary inspectors and 489 minor employees. In addition to caring for 22,782 patients in its hospitals it administered 373,699 treatments in hospital and field dispensaries. Besides supplying whatever medical service is required by the approximately 45,000 passengers on its ships and the approximately 25,000 members of its crews and laborers, the company gives free radio medical service to other ships at sea. In Honduras its aeroplanes can be hired to transport emergency cases to one of the hospitals.

SANITATION

AND

HEALTH

II7

I n Jamaica the United's medical department functions differently from its branches in other divisions, concentrating on first-aid and dispensary service. Serious cases are treated in government hospitals by government physicians, but a few cases are hospitalized in a small ward reserved f o r the company and treated by members of the latter's medical staff. In its various divisions the company's physicians and technicians have carried on many valuable researches. Substantial assistance was given by the company to the founding of a department for the study of Caribbean diseases at Tulane University in New Orleans. In 1 9 2 4 Dr. Deeks called an international conference on tropical diseases, which met in one of the two United Fruit Company hotels on the island of Jamaica. V a s t pestilential areas have been made at least tolerably livable. Smallpox is so thoroughly under control that when it threatened to break out in three places in 1 9 3 0 it was nipped in the bud. A n antitoxin made from the venom of snakes kept in a pit at Lancetilla greatly decreases the danger f r o m snake bite. The death rate was reported as 12.02 per thousand f o r all employees between 1 9 1 4 and 1922.* Excluding Jamaica (whose death rate is given at about 1 per thousand, since deaths occurring in government hospitals are not included), the following death rates were reported by the United Fruit Company in 1 9 3 1 : TABLE 8.

APPROXIMATE DEATH RATE PER 1,000 EMPLOYEES

Costa Chiriqui Colombia Rica Cuba Guatemala Panama Tela Truxtllo 1927 1928 1929 1930 I93I

... ... ... ... ···

7

14 14

9 7 7

7 6

13 14 H 13 IS

12

7 7

6

7

13

19

14

14

II

10 8

16

10 12

II 20

8 6

» Gregory Mason in Worlds Work, July, 1927, p. 302.

7

12

14 15

18 22

1X8

SOCIAL

ASPECTS

OF

THE

BANANA

INDUSTRY

T h e high death rate of the Truxillo division in 1931 w a s caused by the fact that out of 99 reported deaths 61 were caused by violence, all but 9 occurring before medical attention could be given. It must also be borne in mind that none of these rates, not even the general average mentioned above, adequately measure the healthfulness of the banana industry, since the company has no complete record of workers no longer on its payroll who die from sickness contracted in its service. In 1924, 8 5 % of the hospital patients were employees. In 1930 the division between employees and non-employees— the latter including members of the families of employees— was as follows. T A B L E 9.

E M P L O Y E E S AND N O N - E M P L O Y E E S TREATED B Y DEPARTMENT IN

Patients treated in the hospitals Treatments given in hospital dispensaries Treatments given in field dispensaries

MEDICAL

1930

Employees No. % of total patients

Non-Employees No. % of total patients

17,092

67

8,248

33

25,340

147,179

69

67,282

31

214,461

120,463

88

17,016

12

137,479

Total patients

Some indication of the progress in health of an entire community may be gathered from an inspection of the vital statistics of Costa Rica. F r o m 1906 to 1925 the province of Limon, in which the banana farms are located, had the highest death rate of the seven provinces, 30.6 per thousand, while the rate of the entire republic was 24.0 per thousand. B y the year 1928 the rates had fallen, that of the republic being 23.0 and that of Limon 25.1, then the second highest provincial death rate, with Puntarenas, the low-lying province on the west coast having the highest death rate, 29.2. T h e following year the rates were: Limon, 22.6; Punta-

SANITATION

AND

HEALTH

119

renas, 26.3; Costa Rica, 24.0.* It should be noted that in Limon, owing to the fruit company's undertakings, a large proportion of men at the ages which have relatively the lowest death rates, unaccompanied by families, reduces the general average. Nevertheless, considering that the natural conditions in much of this province have been extremely unhealthy, compared with the climate of the interior, it is evident that progress has been made. 5 . T H E B A F F L I N G PROBLEM OF MALARIA

The great problem in the American tropics to-day is not that which is represented by the death rate, nor that of ordinary disease and accidents, to which competent care is given, but that of chronic and debilitating ailments which drag on and on, impairing vitality. Although hookworm was a primary diagnosis in but 557 United Fruit Company cases in 1930, it is frequently a factor in other ills. It is prevalent in many parts of the tropics where it impairs efficiency, produces progressive anaemia, and frequently interferes with mental and physical development. Fortunately the Rockefeller Foundation has been making notable progress against hookworm of late. Venereal diseases accounted for 1483 of the United Fruit Company's cases in 1930. The chief problem, however, is malaria. Ex-President Cutter, in his letter to the stockholders on February 19, 1930, stated that the hospital admission rate of the company's employees for malaria had been reduced from 254 to 85 per thousand in five years. This reduction denotes progress in combating this disease, but not as great progress as these figures suggest. Although from the fall of 1926 to the fall of 1930 the malaria admission rate per hundred employees in the Limon hospital dropped from 26.9 to 7.7, the decline «Oficina Nacional del Censo, Estadística Vital, Anuario Estadístico. 1028, p. 55, and 1929, p. 102.

1906-1925, p. 37, and

I20

SOCIAL ASPECTS

OF THE BANANA

INDUSTRY

in malarial infection, as shown by field surveys, was only about half as great, or from 29.5 to 14. Although practically all of the cases of malaria occurring among salaried employees are treated in hospitals, a large proportion of the cases occurring among laborers are not sent to the hospitals but are treated in their quarters.5 That this tropical fever is still a menace to health is shown by the fact that, out of a total of 55,003 blood specimens made on field surveys in 1931, 13.8% were found to be positive for malaria. On May 1, 1931, President Cleto Gonzáles Víquez stated in his message to the congress of Costa Rica : Malaria and hookworm are our two principal native diseases. . . . Hookworm has been well combated and in reality lessened ; but malaria is still in all its vigor, causing injury without count. While on the one hand the health work of the foreign companies decreases the amount of malaria in the lowlands, on the other hand itinerant workers, to which class belong a large number of United Fruit Company laborers, have contracted malaria in fruit company camps and returned to infect portions of their home communities. As long as a fruit company remains active in a certain area it carries on medical and sanitary work to the advantage of the community. When, however, the company pulls up stakes, it removes its medical staff. Hence in such abandoned localities, which develop frequently and are numerous and large in area, those individuals who remain must shift for themselves. The possible situation of those remaining is illustrated by the following quotation from La Tribuna, San José, Costa Rica, May 27, 1931, concerning not an epidemic, but a chance situation in the town of Guacimo, once a flourishing banana center: S

U . F. C., medical dept., report, 1931, p. 33, et seq.

SANITATION

AND

HEALTH

121

The chief of the federal revenue guard stationed in Guapiles informs his immediate superior, the Inspector General of the Treasury, that he visited the Guacimo zone and found that the company laborers' camps were so unsanitary as to be the foci of terrible and mortal diseases, for the sick are many and he has gathered up six of the most serious cases and sent them to the hospital in San José. This functionary requests, for the sake of humanity, that the government interest itself in this serious problem where so many lives are at stake. The matter will be brought to the attention of the Secretary of the Department of Health and Social Protection. Although in most cases the United Fruit Company has extended its health activities f a r beyond the legal requirements of the countries in which it operates, in some cases of late in Colombia and Costa Rica it has been charged with failure to fulfill the stipulations of laws or concessions. On April ίο, 1 9 3 1 , the sanitary engineer from the department of public health criticized the " emergency hospital," which the company had agreed to build at Siquirres, Costa Rica, and which comprised an old building without hygienic conditions, supplied with three hotel cots, some surgical instruments and medicines, in the care of an untrained attendant who acted as physician, surgeon and druggist.® The United and other fruit companies, in the process of earning dividends f o r their stockholders, have improved health conditions in the tropical lowlands. Yellow fever has disappeared as a result of the combined activities of many organizations, economic, governmental and philanthropic, and progress is being made against malaria. This progress must be accelerated if these tropical regions are to be transformed into genuinely healthy communities. « Report of congressional commission, in La Gaceta—Diario Oficial, no. 251, Nov. 8, 1932, p. 1725.

122

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

6. T H E COST OF T H E C A M P A I G N FOR H E A L T H

F o r its hospitals and the work of sanitation, which E x President Cutter has termed common-sense business procedure on the theory that improvement in standards of living and service to the public are profitable, 1 the United Fruit Company expends about half a million dollars a year. A n approximately equal amount is taken from its employees, through the deduction of two per cent from the wages of each as a hospital charge.* Non-employees, including the families of employees, are charged for the use of hospital facilities. In Costa Rica a dollar has been the usual minimum fee for a dozen or two capsules of quinine or a few doses of castor oil. T h e Guatemala port contract stipulates that the government shall pay the expenses of its employees treated in the fruit company's hospital." In Mexico the fruit trust deducts one centavo per bunch of bananas bought from private planters as contribution towards the cost of medical treatment for stevedores and laborers in the loading gangs. 1 0 Various large items of expense are shared by the company and the government, or borne by the latter alone. Thus the government of Costa Rica subsidized the construction of the Limon hospital to the extent of half of its cost. Sometimes the company performs such works as the paving of streets or the sanitation of a town with the understanding that it will be reimbursed directly or can deduct the cost of this service from its tax bill. 7

Latin America Magasine, May, 1928, p. 11.

• According to its annual reports, the U. F. C. spent $13,091,424 on hospitals and sanitation in 27 years. In 1926 the amount was $525,000. In 1929 the company's pay roll in the tropics was $28420,060, according to President Cutter's statement to the stockholders on Feb. 19, 1930, 2% of which equals $568,401. • A t the same rate as the families of employees. 19

Art. 13.

Walter Schwichow in El Universal, Mexico City, Aug. 16, 1931.

SANITATION

AND

HEALTH

123

While the fruit companies convert formerly uninhabited pestilential areas into centers of human activity, invisible charges are passed on to the nations. Malarial patients are frequently discharged from company hospitals after a few days of treatment and sent into the interior, where the climate is more favorable but where their care must be undertaken by local communities or the government. In 1928 the chief of the health service at Limon reported that his district sent annually " a legion of malaria patients to the interior." 1 1 F r o m 1922 to 1929 Limon contributed between 50% and 60% of the aliens treated in the San Juan Hospital in San José—in 1928-1929 the number being 1050 out of 1895. In 1929 Attorney Alberto Echandi, president of the board of charity, announced that from 1920 to 1929 the expenses of this hospital had amounted to 3 , 0 4 1 , 7 1 8 colones, of which, because of patients from Limon admitted to the hospital, the province of Limon benefited to the extent of over 638,760 colones. 12 This expense, much of which was caused by sicknesses contracted in the banana region, amounted to about $ 1 6 , 0 0 0 annually, or one-fifth of the government's revenue from banana export taxes. This hospital was not in a position to bear unnecessary burdens, as is shown by the fact that two years later the public was notified that new patients would not be admitted as long as its straitened financial condition should last. 18 There are invisible and heavy items chargeable to tropical diseases in the banana regions which do not appear on the fruit company's books. 11

R . Umaña in Memoria de la Secretaría de Salubridad Pública y Protección Social, 1928, p. 193. 12 Ex-President Alfredo Gonzáles Flores, in La Tribuna, July 23, 1930. 11

Public announcement made in La Tribuna, of Nov. 12, 1931.

C H A P T E R

V I I

WAGES AND HOURS I.

CLASSIFICATION

OF B A N A N A

WORKERS

THE recruiting of an adequate labor force on the Caribbean coast of Central America has depended upon three prerequisites : sanitation and housing, already mentioned, and the payment o f wages relatively higher than those which are paid f o r similar types of work in more favored localities. The medical department o f the United Fruit Company in its annual reports has published the number of company employees coming from the temperate zone and the number of those w h o were natives of the tropical zone. TABLE

IO.

E M P L O Y E E S FROM T H E T E M P E R A T E Z O N E A N D FROM THE TROPICAL

Temperate

Zone

Year

Number

% of total employees

1929

2,140 2,090 1,817

31 33 3-2

1930 . ..

1931

ZONE

TroficaI Number 66,825 61,916 54,591

Zone % of total employees 969 96.7 96.8

From the above table it is apparent that, although the United Fruit Company has greatly reduced its ranks since the prosperous year of 1929, the proportion of employees coming from the United States and Europe has remained about 3 % of the company's total working force in the tropics. In the early days of the banana industry most of the workers from the tropical zone were West Indian Negroes and Caribs. A s the scourge of tropical fevers has been decreased, Central Americans, who previously had shunned 124

WAGES AND

HOURS

125

tropical regions, have tended more and more to descend f r o m the highlands in search of employment. Frequently the fruit companies have sent foremen onto the plateaus in search o f labor. A f t e r " greasing the palm o f the comandante " o f a little village, a foreman persuades some of the men to accompany him to the banana farms, g i v i n g them a little advance pay. A s reports of increased opportunities are circulated, other villagers turn towards the banana realm without special invitation. Practically all of the Central A m e r i cans employed in the banana regions are either whites or mestizos (half-breeds), as very f e w full-blooded Indians are willing to work in these areas. Prior to the depression about 260 different kinds of w o r k ers were engaged on the United's tropical properties. W i t h i n the supervisory force are included division managers, superintendents of transportation, agriculture, commissary and other departments, f a r m overseers and timekeepers, accountants and chief inspectors. A m o n g other white-collared employees are clerical assistants and storekeepers. Skilled labor includes f a r m foremen, axmen, railroad mechanics, surveyors, construction engineers and operators o f steam shovels and dredges. A m o n g the semi-skilled workers are ditch diggers and road makers, cutters, w h o harvest the fruit and clean and prune the cultivations, and members o f loading gangs w h o pack the bananas in railway cars. On the wharves, in the railroad yards and on the f a r m s certain unskilled laborers are required, some of them permanently and some of them temporarily. These workers of different categories are paid in various ways. A s a rule white-collared workers receive monthly salaries. Members of railroad gangs receive weekly w a g e s ; and casual unskilled laborers receive daily or hourly wages. Longshoremen, w h o carry the bananas f r o m the freight cars to the loading machines on the ships, are paid b y the bunch.

126

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

The value of spade work on ditch-digging or road-building projects is measured by the distance covered. When the company requires the clearing of virgin land it gives contracts not to individual workers but to foremen who make their own terms with their men. The bulk of farm maintenance and harvesting is performed by workers holding individual contracts to do certain specified tasks. 2.

WAGES OF B A N A N A

WORKERS

The determination of wages rests to a considerable extent with officials in each tropical division. Since, however, they are urged to keep down costs, they do not tend to pay higher wages than necessary to insure an adequate and efficient labor force. Hence wages vary between divisions. In 1 9 1 3 fifty cents a day was sufficient to secure local Colombian workers around Santa Marta, although twice that sum was paid in Costa Rica, 1 where workers were less inclined to settle on the banana farms. Likewise in 1922 labor was cheaper in Jamaica than in Central America. 2 Although competition between banana companies tends to raise the banana purchase prices paid to planters in Jamaica, the availability of a large labor supply in this densely populated island tends to lower the wages paid to workers. In 1929 Samuel Crowther wrote that the fruit companies were paying $i.50-$2.00 a day in Honduras and that the United Fruit Company was paying common labor $2.00 and skilled labor $3.50 and more in Guatemala. 3 On the other hand, the following year the inspector of the treasury of Guatemala reported that the wages of the United's agricultural laborers varied between $ 1 . 0 0 and $ 1 . 5 0 a day. The 1

Fawcett, The Banana, Its Cultivation, Distribution and Commercial Uses, 1913, p. 235. 2

Cundall, Jamaica in 1922, p. 188.

s

Crowther, op. cit., pp. 256, 269.

WAGES

AND

HOURS

127

latter figure was given in the same year by a special commission of the Colombian congress as the average wage for banana workers in the Santa Marta district. 4 Similarly in 1 9 3 0 an official of the United Fruit Company announced that in Jamaica the company was paying about 62 cents a day for ordinary laborers and from $ 1 . 0 0 to $ 1 . 2 5 a day for task workers. Certain manual workers can by strenuous effort secure relatively high wages for limited periods of time. On June 27, 1930, one who was styled " an agent of the government " announced through the columns of La Tribuna of Costa Rica that in the United's new Chiriqui division in Panama it was possible to earn in a day : $2.00 by cleaning with the machete; $2.50 to $3.00 by felling trees; $2.50 by pruning away suckers; and $ 2 . 5 0 by digging ditches. It should be noted, however, that these were not average wages but potential returns to fast workers, that relatively high wages are paid to attract laborers to new developments, and that some of these tasks, especially that of felling trees, are performed by highly skilled itinerant workers who travel from place to place and thus are unemployed during a considerable part of the year. In 1929 when overseers were receiving between $ 1 5 0 and $ 1 9 0 a month and timekeepers were receiving $ 1 0 0 a month in Honduras, dock workers drew $ . 2 5 — . 5 0 an hour and common laborers $ 1 . 2 5 — 1 . 5 0 a day." In 1925 men on the railroad gangs loading bananas into railway cars received $ 1 . 6 2 a day in Costa Rica. A t about the same time the United Fruit Company's dock workers in Costa Rica were paid according to the following rates per hour : * Informe de la Comisión Nombrada para Estudiar el Conflicto Surgido entre la United Fruit Company y la Cooperativa Bananera Colombiano, 1930, p. 24. 5

Monthly Labor Review, vol. 28, no. 3, 1929.

128

SOCIAL

ASPECTS

OF

THE

BANANA

INDUSTRY

cargo, aboard, $.19; cargo, ashore, $.17; winchmen, $.20; gangwaymen, $.20; fitting holds, cleaning and painting, $.17; unloading cars, $.14; and wharf maintenance, $ . 1 1 · Much employment in banana districts is intermittent. Fruit is not cut every day, longshoremen are needed only when ships are in port, task workers are busy as long as their tasks last. The true gauge of workers' earnings is, therefore, not a collection of hourly, daily, weekly and task rates, nor an attempted general average, but the total remuneration received throughout the year. During 1922 the average monthly earnings per laborer in a new Honduran district, to which it was necessary to attract workers, amounted to about $45 a month. During 1925, however, in another Honduran district, where labor was more plentiful, the average monthly earnings per laborer were less than $24. In 1929 the United Fruit Company distributed through its payrolls in all the tropical divisions $28,420,060 to a labor force of about 65,000 men. 7 This gave an average annual return per man of $437.23. Deducting the 2 % hospital dues we find that the average net income per man was about $430 per year, or $1.37 a day on the basis of a six-day week, or $1.21 per day on the basis of a seven-day week. Since departmental superintendents, farm superintendents, overseers and other high grade employees have salaries which figure in four digits instead of three, it is apparent that during the period prior to 1930 the average manual laborer received less than the equivalent of $1.25 a day, six days a week, throughout the year. Many of course received •$1.62 f r o m letter f r o m Jay H . Soothill, supt. of fruit dept., to acting manager of Costa Rica div. of United F r u i t Co. Other wages f r o m the Northern R a i l w a y Co. [Costa R i c a ] , marine dept., Annual Report, 1926. 7 Total payroll f r o m Cutter, Statement to Stockholders, Cutter in The Colonist, Feb., 1929, says : " O u r labor seme 65,000 men."

Feb. 18, 1930. force numbers

WAGES

AND

HOURS

129

more than this amount and many received much less. In the latter class are included large numbers of casual laborers who are employed in rush periods only. I f they could find other employment when not working for the fruit company their plight would not be serious. Near the United's banana centers, however, there is no other large-scale employer. Some few of these casual workers are squatters who from their small cultivations sell an average of three, four, five or possibly ten bunches of bananas to the company weekly, but their total earnings both as casual laborers and as small planters are meagre. 3 . WAGES OF OTHER A G R I C U L T U R A L LABORERS

The wages paid by the United Fruit Company before the world economic crisis were low in comparison to wages paid in temperate regions, but they were high in comparison to money wages paid to agricultural laborers elsewhere in Central America. T h e few wage statistics which are available for the Caribbean indicate that during the decade prior to 1930 skilled industrial workers received higher wages than were being paid to banana workers, and that coffee pickers and other agricultural laborers received less money wages than were paid to banana workers. 8 T w o colones (50 » Howland, American Foreign Relations, p. 289, says : " The scale of day wages of field laborers is about as follows : Cuba, $3 ; Porto Rico, $1.50; Nicaragua, 50 cents [70 cents on the Atlantic coast]; Santo Domingo, 60 cents ; and Costa Rica, 50 cents." In the summer of 1930 Fernando Castro stated that wages on the Pacific coast of Costa Rica were about 40 cents gold. Costa Rica: In 1924, according to the Monthly Labor Review of August, 1927, pp. 111-121 [33S-345], the following wages prevailed: Painters, $1.80; carpenters, $2.10; structural iron workers, $2.50; patternmakers, $2.90; moulders, $3.00; coppersmiths, $4.00; machinists, $4.50 ; and boilermakers, $6.50. Guatemala: According to the above mentioned Review, agricultural wages were 30 cents a day with board in 1924. In the United States Daily of July 23, 1929, Harold M. Randall of the

I3o

SOCIAL

ASPECTS

OF THE BANANA

INDUSTRY

cents) was commonly paid to farm laborers including coffee workers in Costa Rica during this decade.® some received 7 5 cents or more a day.

Nevertheless

A s a rule coffee

workers received in addition free rent, fuel and food, including in some cases sweets.

Many farm laborers on their own

Latín American Division, Department of Commerce, is quoted as saying, on the basis of a report from the assistant trade commissioner of Guatemala City, Robert M. Lane : " What little skilled labor that is available receives from $1.00 to $3.00 per day, while the average wage for the unskilled is $0.25 to $0.85." [These wages, which are much higher than those prevailing generally in rural districts, appear to be based chiefly on urban conditions.] Honduras : Ca tarino Castro Serrano, editor of Guia de Honduras and director of the International Economical Information Bureau, Tegucigalpa, Honduras, stated in an article entitled De Tegucigalpa a la Costa Norte en 47 Días that the average wage in Tegucigalpa was one peso [50 cents], Colombia: In 1924 in Cartagena, according to the Monthly Labor Review of December, 1926, pp. 147, 148, the following wages prevailed: Manufacturing industries, 60 cents to $1.50; carpenters, $2.oo-$2.25 ; carpenters' helpers, $1.50; machinists and mechanics, $2.00; gardeners, $1.25; common laborers, $1.20. Jamaica : In 1925, according to the Monthly Labor Review of June, 1926, p. 73, the average wage was 50 cents a day for agricultural laborers; $1.75 for dock laborers; and $i.25-$2.2S for construction laborers. In 1928, according to the Monthly Labor Review of Oct, 1928, the above wages prevailed for agricultural laborers and for dock laborers. Skilled construction laborers received $2.25 to $3.00 per day, and unskilled construction laborers $.87 to $1.00. Cuba : Skilled work on the farms in the provinces of Havana and Pinar del Rio, according to the Monthly Labor Review of December, 1927, p. 158, was paid from $.70 to $1.50 a day. Nicaragua: According to a consular report of August, 1932: "The very common farm labor receives from 25 to 50 cents per day, including meals. Labor that gathers crops, like picking coffee and fruits, receives a higher wage, as this work is generally done by the ' measure ' system on piece basis. Where subsistence is not furnished, wages are considerably higher, being around 80 cents to a dollar. At present labor is very plentiful and can be had at almost any price." β Figure obtained in interviews, and corroborated by Ruhl, The Central Americans, New York, 1928, pp. 42, 62.

WAGES

AND

HOURS

land or on the coffee fincas plant gardens and keep a cow, a few pigs and some chickens. Hence even if they are not employed continuously on the fincas they need not be hungry. In Colombia at the end of 1929, in spite of the fact that 50,000 workers were unemployed, coffee laborers could command 70 and 80 and more cents a day. 10 In Honduras the prevailing wage on the relatively few coffee fincas was 50 cents without rations and 25 cents with rations. 11 In southern Mexico during the same period wages of coffee workers reached $1.00 a day in the crop season, but at other times varied between 50 and 75 cents. In Guatemala, where relationships on the coffee estates have been semi-feudal, wages are much lower than those paid in Costa Rica, Colombia and Mexico. Prior to 1893 local authorities could recruit mozos (laborers) forcibly and send them wherever they were needed. T h i s mandamiento system was abolished theoretically by the agricultural labor law of 1894. 12 T h a t this failed to emancipate the Indians and mestizos completely is revealed by the fact that in 1906 the Guatemalan congress found it necessary to decree the nullification of agreements between employers for the exchange or sale of mozos.1* Although since 1894 forced labor has been illegal, coffee finqueros and other large planters have been able to hold laborers legally on two grounds. The law of 1894 legalized work contracts, if accepted by mozos voluntarily, prohibited mozos leaving fincas while still in debt to 10

Eder, in The Tea and Coffee Trade Journal, Feb., 1930.

Boletín de la Camara de Comercio de Honduras, May to Aug., 1929, p. 803. Figures given: one peso; and 50 centavos. 11

" D e c r e t o leg. no. 243 of April 27, 1894; text given in Oficina Internacional del Trabajo, Legislación Social de America Latina, vol. ii, pp. 288-294. Ibid., pp. 296, 297. Decreto no. 657 of Feb. 21, 1906, of President Manuel Estrada Cabrera, approved by decreto leg. no. 632 of April 23, 1906. 13

132

SOCIAL

ASPECTS

OF THE BANANA

INDUSTRY

finqueros, even although the term of their contracts should have expired, and provided for the adjudication and enforcement of these contracts by judicial and police authority. These provisions enabled coffee planters to recruit Indians who otherwise would have tended to remain in their highland villages. Agents of the finqueros went to the Indian villages, especially during fiestas, and loaned money to the natives on the condition that the latter work off their debts on coffee fincas during the crop season. In June, 1934, however, a law was passed abolishing debt servitude and providing for the transition to free labor within two years. According to the 1894 labor law laborers are divided into two classes, the colonos, who live permanently on the fincas, and the jornaleros, who work on the fincas for short periods only. The colonos are generally given land on which they can raise their own corn and other foodstuffs, and keep their hogs and in many cases cattle as well. Although the law required planters to furnish not only wages but also living quarters, or material with which to build them, 14 living conditions vary greatly. In many cases the huts with mud floors, whether made of adobe or of saplings, are crude and unsanitary. In some cases small brick houses, superior to the fruit company camps, are given to the workers for their use. Frequently in the past, especially when the colonos have been required to give less than half of their time to the finqueros, their money wages have been about five cents, and they have not received rations. In other cases where colonos give more time to the planter, they draw higher wages and rations as well, and the same applies to the more casual jornaleros. In 1923 President Orellana decreed that in case of dispute between a mozo working off a debt and his finquero, as to the value of a day's work, the latter should be " Ibid., p. 289, art. 4 (6) of dec. leg. no. 243.

WAGES

AND

HOURS

133

considered as 8 pesos ( 1 3 cents). T h e following year 10 pesos ( 1 7 cents) was fixed by presidential decree as the minimum wage for peons occupied on public works. 1 " Although when coffee was commanding a high price in the world market, 60 cents was frequently paid to Indians on the best estates in the highlands, in 1930 25 cents was commonly paid.1® Indians consider the foreign planters rich and the national planters not so; hence they do not expect as much of the latter as of the former. W a g e s in kind as well as money wages vary greatly, some of the planters providing all the staple foods, usually in proportion to the size of the peon's family. T h e situation in 1930 was described by the inspector of the treasury as follows. 1 1 Average wages : These prices fluctuate according to the zones and the circumstances; recently, and because of the fall of coffee, wages have also fallen in the coffee zones. In cold and temperate climates the field laborers receive a wage which fluctuates between 25 and 50 cents, but they receive in addition certain other advantages such as free housing, fire wood and medicines. It is also the custom of certain agricultural enterprises to provide their workers, as complementary to their salaries, a daily ration, which consists of Indian corn [the principal article of food of the national laborers], black beans, salt, coffee, etc. The estates which have vast lands are accustomed to provide the resident peons certain extensions of land which they can cultivate in maize for themselves. 4. T H E COST OF LIVING AND REAL WAGES

The difference between the real wages of coffee and banana workers is less than their money wages would lead one to suspect. A s a rule both on coffee fincas and banana 15 Ibid., p. 299 and p. 300. Decree of July 10, 1923, and decree of July 3i, 1924. 1« David Sapper of Sapper and Co., Guatemala. 17

Inspector Calderón in written statement supplied in Aug., 1930.

134

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

farms living quarters are furnished free of rent. Although banana workers can generally secure patches of land on which to plant a few vegetables, the tropical lowlands are not as favorable as the highlands for raising corn and beans, the staple foods of Central American peasants and workers. The coffee worker, who either raises or receives from his finquero all or nearly all of his food, uses his money wages almost exclusively for clothing and incidentals, while the banana worker uses a considerable proportion of his wages for the purchase of meat from the company or from local butchers, and of corn, beans and canned goods from the company's commissary or local storekeepers. T o a greater extent than his compatriots on coffee fincas he buys imported foods and other goods which are practically always expensive.18 Coffee workers who are not obliged to buy much food are not as seriously affected as are banana workers by the rise in price levels. Although Crowther in writing of Costa Rica in 1929 maintained that the cost of such basic foods as rice, corn and beans had not risen as rapidly as wages, the statistical bureau of Guatemala showed that in that country between 1923 and 1928 wholesale prices had increased as follows : rice, 5 % ; Indian corn, 61%; and the staple black beans, 9 1 % . " Another study made in Guatemala in 1929 indicates that the staple food products, such as eggs, potatoes, pork, beef, chickens, and especially corn and beans, were considerably higher in the banana districts than in the coffee regions.20 18

Commissary stores discussed in Kepner and Sootfaill, op. cit., pp. 319-

322· 1 8 Guatemala, dirección general de estadística, Informe y Cuadros, 1928, p. 25. Cf. Crowther, op. cit., p. 252. 20 Tables of " Fluctuation of Prices of Certain Articles of Primary Necessity in the Provincial Capitals During the Year 1929 " are given in the Memoria de las Labores del Ejecutivo en el Ramo de Agricultura of Guatemala for the year 1929, pp. 63-65. Eight of the 22 provinces pro-

WAGES

AND

HOURS

135

People who have lived on the Caribbean coast testify to the high cost of living which has prevailed there. The cost of living has been high likewise in the banana districts of the Chiriqui division, Panama, and in Colombia and in Mexico. Writing of the north coast of Colombia, where wages are higher than in the interior but " in accord with the rigor of the climate," " Rippy states : w It can hardly be contended that wages in Colombia are adequate. The cost of living has risen so rapidly during the last few years that the country has become one of the most expensive regions of the world. due ed during the year 1928-1929 from 57,143 to 304,877 quintals of coffee each,—the next highest provincial productions of coffee being but 27,724 and 19,050. Using the average price of the eight chief coffee producing provinces as base for each commodity, we find that the relative prices [percentages of the base prices] prevailing in the capital of Izabal, the banana-producing province, were as follows for 20 of the 25 commodities listed: Cacao, raised in the banana regions, 76; horse beans, 73; lard, 64; butter, 70; cheese, 77; rice, 94; and biscuits, 99. Sugar of first quality, 113; of second quality, 129 ; coffee of first quality, 125 ; eggs, 136 ; potatoes, 194 ; pork, 121 ; beef, 171 ; and chickens, 209. The staple black beans were 129; white beans were 108; and colored beans, 128. The staple white corn was 200; with foreign flour, 133. Prices for mutton, second grade coffee, yellow corn, wheat, and native flour were not quoted for the capital of the banana province. These figures are not conclusive, owing to the fact that, except in those cases where the price did not fluctuate, it is impossible to determine a true average between the extremes, and to lack of information as to differences between prices in the provincial capitals and the local communities. It is probable, however, that much the same relation exists between prices in the villages of the coffee and banana provinces as between prices in their capitals. These relative prices, especially those of black beans [129] and white corn [200], justify at least the general statement that home grown food stuffs are not as expensive in the interior, where the chief occupation is coffee raising, as on the coast, where it is banana production. 21

See supra, note 4.

31

The Capitalists and Colombia, pp. 191, 192.

136

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

In 1932 wages paid to Mexican workers in the important banana zones of Otatitlán, Vera Cruz, and Tuxtepec, Oaxaca, were $.75 to $1.00 respectively, while the minimum wage for a typical Mexican budget was calculated at $1.66 and $1.96 in these two regions." 5 . R E C E N T W A G E REDUCTIONS

Before the world economic crisis the United Fruit Company on the average paid considerably higher money wages and somewhat higher real wages than were paid by coffee finqueros and other landed proprietors in the interior. It also paid higher wages than private planters paid to their workers—such at least was the situation prevailing in Costa Rica. But when its labor supply is adequate it often reduces wages. A subsidiary of the United, when undertaking new developments on the west coast of Guatemala, where labor was plentiful, reduced the daily wage of $1.00, which had been paid by other banana planters, to 65 and 70 cents a day. To compensate for this differential in wages and thus to hold the workers, the local management adopted the policy of importing corn and selling it in the commissary at cost and also of selling other staple commodities (but not all commodities) with a minimum of profit. Since 1930 the United Fruit Company's wages have been slashed severely, although reductions were not made for a considerable period after the crash of the stock market. All salaries were cut iO/o in January 1932 and another 10% on the first of the following July, with salaries over $5,000 receiving a 1 5 % reduction.24 Moreover, in Costa Rica M Letter of Engineer Enrique Ortiz of the dept. of industry, commerce and labor of Mexico, dated June 22, 1932. Figures given were $1.50$2.00 [Mexican] and $3.32-3.91 [Mexican]. M

Moody's Industrials,

July 16, 1932.

WAGES

AND

HOURS

137

farm workers had been reduced prior to January, 1932, and all workers on salary or wage basis had received two cuts, one of 20%. 2 5 In Honduras discontent caused by wage cuts led to strikes and was undoubtedly a factor in recent revolutionary outbreaks. In Colombia, although labor has been organized extensively, daily wages remained between 5 1 cents and 92 cents during 1930, 1 9 3 1 , and 1 9 3 2 , but at the end of the latter year dropped to 49 cents and later to 3 7 cents. By the end of 1 9 3 3 they were returned to 49 cents." Private planters receiving reductions in the purchase prices paid by the company for their fruit have been unable to continue their former scale of wages, as was brought out in Costa Rica during the strike of 1934. While the cost of home-grown food stuffs has fallen in some places, the prices of many imports—of which, as already noted, banana workers buy much in the company's commissary stores—have been kept high through increases in import duties. When in 1932, with wide-spread unemployment prevailing, banana workers were receiving about 50 cents a day in Costa Rica, this wage was still the average for agricultural workers in general. 27 On coffee fincas visited in 1 9 3 1 and 1 9 3 2 workers made daily 37 to 50 cents, while particularly fast pickers earned from 50 cents to $i.oo. 2 8 During 1 9 3 3 workers in the mahogany forests of British Honduras were receiving $ 9 a week, " exclusive of maintenance ", and unskilled laborers in the employ of the public works department drew from 50 cents to $ 1 . 0 0 a day. 29 Although banana workers when 25

New York Times, Oct. 18, 1931, iii, p. 8, and La Tribuna, San José, Costa Rica, Sept. s, 1931 and Dec. 30, 1931. 2 * Figures in cents reduced from centavos at rate of one peso equalling $.61. 27 Consular report from Costa Rica, Aug., 1932. 28 From notes of interviews made by Charles A. Thomson in Costa Rica, I93I-I933. 28 Monthly Labor Review, Oct., 1934, p. 984.

138

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

in demand receive wages higher than those which prevail for similar kinds of labor, they lose their individual bargaining power in times of unemployment and labor surplus. Minimum wage laws have been established during the past four years in Costa Rica, Colombia and Mexico, but they do not affect banana workers since the minimum daily wage set by the Costa Rican law is merely 22^2 cents; the law of Colombia does not concern agricultural laborers ; and that of Mexico is applied by municipalities, thus including some but not all rural workers. 50 6. T H E EIGHT HOUR DAY

During colonial times K i n g Philip II of Spain established a precedent for the eight hour day when he limited the work of laborers on the construction of forts and military works to eight hours. In 1920 Costa Rica established the legal eight hour day for industrial workers and the ten hour day for clerical employees, with provision for a 2 5 % increase in pay for the first three hours of additional work and a 50% increase thereafter. Guatemala in its labor law of 1926 provided that the ministry of public works should draw up social regulations applying the principles of the eight-hour day and the forty-eight hour week to the various industrial and commercial enterprises, both public and private. 31 Since, however, these laws do not apply to agri80 Minimum rates in Mexico fixed by minimum wage boards, subordiniate to conciliation and arbitration board of each state. Range between .50 and 3.50 pesos, with farm labor paid less than urban labor. The president had recommended one peso [about $.50] as minimum for rural workers. e l Decree no. 100 of 1920 of Costa Rica. [See I. L. 0 . , Leg. Soc. de Am. Lat., vol. ii, p. 69] ; ley del trabajo of Guatemala, established by leg. decree no. 1434 of April 30, 1926 [itiá., vol. ii, pp. 261-270]. Art. 14 of the latter sets the minimum of 8 hours a day and 48 hours a week, and articles 15 and 16 provide for regulations to put this principle in effect by the ministry of public works issuing such regulations after study and hearings by the national department of labor.

WAGES

AND

HOURS

139

cultural undertakings, they do not affect many of the activities of the United Fruit Company. A l l workers, however, come under the eight hour requirement enacted by Panama in 1914 and put in its administrative code two years later, and the provision of the constitution of Honduras, adopted in 1924, that hired labor can not be required to work over eight hours a d a y . " The enforcement o f the eight-hour day on banana plantations would be difficult owing to the task system, according to which the worker chooses his own time to per form his allotted task and works without close supervision. T h e usual day's work is from about six in the morning to about two in the afternoon, but, if the contracted task is not completed, he may work longer with little idea of the time of day or how long he has been working. The same difficulty applies to the enforcement o f the requirement of Panama's law of 1923 that time and a quarter shall be paid for overtime." Longshoremen and other fruit company workers are covered by the addition in 1929 of three more articles to Costa Rica's eight-hour law. These additions provide that, whether paid by the day, hour or task, workers employed in loading or unloading on wharves, who on account of the continuous character of the work are bound to perform their duties day and night, shall be paid 50% more for the work carried out after 6:00 p. m. This supplementary decree, which also applies to all land and sea transport workers, further stipulates that any em8 2 Art. ι of law 6 of O c t 29, 1914, of Panama, and art. 1079 of code of Aug. 23, 1916 [ibid., pp. 327 and 344] ; and a r t 176 of the constitution of Honduras [ibid., p. 309].

»»Article 6 of law 16 of March 26, 1923 [ibid., pp. 349-350], which establishes the labor office as a dependency of the ministry of public works.

I40

SOCIAL

ASPECTS

OF

THE

BANANA

INDUSTRY

ployer contracting with workers in violation of this provision shall be liable to a fine of 500 to 5,000 colones." 4 7.

O N E D A Y OF REST IN

SEVEN

In 1905 Colombia forbade work on Sundays on religious grounds. T h i s law was superseded by law 57 of 1926 which requires freedom from Sunday work as a general rule but permits enterprises which would be handicapped thereby, because of perishable products or for other reasons, to substitute another day of rest during the week. These provisions are paralleled by the Panamanian labor law. The Guatemalan law provides for one day of rest in seven, with preference for Sunday where that is possible, and the Honduran constitution requires one day of rest in seven. 35 As the law of Guatemala does not apply to agricultural undertakings and exempts rail and ocean transportation services it does not affect the United's major activities. In connection with the constitution of Honduras and the laws of Colombia and Panama it should be noted that the United's claim that the handling of bananas on Sundays is frequently " necessary " and therefore subject to special dispensation, is open to serious question. A t times ships are delayed for twenty-four hours. . Frequently some of the fruit loaded on a steamer has been cut as much as seventy hours previous to loading, and yet does not perish. N o more would bananas perish if they hung on the plants an extra 34

Decree no. 166 of Aug. 14, 1929 [I. L. O., Leg. Ser.,

35

Law no. 37 of April 27, 1905, of Colombia [I. L. O., Leg. Soc. de

1Ç2Ç—C.

R. I], Am.

Lai., vol. ii, pp. 3, 4] ; law 57 of Nov. 16, 1926, of Colombia, and decree no. 83 of Jan. 19, 1927, regulating the same—art. II, par. " a " of which exempts agricultural undertakings [ibid.,

pp. 4-11] ; articles 7 and 8 of

law 6 of Oct. 29, 1914, of Panama [ibid.,

pp. 327, 328] ; chap, iv of labor

law of Guatemala established by leg. decree no. 1434 of April 30, 1926 [ibid.,

pp. 263, 264] ; and art. 176 of constitution of Honduras

p. 309].

[ibid.,

WAGES

AND

141

HOURS

day or remained in railroad cars or on the wharves for twenty-four hours. Moreover, banana cargoes are not as a rule discharged on Sundays in the United States. T h e chief reason for speeding up this work in the tropics is the desire to expedite steamship schedules and to save the cost of layovers in port. 8. THE UNITED EXEMPTED FROM PROTECTIVE LAWS

Social legislation to be effective should be universal and impartial; it tends to be thus in the larger nations of the world. In Caribbean countries the mighty United Fruit Company, by obtaining various legal loopholes through which it can escape governmental control, impairs the effectiveness of such legislation. Four years after Panama had provided for time and a quarter for overtime, on the eighthour basis, it granted a contract to the United's Chiriqui Land Company—article 14 of which provides in part : 8 8 T h e contractor shall have liberty to contract with its employees the conditions of service and the amount of wages, as well as the benefits which they can receive from the contractor. O n e may question as to whether this freedom to contract " conditions of service " exempts the company from any particular law or regulation. Here as frequently the great corporation holds an ambiguous privilege, which, with its corps o f lawyers and its influence in governmental circles, it probably could use to escape responsibility under any present or future law considered prejudicial to its interests. Similarly article 17 of the Guatemala port contract provides : 3 7 ' • T e x t of contract of July 19, 1927 in Sáenz, op. cit., pp. 371-376. Approved by leg. decree no. 1,736 of Dec. 9, 1930. sec. 9. 87

Cf. supra, ch. iii,

142

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

The company will have the right to contract its employees and laborers as it judges convenient, and to enter into arrangements with them in the form that, freely and bilaterally, they agree upon, subjecting itself with reference to workmen brought into the country to the immigration laws of the country, and in view of the character of services which it renders, be it in the port or on the railways, and because of the risk of losses which it might suffer from the decomposition of the fruits which it transports and loads, it may, during the period in which this contract is in force, maintain the activities of its enterprises, by night as well as by day and on Sundays or holidays. The company will form the total group of the employees and workmen in its service with 7 5 % Guatemalans, at least, excepting the number of experts and specialists which the company needs to have in its service. [Italics mine.] W i t h Sunday and night work recognized as regular rather than special conditions, the company escapes responsibility for giving extra pay on such occasions. Thus the fruit company is specially favored in comparison to all industrial and commercial enterprises, which are obliged to leave Sunday free if possible or otherwise to select another day of rest in seven, and to give double pay for " extraordinary " work. A n d should these requirements be placed upon agricultural undertakings in the future, the fruit company would be in a position to claim exemption from them and thus would have a handicap over other similar enterprises. Not only is the company specially favored on these issues but it appears to have been given carte blanche to disregard any labor legislation which the nation may enact in the interest of its workers during the fifty years of the life of the concession, except immigration laws and the requirement to employ 7 5 % Guatemalan labor. A n d the latter provision is weakened by the ambiguous and elastic category of " experts and specialists ", which can be stretched to include many kinds of employees.

CHAPTER SOCIAL I.

Vili

SECURITY

UNEMPLOYMENT

A L T H O U G H many fruit company officials and employees, especially overseers and banana inspectors, work long hours, particularly when a ship is due in port, and are subject to call day or night, most workers are more fearful of underwork than overwork. The United Fruit Company in accordance with the trend of this machine age installs modern machinery and labor-saving devices whenever it can, thus for the moment at least displacing workers. Its policy is to speed up and to increase the efficiency of the individual laborer, thus reducing the number of workers required and cutting down the labor cost. For example, in Costa Rica in 1926 the unit cost of picking up fruit was reduced from 2 cents to ι cent per stem, without a reduction in wages, but by a change from the day wage to contract basis, a stiffening-up of the work for each man, and a decrease in the total number of laborers employed.1

With the prolongation of the depression unemployment has been widespread and devastating. In common with companies in the United States, the United Fruit Company in its tropical divisions has at times staggered jobs. Through this procedure the abler workers rather than the company aid those who otherwise would be displaced. In La Tribuna 1

Letter of J. H. Soothill to manager of Costa Rica div. of July 15,

1926, shows how the former reorganized the fruit department so as to reduce the unit cost per stem of picking up fruit from $.0218 to $.0121 and the unit cost of steamer loading from $.0243 to $.0231. 143

144

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

of November 4, 1930, the manager of the Limon customhouse declared that the fruit company had cut its force of national and foreign workers by at least 50%. T w o days later in the same paper D. J. Cloward, assistant manager of the Costa Rica division, replied that only 58 salaried employees and 34 day-laborers had been dropped. Since most of the farm work is done by contract these figures give no indication of the number of cutters and other workers who, failing to receive contracts, became unemployed. Methods of saving expenses introduced by the company included withdrawing $130 overseers from cacao farms, leaving the same in charge of $60 caretakers, and otherwise substituting lower for higher paid employees. 2 It followed a policy of economic reorganization of its services, including reductions in personnel wherever possible, even before Samuel Zemurray on his advent to power ordered the weeding out of one employee in every four." The reduction of the number of employees dependent upon the United's medical facilities from 68,965 in 1929 to 56,408 in 1931, 4 although not indicating that all these workers were employed at one time, shows that large numbers of both regular and casual workers are now without means of earning a livelihood. Thousands of unemployed workers have been stranded throughout the Caribbean, especially in Colombia and Honduras. In the latter country many such workers have sought to improve their desperate condition by joining revolutionary bands. W h e n banana workers are on the company's payroll they have higher purchasing power than have farm laborers in the interior. This purchasing power they use in part to buy luxuries which coffee pickers afford less often. They are 3

La Tribuna, San José, Costa Rica, Oct. 12, 1931.

* Fortune, March, 1933, p. 29. 4

See supra, eh. vii, sec. 1.

SOCIAL

SECURITY

145

encouraged to do this by the company's policy of allowing them to draw on three-quarters of their earned but as yet unpaid wages for purchases in the company's commissaries. When money wages are suspended because of seasonal unemployment, farm laborers in the uplands can still secure corn, beans and other necessities, whereas banana workers, having spent their higher wages, are virtually helpless. The plight of banana workers is worse still when, on account of exhaustion of the land or retrenchments of the company, they are laid off for many months or permanently. 2 . OLD AGE

Old age pensions are rare in the western hemisphere; they do not exist in banana zones. Minor C. Keith was beloved by a considerable number of old and faithful employees to whose support he personally made contributions. The United Fruit Company induces some of its retired Jamaican laborers to return to their home country. A free trip on a ship owned by the United terminates all expense of the company for an old worker. Guatemalan finqueros are to a limited extent responsible for the care of their aged mozos. Adequate pension systems, however, are lacking throughout Central America. Nevertheless, in the interior elderly persons can secure permanent homes and raise the necessities of life on their own plots of ground, thus being better protected than are retired workers in the banana regions. This being the case, when a banana farm lays off its old Central American workers, they do not, as a rule, stay in their new haunts, but return to their former homes. 3 . S I C K N E S S AND ACCIDENTS

Both temporary and permanent unemployment are caused frequently by sickness and accidents. Although West Indian immigrants are accustomed to the tropical climate,

I46

SOCIAL ASPECTS OF THE BANANA

INDUSTRY

Central Americans find it debilitating and often suffer from the terrific heat of the sun as well as from the ravages of the mosquito. The large extent of sickness among workers is indicated by the fact that, prior to improved conditions in 1930, the Tela division found it necessary to carry a 2 5 % labor surplus. 5 Although salaries of officials and clerical employees continue while they are on the sick list, the wages of workers stop once they lay down their machetes or spades. Hence those who are temporarily incapacitated or lacking in sufficient vitality to force themselves to work are without income. Those who go to the hospital receive the food and treatment for which they have been paying hospital dues, but no means of support for their families. In colonial times the Spanish king, Philip II, created another precedent for social legislation by ordering that workers in mines be paid half their wages during recovery from accidents. Although the constitution of Honduras, established in 1924, provides for the enactment of a workmen's compensation law, this has not yet been accomplished. The other countries of Central America, as well as Colombia, Mexico and Jamaica, have laws of one kind or another providing for compensating workers in certain kinds of employment for accidents occurring while at work. The Guatemalan law for the protection of laborers is of early date—November 2 1 , 1906. It gives workers in factories, workshops, transport and agricultural enterprises the right of indemnification for accidents incapacitating them for over six days, except those caused intentionally by themselves. Such indemnities were made payable from cooperative relief funds unless the employer should prefer to insure his workers. The law provides that these funds shall be 5

United Fruit Co., medical department, Annual Report,

1930, p. 20.

SOCIAL

SECURITY

147

accumulated by weekly or monthly payments, of which onethird shall be contributed by the employer and two-thirds by the workers, also by fines and by subventions from the government, and that they shall be administered by boards, on which two-thirds of the members represent the workers and one-third the employers. The regulatory executive decree of February 14, 1907, provides that these benefits may be satisfied through cooperative or mutual aid societies. T h e schedule of payments includes medical care for the injured and funeral expenses for the deceased, as well as 50% of wages in case of temporary incapacity of less than a year's duration, 60% of wages for a life pension in case of permanent incapacity, and, in case of death, a widow's life pension of not over 20% of wages, plus payments to children under twelve years of age. The total pensions from one death cannot exceed 60% of wages. Disputes relating to less than 200 pesos are the concern of administrative authorities and those over that amount of the common tribunals." 4 . COMPARISON OF W O R K M E N ' S COMPENSATION L A W S

Colombia in 1915, Panama in 1916, Costa Rica in 1925 and Nicaragua in 1930 7 adopted workmen's compensation • I. L. O., Leg. Soc. de Am. Lot., vol. ii, pp. 275-280. 7 Colombia, law no. 57 of Nov. 15, 1915 [ibid., pp. 27-31], amplified by resolution no. 63 of May 12, 1927 [ibid., pp. 31-34], res. no. 80 of June 28, 1927 [ibid., pp. 34, 35], law no. 32 of June 17, 1922 [ibid., pp. 53-55], and law no. 133 of Dec. 9, 1931 [Int. Lab. Rev., vol. xxix, 1934, p. 75]. Panama, law no. 17 of Nov. 16, 1916 [ibid., pp. 330-335], amended by law no. 43 of Dec. 30, 1916 [ibid., pp. 335, 336]. Costa Rica, law no. 53 of Jan. 31, 1925, modified by laws 92 of Aug. 24, 1926, and 12 of Sept. 13, 1927, and regulated by decrees 2 of Jan. 17, 1927, 26 of Sept. 17, 1927, and 44 of Nov. 14, 1927 [ibid., pp. 69-106, and Rafael Castro Quesada, Ley Sobre Reparación por Accidentes del Trabajo, which contains the original law as amended by later laws]. The law has been amended subsequently by law no. 34 of Feb. 3, 1931,.

I 4

8

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

laws obliging employers to report all accidents and making them alone responsible f o r the payment of all liabilities. T h e laws of Costa Rica, Panama and Nicaragua provide for fines or criminal prosecution in the case of employers w h o endeavor to pass this charge on to their workers by deductions f r o m wages o r in any indirect manner. T h e Costa Rican and Nicaraguan laws also include provisions f o r compensation f o r occupational diseases. A l l of these laws are concerned primarily with manufacturing, transportation, mining and public w o r k s — n o t with agriculture per se. Activities carried on by fruit companies which as a rule fall under these laws a r e : sea and land transportation ; repair and construction work, including water works, roads, bridges, sewers, docks, telephone and telegraph lines, and buildings ; and also any other activities where machines driven by mechanical power, such as bananaloading machines, are used. Article 12 of the Costa Rican law provided that if within a year the executive power should deem that through the payment by employers of one colon monthly f o r each worker the national bank of insurance would be enabled to assume the risk of rural laborers, the law should be applied to coffee, banana and other plantations employing over 10 w o r k e r s ; but this proviso was not carried out. Under the original Costa Rican law only farm workers engaged in the above-mentioned activities and those " exposed to the dangers of machinery, motors or instruments moved by a force other than human " were covered. T h e Nicaraguan law holds an agricultural employer responsible merely for first aid and the transportation of an insulti decree no. 26 of Aug. 23, 1933.

See Int. Lab. Rev., vol. xxix, 1934,

PP- 75· 576; also I. L. O., Industrial and Labour Information, vol. xlvii, 1933, P· 395, and vol. i, 1934, p. 21. Nicaragua, law of M a y 13, 1930 [printed in La Gaceta, nos. 114-116 of M a y 26-28, 1930, and in I. L. O., Legislative Series, 1930—Nie. 1].

SOCIAL

SECURITY

149

jured laborer to his home or the nearest hospital, and, in case of death, f o r funeral expenses up to 3 0 cordobas ( $ 3 0 ) . In August, 1 9 3 3 the Costa Rican law w a s extended to cover workers in all kinds of agricultural undertakings. All of these laws deny compensation to employees who are injured by their own intent or by force majeure not connected with the nature of the work. Panama excuses the employer if the accident is caused by a misdemeanor on the part of the injured worker or a stranger ; Colombia frees him from responsibility f o r accidents caused by the laborer's negligence or imprudence — including unnecessary recklessness, intoxication or violation of the rules of the enterprise— or by a sudden attack of illness depriving him of mental faculties or physical strength ; and Nicaragua exculpates the employer if his employee drank alcoholic liquor on the previous day. It is obvious that in the two latter countries the employer has many avenues of escape f r o m responsibility f o r his injured employee. Costa Rica excuses an employer f o r as much of the prescribed compensation as may be received from parties responsible f o r the accident who are not in his employ. In each of these countries the employer must stand the expenses of medical care, and of the funeral in case of death. The additional lump-sum or annuity payments in the several countries are according to the following schedule. The laws of Costa Rica and Nicaragua provide that the compensation may be increased by 5 0 % if an accident occurs where safety devices are lacking or if it is due to the inexcusable fault of an employer. Panama provides that in filling the position of a deceased worker preference shall be given to a member of his family (art. 3 1 ) . All of these laws provide that the rights which they confer upon victims of accidents cannot be waived.

χ jo

SOCIAL

TABLE II.

Temporary partial disability Permanent partial disability

ASPECTS

OF THE

BANANA

INDUSTRY

B E N E F I T S P A Y A B L E UNDER W O R K M E N ' S COMPENSATION

Colombia Yi wage durine disability entire wage for 90-140 days

Permanent total disability

ι year's wage

Death payments to widow, etc.

ι year's wage

Costa Rica V* wage up to ι yr. (then perm. disability) y.1 diminution of capacity if over 10% (total not over 5 χ an. wage) Yi wage (total not over 10 χ annual wage) 20% wage + 15-40% for her children under 16 (total not over 10 χ annual wage)

Nicaragua Η wage up to 2 yrs. (then perm. disability) 1,000 X diminution of wage Yt wage up to 1000 days (not over $1.500) up to 1000 days (not over $1.500)

LAWS

Panama Vt wage during disability Yi dif. bet. ι yr's wage before and after accident ι year's wage 2 χ ι yr's wage

In three of these countries the cases are tried before the local civil courts. In Costa Rica the local political authority is entrusted with the task of helping the parties to come to an agreement, which agreement is then submitted to the superior tribunal of arbitration for approval. If no agreement is reached, this court settles the matter by conciliation or by arbitration. Appeals from the decision of this court can be made to the labor office which is a branch of the department of interior and police. The Nicaraguan, Panamanian and Colombian laws contain arrangements whereby employers can fulfill their responsibilities by insuring their workers. In 1922 Colombia permitted concerns of $50,000 capital or more to carry their own insurance if they should so desire. 8 Employers in Costa Rica are required to insure in the national bank of insurance, which was granted a monopoly by law in 1926.® 8 Law no. 32 of June 17, 1923 [I. L. O., Leg. Soc. de Am. Lai., vol. ii. PP- 53-55]· •Decree no. 16 of May 22, 1926 [ibid., pp. 106, 107], and decree 26 of August, 1933 [I. L. O., Industrial and Labour Information, vol. 1, 1934, p. 21].

lA

wag

SOCIAL

SECURITY

Prior to A u g u s t 1933 employers were allowed to disregard this requirement on condition that ten days a f t e r each compensation agreement or award w a s made, they deposited with the bank sufficient sums to cover the payments due. In 1929 the superior tribunal of arbitration acted upon 1,692 cases, of which 631 were not covered by insurance. In 1933 2,574 cases were referred to the tribunal, all except 44 of which were duly covered by insurance. 10 5. T H E UNITED AND ITS INJURED WORKERS

In Costa Rica prior to the promulgation of the decree of August, 1933, the United Fruit Company settled cases with its workers or fought them in court instead of insuring with the national insurance bank. In the event of an accident, the company submitted the prescribed report to the local authority; its medical department gave the injured man the medical or surgical treatment which he needed (a procedure established long before required by law) ; and other company representatives scurried about seeking to get employee witnesses to sign a statement placing the blame for the accident upon the worker. T h i s would seem to have been a useless procedure legally, since article 7 provides that " professional imprudence " on the part of the worker shall not exonerate the employer. T h e company's hospital — to the support of which the victim had been paying 2 % of his wages since entering the company's employ—nursed him to recovery, unless his disability was permanent, and the company's lawyers sought to pare down as much of the " penalty " as possible. T h e United Fruit Company's treatment of a temporarily disabled salaried employee was better than the legal require1 0 Costa Rica, Anuario Estadístico, 1929, pp. 587, 588, and I. L. O., Industrial and Labour Information, vol. 1, 1934, p. 21.

ïS2

SOCIAL

ASPECTS

OF THE BANANA

INDUSTRY

ments, for it continued his salary in full throughout his period of hospitalization. Thereupon a determined effort was made to induce him to sign a release renouncing any further claim against the company. A similar procedure was followed in the case of a manual laborer, except that the latter's wage stopped once he ceased work, unless it w a s paid in order to get him to sign the release. W h e n A l f r e d o Sáenz was inspector general of railways in Costa Rica in 1925, prior to the enactment of the compensation law, and when workers had recourse to ordinary legal procedure alone, he reported the case of a permanently paralyzed worker w h o had been made to sign a release in order to receive pay for the three months during which he was in the hospital. 11 Releases signed since the enactment of the compensation law presumably were designed to deter unwary workers from seeking further redress, whether or not they were entitled to such. Unless a worker was so thoroughly healed that he could not present any further claim upon the company, such a release lacked legal force. Article 10 declares : " Every agreement contrary to the provisions of this law is void. T h e rights which it confers can not be renounced." Although the fruit company made a policy of settling compensation cases with its workers out of court if possible, nevertheless during the years 1928-1932 the United Fruit Company or the Northern Railway Company was ordered by the superior tribunal of arbitration to pay benefits in thirty-four different contested cases. T h e company appealed twelve of these decisions to the labor office. The latter modified one of them but confirmed the other eleven decisions. 11

Sáenz, Informe, p. 19.

SOCIAL

SECURITY

153

The decision which the office modified was in the case of a worker who, when loading a rail into a car, failed to let go in time, thus receiving injuries to his hand which resulted in the ankylosis of four fingers. His disability was at first diagnosed as temporary, and later as permanent. When it was considered the latter the tribunal ordered that he receive compensation for permanent partial disability, in accordance with article 22 of the law, " from the time of the accident," although he had already received half-pay for temporary disability during the first year. The labor office ruled that this inconsistency of the law, requiring double payment during the first year, was unjust to the employer, and that therefore the company should be held for compensation for permanent disability only after the temporary disability had ceased. 12 Some of the cases in which the fruit company endeavored to escape responsibility or to reduce its payments are the following. A worker had lost the index toe of one foot. The superior tribunal of arbitration decided the case against the company, ordering it to pay the victim one hundred colones (about $ 2 5 ) a year for five years. The company sought release from this responsibility on the grounds of the declaration of an examining doctor, that while the injury interfered with the victim's ease and safety in walking, it did not decrease his professional ability. The labor office held, however, that the tribunal's decision must stand, because in accordance with article 1 3 of the law, the victim of a work accident producing permanent partial disability is entitled to indemnity. The regulatory decree states definitely in a table of valuations the degree of disability incurred by the loss of each member of the body. 1 ' 11

Res. 5 of Feb. 20, 1929, of secretaria del trabajo [Memoria del . . . Gobernación, 1929, pp. 231 et seq.]. 11 Res. 3 of Jan. 28, 1930 of sec. del. trab, [ibid., 1930, pp. 142, 143].

154

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

Another worker received contusions in both hands when moving a railroad tie. In spite of medical attention his right hand did not recover. T h e company paid him up to a certain date and then refused further payment on the ground that the examining physician found his case complicated by syphilis. Subsequent Wassermanns, however, gave negative results, and the labor office refused to exempt the company f r o m continued liability. 14 In other appeals the company objected to the specific amount of payment to a worker injured when his motorcar jumped the tracks, 15 to the amount of the annuities of two of the four children of a worker who had been killed, 1 * to the payment of bills incurred in the municipal hospital at Limon by a worker who preferred this to the company's hospital, 11 and to taking care of a laborer charged with cleaning the station grounds, who was struck by a train, due to the criminal negligence of the conductors. 18 In each of these cases the labor office, finding the tribunal's decision to be in accordance with the facts and the law, refused the appeals of the company's attorneys. T h e United lost its case, not only in these 34 decisions of the superior tribunal of arbitration, but also in the reversal by the labor office of two decisions in which this tribunal had exonerated the company. 19 Since the law of Costa Rica is the strictest of the several laws, it is apparent that in the other countries the fruit com14

Res. 7 of Oct. 19, 1928 of sec. del trab, [ibid., 1928, pp. 127 et

15

Res. 34 of July 22, 1930 of sec. del trab. [Md., 1930, pp. 168 et jfg.].

14

Res. 46 of Aug. 20, 1930

17

Res. 16 of May 3, 1929 [ibid., 1929, p. 244].

18

Res. 51 of Sept. 22, 1930 [ifrid., 1930].

1930, pp. 176-178].

Sentence of Oct. 3, 1929. Res. 60 of Nov. 20, 1929, and res. 18 of June 6, 1931 [ibid., for years concerned]. le

SOCIAL

SECURITY

155

pany and other employers have more chances of escaping liability for industrial accidents. The value of all of these laws to the worker is seen by contrast with the following correspondence which was passed on to the committee of government by the congress of Honduras in 1932. 1 0 Petition of Santiago Contreras, in which he declares that in the month of September, 1923, while working on the track of the Truxillo Railroad Co., a locomotive crushed his left leg, and when the wound had healed the company promised to supply him with an artificial limb, which promise has not yet been fulfilled, and, as he can not demand it on account of lack of a law protecting the national worker, he asks the assembly as a humane act to order the responsible party to furnish an artificial leg. 6. C O L L E C T I V E L I F E I N S U R A N C E I N COLOMBIA

Besides its workmen's compensation law Colombia has adopted legislation requiring each employer whose monthly payroll aggregates one thousand pesos or more to insure at his own expense the lives of his employees whose wages or salaries do not exceed 2,400 pesos annually. Each death benefit shall equal the worker's annual salary or wage; if he has no fixed wage the benefit shall be figured on the basis of his earnings during the last quarter. This life insurance is not contracted in favor of each individual employee ; it is a group policy held by the company. The latter must give each of its employees a certificate stating his annual salary or wage and the essential details of the policy. Enterprises of over 50,000 pesos capital are allowed to carry their own insurance, according to law 3 2 of June 1 7 , 1922, which applies also to all insurance under the workmen's compen20

Honduras, Boletín Legislativo, serie9 ii, no. 13, of Oct. 28, 1932.

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sation law. The qualifications concerning the laborer are that he shall have " died in the service of the undertaking liable for the payment " and " that his name appears on the payroll for the month in which his death occurs." 21 2 1 L a w 37 of Nov. 19, 1921, law 32 of June 17, 1922, and law 44 of Nov. 26, 1929, and enabling decrees [I. L. O., Leg. Soc. de Am. Lai., vol. ». PP· 31-34. S2-S9, and I. L. O., Leg. Series, 1929, Col—2].

C H A P T E R S O C I A L AND E C O N O M I C I.

IX CONFLICTS

TRANSPLANTED WORKERS

C A R I B B E A N jungles have been converted into modern communities, unified economically by the banana industry. But these banana communities do not possess cultural unity. In place of the natural jungle there appears a social jungle in which widely divergent nationalities, races, social classes and economic interests are intertwined as confusedly as were trees, underbrush and parasitical vines before the coming of man.

The partial conquest of the mosquito has facilitated an unusual amount of social mobility. North Americans and Europeans from temperate climates, Negroes from West Indian islands and Central Americans from the highlands, magnetized by the allure of banana gold, have been drawn into an arena of economic and social conflict. Practically all the residents of banana regions are immigrants, the Central Americans no less than the white and black adventurers from over the seas. All have been partially torn from their ancestral moorings and brought face to face with persons of widely divergent cultural backgrounds, social status and economic ambitions. The group which appears to be the most foreign to the new country suffers the least wrench from long established modes of behavior. In the middle of the last century Jamaican Negroes were almost as hesitant to undertake banana cultivation as Central Americans were a generation ago. 157

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Especially were they unwilling to sign labor contracts. A s a result, indentured laborers from India laid the foundations of the Jamaican banana enterprise. In 1 9 1 6 the Indian government stopped indentured emigration. Long before that time the dark-skinned inhabitants of Jamaica and other West Indian islands had become habituated in their homelands to the kind of labor by which they opened up the banana industry of the mainland, as formerly East Indians had opened up the Jamaican banana industry. The West Indian immigrants to Central America are strong in physique, willing to work in hot, wet areas during all kinds of weather. They are scarcely literate peasants of child-like simplicity, capable of adapting themselves to their external environment, at the same time preserving many of their old customs within their own group. Sections of the large banana communities have become small transplanted Jamaican villages in which many cherished folkways prevail and old mores still hold sway. The Jamaicans' religion is predominantly Protestant, especially Baptist, in contrast to the Catholicism of the Central Americans. Aided by the United Fruit Company, which furnishes buildings for the use of churches and schools, many Jamaicans continue to worship after the manner of their fathers and to train their children in their language and traditions. Unlike the Caribs, whose villages near port cities are to a large extent permanent habitations, the Jamaicans tend to remain foreigners, still cherishing the island across the sea as their homeland. Many of them send earnings back to Jamaica to support relatives. Although some of them become citizens of the new land, many others save as much money as possible in hope of returning to the island in the future. F a r greater would be the inner conflict for the Indians, with their love for the soil of their fathers, were they to

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any great extent uprooted from their tribal homes in the mountains and set down on the strip of land along the Caribbean coast. Comparatively few full-blooded Indians are employed in the banana industry; those who take part in it occasionally are itinerant workers. Several years ago it was thought likely that, as the banana industry developed in western Guatemala, it would attract many Indians from the highlands. Had this been the case, they would have experienced a profound clash between their tribal customs and the life of a community dominated by modern mass production in agriculture. United Fruit Company officials operating on the west coast have found that Indians, although willing to work on coffee fincas during the crop season, cannot be induced to hire themselves out on farms at a lesser altitude than fifteen hundred feet above sea level. Indirectly, however, these Indians are being affected by the fruit company's operations on the west coast. A s early as 1929 other large scale employers of labor including prominent coffee growers had abandoned the traditional colono system of hiring labor in favor of methods similar to those of the fruit company. The same situation may develop in western Panama where planters and other employers can make contracts, enforced by the state, binding laborers to their establishments for stipulated periods of time, but not for life. 1 Up to the present time the greatest social change conditioned by the banana industry has occurred among the white and partially white nationals, who, born and brought up in the easy going villages of their fathers, moulded by their communities, have suddenly found themselves not only in a less healthy climate, but also in a strange social environment. These nationals are by no means homogeneous; they come 1 Cf. ch. ν of código administrativo, adopted by Panama on Aug. 22,1916 [I. L. O., Leg. Soc. de Am. Lai., vol. ii, pp. 337-442]·

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from different racial mixtures and cultural backgrounds. Costa Rica boasts that eighty per cent of its citizens have unmixed white blood and that practically the same per cent are literate. Costa Rican peasants are different in habits and attitudes from illiterate mestizo (half-breed) peons, accustomed to the semi-feudal conditions prevailing on Guatemalan fincas, as well as from impoverished Honduran mestizos, accustomed to living upon the meagre diet of corn and beans raised on rugged hillsides. 2. THE COLLAPSE OF SOCIAL CONTROLS

In what purports to be a psychological sketch, Dr. José A. López of the United Fruit Company's hospital at Puerto Castilla, Honduras, presents a " parade of sadness and disease " of the lower class of tropical American patients.* There is an air of dreaminess about them that verges on apathy, as they lounge in front of their camps. The insidious laziness is induced by impoverished blood, where the plasmodia of malaria have been playing havoc. . . . They lie in their hammocks, smoking and looking at the sky ; they sit on the railroad tracks, and grunt as approaching trains disturb their repose. He then proceeds to characterize them as irresponsible, egocentric, illiterate, superstitious, child-like and cruel. After remarking that man has three pathways of retreat from the realities of every day life—work, love and alcohol—the doctor adds : To escape from the drab daily existence through work, you must do something congenial to your inner self. Your work is the greatest outlet for self-expression to be had. . . But when working under the tropical sun ; wading in the mud during the rainy season when frequent showers keep your back well drenched; being ordered by an overseer to move about, 2

United Fruit Co., medical dept., Annual

Report,

1930, pp. 163-7.

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i6l

while fever, chills and headache are urging you to lie down and die—then is the time to chose more pleasant avenues of escape, and love and alcohol play their winning hands. A s far as those attitudes and habits prevail—for this composite picture does not represent all Honduran mestizos—they are conditioned by very divergent factors such as biological heredity, social heritage, personality traits, new geographical and social environment, heat, malaria and strenuous work. The debilitating climate and chronic malarial conditions are very important as, too, is the new social environment. A citizen of the United States residing in Honduras has commented upon the fact that servants coming directly from the interior are more honest and conscientious than are those who have become infected by the attitudes prevailing in coastal communities. The transplanting of workers from the highlands to banana workshops is heralded as a service because it " raises the standard of living." That the fruit company through its commissaries is concerned about this matter is shown by the following words of its former president, Victor M. Cutter. 5 We . . . know that the vast masses of other humans in the less developed countries of the three continents mentioned [Africa, Asia and South America] have at present an extremely low consuming power, and we also know that this power can be raised at least to approach our own level. Further, we have had experience and knowledge of sure methods for raising their standard of living and consequently their consuming power. A s a result of such salesmanship the bare-footed mestizo from the uplands learns to wear shoes on occasion, frequently eats canned foods in place of home grown vegetables and * Annals of the Am. Academy of Political Science, July, 1927.

162

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buys various articles of common use in northern climes, some of which add to his comfort and increase his self-esteem. Many of these articles, such as safety razors, sewing machines, cosmetics, phonographs and flash lights can also be purchased in the remote interior. In the old home the worker leaves his picturesque jacket as well as many a colorful custom. The Honduran laborer may compensate for a sense of inferiority by buying a Stetson hat when he has scarcely enough money for food, or by wearing flashy silk shirts while his feet are bare, but these material luxuries do not necessarily enhance the quality of his life. More important than material acquisitions are the psychological and social changes which these people undergo. A new worker on the banana plantations comes from a village where he knew everyone. He had a recognized status among his fellows : he belonged somewhere and amounted to something. Suddenly he is uprooted. H e finds himself in an environment where he does not count over much. He misses many of the customs and friendships through which he found his deepest satisfactions. In his small home community he was influenced by the attitudes of his neighbors. He enjoyed their approval and shunned their disapproval. With these primary relationships gone, many a transplanted worker, whether born in a Boston apartment house, a Jamaican cabin, or a highland adobe hut, loses important controls which formerly had guided his daily conduct. Especially significant for many workers and the new communities in which they live is the lack of family life. Homes exist in the highlands; some homes exist in the lowlands, but many of the banana workers are single men or heads of families who have left their wives and children in the interior. In two years' time the railroads of Costa Rica transported five thousand itinerant laborers from the west

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163

to the east coast. It was reported that they resembled military convoys because of the absence of women and children.* It was estimated by the medical department of the United Fruit Company in Guatemala in 1912 that about 35% of the laborers had wives. The province of Limon, Costa Rica, the center of the banana region, had over a twenty-year period ending in 1925 an average birth rate of 34-4% compared to 40.7% for the entire republic.5 The lack of any worth while interest in banana communities is apparent. Independent easy going highlanders become wage workers and adopt sophisticated ambitions and vices. Strong drink gives excitement and forgetfulness to North Americans and Europeans, Central Americans and Jamaicans alike. In more primitive communities there exists as a rule a considerable amount of loyalty between one man and one woman whether married or not. In these communities in touch with the outer world, commercialized prostitution and general promiscuity take their toll of those who have become irresponsible. Gregory Mason, writing in World's Work of July, 1927, declared : The fruit company has had the inescapable handicap of dealing with laborers who are restless and nomadic by nature, addicted to a wandering life. At one plantation, for example, there was a 100% labor turn-over within approximately eight weeks. It is true that some of the laborers on fruit company plantations were habitual drifters before they came in contact with that industry. Many of them, however, previously stable members of upland communities, became migratory after entering the employ of banana producers. With the shifting of banana cultivations from one place to another they 4

Costa Rica, Estadística

5

Ibid., p. 37.

Vital, p. 34.

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have been forced to move about. W i t h the breaking of home ties and the failure of the new communities to establish a permanent hold upon them, many develop the wanderlust. 3. VIOLENT AND S Y M P A T H E T I C

CONTACTS

Sometimes the dull, prosaic, exhausting life on banana plantations is enlivened by outbreaks of brutality, especially under the stimulus o f liquor. Many a laborer, who ordinarily is peaceful and law-abiding, lashed into a frenzy on the aftermath of pay day, settles past and present grudges with machete or gun. Sometimes the murderer is captured by governmental authorities; sometimes he falls before the hand of an avenger; but frequently he escapes to the mountains and the affair is closed. A n indication of the prevalence of this law of the jungle is given by the fact that there were sixty-one violent deaths in the Truxillo division of Honduras in 1931. During some previous years the outbreaks of personal violence were much greater. T h e overwhelming majority of these killings follow gambling, petty squabbles or long-time feuds between laborers. T h a t the severing of old relationships and the breaking down of social controls have much to do with such outbreaks of lawlessness is indicated by the fact that machete fights are less frequent among the mestizos who still live in their ancestral villages or on the semi-feudal coffee estates of western Guatemala. But personal violence is not an inevitable outgrowth of complex banana communities. During the four years of 1924-27, out of sixty-three murders reported in the seven provinces of Costa Rica, only seventeen were reported in the province of Limon." The social disorganization of banana communities does not necessarily produce violence—in fact, violence is the exception rather than the rule—but it creates a ferment which quickly becomes violent • Costa Rica, Anuario Estadístico

for these years.

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165

when aroused by disturbing irritants. Occasionally officials have been killed. In most of these cases the killer has been caught cheating or is enraged by real or fancied injustice suffered from the particular official or from the company whose orders the official was carrying out. Sometimes the sincere effort of a superior official to straighten out a dispute has led the laborer to assume that he has been wronged by the subordinate official, whom thereupon he has attacked ruthlessly. Even when liquor appears to be the cause of such brutality it may be merely the stimulant by which the assassin has whetted his courage to perform a previously contemplated deed of revenge. In the tropics as elsewhere spectacular crime looms large and hides from sight normal relationships which are usually peaceful and often friendly. Although in some banana districts officials consider it necessary to carry side arms f o r self-defense, this precaution is not considered necessary in other districts. The United Fruit Company has supplanted hard-boiled soldiers of fortune who in the past filled many posts in the tropics by men of education and character, many of whom through the intimate contacts of daily work become interested in their workers, whose welfare they seek to advance. Frequently personal relationships mitigate the hard features of the banana industry and the sordid life which accompanies it. Many in positions of responsibility have learned that the laborers, as a whole, are not difficult to handle, providing the supervisor shows tact and discretion, leaving them strictly alone when they are under the influence of drink.7 One North American, having in his charge a large undertaking of the United in Costa Rica, declared in the summer of 1930 that he was concerned about the problems of his. 7

Testimony of a supervisor in Costa Rica.

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workers, that he tried to meet them on a human basis, and that they were staunchly loyal to him. The Latin temperament, easily embittered by injustice or misunderstanding, is quick to respond to sympathy and good will. 4·

EDUCATION

AND

LANGUAGE

From the foregoing discussion it is apparent that one of the chief needs of banana workers is the provision of high grade facilities for the use of leisure time. In various places hotels, club houses, recreation fields and buildings for the use of churches and schools meet this need partially for one or more classes of fruit company employees. In Tela, Honduras, the United furnishes a building which is used for religious services both by a Catholic priest and a Protestant minister. For the children of workers schools are exceedingly important. Even in Costa Rica, where 84% of the children of the proper age are registered in schools, the supply of buildings and of teachers is inadequate. Many of the public school buildings in use in the banana zone were reported in 1928 as inadequate or in need of renovation. 8 In 1930 the company's contribution to education in Costa Rica, except for the Pejivalle school, was limited to English-speaking schools for the children of its higher employees, and the supply of facilities to Jamaicans for other English-speaking schools. In the summer of 1930 the secretary of education of Costa Rica, Attorney Ricardo Fournier, in a personal interview, expressed his attitude towards public and private schools as follows : All the government schools in the banana zones are built and supported by government funds. There are also private schools in this region. Because of the language difficulty, the children 8

Memoria de la Sec. de Educación Pública, 1928, pp. 496, 497, 527.

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167

of English speaking Jamaican Negroes frequently go to private schools, in which they often have to pay tuition. The private schools really are an acute problem for the public education system—it being hard to exercise supervision over them because of the language and because they do not follow governmental regulations. Some of the schools are in very small villages ; thus the only way to force them to conform to governmental requirements would be to increase the number of inspectors. They tend to denationalize their areas. In them the government is unable to teach national ideals and the sentiments of Costa Rica. It is natural that fruit company employees should desire their children educated in their own language and in loyalty to their own national ideals. This clash of interest illustrates the fact that banana-raising communities are in many respects alien to the countries in which they are located. The United Fruit Company is obliged to provide school facilities in some places. In Guatemala the executive decree of December 14, 1927, following in general the old law of 1894, requires owners of agricultural undertakings to furnish schools for the children of their workers, if ten or more children are available." The United's port contract is less strict than this law ; it requires the furnishing of school buildings but not of schools. The criticism of the denationalizing influence of the United's contribution to education is paralleled by the more frequent criticism of the use of the English language, especially in the dispatching of trains, in routine business and on steamships. The use of different languages is an obstacle to the fusion of different elements in a community. It increases the separation between English-speaking North Americans and Jamaicans and Spanish-speaking Central Americans. Sometimes it leads to what appears to be dis9

I. L. O., Leg. Series, vol. viii, 1927, pt. iii, indexes, p. 1675.

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crimination on the grounds of nationality or race. A Spanish-speaking foreman tends to select Central American workers because he prefers to give orders in Spanish and an English-speaking Jamaican foreman tends to select foreign workers because he prefers to give orders in English. Although officials in high positions use both languages and many of the workers learn smatterings of the tongue which is foreign to them, the use of two languages side by side remains a handicap during work hours and a cause of misunderstanding during periods of leisure. 5. RACE RELATIONS AND RESTRICTIONS

In 1927 18,000 of the 32,000 inhabitants of the province of Limon, Costa Rica, were Negroes. 10 For years many Costa Ricans, proud that their country is the outstanding white republic of Central America, looked askance at the infiltration of blacks. When these dark-skinned immigrants became more widely scattered throughout the nation, race conscious alarmists raised voices of protest. In their minds more sinister than the color of the population of Limon was the fact that in 1 9 2 7 there were 832 Negroes in the inland provinces and 301 on the Pacific coast. One cause of opposition to granting the United Fruit Company a new concession in 1 9 3 0 was the fear that the Pacific coast might become " A f r i c a n i z e d " like the Caribbean coast. In 1 9 1 2 the United Fruit Company's medical department reported that 3,000 of the company's employees in Guatemala were colored and only 1 7 5 were white. 11 To-day there is a large proportion of Negroes in Puerto Barrios, as in fact in all of the Caribbean port cities. 10

From table published by Dr. José Guerrero, director of statistics, in La Tribuna, Aug. 13, 1930. 11

United Fruit Co., medical dept., Annual Report, 1912, p. 36.

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The relations between individuals of different races vary greatly from place t o place and from time to time. When recently J. L. Williams was an overseer on one of the United's farms in eastern Guatemala, he found a considerable amount of antagonism and personal violence which appeared to result from racial differences. 12 A f t e r mentioning the " babel of tongues " arising from the heterogeneous mixture of colored railway construction men from the United States, blacks from the West Indies and British Honduras, French Negroes from Martinique and Guadeloupe and Chinese merchants, he adds : If all these people could abide in harmony, there would, of course, be no problem. The Negro from the United States has no use for the British subjects. The Jamaican has no regard for the black from Belize or Barbadoes, and still less for the French-speaking Negroes and the blacks from the United States. At the completion of the canal, a large number of the mass of laborers were turned loose in Central America. The thrusting of such a group of labor upon the various countries of the mainland led to serious trouble, in racial lines. Numerous fights and small riots occurred in various districts. One of the most serious took place on the plantation of Zehuana in the Quirigua district of the Guatemala division. Trouble between the natives and Jamaicans arose which was not quelled without bloodshed. After calling attention to the respect shown to white officials by Negroes f r o m the United States and by natives of the country, he says that Mexicans and Colombians have caused numerous disturbances but that the big problem is the Jamaican Negro, proud of being a British subject. When the latter, with his " cocky " attitude, is placed under the eye of a white boss from south of the Mason and Dixon line, trouble is likely to ensue. Of course 11

J. L. Williams, The Rise of the Banana Industry and Its Influence on Caribbean Countries, pp. 118-120.

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this rule does not apply to all Jamaicans, a large number of whom are seeking only to save money in order to return to Jamaica and lead a life of ease. T o avoid complications, therefore, a strict color line is drawn. All persons of color must always give the right of way to whites, and remove their hats while talking. A rule also forbids any laborer from entering the front yard of any white man's residence. As a direct result of this sharp color line, various whites have been slain, and also [though the company officials may not be aware of it] many blacks have been ruthlessly made away with. . . . On pay days in particular the racial feelings break out, and, due to gambling and the terrible native liquor, the hospital has numerous cases. One interesting feature is that the whites could bank on the support of the American Negroes, and these same Negroes often played the part of spies and forewarned the whites of any Jamaican plots. T h i s testimony indicates not so much racial antipathy as a struggle for status. I n striking contrast to the bitterness prevailing a decade ago in Guatemala are the relations between the races on the Costa R i c a n plantations, reported by J a y H . Soothill as follows : On the banana farms in sixteen years I never observed race hatred, even during the Marcus Garvey disturbance. Most of the foreign overseers prefer West Indian Negroes to natives as laborers for the reason that they both speak the same language. The overseers see few others during the week than their laborers and they are intimately associated with them in handling the work, day in and day out. I do not mean that they become chummy socially, but that the idea of a difference in color seldom if ever enters their heads; they are both too busy. The white overseer understands full well the hellish grind on a human being, swinging a machete at arm's length all day, under a blistering hot sun, or a torrential tropical downpour. White man is considerate of black man and black man is considerate

SOCIAL

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CONFLICTS

of white man ; each goes out of his way for the other many, many times, without giving the matter a thought. A s superintendent I have had among such overseers under me Britons, Austrians, Germans, Frenchmen, Italians and others, as well as Americans and an occasional native. I want to emphasize the point that there is not in the American tropics the race hatred between black and white that there is here in the United States. If you were to ask a white native laborer or a West Indian black laborer whether they ever experienced any race hatred they would not know what you were talking about. They intermingle socially, and here is an odd thing: there is no more miscegenation among them than there is between white supervisor and black female. The former occasionally live together and even intermarry ; so also occasionally does the white supervisor and the female mulatto. Partly because of racial pride but chiefly in order to protect national workers Caribbean countries have restricted immigration. E v e n before the United Fruit Company entered Honduras this country regulated the entrance of Negro workers. Prior to 1903 they could be admitted under certain conditions f o r temporary work provided their employer put up a bond. T h e Truxillo concession permits the concessionaire to bring workers into the country, except Chinese coolies and Negroes. The Tela concession provides that Negroes can be introduced " with the express permission of the government and the Cuyamel's Mata de Guineo concession repeats this condition, adding the obligation to repatriate them after the conclusion of their work. 1 * 1 S Art. no. 93 of of April the Tela

20 of decree no. 113 of April 12, 1912 [Tela] ; a r t 7 of decree March 25, 1918 [Mata de Guineo] ; and art. 18 of decree no. 99 9, 1912 [Truxillo], These are all printed in La Gaceta Oficial, c. on July 29, 1912 and the Truxillo c. on July 10, 1912.

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In 1929 Honduras forbade the further immigration of Negroes except persons possessing 5,000 silver pesos ($2,500), a prohibitive condition in almost every case.14 Panama in 1926 and 1927 prohibited the entrance of Chinese, Japanese, Syrians, Turks, East Indians and " Negroes of the Antilles and the Guianas whose native language is not Spanish", unless it can be proved that: ( 1 ) there is not a sufficient labor supply to carry out work contemplated ; ( 2 ) such work is a public utility or an agricultural enterprise; ( 3 ) the wages offered are not lower than those prevailing for nationals and resident aliens; and (4) such immigrants will guarantee that they can pay their own hospital expenses in case of sickness.15 During the past two decades Negroes have sometimes been introduced into Honduras through special permission from governmental officials, but they have also been smuggled in. On one occasion 1,000 West Indian Negroes were to have been landed on a beach in the Truxillo division during the night, but advance news of the plan leaked out and the affair was called off. Such underhanded dealings have aroused much resentment against the company, as is shown by the following excerpt from an editorial which appeared in El Nacional of San Pedro Sula on February 13, 1931 : The Negro worker continues to multiply notwithstanding that in bygone days the secretary of public works requested of foreign companies located in this section that the proportion of native laborers be increased, particularly in the area of the Truxillo Railroad Company. And the number of these immigrants has not only increased in the foreign companies, but 11

Ley de Inmigración, decree no. 101 of Feb. 28, 1929 [I. L. O., leg. series, 1929, Hond.—i], ch. iv. 15 Law no. 13 of Oct. 23, 1926, amended by law no. 16 of Jan. 28, 1927. Digest in Monthly Labor Review, April, 1927 and March, 1928.

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173

they are entering the country in increasing numbers in violation of the immigration law, undoubtedly because the immigration authorities pay no attention to the matter in view of the great splendor their silence and indifference toward this entry of undesirables must win for them. This same editorial reported that 1 1 5 national workers had sought work on the wharf at Puerto Castilla, where labor was being performed largely by Negroes, but were refused entrance, until the chief of police of Trujillo, summoned on the false report of a strike, insisted that the nationals be given wharf permits. This situation of competition for jobs, which, rather than any great amount of racial antagonism, appears to be the chief cause of opposition to Negro immigration, is summed up in the following extract from a written interview concerning the United Fruit Company granted by Julián López Pineda, director of El Sol of Tegucigalpa, Honduras : Another of the motives of censure is the preferential employment of individuals of the Negro race in agricultural and railroad work, with detriment to the national peons and laborers, white or mestizo. Particularly during the unemployment of recent years has the presence of large numbers of foreign Negro workers been resented as prejudicial to Central American workers. 6.

NATIONAL

VERSUS

FOREIGN

WORKERS

When Central Americans were loath to live in banana regions, they were comparatively indifferent to the penetration of a large foreign labor population into their countries. In fact, in some cases immigration was encouraged. Thus Honduras, through its agricultural law of 1906, offered free land unencumbered with taxes to those who would en-

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gage in farming. 1 * When later large numbers of nationals desired work on the banana plantations, their governments became increasingly jealous of all classes of foreign labor. T h i s attitude has been accentuated by the unemployment resulting f r o m the depression and accompanying retrenchments. T h e desire to prevent the undercutting of wages and the reduction of opportunities f o r employment culminated in 1 9 2 1 in the following resolution of the third congress of the Pan-American Federation of L a b o r . " We believe that one of the most important problems the labor organizations have to solve is the immigration problem. The United States has decreed a law, we understand, which prohibits the immigration of Latin American workers for the period of one year. In this law the Mexican workers are not included. This shows that in the United States the interests of the workers are protected. W e ought to do the same, even if our situation and conditions are not the same as that of the United States. It is necessary, then, that we give special attention to this problem and protect the interests of the workers of our countries. T o that end, we request that this Congress appoint a special committee to study the already mentioned problem, and that the affiliated organizations be given recommendations to the end that they furnish this committee with any information they can give on the subject. A g a i n in the congress of 1 9 2 7 the Panamanian delegate introduced a resolution to prevent immigrant workers f r o m lowering standards of workers in countries to which they go· 1 9 le

Sec also facilities for obtaining land provided earlier by the ley de agricultura, adopted by decree no. 85 of Aug. 21, 1895, and the ley agraria, adopted by decree no. 188 of March 12, 1898. [Leyes de Hacienda, pp. 744-752, and 907-925], " Proceedings,

1921, p. 121.

18

1927, p. 97.

Proceedings,

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CONFLICTS

175

Although sometimes, as during the opening of the Chiriqui division in western Panama, comparatively high wages are paid to attract workers from neighboring countries, on other occasions immigration definitely lowers wage standards. Thus f o r gathering its sugar cane the United Fruit Company recently has introduced Haitians into Cuba—one year 5,000 in number—with the understanding that they would be repatriated at the end of the crop season. 1 ® This situation not only provided efficient labor, but also enabled the company to cut the wages which had been relatively high owing to the competition of various companies for resident workers. One class of immigrant labor, small as compared with the West Indian groups, and yet large in certain cases, consists of the citizens of one Central American country at work in another Central American country. Latin American authorities have been concerned with the condition of national workers with whom such laborers compete and also with the conditions of these laborers themselves. Hence the Central American republics wrote into the Washington Convention of 1 9 2 2 - 1 9 2 3 a clause prohibiting employers from contracting with workers to labor outside of their own countries, until : ( 1 ), the respective governments shall have mutually agreed to safeguard the workers' interests; and ( 2 ) , the prospective employers shall have guaranteed the cost of the return of these workers to their homes. 20 One of the national decrees carrying out this convention— that of President Orellana of Guatemala on July 20, 1923 —makes the obtaining of a permit for such a contract dependent upon the employer certifying to the municipal or departmental authority the farm or industrial undertaking to which he proposes to take the laborers, the length of the 19

United Fruit Co., medical dept., Annual Report, 1930, p. 49. Article 1(9). See I. L. O., Leg. Soc. de Am. Lai., vol. ii, p. 258.

ΐγβ

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

contract, the wages to be paid, the hours of work, the climatic conditions and the quality of housing and food supply, as well as depositing sufficient funds to cover the cost of food of the families left behind and 25 pesos gold f o r the repatriation of each worker after the termination o f the contract. 21 When recently Nicaraguans and Hondurans, formerly employed by the United Fruit Company in western Panama, were stranded without work, a special committee of the Panamanian congress studying the labor situation recommended that companies be obliged to repatriate unemployed workers. 22 T o a large extent citizens of the United States, with a scattering of Britishers and other Europeans, hold the more responsible executive, clerical and farm positions of the United Fruit Company. In August 1930 the overseers in the Progresso and Ulua districts of Honduras consisted of six North Americans, three Britishers, two Spaniards, three Mexicans, two white Jamaicans, four Hondurans and two citizens of other Central American countries. O f the time keepers five were North Americans and eleven were Hondurans. O n September 5, 1927, the inspector general of railways of Costa Rica wrote to the president of the United Fruit Company objecting to the demotion of twelve Costa Rican overseers to timekeepers—with foreign young men being placed above them as overseers—and complaining that " better salaries are always paid to the foreigners than to the Costa Ricans Jay H. Soothill reports that during the fifteen years that he was in the employ of the United Fruit Company in Costa Rica it was the company's policy to avoid as much as possible putting nationals in high posi31

Ibid., pp. 281, 282.

21

La Tribuna, Jan. 29, 1933.

" Sáenz, Contratos y Actuaciones,

pp. 421, 422.

SOCIAL

AND

ECONOMIC

CONFLICTS

tions, because of their divided allegiance in disputes with national governments. Central Americans complain not only that it is difficult and in some cases impossible to secure the more desirable positions, but that for the same kinds of work in business in general they receive less remuneration than that accorded to more favored foreign employees. In Guatemala in 1929, when national stenographers were earning $ 3 5 to $ 5 0 per month, bookkeepers $ 5 0 to $75, combination bookkeeper and cashiers $ 1 0 0 to $ 1 5 0 , female stenographers, using English as well as Spanish, $ 7 5 to $ 1 2 5 , and male stenographers of the same qualifications $ 1 5 0 , foreigners holding the same positions were receiving from $200 to $ 2 5 0 . " Similarly in 1926 in the region of Puerto Cortes, Honduras, where the Cuyamel Fruit Company was the largest employer of labor, when native clerical workers were receiving approximately $ 5 0 a month, foreign clerks were paid from $ 1 5 0 to $ 2 5 0 . " Panama has attempted to prevent such discrimination by providing in the Chiriqui concession that Panamanian workers must receive at least equal pay and benefits as are accorded to foreign employees of the same categories. 1 ® Latin American republics have endeavored to preserve work for their citizens by requiring in laws and concessions that at least a certain percentage of every labor force shall be composed of nationals. The Costa Rican law, which is written into various concessions, stipulates that the proportion of national workers must not fall below 50%. In spite in this requirement the Northern Railway Company in August, 1928, employed 8 1 2 Costa Ricans, 978 Jamaicans, ** Harold M. Randall, Latin American div., dept. of commerce, in U. S. Daily, July 23, 1929, on basis of a report of R. M. Lane, ass't trade commissioner of Guatemala City. " Monthly Labor Review, June, 1926, pp. 72, 73. M Contract no. 13, art. 14, Sáenz, Contratos y Actuaciones, p. 375.

178

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

51 North Americans, 56 Central Americans, 31 Englishmen and 5 persons of other nationalities.2' Mexico insists that 90% of a labor force must be native Mexicans or naturalized foreigners of the white race.28 The Guatemalan law requires that 75% of the employees of every commercial, industrial or agricultural enterprise shall be Guatemalans. The enabling decree of President Chacon defines " employee " as one who can read and write and receives a periodic compensation, and excludes manual laborers from the provisions of the law.29 The United Fruit Company's port contract is stricter than this decree for it requires that 75% of the company's " employees " and " workmen " shall be Guatemalans. As already noted in regard to Guatemala's reference to " specialists ", various phrases exist which permit the stretching of the foreign contingent. Article 14 of the Chiriqui concession requires that 50% of the laborers and employees be national, provided that " it is possible to obtain them, and they possess the capacities required for the work ". Likewise in its Costa Rican concession of 1930 the United Fruit Company promises in filling any position of office worker, operator, or laborer, to give the preference to a Costa Rican, " when in its judgment he possesses equal ability and capacity with one of another nationality ". 30 Except for such elastic provisions these quota laws exclude North Americans, Europeans and Jamaicans. The United from time to time makes a formal attempt to check the nationality of its workers by requiring its officials to submit censuses from its payrolls. These are practically meaningless since in lack of 27

Costa Rica, Anuario Estadístico,

M

Moisés Poblete Tronscoso in Int. Lab. Rev., May, 1933, p. 640.

1927, p. 516.

29

Leg. decree no. 1367 of April 14, 1925 and exec, decree no. 967 of Dec. 19, 1927 [I. L. O., Leg. Soc. de Am. Lot., vol. ii, pp. 283-285], 30

Concession printed in La Tribuna, Sept. 3, 1930.

SOCIAL

AND

ECONOMIC

CONFLICTS

179

more exact information workers with Spanish names are considered nationals. Consequently a great many citizens of other Central American countries slip through the bars of the quota. Unable in the short time at its disposal to check the figures presented to it by the Chiriqui Land Company, the Panamanian special commission recommended in 1 9 3 3 that the government order an official census to determine the nationality of all workers. 31 Such a census could be made by a government representative stationed at fruit company headquarters on pay day. Advance has been made toward greater accuracy in this matter. Guatemala in 1928 decreed that all banks, commercial houses, industrial and agricultural enterprises submit complete statistics, including the nationality of their workers ; 8 2 Costa Rica by decree 54 of 1 9 3 2 required that quarterly employment statistics be submitted by employers covering all types of labor except domestic servants. 31 32

La Tribuna, Jan. 29, 1933.

Exec, decree of Feb. 29, 1928 [I. L. O., Leg. Soc. de Am. Lot., vol. ii, p. 285].

CHAPTER THE

ROLE I.

Χ

OF O R G A N I Z E D

EARLY BANANA

LABOR

STRIKES

ALTHOUGH workers have grumbled often there has been little organized direct action in the banana zones until recently. Following the world war, when strikes were rife in many parts of the world, reverberations of these conflicts resounded in parts of the United Fruit Company's domain. In Costa Rica, for example, there were a number of strikes, ineffective for the most part. Except for one which was inspired by Marcus Garvey's racial movement, these strikes were spontaneous outbursts of indignation or strivings for better conditions, rather than culminations of the efforts of outside agitators. During the twenties no union organization existed in the banana region, among banana, railway or dock workers. T h e backbone of these sporadic walkouts was broken when the company, by playing white and black workers against each other, persuaded sections of the strikers to return to work. For several months during the winter of 1918-1919 a strike of considerable magnitude prevailed on the United's Panamanian properties. T h e workers, who had no strong labor organization, had been aroused by the propaganda of Marcus Garvey and his Negro World, which infused labor struggles with racial antagonism. T h e company's officials, realizing the potential power of workers when aroused by unjust conditions, made certain concessions in the hope of breaking the strike and forestalling similar suspensions of work in the future. These concessions, which the officials recognized to be no more than just considering the prevail180

THE

ROLE

OF ORGANIZED

LABOR

181

ing cost of living, included some advances in wages and the issuing of hauling equipment without charge. Workers thus learned that wages need not be determined solely by the company's need for their individual services. They discovered the possibility of developing collective bargaining power. 2.

LABOR

ORGANIZATION

During the past decade strikes have been better organized and more widespread than formerly. T h a t this development is of late date is a result of the ineffectiveness of early labor organizations in the Caribbean. Prior to the world war various mutual-aid societies flourished but bona fide unionism was weak. T h e impotence of early labor organizations is illustrated by the fact that under the dictatorship of Estrada Cabrera no union could be recognized in Guatemala unless it made this reactionary tyrant its honorary vicepresident. The first Pan-American labor congress, held at Laredo, Texas, in November, 1918, contained delegates from Guatemala, E l Salvador, Costa Rica and Colombia as well as from the United States and Mexico. Honduras and Nicaragua were represented at the second congress held the following year. Since that time the Pan-American Federation of Labor, dominated by the A . F . of L . and the C R O M (Confederación Regional Obrera Mexicana) has tried to stimulate unionism on the isthmus and to coordinate labor activity. The federation's conventions have drawn up lengthy resolutions condemning imperialism in Santo Domingo and Nicaragua and have fostered the discussion of Central American problems, but they have failed to engender a strong labor movement in Central America. In September, 1921, a Central American Federation of Labor was organized. Although these two international federations purposed to cooperate in the common objective

I82

SOCIAL

ASPECTS

OF THE BANANA

INDUSTRY

of building an effective Central American labor movement, they ran into a snag because the Central American federation, claiming the exclusive right to deal with matters of Central American labor, denied the right of several national movements to representation in the Pan-American federation. 1 In Colombia prior to 1924 the workers were " almost totally dominated by the influence exerted by the combined force of the church and the politicians " . T o break this control and protect the interests of workers the Colombian Federation of Labor was organized in May, 1924, following the circulation of a letter from Samuel Gompers, president of the Pan-American Federation of Labor. 2 The Colombian federation and the constituent societies of the Central American Federation of Labor have developed unions of bakers and needleworkers, carpenters and typesetters, and many other crafts, but have had relatively little influence upon the problems of the banana workers. More attention has been paid to the latter by communistic and other radical groups. A t the present time both right and left wing movements exist in most of the Caribbean countries. The Federación Obrera de Guatemala, a member of the Central American federation and affiliated with the Pan-American federation, has a fine headquarters building in Guatemala City, but the Federación Regional de Trabajadores of the same country, affiliated with the Third International, has been obliged to g o underground during the present governmental administration. The Federación Obrera Hondurena, with headquarters in Tegucigalpa, had six thousand members in 1931. A t that 1

Pan-American

Congress,

Federation of

1924, pp. 48-50, 120, 121.

* Ibid., pp. 54-57-

Lahor, Proceedings

of

the Fourth

THE ROLE OF ORGANIZED

LABOR

183

time it found the president of the republic cooperative, but it was opposed by the politicians. In the same country a left wing organization, the Federación Sindical Hondureña, affiliated with the Confederación Sindical Latino-Americana de Montevideo, has headquarters at San Pedro Sula, near the old Cuyamel banana and sugar plantations, and branches in the other banana towns of Tela, Puerto Castilla and Progreso. A very different type of organization, L a Sociedad de L a Juventud, founded in 1 9 1 3 by a labor and professional group, also has headquarters in San Pedro. It is inspired by a strong unionist, sentiment but strives chiefly for education and peace, working against the revolutionary propensities of the country. In 1926 the Railroad Union of Honduras received the official sanction of the government. This organization had headquarters at Puerto Cortés and branches in other transportation centers of the republic, Tela, L a Ceiba, and Puerto Castilla. Its aim was stated as follows : 3 To unite for purposes of mutual aid all railroad employees in the republic and in Central America, to open a savings fund for members as an incentive to thrift, to give aid in case of accident, ill health or death of the members, to see that the members fulfill honorably their contracts with the companies, to conduct educational lectures, libraries and evening schools, to discourage the use of alcohol and other vices, and to work for the recognition of the rights of the union by the railroads. In Costa Rica a Federación General de Trabajadores united various crafts for a while but eventually collapsed as a result of unsuccessful political activity. Recently banana workers have been organized by the Sindicato de Trabajadores del Atlantico, sponsored by the communist party of Costa Rica. 1

Bulletin of the Pan American Union, 1927, pp. 302-3.

184

SOCIAL ASPECTS

OF THE BANANA

INDUSTRY

3 . T H E L E G A L I T Y OF S T R I K E S

Organized labor has been given many guarantees by the nominally labor government of Mexico. In Colombia the cause of the workers has been aided by the national socialist party, which, although not in power, has exerted considerable influence in legislative counsels. On the other hand, throughout Central A m e r i c a unionism has obtained little support in congressional circles, and in some countries, notably in Guatemala and Salvador, radical laborites have been outlawed and imprisoned. Generally accepted principles underlying social legislation have been recognized by conservative and liberal parties with such practical results as have already been outlined. Political leaders have been willing to grant individual workers rights and privileges through protective laws, but they have been w a r y of encouraging the development of strong workers' organizations. On F e b r u a r y 1 5 , 1 9 2 6 , President Chacon of Guatemala, reflecting prevailing fears of labor activity, issued a decree forbidding strikes on public utilities. By this decree union organizers and workers interfering with the orderly functioning of postal, telephone, telegraph, railroad and other public services, were made liable to eight years' imprisonment. T h e enforcement of this decree was delegated to military tribunals. T h i s sweeping prohibition of strikes aroused vigorous protest, and on April 29 the national congress disapproved the president's decree.* The following day the congress of Guatemala enacted the labor law, which, although less drastic than the anti-strike decree, renders strikes, not only on public utilities but also in private enterprises, practically impossible. T h i s law provides that no strike can be called without notice being given * Exec, decree no. 914 [Monthly Lab. Rev., May and July, 1926 and Pan. Am. Fed. of Lab., Proceedings, 1927, p. 149].

THE

ROLE

OF ORGANIZED

LABOR

185

eight or fifteen days in advance, according to the nature of the enterprise. It also requires that any conflict leading to disruption of work shall be submitted to conciliation by three representatives of each party, and that in the event of failure of the conciliators to reach an agreement the matter must be submitted to an arbitral tribunal. T h e latter is composed of one representative of each party and a third chosen either by the other two members, or, in the event of their failure to agree, by the president of the supreme court of justice. Inasmuch as strikes are forbidden during the processes of conciliation and arbitration and also during the duration of the award, which must be from one to three years, it is evident that they are practically impossible, unless carried on in violation of the labor law. Inspection of labor conditions and intervention in labor disputes is the prerogative and duty of the national labor board, created by the same law as a dependency of the department of public works. 6 In Colombia, also, the possible activities of labor have been limited by legislation. The law of November 19, 1919,® defines a legal strike as a voluntary ceasing of work by a number of workers, causing the suspension of the enterprise, in order to improve the conditions of labor by peaceful means, but proclaims that tumultuous gatherings under the name of a strike yet without legal character shall be subject to the common law. T h e act proclaims that in dealing with their employers strikers cannot be represented by outsiders; and that all who try to create disorder or to disturb the peaceful nature of a strike shall be detained by the authorities. It also provides that if an accord is reached all parties must accept it, with the notable exception of workers who after the lapse of 60 days find their wages insufficient 5 Chap, i x of leg. decree 1434 [Leg. Soc. de Am. Lat., vol. ii, pp. 267-270].

* Leg. Soc. de Am. Lat., vol. ii, pp. 14-17.

186

SOCIAL ASPECTS

OF THE BANANA

INDUSTRY

for personal subsistence. The governmental authorities are required to give sufficient guarantees to persons and property, to prevent or dissolve illegal gatherings, and to protect strike-breakers. Article 1 0 contains the unusual provision that the owner of a business or of an agricultural undertaking cannot shut down without giving at least one month's notice, except in case of his bankruptcy or death or of force majeure, such as fire, flood or shipwreck. In the event of failure to comply with this protective stipulation the employer must pay each of his workers a month's wages. The United Fruit Company, however, escapes this responsibility through the legal exemption of undertakings engaged in the harvesting of fruit, which the law considers of a " transitory " nature. L a w 2 i of October 4, 1920, 7 supplementing this law of 1 9 1 9 , provides that wherever there is a collective conflict which may result in a suspension of work the employees shall choose as their representatives Colombian citizens who have been at least six months in the employ of the establishment concerned, and that the employer or his manager must receive them. If this procedure does not facilitate the settlement of the dispute, the matter must be submitted to conciliation, and, in the event of the failure of conciliation, it may be submitted to arbitration. If the question is arbitrated, the decision must be accepted by both parties ; striking is outlawed during the consideration of the case and for the duration of the award. L a w 83 of November 12, 1923, created the general labor office as a part of the ministry of industries to study labor problems, to secure the observance of labor laws and to intervene in labor conflicts.8 Law 73 of November 15, 1927, amplifying the duties of the general labor office, permits the 7 8

Ibid., pp. 17-22. Ibid., pp. 41, 42.

THE

ROLE

OF ORGANIZED

LABOR

187

director and members of the g o v e r n i n g body of the latter to constitute a labor council to settle disputes referred to it by both parties to a labor conflict.* I n the summer of 1928 reactionary measures were taken by the Colombian government.

These had at least the strong

approval of the United F r u i t Company, as is shown by the f o l l o w i n g official message given out by the company d u r i n g the strike of the f o l l o w i n g D e c e m b e r : 1 0 The existence of the subversive movement which broke out in the Department of Magdalena has long been envisaged by the Colombian Government, a fact which was indicated last summer by the submission to Congress of a message urging legislation empowering the Government to cope with radical and revolutionary activities which might break out in some sections of the republic. Such legislation was enacted then in response to a request of the Colombian President. T h e legislation made it a crime to assemble for any such purpose as the incitement of crime, the provocation or fomentation of strikes, the advocation of insubordination in the army, or the abolition or disavowal of family rights as recognized by the Constitution. 4.

CAUSES OF B A N A N A

STRIKES

D u r i n g the past dozen years a number of strikes have occurred in the banana countries.

widespread O n e o f the

earliest of these w a s carried on jointly by the w o r k e r s o f the U n i t e d F r u i t C o m p a n y ' s Guatemalan banana f a r m s and the workers of the International R a i l w a y s of Central A m e r ica.

In Colombia a number of strikes have been declared

against the United, the strike o f 1928 h a v i n g been the most significant and bitterly contested of

all banana conflicts.

• Art. xi [I. L. O., Leg. Series, 1927, Col.—3]. 10 Nnv York Times, Dec. 9, 1928. For law 69 of Oct. 30, 1928, see I. L. O., Leg. Series, 1928, pt. iii, indexes, p. 33.

x88

SOCIAL

ASPECTS

OF THE BANANA

INDUSTRY

H o n d u r a s h a s been the a r e n a o f s u n d r y s t r i k e s ; those 1931

and 1932 were associated with revolutionary

ments.

S e v e r a l strikes h a v e been declared against the f r u i t

c o m p a n y in the C h i r i q u i d i v i s i o n o n the Pacific coast Panama.

of

moveof

E v e n the L i m o n p r o v i n c e o f C o s t a Rica, h i t h e r t o

u n a c q u a i n t e d w i t h unions, w a s the scene o f direct a c t i o n in A u g u s t and September, 1934. T h e s e strikes w e r e m a s s m o v e m e n t s , caused by g r i e v a n c e s on the part o f the w o r k e r s .

A l t h o u g h f r u i t c o m p a n y repre-

sentatives, d e n y i n g that they h a d received complaints

from

their employees, b l a m e d outside a g i t a t o r s f o r the C o l o m b i a strike o f 1928, 1 1 a n d a l t h o u g h C o s t a R i c a n newspapers, politicians a n d other citizens b r a n d e d the 1 9 3 4 strike a s m e r e l y a political m o v e o n the part o f the c o m m u n i s t party, a s t u d y o f these strikes c o n v i n c e s o n e o f the w i d e s p r e a d d i s c o n t e n t o f the w o r k e r s themselves. T h e g r i e v a n c e s o f s t r i k i n g w o r k e r s h a v e been n u m e r o u s . P r i o r to the w o r l d e c o n o m i c crisis strikers demanded

in-

creases in w a g e s ; since that time they h a v e protested a g a i n s t decreases in w a g e s a n d the l a y i n g off o f thousands o f w o r k ers.

W o r k e r s h a v e also d e m a n d e d that, instead of being p a i d

f o r t n i g h t l y , w i t h a d v a n c e s in the f o r m o f c o m m i s s a r y o r d e r s , t h e y be paid w e e k l y in cash.

I n C o s t a R i c a strikers a s k e d

f o r the supply o f n e c e s s a r y tools a n d the maintenance commissary

prices

at

levels

prevailing

in

local

of

markets.

B o t h in C o s t a R i c a a n d C o l o m b i a better sanitation o f c a m p s a n d added hospital or d i s p e n s a r y facilities were demanded. In C o l o m b i a not only a x m e n w h o clear a w a y the trees o f the j u n g l e but also m a n y k i n d s o f f a r m laborers were h i r e d indirectly t h r o u g h padrones

or f o r e m e n - c o n t r a c t o r s , a sys-

tem to w h i c h the w o r k e r s o b j e c t e d strenuously.

Costa Rican

labor s o u g h t the abolition o f all task w o r k and the substitution o f 11

regular wages

f o r all f a r m laborers.

New York Times, Dec. 9, 1928.

The

recog-

THE

ROLE

OF ORGANIZED

LABOR

189

nition of the union was also an issue in the Costa Rican strike ; the substitution of collective for individual contracts was demanded in Colombia in 1928." The United Fruit Company through technicalities or otherwise has avoided compliance with certain labor laws in some of the Caribbean countries. In Guatemala it has been advancing a large proportion of the workers' pay through commissary orders in spite of the provision of the labor law that no employer shall withhold more than ten per cent of its workers' wages for advances of any kind previously made to them.13 The striking Colombian workers demanded in 1928 that the company comply with the national laws for collective insurance, workmen's compensation, a day of rest in seven, hygienic dwelling places and social hygiene. The company held out especially on the insurance laws, refusing to be responsible for migratory workers who were in its employ only a short time. It should be noted, however, that under these laws companies are not liable for former workers who have left their employ. The United evaded responsibility for many of its workers not merely by hiring labor indirectly through the padrones, but also by inserting in its contracts with the latter the following statement : 1 4 The work must be executed under the entire responsibility of the contractor. . . . All of the details of the work shall be the concern of the contractor, and neither he nor his employees are employees of the United Fruit Company, notwithstanding any stipulation in this contract. 12

Details in Kepner and Soothill, op. cit., pp. 323-35. Rippey, op. cit., gives account of Colombian strike. Demands of Colombian strikers in Sáenz, La Situación Bananera, pp. ix and χ. " D e c r e e 1,434 of April 30, 1926, art. 12 [Leg. Soc. de Am. Lai., vol. ii, p. 262]. 14 Informe de la Comisión Nombrada para Estudiar el Conflicto Surgido entre la U. F. C. y La Cooperativa Bananera Colombiana.

ι go

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

In Costa Rica the strikers demanded an eight-hour day for axmen and a six-hour day for other farm laborers. Other issues in the banana strikes will be considered in relation to the role of private planters. During the past few years workers have sought to obtain special consideration for those who have been laid off the pay rolls. In 1930 the defense committee of the unemployed circulated in the Colombia banana region a leaflet demanding a seven-hour day without reduction in wages f o r those still at work, half wages, free rent, water, light and restaurants for the unemployed, exemption of taxes on articles of primary necessity, the taxing of businesses worth over $3,000 to aid the unemployed, the immediate undertaking of public works financed by forced loans or high taxes, and the suppression of gambling and the sale of distilled liquors. 15 5 . T H E DOUBLE ROLE OF PRIVATE P L A N T E R S

One of the features which distinguishes banana strikes from strikes in other industries is the double role played by private planters. In dealing with fruit companies large landholders employing hundreds of workers, and poor peasants, raising their own bananas, Latin American aristocrats, North American and European growers and Negro immigrants, all have common interests; but in labor disputes they gravitate to opposite camps. They no more constitute a unified social group than would feudal landlords and oppressed peasants. Struggles of workers to secure higher wages and better living conditions, while concentrating upon the fruit company as the largest employer, naturally spread to other employers of farm labor. Especially in Colombia and Costa Rica, where over half of the bananas exported are produced by private planters, the latter as well as the company are » Ibid.

THE ROLE

OF ORGANIZED

LABOR

191

objects of the strikers' wrath. A strike which took place in Colombia in December, 1933, was localized on the plantation of a substantial grower, but would undoubtedly have spread throughout the entire banana zone, had it not been for the conciliation effected by the governor. 1 " Although the 1928 strike was directed against some of the leading Colombian planters as well as against the fruit company, many other planters espoused the cause of the workers because of their resentment at the company's irrigation policy and its opposition to their cooperative enterprises. In Costa Rica many of the poorer planters abetted the workers against the employing planters and company. The confused web of interests was reflected in the workers' demand that the planters unite in a struggle to force the company to raise the banana purchase price to fifty cents per count bunch, to induce the government to prevent the arbitrary rejection of fruit, and to prevail upon congress to reject the Cortés-Chittenden agreement. Agrarian problems, including the peasants' difficulty in securing land, were involved in the Chiriqui unrest of 1932!933One of the causes of the Honduran revolution of 1931, which was accompanied by a strike, was the resentment on the part of the planters and others at the award of irrigation contracts to the fruit companies. The following year planters and workers made common cause against the United, the planters because of a twenty-five per cent reduction in banana purchase prices and the workers because of a twenty per cent reduction in wages. 17 1 9 U. S. For. and Dom. Commerce, Lat. Am. Div., Consul E. W. Magnuson, Labor Unrest in Banana Zone of Magdalena, Colombia, mailed Dec. 20, 1933.

" Kepner and Sootfaill, op. cit., p. 137.

IÇ2

SOCIAL

ASPECTS

OF THE BANANA

INDUSTRY

The independent farmer in bananaland is a fiction. The fruit companies employ four classes of assistants on the land : first, the wage worker ; second, the contract workers, performing given tasks on contract; third, the small planters, selling fruit on long-term contracts which give the company a hold upon their property; and fourth, the large growers, who although themselves employers of labor, are in many ways subject to the will of the great company. One complaint which has been made against the United Fruit Company by planters is that the company pays such relatively high wages that it forces their wage scale up also. Moreover, the company does much more than the planters for the health of the workers. In these respects the worker's welfare is better served by the United than by national and foreign planters. These planters, however, are limited in the wages they can pay and in the living conditions they can offer by the price they receive for their bananas from the company. In the banana regions class consciousness, national consciousness, and race consciousness exist, but not planter consciousness. The banana planters are numerous and, except when bargaining with the company, influential. Their aid is an important asset to whichever side in a labor conflict can enlist their sympathy. 6.

STRIKE

LEADERSHIP

Although the discontent and resentment of workers and peasants are the ultimate sources of labor conflicts, these feelings are sometimes crystallized by labor organizers. And these are the men who provide leadership in the organization of strikes. Labor leadership has varied greatly. Organized labor on the Honduran banana plantations has been for the most part conservative. When radical workers called a small strike

THE ROLE

OF ORGANIZED

LABOR

in 1930, conservative laborites appealed to its members to disavow the move. 1 ® It is difficult to disentangle the forces which were active in the more extensive strikes of 1 9 3 1 and 1932. It appears, however, that although some of the especially active strikers belonged to communistic groups, the large majority of the workers did not, that unionists who were not extremists were involved, and that political revolutionaries (but not economic revolutionaries) enticed many of the workers, especially those who were unemployed, into the ranks of political rebellion. In the winter of 1 9 3 2 - 1 9 3 3 the Panamanian legislature, aroused by reports that the labor unrest on the United's Chiriqui plantations was the result of communistic agitation, sent a special commission to study the situation at first hand. In its report this commission affirmed that the group of uncultured but good workers assuming the impressive title of Federación Sindical Regional de Chiriqui, Partido Comunista de Bananera Sección de la Internacional Comunista, was small and without prestige among the masses, and recommended as a solution of the unrest : i e The executive power should face the agrarian problems in the province of Chiriqui ; it should harken to and attend to the complaints and claims of the country people. It should give them land when they request it, where they can work. Violence and abuse should not be permitted to silence the protests they formulate, for it happens that social justice is very often on the side of the yokel. The Colombian strike of 1928 was a far-reaching mass movement, covering the entire banana district, and aided by planters, merchants and others who were not workers. Even 11 Great Britain, dept. of overseas trade, Economic Conditions in the Republics of Guatemala, Honduras and Nicaragua, Oct., 1930. La Tribuna, Jan. 29, 1933.

Ι94

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chambers of commerce gave support to the strikers because of resentment at the competition offered to local business by the company's commissaries. Newspapers also sympathized with the movement. The mass of the workers demanded a strike in spite of the hesitancy of some of their leaders to act. The strike was conducted by the Unión Sindical del Magdalena, which was affiliated with the national socialist party. This party contained members of varying shades of political and economic opinion, ranging from liberal constitutional reformers to revolutionary radicals. The union's strike committee was also divided into one liberal and two radicals, but with the liberal in control of the strike at first. Many citizens of the region conceived of the movement as political as well as economic, as a protest against the unpopular government in power at the time. No one economic or political group was alone responsible for the strike; it was the outgrowth of discontent on the part of the various elements, both in the masses and in the leadership, united by a common opposition to the company and also to the government. The recent strike in Costa Rica is the only one of these banana strikes which appears to have been dominated throughout by a communist group. In this case the national communist party, led by two congressional deputies, the party newspaper, Trabajo, and the Sindicato de Trabajadores del Atlantico, constituted the driving force of the struggle. The mass of the workers, however, understood little of communism; but they were thoroughly familiar with low wages, high living costs, unemployment and sickness, and they rallied behind those who offered them relief. The composition of the labor force of a given area has an important bearing upon the calling and the prosecution of a strike. The population of Colombia is 7 % Indian, 5%

THE

ROLE

OF ORGANIZED

LABOR

Negro, 50% mestizo, 1 8 % mulatto and 20% white," with the latter assuming the active leadership in national and international affairs. A l l of these groups, however, are Colombian, and they almost exclusively constituted the United's labor force in 1928. W i t h a sense of national unity prevailing, labor solidarity is more easily achieved than is the case when workers are divided into mutually exclusive groups of nationals and foreigners, whites and blacks. Some workers because of national backgrounds or past experiences are more prone to strike than others. Hence at one time a subsidiary of the United hesitated to introduce onto the comparatively undisturbed Pacific slope of Guatemala workers who might have been impregnated with striking proclivities on the Caribbean coast. A number of Nicaraguan laborers were deported from Costa Rica because of their part in the 1934 strike. On the other hand the Panamanian legislative commission denied the rumor current in the winter of 1933 that two hundred and fifty discontented Nicaraguans, living miserably on about one day's work a week around Puerto Armuelles, were the chief troublemakers in the Chiriqui unrest. 21 7 . CONCILIATION A N D SUPPRESSION

Strikes have been preceded by attempts on the part of one side or the other or of governmental authorities to adjust disputes. In the Colombia strike, said to have involved 30,000 workers, the strikers formulated their demands on October 6, 1928, but it was not until October 22 that they were granted an interview by the manager of the company, and even then he refused to consider their complaints. 2 * According to the Colombian law the head of a business enterprise is obliged to meet the delegates of his employees 30 ai aj

Colombia Yearbook, 1927, p. 49; 1925-26, p. 31. Report in La Tribuna, Jan. 29, 1933. Report of Alberto Castrillón, see Rippy, op. cit., p. 185.

igS

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

within twenty-four hours after receiving their request for an interview, but, be it noted, these representatives must be adult Colombians who have been in his employ for at least six months." Late in November representatives of the workers and of the company met with the governor of the province of Magdalena, Dr. Nuñez Roca. The company accepted certain of the workers' demands and made changes in others, but it refused to agree to a fifty per cent increase in pay, weekly payments in cash, and the collective life insurance of its workers. At a second conference the manager of the company agreed to all of the demands except that pertaining to collective insurance; he was unwilling to submit the insurance law to an impartial body for interpretation. 24 Another Colombian labor dispute which occurred during the summer of 1 9 3 1 was terminated by Dr. Miguel Valandia, director of the general labor office. Five hundred dock workers who had been thrown out of work agreed to accept a forty per cent reduction in wages when the company should resume banana shipments in September, and the company agreed to advance some money each week and to provide free meat and bananas to the workers' families. 25 In December, 1933, a widespread strike was averted through the mediation of the governor of Magdalena. A year prior to the world economic crisis the president of Honduras arranged a settlement which for the time being composed differences which threatened to produce a strike in some of the farms of the United and Standard fruit companies in Honduras." 33

Law 78 of Nov. 19, 1919, art. 2, and law 21 of Oct. 4, 1920, art. 2 and art. 3 [Leg. Soc. de Am. Lai., vol. ii, pp. 15, 18]. M Sáenz, La Situación Bananera, pp. viii, ix, and New York Times, Dec. 6, 1928. 25 New York Times, Aug. 2, 1931. 2e Honduras, Secretarla de Fomento, Memoria, 1928-29, pp. 38, 39.

THE

ROLE

OF ORGANIZED

LABOR

The larger strikes have been accompanied by violence. Some strikers have committed acts of sabotage. Workers went wild in Colombia after the military had opened fire and mowed down a crowd in the railway plaza of Ciénaga. During 1 9 3 1 and 1 9 3 2 many Honduran workers, especially among the unemployed, joined the rebel forces of General Ferrara and other disgruntled politicians, but the acts of these rebels should not be imputed to those workers who on farms, docks and railroads struck without violence in protest against reductions in pay. During the extensive strikes in Guatemala, Honduras and Colombia martial law was declared and soldiers were dispatched to the scenes of conflict. In some cases soldiers sympathized and fraternized with strikers, with the result that these soldiers were replaced by more dependable armed forces. 27 In Guatemala, where legal strikes are practically impossible, many workers were killed, imprisoned or deported under the military rule. The Colombia strike was suppressed by the military with terrific bloodshed. The commander of the army estimated that forty strikers were killed and over one hundred wounded; one of the strike leaders estimated that fifteen hundred were killed and three thousand wounded. More reliable estimates range between these two extremes. 28 Radical commentators allege that workers arrested in Honduras in 1930 were tortured in the Y o r o jail and that hideous brutalities were committed by soldiers against strikers in Colombia and elsewhere. They also affirm that the United Fruit Company employs private armed guards not only to protect strike-breakers but also to terrorize peasants and workers. In the 1 9 3 2 strike leaders were seized in " Mundo Obrero, April, 1932. 28

Rippy, op. cit., pp. 183-187.

8

SOCIAL

I9

ASPECTS

OF THE

BANANA

INDUSTRY

Honduras and transported in the company's aeroplane to Salvador." S o m e politicians called for the declaration o f martial law in Costa Rica, and leading citizens proposed the formation o f a fascist band to defend the country against the communists. President Ricardo Jimenez sent soldiers to protect the strike-breakers, and shots were fired with some casualties, including the shooting of one o f the strike leaders. Many arrests were made in Costa R i c a as in other strike areas. President Jimenez, however, refused to declare martial law, explaining his position thus : I cannot use force against ideas. I treated with the Communists because they represented the workers on strike. I, as the President and as a citizen loving justice, cannot silence the Communists. I cannot ignore the laborer—the forgotten man, overlooked in the shadow of humiliation. It is my duty to hear and examine his complaints with justice. T h e same attitude was taken by the Panamanian congressional commission which declared, a f t e r investigating the unrest in the Chiriqui region : In order to maintain due public order the executive power must increase the police force in the province of Chiriqui ; but your commission repeats that this force should not be placed at the service of reaction, that would snuff out social movements with bullets and the jail. Public force should not be an instrument of oppression but rather an instrument of liberty, guaranteeing free play of ideas, open opposition to political doctrines and the development and normal functioning of labor syndicates or political parties. M

For example, ibid. : Castrillón's version of Colombia strike ; also The Daily Worker, July 25, 1929, July 12, 1930; Mundo Obrero, April, 1932. 30

New York Times, Sept. 1, 1934.

THE

ROLE

OF ORGANIZED

LABOR

8. RESULTS OF B A N A N A STRIKES

Some objectives sought by banana workers have been attained through strikes; other objectives have been lost. T h e strike of Guatemalan farm and railroad workers was crushed by the army. In their various struggles the Honduran workers appear to have gained little. The company's agreement to provide quarters and sustenance to the strikers of 1932 was small compensation for the pay cut which the company refused to revoke. 31 O n December 29, 1928, at the conclusion of the Colombian strike, the manager of the United Fruit Company agreed to erect two emergency hospitals, to adopt a weekly pay day and make all payments in cash, to improve the living quarters of the workers, to pay those working on the daily wage basis a minimum of $1.20, $1.50, and $2.00 a day, depending on the location of the work, and to erect a few rural schools. 82 This was something, but it was less than the manager had been willing to concede after the conferences with the governor during the early days of the strike. Had the workers accepted the terms possible at that time they would have gained practically all of their demands; they could have left to the government the enforcement of the collective life-insurance law; and they would not have been victims of a massacre. The bitterness manifested in the strike had more complicated roots than were visible in the workers' statement of grievances. Underlying the issue of collective insurance was the company's refusal to recognize as its own employees men hired by foremen-contractors, a refusal by which it might evade other responsibilities for its workers. Moreover, the uprising " was not merely a strike of the prole41

Christian Science Monitor, Jan. 9, 1932.

" Rippy, op. cit., p. 188.

200

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ASPECTS

OF THE

BANANA

INDUSTRY

tariat ; it was in some measure a peasant revolt against this foreign company for attempting to deprive them of their lands and irrigation water." The summer after the strike Deputy Jorge E . Gaitán, after a personal investigation in the Santa Marta district, precipitated a stormy session in the national congress by presenting what he considered to be " evidence of complicity between the United Fruit Company and the national army in dispossessing native Colombian landowners." So convincing was his criticism that the secretary of war was forced to resign. 3 " The United Fruit Company's reaction to the strike led shortly to a request to the government for permission to introduce ten thousand Jamaican laborers into the Santa Marta banana district. 84 The conciliatory settlement of the strike of 1932, before it had affected many plantations, accomplished most of the workers' objectives at that time. The planters agreed to raise the daily wage for ordinary labor, which during the depression had slumped in some cases to as low as 30 cents, to 49 cents, but not to 80 cents as demanded by the workers. They promised the eight-hour day, fortnightly pay days, the reduction of commissary prices to prevailing market levels, and the reinstatement of the banana cutters' task rate to 3 centavos per stem, from which it had fallen to 2 centavos." Similarly, the agreement reached through conciliation between the strikers and private planters in Costa Rica in 1934 contained a compromise on wages, the minimum rates for ordinary labor being set at cents and 20 cents per hour rather than at 25 cents as asked, and included the workers' demands for an eight-hour day for axmen and six hours for other workers, medical protection, the supply of « Ibid., p. 187. 84

New York Times, April 6, 1929, 6: 5.

38

See supra, rote 16.

THE ROLE

OF ORGANIZED

LABOR

certain tools, w a g e payments in cash, the maintenance of commissary prices at market levels and the recognition of the union.

It also offered certain advantages to the w o r k e r s

not forecast in the formal demands.

Curiously enough the

planters refused the workers' suggestion of a joint effort to induce the United to raise banana purchase prices to 50 cents per count bunch and to obtain governmental protection against the arbitrary rejection of fruit.

T h e agreement also

omitted reference to the workers' demand f o r guarantee of proper compensation for accidents, which is taken care of by the workmen's compensation law. 38 T h e outstanding defect in this settlement is that the manager of the United F r u i t Company would neither participate in the conference nor sign the agreement.

Consequently

some of the workers struck a second time against the company, but without effect. T h e chief result of the banana strikes has been the rise of an organized labor movement a m o n g banana workers. In spite of the varieties of political and economic convictions of leaders and workers, and in spite of divided counsels in regard to strike policies, the w o r k e r s have discovered that they can offset the strength of a mighty corporation and wealthy planters by collective action.

In

Caribbean

countries, which are predominantly agricultural rather than industrial, organized banana w o r k e r s are likely to constitute the spearhead of the labor movement of the future. 9. T H E M E X I C A N G O V E R N M E N T A N D B A N A N A WORKERS

Unlike those Caribbean governments which have been either hostile or lukewarm towards organizations of banana workers, the M e x i c a n government has encouraged and fostered such organizations.

A

f e w years a g o in

Tabasco,

T o m á s Carrido Canabal, at that time governor, and also " Trabajo, San Jos¿, Costa Rica, Sept 2, 1934.

202

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ASPECTS

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INDUSTRY

the national secretary of agriculture, more than doubled the wages of banana workers, turned commissary stores over to the workers to operate without profit, helped workers to buy land, encouraged cooperative enterprises, and practically ended unemployment." Such assistance to small farmers and agricultural laborers is in keeping with the policy which the Mexican government has been following for some time. Reference has already been made to the encouragement which it has given to cooperative organizations among banana planters. In the summer of 1929 a convention was called in Mexico City to consider problems of the banana industry. The roster of the convention included nine federal officials, three representatives of state governments, twenty-two representatives of banana planters, chambers of commerce and exporting companies, and twenty-eight labor delegates. All of the delegates were Mexican citizens, except R. A . Crespi and Patrick O'Hea of the United Fruit Company's Transcontinental Transport Company, John Shields of the Cuyamel Fruit Company and B. J . Parachini of the DiGiorgio Fruit Corporation. Three of the labor delegates represented the Confederación Regional Obrera Mexicana ( C R O M ) , the chief labor organization of the country. The convention remained in session from June 3 to July 6 under the presidency of the secretary of industry, commerce and labor. Among the resolutions passed were those approving organization for both employers and employees ; requiring the execution of collective contracts between the owners of each farm and the major labor group, without prejudice to other workers already employed ; and providing for supplying workers with wooden houses on piles, free medical attention and medicines, firewood, and as good drinking water as provided to the management. Detailed regulations were drawn " New York Times, March 31, I93S-

THE ROLE OF ORGANIZED

LABOR

up for the organization of mixed commissions—farm, district, and national—to settle labor disputes ; and the owners and workers agreed not to carry out a strike or lockout until they should have exhausted these resources of conciliation and submitted the dispute to the decision of a competent tribunal. 38 The representatives of the owners and the workers on about half of the farms concerned were able to agree on the minimum wage — it being in all but one case cited either $2.00 or $2.50 (Mexican). On many farms, however, in the important Tuxtepec and Otatilán zones the owners held out for $2.00 and the workers for $2.50, while in some of the other zones of the country owners insisted on as low as $ 1 . 0 0 or $ 1 . 5 0 , with the workers demanding at least 50 cents more. Considering the difficulty of the situation it was voted to request the secretary of industry to designate a commission representing equally workers and employers to determine wages on these farms. A definite schedule of payments for workers engaged in transportation in certain areas was also drawn up by the convention. A voluntary form of collective contract for the region of the Papaloápam River was approved by the convention. This provides among other matters, including conformity to the resolutions of the convention, that the farm mixed commission representing labor and management shall determine the fitness of the workers for their tasks. The contract limits the amount of hectares to be assigned to one laborer, and prohibits work on holidays and the weekly day of rest, except on special occasions when double pay shall be given. Provision is made for bonuses every six months if production averages over ten bunches per hectare per week. 58 Mexico, Secretaría de Industria, Comercio y Trabajo, Convención de Factores del Cultivo, Industria, Comercio y Transporte del Platano, Mexico City, June 3-July 6, 1929.

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The contract gives the owner the right to determine whether a particular employee shall work for a daily wage or by contract, but then negates this provision by compelling the owner to assign work on the wage basis if the laborer is not satisfied with the task basis. It also provides that a worker on the task basis who does not earn the equivalent of the minimum daily wage, can secure the same by proving that he has been working for eight hours. Only persons who actually work on the farm are considered members of the union for the purpose of the contract. This form for collective contracts, approved by the convention, was signed by 23 delegates including 4 governmental representatives— the rest being about equally divided between employers and workers. Patrick O'Hea, one of the two representatives of the United Fruit Company, signed, but Crespi, the United's manager, did not, nor did the representatives of the Cuyamel and the DiGiorgio interests, nor the delegates of the CROM. At the request of the representatives of the United and DiGiorgio the convention petitioned the government for a reduction of the export tax from 3 cents to 1 cent during the months of greatest productivity. It passed the resolution, interestingly enough, three days before the subcommittee which had been studying the matter reported to the convention recommending that the tax should not be reduced. Superficially labor seemed to win most points in this convention. There was, however, a strong undercurrent running in the opposite direction. One of the assumptions stated in the convocation was that in the formulating of the general basis of a plan with jurisdiction over the entire region occupied by the banana industry, " a precise and inescapable condition " should be the " recognition of the socio-economic conquests already acquired." Some of the

THE ROLE

OF ORGANIZED

LABOR

agreements reached by the convention were not as favorable to labor as was a contract which had been signed previously by the DiGiorgio Fruit Corporation and the Oro Verde union, affiliated with the C R O M . Consequently, the delegate o f this union called the attention of the convention to this inconsistency, affirmed that unions without real authority had been given voice in the assembly, and, with the other C R O M delegates, withdrew from the convention. Thereupon delegates representing other labor unions proposed that the convention should seek a revision of the Oro Verde contract. Delegates of the Vera Cruz union volunteered that their organization would enter into a new contract with DiGiorgio in accordance with the terms of collective contract laid down by the convention. The representative o f DiGiorgio then told the convention that according to the O r o Verde contract his company was compelled to pay wages two or three times as high as other companies were paying, and that the contract was very oppressive upon the company. He declared, however, that any move against the contract must be made in a completely legal manner, and he hesitated to make any move himself. Patrick O ' H e a of the United's Transcontinental declared that the representatives o f the owners must all stand together on this matter since the O r o Verde-DiGiorgio contract had looked towards obtaining the adoption of the same terms throughout the entire banana region. W i t h the C R O M out of the convention, a motion, signed by the unions not affiliated with it, was read, asking that in the assigning of new contracts preference should be given to the unions subscribing to the dispositions approved by the convention. One o f the representatives o f the government spoke in approval o f this as a disciplinary measure. In speaking to the representative of the house o f DiGiorgio, one of the Vera Cruz delegates declared that his group was

2o6

SOCIAL ASPECTS OF THE BANANA INDUSTRY

willing to work under conditions more favorable to DiGiorgio providing the C R O M union did not modify its contract. One wonders why, if this man was truly the delegate of a hostile union, he should suggest that the C R O M might be given a chance to modify its contract and thus to keep the work itself. The following day the delegate of the Vera Cruz syndicate insisted again on the revision of the Oro VerdeDiGiorgio contract. DiGiorgio's representative withdrew from the convention that he might not appear to be interested in the matter. Representatives of the other companies pressed the matter because of its possible effect on them. When the matter was settled, DiGiorgio's representative stated that he feared there might be agrarian disturbances on the DiGiorgio properties. Thus ended the convention to conciliate and reconcile the various groups in the banana industry, with the strongest labor group replaced by more docile elements on some of the banana farms and in the counsels of the convention. In spite of this blow to labor, however, the resolutions are far more favorable to the workers than are the prevailing contracts and general practices of other countries. Subsequently to the convention these resolutions exerted some influence on the banana industry of the country, but they have not been applied in their entirety.

CHAPTER SUMMARY I.

AND

XI

CONCLUSION

SUMMARY

IN 1898 the importation of bananas into the United States was less than 12,000,000 bunches. 1 These were produced mostly by nationals of Caribbean countries and purchased by small competing steamship and exporting companies. During the following generation the banana enterprise was transformed into a highly organized and largely monopolistic system with many economic, political and social ramifications. Most of the 103,000,000 bunches of bananas constituting the world's shipments in 1930 were produced in Caribbean countries and exported to North America and Europe. Practically all of the Central American bananas are shipped by the United except for the Standard's relatively small exportations from Honduras, Nicaragua and the Canal Zone. T h e United also handles approximately 8 5 % of Colombia's banana exports. 2 Only in Mexico and Jamaica is there much competition with or governmental control o f the United's banana undertakings. The fecundity of the banana, the fertility of the Caribbean littoral, the initial investments o f North American capital, efficient management and the application of improved techniques, have been important factors in this rapid development. Honduran farmers clearing the jungle, Cap1

Adams, op. cit., p. 69.

Consul E . W . Magnuson in report on The Banana Colombia, mailed Sept. 19, 1933. See also supra, ch. iii. 1

Industry 207

of

2O8

SOCIAL ASPECTS OF THE BANANA

INDUSTRY

tain Lorenzo D. Baker discovering a market for bananas, President Guardia of Costa Rica visualizing an interoceanic railway, Minor C. Keith planting bananas to provide freight f o r a railroad, Andrew W . Preston organizing a strong company, Jamaican Negroes toiling under the tropical sun, Central American planters and workers risking capital and lives in a pioneer enterprise, politicians sacrificing future freedom for immediate advantages—these and a host of other individuals of many classes, nationalities, and races laid the foundation of the modern banana industry. Like all agricultural undertakings, the banana enterprise is based upon land. The attainment of an international domain of over three and a half million acres by the largest of the fruit companies and of lesser domains by other companies was made possible by national policies under which lands were given away or sold at exceedingly low prices. The expectations of those who initiated these policies have been only partially fulfilled. Much national domain was made available through denouncement proceedings in order to open up the country and to encourage independent homesteaders. The fruit companies opened up the land, but reduced farmers to a dependent status, changing many of them into manual laborers. Other large extensions of national domain were given away supposedly to subsidize transportation systems needed by the countries. 3 Although vast networks of rails have been laid they have merely served banana zones, failing to provide the transportation facilities most essential to the nations. Owing to the weakness of the divided republics of Central America foreign capitalists were able to strike hard bargains at the outset and to evade obligations as the years went on. 4 ' Cf. supra, ch. iv. *Cf. Kepner and Soothill, op. cit., pp. 43-51, 1 0 2 - 1 1 2 , 123-129, 140-178, 228-255.

SUMMARY

AND

CONCLUSION

209

I n some respects a banana division, whether belonging to the United or to one of the other large fruit companies, resembles a vast feudal estate. Y e t it is essentially modern rather than medieval. D r a b and artificial banana settlements are to a large extent counterparts o f factory towns, both in physical characteristics and in social interaction. W i t h long lines of standardized labor camps, smoky railroad yards, noisy machine shops and trim business headquarters, they abound in material activity but lack social solidarity, thus resembling the boom towns and—as banana cultivations deteriorate—the decadent villages which marked the industrial expansion of the last century. Practically all power is centered in the great corporation. Banana plantations, banana purchases, railroads, steamships, wharves, radio, public utilities, leading stores, real estate holdings and English-speaking schools are directed by the same unified authority. Local and national governments, supposedly independent, are much influenced by the banana dictators. W r o t e the special commission o f the Colombian congress after listening to the complaints o f the Santa Marta workers, planters and other citizens : 5 Ordinarily, among government officials large and small, there are many banana growers who have received loans from the United Fruit Company and whose crops are pledged for payments; functionaries who do not succeed in living becomingly on their salaries and who receive extra salaries, gifts or other outside perquisites; government agents who aspire to become property-holders and thus emancipate themselves from the bureaucracy and who use the privileges of their position to forward the transformation desired; employees who weigh the potentialities of the forces at play, in order to assume attitudes and take measures which should be founded solely on the direct interests of the public good. 0

Informe,

cited in note 14 of ch. χ, supra.

210

SOCIAL

ASPECTS

OF THE

BANANA

INDUSTRY

T h i s all-pervading power is exerted by a foreign corporation which has transformed sections of Caribbean nations into quasi-foreign settlements. Much of the hostility to the United Fruit Company comes f r o m citizens of these nations who, although welcoming foreign capital, resent the curbing of national sovereignty when this economic giant seeks concessionary favors, acts independently of national authority or obtains what amounts to administrative and political control in banana regions. It is evident [wrote two leading Costa Ricans in 1929] β . . . that the fruit company, besides having taken possession of a large portion of the Atlantic Zone, is exercising over it a predominance and control such as not even the government of the republic itself exercises; there it is the company which commands. T h e one large group which has refused to bow the knee to the foreign capitalists is organized labor. The company has objected to " interference " on the part of outside organizers, and, as noted in the last chapter, a number of devastating strikes, several of which were accompanied by much brutality and bloodshed, have resulted. Organized banana workers bid fair to be the vanguard of the Caribbean labor movement in the days ahead. Private planters are controlled by the fruit company through banana purchase contracts, which prevent them from selling fruit to competing exporters who might better the low prices they are receiving, 7 but which do not prevent the company from increasing the rigidity of its inspections when it desires less fruit. A f t e r the contracts lapse planters have • J. Garcia Monge and M. A. Zumbado R. in Sociedad Económica de Amigos del País, Estudio, p. 7. Cf. Catarino Castro S., Honduras en la Primera Centuria, pp. 45-47. 7

Cf. supra, ch. v.

SUMMARY

AND

CONCLUSION

211

no assurance that they will be renewed; if they are not renewed the planters' investments are lost, as no other purchaser has been able to establish itself in the company's spheres of influence. F r o m the survey of labor conditions in the last five chapters three facts stand out clearly. ( ι ) Where the medical department is still active, the menace of tropical fevers is much less than it was a generation ago. ( 2 ) Prior to the depression the wages of banana workers were as a rule higher than the wages of coffee workers—much higher than the wages paid on Guatemalan fincas. ( 3 ) With these wages banana workers bought more of the products of material civilization than other w o j k e r s purchased in the interior. But from these three facts one can not unhesitatingly leap to the conclusion that those who labor on banana plantations are necessarily " better off " , all values considered, than they would have been had they remained in their upland homes. A balance sheet of the workers' profit and loss in terms of human values cannot be drawn up without knowledge of many items difficult to ascertain and of subjective factors which cannot be measured objectively. T h e reduction of wages in kind; high prices paid for imported goods; the ravages of the still active anopheles mosquito; bones broken in collisions between carelessly driven motorcars; the lack of provision f o r unemployment and old age; the clash of interest between workers of different nations and races; the loss of income and sometimes of life in banana strikes; the inner conflict in each worker when transplanted into a new material and social environment; the inferior status of all who are subjected to the control of the dominant company; the destruction of old cultural values and the severing of home ties—these are some of the conditions which cast g r a y or black shadows across the bright portraits of banana workers painted by propagandist writers.

212

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ASPECTS

OF THE

BANANA

INDUSTRY

There is no warrant to assume that if the United Fruit Company had not employed thousands of workers in the Caribbean during the last generation no other company would have done so. T h e United's power to circumvent the establishment of competitors in its neighborhood prevents workers from receiving wages raised by competition for their services. In banana districts there is no other large employer of labor, since the fruit companies operate the railroads, wharves and other enterprises employing labor. In the Cuyamel and Standard spheres of influence in Honduras a shoe factory, a brewery, a cigarette factory and other small establishments exist, but these are operated by the resident fruit company. Central American workers cannot benefit from the condition which existed in Cuba a few years ago when competition between cane growers caused wages to be raised. 8 Whatever advantages in wages workers had when it was necessary to attract them from Caribbean islands and Central American plateaus to the banana districts, are prejudiced when the company begins retrenching and the labor supply is greater than the demand. This situation accompanies the exhaustion of the land and the spread of the Panama disease to an extent. Under such conditions, however, the plight of the workers is not as severe as that of the private planters, since the workers can betake themselves to other districts while the planters cannot move their lands. T h e chief effect upon the workers is to make them increasingly migratory. Thousands of workers have become unemployed and others have suffered severe reductions in pay during the world economic crisis. In some cases, as noted in Costa Rica, the wages of banana workers, formerly higher than those which prevailed for agricultural laborers in the interior, were re8

United Fruit Co., medical department, Annual Report, 1930, p. 49.

SUMMARY

AND

CONCLUSION

213

duced to the level of the latter." When unemployed the banana worker who owns no property and but few personal effects is impoverished and becomes a drifter and a disturbing element in the nation, whereas in the interior an agricultural laborer settled permanently, owning a shelter and a little land with a cow, pigs and chickens is able to feed his family and remains a stable force in his country. The fruit company offers the world economic crisis as the excuse for its retrenchments. We have seen, however, that between 1929 and 1 9 3 3 , when all but one of the outstanding rivals of the United ceased their independent existence and the Standard concluded certain working agreements with the United, the United States' banana imports declined from 65,134,000 bunches to 39,613,000 bunches, and the wholesale price of bananas remained at almost pre-depression levels. It would appear that this business decline resulted from the deliberate limitations of the supply of bananas rather than from any decreased tendency on the part of the people of the United States to relish this wholesome fruit. 1 0 In any case, as a consequence of this reduction of imports, consumers have been forced to pay relatively higher prices for bananas than for home-grown foodstuffs and vast numbers of Caribbean workers and planters have been idle. 2.

CONCLUSION

Prior to the depression the company could easily have afforded to share more of its gains with the planters and workers who had contributed largely to its success. In 1929 it paid $28,420,060 in salaries and wages to officials and workers throughout the Caribbean, and it dispensed $ 1 3 , 999,900 for the purchase of fruit and sugar cane. A f t e r • Cf. supra, eh. vii, sec. 5. 10

Kepner and Soothill in The Banana Empire, pp. 64-76, 130-133, 180, 263-285, 304-306, 3 1 1 - 3 1 4 , point out the tendency of monopoly to restrict supply. Cf. also rupra, p. 69.

SOCIAL

214

ASPECTS

OF THE

BANANA

INDUSTRY

doing this and making an allowance f o r estimated taxes its net profit was $ 1 7 , 8 0 2 , 9 9 2 . Of this amount $ 1 0 , 3 6 9 , 4 2 9 was paid to stockholders in cash dividends which amounted to 4 % on the basis of the stock outstanding at the time and to 2 0 % and to 2 9 . 2 % on the bases prevailing in 1 9 2 0 and in 1 9 0 7 , prior to distributions of stock dividends and the 2 ι / 2 to ι split-up. In the same year, 1929, it added $ 7 , 4 3 3 , 5 6 3 to its $ 1 8 7 , 8 8 5 , 3 5 9 capital stock and surplus, all but $64,365,4 1 9 of which had been accumulated as surplus in the past. x

9 3 3 when many concerns were barely earning a new dollar f o r an old one its net income amounted to $9,240,942. E v e n to-day it could afford to pay somewhat higher wages and purchase prices than it is paying, although such procedure probably would not be welcomed by its stockholders. T h e company has practised rigid economy, especially since Samuel Zemurray came into power. T h i s has included the slashing of the working force in the interests of profits for stockholders. Less economy and greater consideration for workers, who have been encouraged to leave their distant homes and now are stranded, would be an enlightened policy and one which would probably redound to the advantage of the company in the long run. Such a policy would include responsibility f o r workers hired indirectly 1 1 and some help f o r those who are unemployed because of age, sickness or the company's retrenchments. The United Fruit Company has received considerable praise f o r its health work. Much of this praise is deserved; its hospitals are superior to most medical establishments in the Caribbean area and it has greatly reduced tropical diseases. It has done much more f o r the health of its workers than the governments of Guatemala and Honduras have done f o r their own people. 11 Cf. supra, ch. χ, sec. 4, dealing with attempt to evade responsibility f o r workers hired by Colombian foremen-contractors.

SUMMARY AND

CONCLUSION

215

Since, however, its medical department is essential to its business enterprise, it might well bear the expense itself instead o f deducting 2 % hospital dues from the wages o f its workers. I f , on the other hand, it is to continue to make these deductions it should not merely treat acute ailments but also carry the workers to complete recovery, paying wages or making provision for their families during times o f forced unemployment. It might in healthy regions open colonies for workers who are convalescing after attacks of malaria, and who now either return to the interior to be charges on inland communities, in some cases infecting their neighbors, or return to work while still weak. I f such action were supplemented by more thorough sanitation and by a determined effort t o make workers' camps mosquito-proof, the malarial scourge would be greatly reduced in the future. T h e United F r u i t Company has made contributions to tropical agriculture through its research laboratories and experimental farms. It might sponsor equally important social researches and experimentation in its settlements where peoples o f many cultural and racial backgrounds are intermingled. T h e decline o f ancient cultures would not be socially detrimental if something new and positive were developed in their places. Nor would the mingling o f d i f ferent racial, national and class groups be disruptive if they could mingle with mutual appreciation and good will. A company which creates the foundation for what we have called banana communities through its economic enterprises might facilitate the development o f that social solidarity which is necessary if these economic workshops are to become genuine communities. Something is being done in this regard through the opening o f club houses and the encouragement of athletic activities, but these do not reach the entire rank and file o f the workers. Leisure time in banana regions is a great void.

2i6

SOCIAL ASPECTS OF THE BANANA

INDUSTRY

Intelligent community workers, preferably of Caribbean nationalities, might lead in organizing entertainment and other communal activities. Education is needed greatly— not merely English-speaking schools for North American and Jamaican children, but Spanish-speaking schools integrated with the public school systems of the several nations. Adult education might help individuals to adjust themselves to their new physical environment and to obtain a better understanding both of their own ideals and traditions and of contributions made by other peoples. It would probably be difficult to interest banana workers and their families in such use of leisure time, but the government of Mexico has proved that this is possible with understanding leadership. Personalities are even more important than programs. By continuing to encourage supervisors and other officials who are simpático and interested in the welfare of their workers, the company can do much to cement the motley elements in its divisions into cohesive communities. Further advances can be made by greater use of the Spanish language and by the advancement of national workers. The success of democracy in the Caribbean depends in large measure upon such associations as planters' and workers' cooperatives, labor unions and national governments. Jamaican peasants united in their own producers' association 12 are more self-respecting and better trained for citizenship than are Jamaican workers who are mere cogs in the banana machine in Central America. Santa Marta longshoremen trying to organize a cooperative housing association 1 3 may lack efficiency and fail economically but they receive experience in the art of self-government. Mexican workers may have made a leap in the dark when they proposed to the 12 ia

See supra, ch. ν, sec. 7, and Kepner, op. cit., ch. xi, sections 3 and 4.

The organization of La Sociedad Constructora del Barrio Obrero de Santa Marta is reported in the Informe mentioned in note 5 supra.

SUMMARY

AND

CONCLUSION

217

United that they take charge of all harvesting and transportation operations, but it was a leap forward. Labor unions in general are not perfect and some of their demands may be unreasonable, but upon them depends the future welfare of the workers. The success of self-government and national welfare in the Caribbean is linked in large measure with the development of these self-governing associations. The final test of the United Fruit Company's interest in Caribbean nations is found in its attitude towards these organized groups. If it were to encourage cooperative organizations among both planters and workers and to deal willingly with labor unions, it would contribute much to social solidarity and democratic development, and, in the end, to its own prestige in the Caribbean region. Outside organizers who are feared by many corporations are needed by workers who lack the training and power to help themselves. These " agitators " would be less disturbing influences if companies were willing to listen to their complaints and if just grievances such as those considered in the last chapter were removed by the companies themselves or through conciliation. Most essential of all is cooperation with national governments. A company which makes its profits from investments in foreign lands should accept less profits rather than frustrate the national will through technical loopholes, economic pressure, political intrigue, the employment of undercover agents or illegal acts. Not concessionary privileges but a contribution to the social policies of Caribbean nations should be the goal of an enlightened corporation in the future. Caribbean governments and conservative labor organizations, anxious to prevent the spread of communistic and other radical ideas, should themselves sponsor the rights and interests of banana workers more effectively, thus removing the discontent out of which communism grows. The labor

2i8

SOCIAL ASPECTS OF THE BANANA

INDUSTRY

codes which are now pending in several national legislatures should be considered carefully, amended where necessary, passed and enforced. Colombia has ratified twenty-four o f the conventions of the International Labor Conference. Mexico has promoted cooperative organizations and developed procedures of collaboration between employees and organized workers. Jamaica is outstanding in aiding materially its producers' associations. 14 Central American governments have an opportunity through social legislation and the encouragement of unionization to advance the welfare of their workers in the future. All consumers of bananas and all citizens of the United States are affected, whether they realize it or not, by the methods employed in the quest for the banana. Great corporations operating abroad are visible symbols o f their homeland; their attitudes and acts increase or decrease international amity. T h e welfare of the worker who harvests the food we eat is our concern, as also is the success of planters and other citizens of our neighbor republics. Private endeavor, public opinion and governmental action should unite to prevent the exploitation o f Caribbean peoples and to aid them in the achievement of greater material and social progress. 14

See supra, eh. vi, sec. I and ch. ν, sec. 7.

BIBLIOGRAPHY The following publications are listed for the convenience of the reader when using the footnotes. A more comprehensive bibliography of works relating to the Caribbean region is given in Jones, Caribbean Backgrounds and Prospects. Additional sources concerning the fruit companies are presented in Kepner and Soothill, The Banana Empire. Adams, Frederick Upham, Conquest of the Tropics, New York, 1914, 368 p. Argueta, Ernesto, Address on Honduras, Washington, 1930, 23 p. Beats, Carleton, Banana Gold, Philadelphia and London, 1932, 367 p. Bitter, Wilhelm, Die Eroberung Mittelamerikas durch den Bananentrust, Braunschweig (Westermann), Germany, 1921, 145 p. Buell, Raymond Leslie, The Central Americas (Foreign Policy Association, pamphlet, no. 69, series 1930-31, December, 1930), New York, 1930, 31 P· -, The United States and Central American Revolutions (Foreign Policy Reports, vol. vii, no. 10, July 22, 1931), New York, 1931, 26 p. , The United States and Central American Stability (Foreign Policy Reports, vol. vii, no. 9, July 8, 1931), New York, 1931, 26 p. Castro Quesada, Rafael, Ley sobre Reparación por Accidentes del Trabajo, con Jw Reglamento, Tarifa Médica y Catálogo de mecanismos destinados a impedir los Accidentes, San José, 1927, 54 p. Castro Serrano, Catarino, Honduras en la Primera Centuria, Tegucigalpa, 1921. Colombia, Diario Oficial, Bogotá. , Informe de la Comisión Nombrada para Estudiar el Conflicto Surgido entre la United Fruit Company y la Cooperativa Bananera Colombiana, Bogotá, 1930, 33 p. , Colombia Yearbook (by Martinez, Abraham), 1925-1926, 1927, New York, 310 and 477 P· Committee cm Cultural Relations with Latin America, The Seminar in Mexico, 1929 (multigraphed report), New York, 1929. Cooperativa Bananera Costarricense, Trabajos y Opiniones sobre ¡as Cuestiones Agraria y Ferrocarrilera, en relación con los Concesionarios Extranjeros en Costa Rica, San José, 1928, 192 p. Costa Rica, La Gaceta - Diario Oficial, San José. , Oficina Nacional del Censo, Anuario Estadístico, 1928, 1929, San José, about 600 p. each. 219

220

BIBLIOGRAPHY

, Estadística Vital (1906-1925), San José, 1927, 87 p. , Secretaría de Educación Pública, Memoria, 1928, San José, 788 p. , Secretaria de Gobernación y Policía, Memoria, 192&, 1929, 1930, San José, about 480 p. each. , Secretaria de Salubridad Pública y Protección Social, Memoria, 1928, San José, 227 p. Council of the Corporation of Foreign Bondholders, Annual Report, 1929, London. Council on Inter-American Relations, Inc., bulletin, no. IS, October 19, 1934, New York, 1934. Cox, Isaac Joslin, Nicaragua and the Uttited States, 1909-1927 (World Peace Foundation pamphlets, vol. x, no. 7), Boston, 1927, 190 p. Crowther, Samuel, The Romance and Rise of the American Tropics, New Y o r k , 1929, 390 p. Cundall, Frank, The Handbook of Jamaica (published annually), London and Kingston. , Jamaica in 1922, London. Cutter, Victor M., articles in Annals of the American Academy of Political and Social Science, July, 1927; The Colonist, February, 1929; Economic Geography, October, 1926; Latin America Magazine, May, 1928. , Statement to Stockholders, 1930-31, Boston, 1930 and 1931. Deeks, W . E., Malaria, Its Cause—Prevention and Cure, Boston, 1925, 30 P· Dunn, Robert W., American Foreign Investments, New York, 1926, 421 p. Fawcett, William, The Banana; Its Cultivation, Distribution and Commercial Uses, London, 1913, 287 p. Franck, Harry Alverson, Roaming Through the ¡Vest Indies, New York, 1920, 486 p. Great Britain, Department of Overseas Trade, Economic Conditions in Mexico, November, 1933, London. , Economic Conditions in the Republics of Guatemala, Honduras and Nicaragua, October, 1930, London. , Imperial Institute, bulletin, vol. xxii, no. 3, The Banana and Its Cultivation with Special Reference to the British Empire, London, 1924. , The Yearbook of the Bermudas, the Bahamas, British Guiana, British Honduras and the British West Indies, 1933, London, 338 p. Guatemala, Dirección General de Estadística, Informe y Cuadros, 1928, Guatemala, 112 p. , Ministerio de Fomento, Documentos Relativos al Ferrocarril del Norte, Guatemala, 1912, 23 p. , Secretaria de Agricultura, Memoria, 1929, Guatemala, 290 p.

BIBLIOGRAPHY

221

, Secretaria de Gobernación y Justicia, Leyes Vigentes (Coleccionadas por Rosendo P. Mendez), Guatemala, 1927, 653 p. Güell, Tomás Soley, Historia Monetaria de Costa Rica, San José, 1926, 288 p. Honduras, Boletín Legislativo (legislative record). Tegucigalpa. , Compilación de las Leyes de Hacienda de la República de Honduras de 1866 a 1902, Tegucigalpa, 1902, 1,097 p. , Constitución Política de la República de Honduras, Tegucigalpa, 1924, 238 p. , La Gaceta (official gazette), Tegucigalpa. , Guia de Agrimensores (coleccionadas por Antonio R. Vailejo), Tegucigalpa, 1912. , Ley Agraria y sus Reformas (in Códigos, Tegucigalpa, 1912). , Secretaría de Fomento, Memoria, 1928-1929, Tegucigalpa. Howland, Charles P., Survey of American Foreign Relations, New Haven, 1929, 535 p. International Labour Office, Industrial and Labour Information (serial publication), Geneva. , International Labour Review, Geneva. , Legislative Series (serial publication), Geneva. , Legislación Social de America Latina, 2 volumes, Geneva, 1928 and 1929, 366 p. and 645 p. Jamaica Banana Producers' Association, Ltd., Banana News, Kingston. James, Herman G., and Martin, Percy Α., The Republics of Latin America, New York and London, 1923, 533 p. Jantha Plantations Company, Do You IVant a Home and an Income for Lifef Opportunity is Now Knocking at Your Door. Let Him In, Pittsburgh, undated, 44 p. Jenks, Leland Hamilton, Our Cuban Colony, A Study in Sugar, New York, 1928, 341 p. Jones, Chester Lloyd, Caribbean Backgrounds and Prospects, D. Appleton-Century Company, New York and London, 1931, 354 p. Kepner, Charles David, Jr., " The Banana Industry in the Caribbean " (in Wilgus, A. Curtis, Modern Hispanic America, Washington, 1933. 630 p.). Kepner and Soothill, J a y Henry, The Banana Empire, A Case Study in Economic Imperialism, New York, 1936, 388 p. Lahee, Arnold W., Our Competitors and Markets, An Introduction to Foreign Trade, New York, 1924, 477 p. Long, W. Rodney, Railways of Central America and the West Indies (United States Department of Commerce, Bureau of Foreign and Domestic Commerce, Trade Promotion Series, no. 5), Washington, 1925, 376 p.

222

BIBLIOGRAPHY

Maleady, Thomas J., State of the Banana Industry in Costa Rica (voluntary, unofficial report, September, 1929), Washington, 1929. Mexico, Secretaría de Agricultura y Fomento, Dirección General de Agricultura y Ganadería, Boletín Mensual del Departamento de Economía y Estadística, nos. 24, 33, 53, 54 and 70, Mexico. , Secretaria de Industria, Comercio y Trabajo, Departamento de Trabajo, Convención de Factores del Ctdtivo, Industria, Comercio y Transporte del Platano, Mexico, June 3-July 6, 1929, Mexico, 1930, 144 p. Miner, William Harvey, The Story of a Trip to the Tropics, Sioux Falls, 1915. Moody's Industrials. Munro, Dana G., The Five Republics of Central America, New York, 1918, 332 P· Pan-American Federation of Labor, Reports of the proceedings of its congresses in 1921, 1924 and 1927, Washington, about 140 p. each. Pan American Union Bulletins. Reynolds, Philip Keep, The Banana, Its History, Cultivation and Place among Staple Foods, Boston and New York, 1927, 181 p. , The Story of the Banana, Boston, 1931, 40 p. Rippy, J . Fred, The Capitalists and Colombia, New York, 1931, 256 p. Robertson, William Spence, History of the Latin-American Nations, New York and London, 1925, 630 p. Ruhl, Arthur J., The Central Americans, Adventures and Impressions between Mexico and Panama, New York and London, 1928, 284 p. Rung, Richard, Die Bananenkultur (No. 169 in Petermann, Geographische Mitteilungen), Gotha, 1911, 117 p. Sáenz, Alfredo, Contratos y Actuaciones de las Compañías del Ferrocarril de Costa Rica, la Northern Railway Company y la United Fruit Company, en Costa Rica, San José, 1929, 478 p. , Informe y Documentación Legal, San José, 1926, 75 p. , La Situación Bananera en Los Países del Caribe, San José, 1928, 16s p. Slade, William F., The Federation of Central America. Privately printed, Worcester, Mass., 1917, Pub. Journal of Race Development, vol. 8, PP- 79-'50 and 204-275, Worcester, Mass. Sociedad Económica de Amigos del Pais, Estudio relativo a los Contratos Bananeros celebrados entre el Gobierno de Costa Rica y Mr. M. M. Marsh y la United Fruii Company, San José, 1929, 33 p. Thomson, Charles Α., News Letters on the Fellowship of Reconciliation in Central America, 1929, 1930, about 6 p. each. United Fruit Company, Annual reports, 1899-1934, Boston, 1900-1935, about 16 p. each.

223

BIBLIOGRAPHY

, Medical department, Annual reports, 1912, 1930, 1931, about 300 p. each. , Uni fruit co (company m a g a z i n e ) . United States, Congressional Record; Congressional h e a r i n g s ; and consular reports, both printed and in manuscript. , Department of Labor, Bureau of L a b o r Statistics, Monthly Labor Rcvieiv, Washington. , Workmen's Compensation Legislation of the Latin American Countries, Bulletin of the U . S. Bureau of L a b o r Statistics, N o . 529, December, 1930, Washington, 307 p. -, Department of Commerce, Bureau of F o r e i g n and Domestic C o m merce, Foreign Commerce Yearbook, 1932, 1933, 1934, W a s h i n g t o n , about 380 p. each. , Statistical

Abstract

of the United

States,

1934, W a s h i n g t o n , 1934,

791 ΡWilliams, John L., The Rise of the Banana Industry and Its Influence on Caribbean Countries ( C l a r k University master's dissertation, in manuscript), Worcester, 1925, 125 p. NEWSPAPERS

AND

PERIODICALS

In addition to newspapers and magazines of the United States, and to the Central American official gazettes already listed, the f o l l o w i n g Latin American journals are quoted. Boletín de la Camaro de Comercio de Honduras, Tegucigalpa. El Ecuador Comercial (commercial periodical). Guatemala Agrícola ( ó r g a n o de la Confederación de las Asociaciones A g r í c o l a s de la República), Guatemala. El Nacional (local newspaper), San P e d r o Sula, Honduras. Trabajo ( o r g a n of the communist party of Costa R i c a ) , San José. La Tribuna (independent daily of Costa R i c a ) , S a n José. El Universal ( a leading newspaper of M e x i c o ) , M e x i c o City.

INDEX Adams, F. U., 25, 36η, 48η, 49η aeroplane, hospital service, 1 1 6 ; in strike, 198; transportation, 76 A f r i c a , potential banana lands, 63 Almirante division, decline, 65 ; prosperity, 49 ; strike, 180 Altschul, Francisco, 56η American Banana Co., 43, 49η American Fruit and Steamship Corporation, 68 Atlantic Fruit Co., compact with United, 48; in Nicaragua, 56, 57n; receivership, 68; thwarted by United, 51, 83η Argentine banana market, 64 Bahama Islands, banana industry of, 35 Baker, Captain L. D., 36 balsa, 20, 21 banana, bunches per acre, 63, 65, 94 ; nature of, 27, 140-1 ; varieties o f , red, 35 ; yellow, Cavendish, 63, 69; Gros Michel, 35; Laca tans, 20 banana communities, dominated by fruit company, 88-9, 105 ; transitory, 89-91 ; social conditions, 157-73 banana cultivations, expansion and abandonment, 47-64 Banana Empire, The, 7, 8, 23ra, 25, 33η, 49η, son, 51η, 53η, 55η, 56η, 59η. άιη, 7θη, 76, 76η, 88, 93. ι°ο, ΐ02η, Ι04Π, 107η, ιβ9> ΐ9ΐ> 2θ8, 213, 2 ΐ 6 banana exports, table of, 67 ; also, Brazil, 65-6; Canary Islands, 69; Costa Rica, 39, 50 ; Ecuador, 65 ; Haiti, 68, 69; Honduras, 103; Jamaica, 47-8; Mexico, 57-8; Nicaragua, 55 ; total, 67-9,87, 207 banana imports, U . S., 69, 207 banana industry, expansion of, 4669; origin of, 35-9, 102-4; sociological effects of, 157-77 ;

techniques of, 15-6, 25-8, 40-1, 49, 63, 87, 96, 100 banana markets, 35, 39, 43, 63-5, 68-9, 108 Banana News, 108 banana production, cost of, 96-8; hazards o f , 16, 40, 6on ; soil required for, 27-8 banana purchase prices, 93, 98-9, 101-3, 107-8 banana rejections, 16, 85, 94-5, 108 banana wholesale prices, 69 Barrios, Justo Rufino, 30 Barrios, Puerto, 52, 168 Bayer, Henry, and Co., 42 Bay Islands, 32, 35, 103-4 Belize Royal Mail and Central American Steamship Company, 42 Bitter, W „ 48η, i o i n Bluefields Steamship Co., 42, 55-6 Bocas del Toro, Panama, 39, 112 Boston Fruit Co., 36-7, 41, 45-7, 52-3 Bragman's Bluff Lumber Co., 56, 82 Brazil, banana industry of, 64-5, 69 British Honduras, 32; banana industry o f , 55, 103 ; wages in, 137 Bryan-Chamorro treaty, 31-2 BuelL, R. L., 31, 31η., i o i n Cabrera, Estrada, 131η, i 8 i Cacao, 17, 19, 20, 65, 91 Canadian market, 25, 69 Canal Zone, banana industry of, 68 Canary Islands, banana industry o f , 35, 63, 67, 68n Carias Andino, Tiburcio, 75 Caribbean coast, 27-8, 32, 38, 46, 51, 53, 61 Caribs, 28, 110-1, 158, 195 Central America, geography of, 28 ; history of, 29-35 ; Jamaica compared with, 47; social legislation retarded in, 110 Central American Court of Justice, 31 225

226

INDEX

Central American Federation of Labor, 181-2 Central Americans, culture conflicts of, 159-64; heterogeneity of, 33-4, 159; shun coast, 124 Chile, banana industry of, 65 Chiriqui Land Co., 61, 65, cost of living, 135; labor relations of, 141, 179, 188, 193, 195, 198; purchase of lands, 82; wages paid, 127, 175 coffee, importance of, 59; see also cost of living, planters, wages, workers Colombia, banana industry of, 41-2, 48-9, 93, 98η, io8; banana exports of, 67; collective insurance, 155-6; cost of living in, 135; foremen-contractors, 188-9; irrigation in, 49, 108, 191 ; land, cost of, 96; minimum wage law, 138; one day of rest in seven, 140; population, composition of, 194-51 social legislation of, 10910; strikes and strike regulations, 185-201 ; wages in, 47, 1267, 131 ; workmen's compensation, 147-51 Colombia Land Co., 39 commissary orders, 134η, 145, i88; illegal, 189 commissary stores, 18, 101, 134; prices of, 136-7, 200; standard of living and, 161 Committee on Cultural Relations with Latin America, 7, 70η communism, 182-3, 188, 193, 217-8 community organization, 215-6 competition, early, 40. 49, 54, 102-4; in Honduras, 54; in Jamaica, 48, 101-2; present condition of, 68 concessions, 25, 33, 109; Costa Rica, 51-2, 71-2; Guatemala, 52, 141-2; Honduras, 54, 62, 74-6; Nicaragua, 57; and labor laws, 109, 1412; race restrictions in, 171 conciliation, 186-7, 195-6, 202-3 Confederación! Regional Obrera Mexicana, 181, 202, 204-6 consumers' interests, 24, 69, 87, 213 contracts, banana purchase, 93-5 ; power over planters, 100-4 cooperatives of banana planters, 51, 78η, 92, io6-8, 216

Cortés-Chittenden contract, 51, 62, 99. 191 Costa Rica, banana industry of, 39, 41-2,

50-2, 62, 65, 93-100.

123;

banana exports of, 67: banana production, cost of. 95-8 ; banana purchase prices, 93, 99; cacao, production of, 20; and Central American unity, 31, 34; characteristics of, 34, 35, 78, 164; education, 34, 164, 167 ; eight hour day, 138-40; health problems, 11923; lands, 71-2, 96; minimum wage law, 138; Pacific coast, 28, 62, 83 ; race relations in, 160, 168, 170-1 ; railroads, 37-9, 177-8; strikes, 180, 188, 190-1, 194-5, 198, 200-1; vital statistics, 118-9, 163; workmen's compensation, 147-56 Costa Rica Railway, 71-2 cost of living of banana and coffee workers compared, 133-6, 144-5 count bunch ratio, 93 Crowther, Samuel, 25, 85, 126, 134 Cuba, banana industry of, 35, 37, 46-7, 68; labor conditions in, 175, 212; sanitation, 113-4; sugar, 17, 46-7 Cutter, Victor M., on banana purchases, 92η; on life of banana cultivations, 19η; on malaria, 119; on medical work, 122; on payroll, 128η; on standard of living, 161 Cuyamel Fruit Co., in Costa Rica, 51, 100; in Honduras, 52-5, 81-2, π 6, 202; in Mexico, 59, 202; in Nicaragua, 56, 57η ; purchased by United, 54, 68 Deeks, Dr. W . E„ m , 115-7 DiGiorgio Fruit Corporation, 59, 68, 202-5 Echandi, Alberto, 123 economic imperialism, see United Fruit Co. Ecuador, banana industry of, 65 eight hour day, 138-40, 190, 200 Estrella Valley, Costa Rica, abandonment, 90 European markets, 20, 25, 68, 69,108 family life, 162-3

INDEX Fawcett, William, 25, 126 Franc, Α. F., 35 Frank Brothers Company, 35 Federación General de Trabajadores, posta Rica, 183 Federación Obrera de Guatemala, 182 Federación Obrera Hondurena, 182-3 Federación Regional de Trabajadores, Guatemala, 182 Federación Sindical Hondurena, 183 Federación Sindical Regional de Chiriqui, 193 Fortune, 54η, 67η, g8n, 144η Fournier, Ricardo, on education, 166-7 Fruit Dispatch Co., 37, 42-4, 108 Gaitán, Jorge E., on strike, 200 Garvey, Marcus, 170, 180 Gompers, Samuel, 182 Gonzales Flores, Alfredo, 123 gracias, Costa Rica, 79-80, 83 Guacimo, Costa Rica, 120-1 Guadeloupe, 64, 66n Guardia, Tomás, 37-39 Guardia Quiros, Victor, 36η, 83η Guatemala, banana industry of, 523, 62 ; banana exports of, 67 ; banana purchase prices, 93, 103 ; characteristics of, 33-4; colonial, 29-32 ; cost of living in, 134-51 eight hour day, 138-9; industrial accidents, 146-7 ; labor law, 138 ; one day of rest in seven 140; peonage, 131-3 ; quota of national workers, 142, 178 ; race relations, 168-9; strike regulations, 184-5 Guatemala port contract, 62, 122, 141-2, 17« Guëll, T . S., 38η Gulf of Dulce Land Co., 62, 83 Haiti, banana industry of, 64, 68, 69 health, conditions, 28, 110-112, 11721, 124-5, 157-8, 173-4, 211; education, 113; projects, m - 1 4 , 1167, 214-5; cost of, 122-3 Honduras, banana industry of, 535. 59. 68, 102-4; banana exports, 67, 103; banana purchase prices, 93, 99, 102-3 ; and Central American unity, 29-32 ; eight

227

hour day, 139 ; immigration laws, 171-2; labor code delayed, n o ; land laws, 73-5 ; one day of rest in seven, 140; race relations, 1723 ; revolutions, 34, 137, 144, 188, 191-3, 197; strikes, 188, 191-3, 197-9, 208 ; sugar 17 ; workmen's compensation, lack of, 146, 155 Honduran workers, a characterization of, 160-2 hospitals, 18, 116-9, 121, 123, 199; dues, 122, 128 housing, of banana workers, 17, 114-6, 133-4, 202, 209; of coffee workers, 132-4; of fruit company officials, 17, 18 Hughes, Charles E., 53 immigration, 110, 171-6 Indians, 28, 33-4. 73. 84, 131-3; shun banana coast, 125, 158-9 insurance, by scattered holdings, 40; collective life, 155-6, 189 international labor conventions, 109 International Railways of Central America, 21, 52-3 irrigation, 49, 61, 100, 106; control of, 85, 108, 191 ; demolition of works, 62 Jamaica, banana industry of, 28, 37, 47-9, 68 ; banana exports, 36, 67 ; banana purchase prices, 101-2, 107 ; bunches per acre, 27, 65 ; cacao, 17; governmental aid, 100I, 107; hospitals, 117; intensive cultivation, 65 ; private planters, 47. 48, 93; see also, competition Jamaica Banana Producers' Association, Ltd., 67-8, 107-8, 216 Jamaica Negroes in Central America, 114, 177; customs, 157-8; schools of, 166-7 Jantha Plantations Co., 60, 94 Jenks, L. Η., 47η Jiménez, Ricardo, loin, 198 Jones, C. L., 58η, 6οη, 65η, 66η, 70η jungles, 15, 17. 19, 21, 26, J2. 45. 89-91, 104, n o , 157 Keith, Minor C., 37-9. 4ΐ-3. 45. 40. 52-3, 76, 8ιη, m , 145 Kepner, Charles D., Jr., 76η ; see also. The Banana Empire

228

INDEX

labor codes, 109-10 I Negroes, West Indian, banana labor, leaders, 192-4 ; organization, I workers, 91-2, n o , 124; see also, 2 0 1 181-3, · 210; see also, health, Jamaica Negroes, race relations strikes, wages, workers, workNicaragua, banana industry of, 55men's compensation 7, 68; banana exports of, 67; L a Nacional Platanera, S. C. L., banana purchase prices, early 107-8 103 ; and Central American unity, Lariceti lia experimental station 19, 30-2 ; workmen's compensation 21 law, 147-51 Northern Railway C o , Costa Rica, language, differences in, 167-8, 170, 72, 177-8; industrial accidents 216 on, 152-5 land, coastal, 73, 75 ; cost of, 6on, 70-2, 83, 97 ; dominium directum Nuñez Rocca, Dr., mediation of, 196 of. 73*4; dominium utile of, 73Nutter, Dr. R. B., 00 sanitation, 112 4, 81; national, 32-3, 56, 71-83; national policies concerning, 75, ocean mail contracts, 23η 88-9 one day of rest in seven, 140-2, 189 land acquisition, in alternate lots, Orr, A. B., in Nicaragua, 56 72-3, 75-6, 88-9; by denouncement, 77-80; by application of Pacific coast, 28, 32, 71-2, recent gracias, 79; by lease, 81, 85; trend toward, 61-2, 79 through intermediaries, 75-6, 79, Panama, banana industry of, 39, 42, 83-4, 88; by pressure, 84-5; by 49-50, 61, 65, 68, 103; banana expurchase, 56-7, 62, 85 ; by railports, 67 ; banana purchase prices, road concessions, 71-6, 85 early, 103 ; cacao production, 17, Limon, Puerto, 37-8, 62, 89 20; congressional investigation of Limon, province of, 49, 52 ; birth banana industry, 176, 179, 193, rate of, 163; health of, 118-9, 198; debt servitude, 159; eight 123; racial mixture of, 168 hour law, 139, 141 ; equal pay for Lindsay, Samuel McCune, 8-9 equal work, 177 ; immigration López, José Α., on psychology of law, 172; one day of rest in Honduran workers, 160-1 seven, 140; strike, 188; workLópez Pineda, Julián, 173 men's compensation, 147-51 Panama disease, 19-21, 40, 49, 51, McDaniel, J. C., on sanitation, 112 57, 60-1, 67, 86, 89-100 Maleady, T . J., 19η, 84 Pan-American Federation of Labor, malaria, menace of, 119-21, 160-1, 174, 181-2 215; see also, health; sanitation planters, banana, 47-8, 51-2, 53-4, Mason, Gregory, 117η, 163 56, 62, 65; classes of, 92, 106, mestizos, 34, 125, 131, 160-1, 164 190; dominated by fruit comMexico, banana industry of, 57-60, panies, 25, 51, 55, 85, 104-S; and 68; banana exports of, 67; conhealth of workers, 122, 192; inference on banana industry, 106, ferior lands of, 51-2, 93; in 19th 202-6; cooperation of banana century, 49, 53, 102-4, n o ; perproducers, 107-8; cost of living centage of fruit grown by, 27-8, in, 136; governmental aid to 51-2, 55, 66, 92-3, 103; pioneerplanters, 59-60, 107-8; labor ing in jungles, 104, n o ; profit policies of, 109-184, 201 ; miniand loss of, 92-108; status of, 88, mum wage law, 138; relation to 104-6, 190-1, 200, 208; wages Central American unity, 29-30, paid by, 136-7, 192; see also, co32 ; quota of Mexican workers, operatives 178; union of small producers politics, 32-3, 50, 62 of tropical fruits, 106 Porto Rico, banana industry of, minimum wage laws, 138 64, 66n

229

INDEX Preston, Andrew W., 36, 39, 82 Progreso, Honduras, 19 Progreso, Panama, 61 quotas of national workers, 177-8

Soto-Keith contract, 38, 71 squatters, 79 Standard Fruit and Steamship Co., now taken over by Standard Fruit and Steamship Corp., 54, 56, 57η, 59, 67-69, 90, io8, 196, 207, 2 1 2 ;

race relations, 168-73 radio, 18; health service, 116 railroads, Costa Rica, 37-8, s o ; Guatemala, 52-3; insufficiency of, 76; Jamaica, 47, 101 ; Mexico, 58, 60; need of, 32-3» 70, 208; removal of, 62, 90-1 railroad union of Honduras, 183 religion, 113, 158 Reynolds, P. Κ., 16η, 25, 27a, 65η Rio Grande de Terraba, Costa Rica, 80, 83 Rio Grande, Nicaragua, 56 Rippy. J . Fred, 135. ι88η, 197η River Plate Trust Land and Agency Co., Ltd., 71-2 Rockefeller Foundation, 119 Sáenz, Alfredo, son, 71η, 72η, ioin, 141η, 152, 176η

Sáenz Cordero, Manuel, 78, 8on sanitation,

111-114

San José, Costa Rica, 37 ; hospital, 123

Santa Marta, Colombia, 39, 126-7 Santo Domingo, banana industry of, 35. 37. 46, 47, 64, 66η Schwuchow, Walter, 58η, ixm screening for malaria prevention, 17, 114-6, 215

shipping, 18-9, 36, 107, 116 Sindicato de Trabajadores del Atlantico, Costa Rica, 183, 194 Siquirres, 90; emergency hospital, 121

Sixaola district of Costa Rica, 67; abandonments in, 90 S lade, William F., 30η, 3ΐ smallpox eliminated, 117 snake bite antitoxin, 117 Snyder Banana Co., 39, 49 social legislation handicapped by concessions, 141-2 s o c i a l p r o b l e m s , 70, 157-73, 211-3

social research, 215 Soothill, Jay H., 8, 128η, 143η, 170I, 176-7; see also. The Banana Empire

see also, Vaccaro brothers standard of living, 161-2, 174 strikes,

180-1,

banana,

187-201 ;

regulations of, 184-7 sympathetic contacts, 165-6

Talamanca Valley, Costa Rica, ruin of, 90 Tegucigalpa, Honduras, 76 Tela Railroad Co., 54, 74, 146 Thomson, Charles Α., 137η Tinoco, Federico, 34-5 Tinoco, Luis D., 79η, 92η Transcontinental Export Co., 59, 202

tropical diseases, 53, 110-2, 1 2 1 ; see also, malaria Tropical Trading and Transport Co., 39 Trujillo, 28 Truxillo Railroad Co., 54, 74, 77. 118, 164

unemployment,

128-9,

143-6,

190,

212-3

Unión Sindical del Magdalena, 194 unions, see, labor organization United Fruit Co., banana cultivations, expansion and contraction of, 17-19, 46-^5 ; summarized, 64 ; banana exports, 17, 67 ; cacao cultivations, 17, 19; competition eliminated by, 42-4, 49-51, 86-7, 100, 212; dividends of, 24; expansion o f , 42, 69 ; economic imperialism of, 25, 50-1, 88, 104, 209-10;

financial

condition o f ,

22-4, 214; fixed assets and enterprises, 17-21 ; health work, 18, 89, 111-23, 192, 214; illegal acts of, 50, 85, 121, 172, 189; industrial accidents, 151-5 ; officials of,

127,

165-6,

170,

176,

216;

origin of, 36-42 ; propaganda, 50, 52, 62; research, 19-2 r ; schools and churches aided, 158, 166-7, 199; see also, health, hospitals, housing, planters, strikes, unem-

230

INDEX

ployment, wages, workers, etc. United States, banana imports, 69, 2 1 3 ; foreign policy, 218 Vaccaro brothers, 53-4, 72, 74 Valandia, Dr. Miguel, 196 Venezuela, land surveyed in, 63 Viquez, Cleto Gonzáles, 120 violence, 164, 197 wages, agricultural, 129-33, 137; clerical, 177; coffee, 129-33, 137; discrimination against Central Americans, 176-7 ; industrial, 12930 wages of banana workers, 126-30, 203, 3 1 1 - 3 ; kinds of, 125-6; reductions in, 136-8, 191, 212 ; strike demands, 188, 200 Washington Convention of 192223, 175

Williams, J . L., 103η, 169-70 workers, banana, 1 1 1 - 2 0 7 ; aged, 145 ; casual, 129, classification of, 124-5; death rate of, 117-9; hours of work, 139; hospital dues, 122-128 ; recruiting o f , 125 ; Sunday work, 140-1 ; welfare of, 151-66, 173-79, 209-13 ; yearly income of, 128-9; see also, cost of living, health, labor, social problems, strikes, unemployment, wages, etc. workers, coffee, aged, 145; recruiting of. 1 3 1 - 2 ; see also, cost of living wages workmen's compensation, I47-S7, 189 yellow fever, 112, 121 Zemurray, Samuel, 53-4, 81, 87, 144, 214