When General Electric formed the Radio Corporation of America or RCA with Marconi assets in 1919, conflicts over patents prompted a push for cross-licensing agreements with the other large electrical and telephone interests. In addition to RCA, General Electric, AT&T and Westinghouse, a fifth partner in the patents pool was the United Fruit Company, a conglomerate whose primary business was banana production in Latin America.
The United Fruit Company actually started out in the railway business: In 1871, U.S. entrepreneur Henry Meiggs signed a contract with the government of Costa Rica to build a railroad connecting the capital city of San José to the port of Limón. He was assisted by his nephew, Minor C. Keith, who took over Meiggs’s business after his death in 1877. Keith began experimenting with the planting of bananas as a cheap source of food for his workers. When the Costa Rican government defaulted on its payments in 1882, Keith had to borrow money from banks and private investors to keep going.
In exchange for this, and for helping renegotiate Costa Rica’s own debt, in 1884 the government agreed to give Keith 800,000 acres of tax-free land along the railroad, plus a 99-year lease on the operation of the train route. The railroad was completed in 1890, but the flow of passengers proved insufficient to finance Keith’s debt. However, the sale of bananas grown in his lands and transported first by train to Limón, then by ship to the United States, proved very lucrative. Keith eventually came to dominate the banana trade in Central America and along the Caribbean coast of Colombia.
Although it competed with the Standard Fruit Company (later Dole Food Company) for dominance in the international banana trade, United Fruit came to control vast territories and transportation networks in Central America, the Caribbean coast of Colombia, and the West Indies. It maintained a virtual monopoly in certain regions, some of which came to be called “banana republics” – a term coined by the writer O. Henry. In 1901, United Fruit was hired by the government of Guatemala to manage the country’s postal service, and in 1913 it created the Tropical Radio and Telegraph Company.
By 1930, United Fruit Company had absorbed more than 20 rival firms, acquiring a capital of $215 million and becoming the largest employer in Central America. In 1952, the government of Guatemala began expropriating unused United Fruit Company land to give to landless peasants. The company responded by lobbying the U.S. government to intervene and mounting a misinformation campaign to portray the Guatemalan government as communist. In 1954, the U.S. Central Intelligence Agency funded a military force that deposed the Guatemalan government and installed a military dictatorship.
This kind of behavior didn’t end in the 1950s. In 1984, Carl Lindner, Jr. transformed United Brands into Chiquita Brands International. In March of 2007 Chiquita Brands pleaded guilty in a United States Federal court to aiding and abetting a terrorist organization, when it admitted to the payment of more than $1.7 million to the United Self-Defense Forces of Colombia (AUC), a group that the United States has labeled a terrorist organization. Chiquita Brands agreed to pay $25 million to the families of victims of the AUC, which the company paid to protect its interest in the region.