The Guatemalan Coup

Fresh from its CIA triumph in Iran, the Eisenhower administration next turned its attention to Guatemala, where the left-liberal regime of Jacob Arbenz Guzman had nationalized 234,000 acres of uncultivated land owned by the nation’s largest landholder, the American-owned United Fruit Company, which imported about 60 percent of all bananas coming into the United States.

Arbenz also announced his intention of seizing another 173,000 acres of idle United Fruit land along the Caribbean coast. In late 1953, Eisenhower gave the CIA the assignment of organizing a counter-revolution in Guatemala. With the actual operation directed by former Wall Street corporate lawyer Frank Wisner of the CIA, the agency launched a successful invasion of Guatemala, led by exiled Army Colonel Castilo Armas, which soon overthrew the Arbenz regime and replaced it with a military junta. The Arbenz land program was abolished, and most of its expropriated property was returned to the United Fruit Company.

Allen W. Dulles had financial connections with United Fruit and with various sugar companies which had also suffered land expropriation from the Arbenz regime. For several years, while a partner at Sullivan & Cromwell, he had been a board member of the Rockefeller-controlled J. Henry Schroder Banking Corporation. Members of the board of Schroder during 1953 included Delano Andrews, Sullivan & Cromwell partner who had taken Dulles’s seat on the board; George A. Braga, president of the Manati Sugar Company; Charles W. Gibson, vice-president of the Rockefeller-affiliated Air Reduction Company; and Avery Rockefeller, president of the closely linked banking house of Schroder, Rockefeller, & Co. Members of the board of Manati Sugar, in the meanwhile, included Alfred Jaretski, Jr., another Sullivan & Cromwell partner; Gerald F. Beal, president of J. Henry Schroder and chairman of the board of the International Railways of Central America; and Henry E. Worcester, a recently retired of executive of United Fruit.

United Fruit, furthermore, was a controlling shareholder in International Railways, while, as in the case of Beal, the board chairmanship of the railway had long been held by a high official of Schroder. The close ties between United Fruit, Schroder, and International Railways may also be seen by the fact that, in 1959, the board chairman of the railway became James McGovern, general counsel for United Fruit. International Railway, in fact, carried most of United Fruit’s produce from the interior to the port in Guatemala. In addition, Dulles’s close associate and fellow trustee of the Council of Foreign Relations in this period, and former treasurer of the CFR, was Whitney H. Shepardson, formerly vice-president of International Railways.

Not only that: Robert Cutler, national security adviser to the President at the time of the coup against Arbenz, had himself very close ties to United Fruit. Cutler’s boss at Old Colony Trust, chairman of the board T. Jefferson Coolidge, was also, and more importantly, board chairman at United Fruit. Indeed, many members of the board of United Fruit, a Boston-based company, were also on the board of Old Colony or its mother company, the First National Bank of Boston.

Furthermore, during the period of planning the Guatemalan coup, and up till a few months before its success in 1954, the Assistant Secretary of State for Inter-American Affairs was John Moors Cabot, a well-known anti-Arbenz hawk. Cabot’s brother Thomas D., was an executive of United Fruit and a member of the board of the First National Bank of Boston.

The Council on Foreign Relations played an important role in the Guatemalan invasion. It began in the fall of 1952, when Spruille Braden, a former Assistant Secretary of State for Inter-American Affairs and then consultant for United Fruit, led a CFR study group on Political Unrest in Latin America. Discussion leader at the first meeting of the CFR-Braden group was John McClintock, an executive of United Fruit. Former leading New Dealer and Assistant Secretary of State Adolf A. Berle, Jr., a participant in the study group, recorded in his diary that the U.S. should welcome an overthrow of the Arbenz government, and noted that, “I am arranging to see Nelson Rockefeller (himself Assistant Secretary of State for Inter-American Affairs during World War II) who knows the situation and can work a little with General Eisenhower.”

In the actual Guatemalan operation, President Eisenhower himself was a CFR member, as were Allen Dulles, John M. Cabot and Frank Wisner, the man in charge of the coup and the CIA’s deputy director for plans. Of the twelve people in the U.S. government identified as being involved at the top level in the Guatemalan affair, eight were CFR members or would be within a few years. These included, in addition to the above, Henry F. Holland, who succeeded Cabot in the assistant secretary of state slot in 1954; Under-Secretary of State Walter Bedell Smith, a former director of the CIA; and Ambassador to the UN Henry Cabot Lodge.

Paving the way for the coup was a public report, issued in December 1953 by the Committee on International Policy of the National Planning Association on the Guatemalan situation. Head of the Committee was Frank Altschul, secretary and vice-president of the CFR and a partner of the international banking house of Lazard Frères, as well as a director of the Chase National Bank and president of the General American Investor Corp., a firm largely controlled by Lehman Brothers. The Altschul report, signed by twenty-two committee members of whom fifteen were CFR members, warned that “Communist infiltration in Guatemala” was a threat to the security of the Western Hemisphere and hinted that drastic action would probably be necessary to deal with this menace.

Of those involved in the drastic action, Secretary of State John Foster Dulles, while at Sullivan & Cromwell, had once represented United Fruit in negotiating a contract with Guatemala. Under-Secretary of State Walter Bedell Smith, after leaving the government, became director of United Fruit, as did Robert D. Hill, who participated in the Guatemala operation as Ambassador to Costa Rica. Furthermore, future president of Guatemala Miguel Ydigoras Fuentes noted that his own cooperation in the coup against Arbenz was obtained by Walter Turnbull, a former executive at United Fruit, who came to him along with two CIA agents.