III. Banana Empire Slipping
Stein, Nancy
Last August, students stoned the U.S. Embassy in Panama City in the first display of anti-Yanqui violence in a long time. This demonstration, which took place while Panama's National Guard...
...New York Times, May 7, 1974...
...Panama Banking Association Report, Panama City, 1973...
...These countries find themselves continually opposed to the reactionary regimes of El Salvador, Nicaragua and Guatemala which have played no role in this battle except to indirectly support the companies themselves...
...6, 1974...
...The business community interpreted this as a negative government attitude toward private enterprise and threatened a one day strike by the members of the Chamber of Commerce, Industry and Agriculture...
...Panama had imposed a one dollar per crate tax on banana exports which United Brands refused to pay...
...Torrijos himself explained that "the Third World, which is the union of exploited countries against the exploiters, is waiting for the outcome of this struggle...
...defied the U.S.-imposed blockade of Cuba...
...and especially Stanley Meisler, "The Blacks of Panama," Nation June 22, 1974...
...5. Miami Herald, August 17, 1973...
...Christian Science Monitor, June 3, 1974...
...Washington Post, February 4, 1974...
...It urged the government to preserve a nationalist canal policy including 1) The recovery of the present canal,2) the right of the Panamanian state to build, manage and profit from any new canal, 3) the emancipation of its territory from foreign bases, 4) the neutrality of the present canal and any new canal, 5) total and sole jurisdiction by the Panamanian state over the territory known as the Canal Zone...
...He suggested that the United States should suspend diplomatic relations with Panama if other incidents occur, and stated that, "the United States shouldn't allow further negotiations on the Canal until we have a responsible government in the Republic of Panama...
...Torrijos said that the tax was not subject to negotiation and denounced the company's actions...
...The combination of these events has produced a potentially volatile situation that could lead to a coup attempt...
...Portfolio and Fund Guide International, Ibid., August, 1974...
...At about the same time, a CIA cohort of Hunt's, Cuban exile Manuel Artime, revealed that Hunt tried to recruit him for a clandestine mission in Panama...
...Though this confrontation was avoided (they began discussions with the government), the businessmen formed the National Council of Private Enterprise (CONEP) to mobilize against Torrijos...
...New York Times, July 11, 1971...
...Ibid., p. 7. 17...
...b) mobilizing people through women's committees and professional unions...
...New York Times, June 11, 1973...
...New York Times, February 8, 1970...
...For information on tax havens, see Portfolio and Fund Guide International,Ibid., August, 1974...
...5. Wall Street Journal, Feb...
...e) calling shop owners strikes, truckers strikes, creating shortages and marches of the "empty pots" 6 CONEP is attempting to generate the pre-conditions for a coup, because its members see their interests threatened by the government's intervention in the domestic economy...
...D.C., for a discussion of the different positions held by Panama and the U.S...
...But if Torrijos is pressured to move to the left, and to pose a more serious threat to basic U.S...
...This demonstration, which took place while Panama's National Guard directed traffic around it, was caused by the "banana war" raging between Panama and United Brands of Boston (formerly the United Fruit Company...
...6. IDB Annual Report, Ibid., 1973...
...4. Arqueles Morales, "Profiles and Prospects of the Banana War," Prensa Latina Feature Service...
...4. Quoted in Latin America, May 3, 1974, p. 133...
...Torrijos has confronted the United States on the Canal issue...
...The French company agreed to sell out for a low price partly because they were panicked by the Walker Commission's report...
...military bases and training in Panama, see The U.S...
...6. Much of this information comes from H. Sousa, Notas cerca de la Situacion Socio Politics de Panama, January, 1974...
...The opposition movement has one severe limitation however...
...Ecuador, which produces 30 percent of the world's bananas, has thus far refused to become a member of the Union, but the government of Panama is determined to continue the fight...
...In any event, the conservative elements in Panama, composed of wealthy businessmen, landowners and financiers, have begun to prepare the ground work for an opposition movement against Torrijos...
...Miami Herald, April 9, 1974...
...even though Panama is willing to take over the production of bananas, it does not have the necesary experience to handle the lucrative marketing and sales end of the operation...
...This is an American Opinion publication, but has a lot of information...
...Foreign service and aid officers who served in the Dominican Republic in 1965, Saigon in 1968, Uruguay in 1970, or Chile in 1968-70, are now in Panama...
...Sousa, 2p...
...The Panamanian government began planning to take over the production and packing operations, while United Brands will continue transporting and marketing the fruit...
...Military Apparatus, published by NACLA, 1972...
...New York Times, Jan 12, 1964...
...See Panama Canal Zone: Occupied Territory, EPICA, 1973, Wash...
...Inter-American Development Bank Annual Report 1973, "Economic and Social Progress in Latin America...
...29, p. 113...
...3 The Chiriqui Land Co...
...Honduras has been the hardest hit by the production boycott, since 51 percent of its exports are bananas...
...3. For more on U.S...
...Until the fight for national sovereignty extends to the wider economic arena, the United States15 can live with the Torrijos government...
...4 Even conservative Panamanian business interests came out in opposition to the banana companies because the issue of national sovereignty and control of Panama's natural wealth was involved...
...Panama Banking Association Report,1973...
...The case of United Brands is a special one, in that the company is an old target of nationalist Latin American governments and represents an outmoded form of agricultural investment...
...government was concerned about Torrijos' uncooperative attitude toward renegotiating the Panama Canal treaty...
...These include: a)organizing their social base and re-enforcing their alliance with the petty bourgeoise...
...For an example of how Robert Vesco used a Panamanian paper corporation to gain control of IOS see "The Looting of IOS", Fortune, March, 1973...
...3. Richard Hudson,"That Other Canal',' New York Times, January 6, 1974...
...United Brands, through its subsidiary the Chiriqui Land Co., continued production in Panama until July...
...Many of the activities of CONEP have paralleled the manuvers of the right in Chile, although the business Community is not yet as consolidated...
...This arrangement reveals how deep the dependency on foreign companies goes...
...Aside from the dispute over housing, the State has taken over water, power, telecommunications, the large cement industry, and has begun operating state-owned sugar mills...
...much of this information on bank advisory relationships with foreign governments, came from a memo prepared by Fred Goff for the NACLA Banking Project...
...15, 1974...
...For a good description of the anti-Panama forces in Congress, see the International Bulletin, May 6-19, 1974...
...7, 1964 (published in Panama...
...This is an excellent analysis of the current situation and class structure in Panama, which will soon be published by Siglo XXI in Mexico...
...NY, 1959, for one of the most comprehensive histories of how the United States acquired the canal, including previously unpublished documents exposing the role of Cromwell and Roosevelt...
...corporations and banks...
...9. Washington Post, Feb...
...Other workers in Panama voted to turn over portions of their salaries to the banana harvesters, and the Panamanian government also promised to continue paying the banana workers while the boycott lasted...
...By making these loans, Torrijos has placed Panama in the forefront of the fight to defend the natural resources of Latin America, forming a strong nationalist block with Costa Rica and Honduras...
...5. Christian Science Monitor, November 29,1973...
...l The confrontation with United Brands and other fruit companies began in March 1974, when Panama called for the creation of the Union of Banana Exporting Countries (UPEB) to end the exploitation of these countries by the multinational banana companies...
...Panama Banking Association Report, Panama City, 1973...
...8. Business Latin America, April 13, 1967, p. 120...
...8. Washington Post, Feb...
...Then it closed down its operations after the government seized funds deposited to cover the tax in the event a negotiated agreement or a court decision forced the company to pay...
...Security Council meeting...
...The Commission was finally pressured into recommending Panama...
...Torrijos has also made one million dollar loans to both Costa Rica and Honduras to offset the effect of the loss of banana production on their economies...
...but when it was exposed, the Panamanian government broke off treaty negotiations in protest...
...In Fall 1973, Torrijos enacted housing legislation that provided for rent control, urban renewal and low cost housing, without consulting the affected parties...
...Torrijos pledged that "if necesary, we will sacrifice other public works and projects to help out the banana workers, because the only thing we can't afford in this struggle is to lose the fight...
...5 In spite of this fight with United Brands, the general position of the Torrijos government has been to encourage economic penetration by U.S...
...El Periodista , Feb...
...4. Richard Hudson, "That Other Canal," New York Times, Jan...
...exports 30 million crates of bananas per year, which14 Cuban comment on the Banana War: "Plato" means money...
...The United States has been particularly interested in a canal due to its westward expansion, the Gold Rush, and increased trade with South America...
...and even though all of the facts aren't known, it is a logical component of the campaign begun by the banana companies to break the strength and unity of these nationalist governments...
...For Panama, the additional revenues from the tax would be 16 times more than the annual rent the United States pays for using the Canal...
...Latin America Economic Report and Andean Times, July 26,1974, Vol.II, no...
...Nancy Stein16 References - Part I 1. The United States cast the third veto in its history at the U.N...
...cit., p. 6. 16...
...Economic and Social Progress in Latin America," Inter-American Development Bank Annual Report, Washington D.C.,1973...
...interests, he could provoke a coup attempt...
...Miami Herald, January 1, 1974...
...Any attempted coup without the National Guard, would be easily defeated at this time...
...c) developing methods of carrying out anti-government activities at a time when the government wants to appear stable because of the negotiations with the United States...
...Senator Strom Thurmond (R-SC), who is adamantly opposed to recognizing Panama's sovereignty over the Canal Zone, took this occasion to call for the suspension of the Canal treaty talks...
...Miami Herald, January 27, 1974...
...2. Panama Canal Briefings, Hearing before the Committee on Merchant Marine and Fisheries, House of Representatives, 93rd Congress, First Session April 13, 1973...
...Panama, Costa Rica and Honduras imposed a tax, but only Panama has maintained the original rate of $1 per crate...
...The Walker Commission was convened to investigate possible canal sites and repeatedly favored the selection of Nicaragua...
...Our country is willing to wage the struggle to the end, to bury the spectre of the banana republic and to make the monopolies understand that new winds are blowing in this part of the planet...
...Great Britain abstained and all the other countries voted with Panama...
...Standard Fruit first ceased the production and export of bananas in Costa Rica and Honduras, putting thousands of people out of work and letting thousands of crates of fruit rot on the docks...
...13, 1974...
...Five Panamanian lawyers, whose political views range from socialist to conservative presented an analysis of the agreement to Torrifos, warning that it may only serve to "prolong America's neo-colonialist presence...
...the National Guard, which is Panama's only armed forces, is staunchly in support of Torrijos and would not move against him...
...2. Tricontinental New Service, September 3, 1974...
...Torrijos then called for a meeting of banana workers, which was attended by delegates from six banana producing countries who declared their support for the governments that were confronting the banana companies...
...This will lead to the further weakening of the oligarchy, and the possibility of open conflict, not only with the right wing, but also with the United States...
...Piatano" means banana...
...Part II i. H. Sousa (a Brazilian sociologist living in exile), Notas cerca de la Situacion Socio Politics de Panama, January, 1974...
...Business Latin America, July 5, 1973, p. 212...
...International solidarity with the people of Panama in their struggle to control their national resources and development process will play a major role in preventing this conflict from erupting into a coup...
...Shipping and Canal Operations, Hearing before the Subcommittee on Panama Canal, Merchant Marine and Fisheries Committee, 93rd Congress, First Session, July 17, 1973...
...4, 1974...
...isolated the United States at the March 1973 U.N...
...And with the massive counterinsurgency apparatus in the Canal Zone, complete with the CIA and Green Berets, they would not have to go far to organize a coup team...
...The company threatened that it would stop all of its activities in these countries and refused to pay the tax...
...Panama refused to negotiate with United Brands until the company ended the boycott and resumed operations, which it did on September 4. United Brands agreed to pay back salaries, to compensate the independent producers for their losses, and to continue negotiating over the tax...
...A year ago, John Dean revealed plans for an assassination plot against Torrijos involving Watergate defendent E. Howard Hunt, that was to occur after the 1972 presidential election...
...This plot was reported by the Panamanian ambassador to Costa Rica...
...and Nancy Stein, School for Scoundrels, Latin America and Empire Report, Vol...
...Panama was included in this plot because of the role it has played in economically aiding Costa Rica and Honduras to withstand Standard Fruit's attack...
...9. Commercial and Financial Chronicle, February 11, 1971, p. 414...
...Quoted in Hudson, op.cit.,Jan...
...The plot was never carried out...
...for more on the public debt and financial situation see Circular on Panama of May 12, 1972, Goldman, Sachs and Co., New York...
...In preparation for a possible covert operation, U.S.Embassy officials with experience in other "hot spots" have been transferred to Panama...
...6. Los Angeles Times, March 14, 1974...
...6, 1974...
...ranks Panama 14th among the banana producing countries...
...According to Dean, the U.S...
...Stanford Research Institute completed a massive study on the sea-level canal in.1967...
...and took on United Brands...
...recommending that one be built in Panama...
...Torrijos has responded actively to the campaign of the rightists: by forbidding CONEP to hold public meetings, closing down one of their newspapers, replacing government officials with leftist leaders and building up its own base of support among the urban and rural workers...
...3. Ibid...
...7. Nation, Ibid...
...The agreement being worked out with United Brands, may serve as a model for Costa Rica, which is also negotiating to buy out Standard Fruit...
...Washington Post, February 4, 1974...
...banana plantations, with or without their consent, because the sovereignty of the country is involved...
...Resisting this pressure will depend on Torrijos' ability to consolidate his nationalist policies and strengthen his popular base...
...3, March 1974...
...Former President Lyndon B. Johnson, New York Times, March 22, 1964...
...d) promoting a general climate of dissatisfaction and instability through the press and demonstrations...
...2 In response to the tax, the major banana companies--Standard Fruit and United Brands (the only fruit company operating in Panama)--developed a strategy to break the back of the Union...
...He asserted that "studies were being made as to the purchase, negotiation or expropriation of U.S...
...This is not the first time that the United States was implicated in an attack on Panama...
...Miami Harold, July 17, 1974...
...He is walking a fine line between the right and the left, uniting most sectors of the population around issues of national sovereignty such as the Canal and the "banana war," but facing pressures from the right to halt the leftward drift of his domestic policies...
...But more is at stake than just Panama's benefits...
...7. Commercial and Financial Chronicle, January 27, 1972...
...2. Department of State Bulletin, April 29, 1974...
...Part III 1. Miami Herald, August 17, 1974...
...See Earl Harding, The Untold Story of Panama, Athene Press, Inc...
...VIII, No...
...In addition to sabotaging the production of bananas, Standard Fruit was also accused of attempting to assassinate Torrijos and overthrow the governments of Costa Rica and Honduras...
...Portfolio and Fund Guide International, August, 1974, Copenhagen, Denmark, p. 20...
...New York Times, February 12, 1974...
Vol. 8 • September 1974 • No. 7
