by Gerard Colby
The embassy’s biggest concern was for United Fruit. Arbenz’s chief worry was the smaller coffee growers in the highlands and their allies among other rural landlords, the clergy, and the military. The growers dominated most of the best lands, which left the mass of the Indians landless, forcing them to work as seasonal laborers on the coffee fincas or on cotton and sugar plantations on the coast. The coffee growers had been an important base of support for the revolution that had overthrown the Ubico dictatorship in 1944. But strikes by Indian workers and land seizures by peasants—sometimes led by Guatemalan communists, but most often not*—alarmed the coffee growers. Arbenz’s officials responded by trying to keep the highlands relatively undisturbed. Rather than initiate the kind of radical agrarian reform program that had already thrown the coastlands into turmoil, they sponsored programs initiated by the Guatemalan branch of the Inter-American Indian Institute—projects in archaeology, ethnography, bilingual education, and soil reclamation and surveys of health conditions, labor, and trade. None of these programs posed an immediate threat to the status quo. If anything, they all were a continuation of similar projects originally funded by Nelson Rockefeller’s CIAA and the State Department.
Arbenz was convinced that roads, education, and fairer prices for goods and services would end the “backwardness” of the highland Indians. To carry out his plan, he relied on two old hands in Indian assimilation: the National Indian Institute and SIL.
Cam called down Ethel Wallis, an SILer from Mexico’s Mezquital valley whom he would later choose as SIL’s official historian, and assigned her to work on the Guatemalan government’s new education and language program among the 300,000 Kikchí Indians of Alta Verapaz, a hilly, semitropical coffee region. Like most of the Indian highlands, the Kikchí villages would remain relatively silent when Guatemala City came under attack by a CIA-sponsored invasion in 1954. Most of the poorer Indians could not be inspired to defend the Arbenz government because the core of their economic needs had not been reached by the revolution.
The same was true for the mining state of Huehuetenango, an area rich with Mayan ruins. Cam sent an SIL couple to the Aguatatec Mayas in that region. Not surprisingly, their Protestantism was appealing to some young garlic growers who were challenging the Ladino-dominated cargo system of their elders. But the vast majority of these landless Indians, their economic needs also untouched by Guatemala City, would not defend Arbenz when the crisis came.
Cam needed no introduction to the Cakchiquels, whom he visited earlier in the year. More than a thousand of these Indians turned out to hear the American speak to them in their own tongue of God’s Will.
But the Black Carib tribe of the Caribbean coast were new to Cam. Some of them worked as seasonal laborers alongside blacks brought in from Jamaica to cultivate the banana plantations of United Fruit. Arbenz had recently penetrated the United Fruit stronghold with a long-promised road linking the Pacific Coast to Puerto Barrios on the Caribbean coast. The road provided an alternative to the high freight fares charged by the only railroad, owned by United Fruit. Just south of Puerto Barrios, Arbenz also built a new port connected to the road, to compete with United Fruit’s docking monopoly.
Into this smoldering economic conflict, Cam sent two SIL women, who set up shop in Livingston, a Ladino-controlled town north of Puerto Barrios where landless peasants and United Fruit’s agricultural workers were pressing for reforms. The peasants had legitimate grievances against the American company: discriminatory policies, high-priced company stores, low wages, poor housing, lack of safe working conditions or workers’ compensation, hospital fees set at 2 percent of their salaries, and hundreds of thousands of acres of fallow land. The coffee growers had originally backed the revolution against Ubico to end United Fruit’s domination of freight charges and its distortion of economic development. Now, fearful of the lower classes, they were closing ranks with the conservatives.
It was apparently too much for the two politically unprepared American women. At the close of 1953, as the political climate tightened with peasants seizing land and Arbenz agreeing to expropriate and distribute unused lands owned by United Fruit, they returned home.*
During their absence, the Arbenz government expropriated 173,000 acres from United Fruit’s Banassera plantation on the Caribbean. This brought the total loss for United Fruit to more than 400,000 acres.9 Through United Fruit’s fallow landholding alone, Guatemala’s peasantry had recovered one-seventh of their country’s arable land.
THE FINAL BREAK WITH THE CÁRDENAS LEGACY
While Arbenz acted, friends and associates of Nelson Rockefeller met secretly to bring Arbenz to his knees. They branded Arbenz in the hemisphere’s press as a Soviet agent. Friends in the State Department informed Guatemala’s ambassador that agrarian reform bills like Arbenz’s were actually “secondary problems” of a much broader communist problem. United Fruit was breezily dismissed. The problem was communism. Communism was “not any economic, doctrinal or even military matter. It was a political one.”10
Adolf Berle drew on the legacy of Nelson’s work at the Chapultepec conference to urge the Eisenhower administration to use the OAS as the auspices through which Arbenz could be overthrown. After three weeks of intensive lobbying among Latin American diplomats in Washington failed, the State Department’s political action officer in Guatemala suggested economic warfare “to keep Guatemala off balance” until Washington could line up votes for the “proposed OAS meeting.” His list of economic weapons included diverting oil tankers to create a gasoline crisis, suspending credit for coffee growers, and spreading a CIA rumor about impending U.S. economic sanctions to stimulate a business panic and “flight of capital.”11
Nelson’s old friend J. C. King became the first field general in the CIA’s plot to overthrow Arbenz. King, relying on the military and United Fruit, had tried twice before and failed.
CIA Director Allen Dulles and Deputy Director Frank Wisner decided that this time King needed troops who were more familiar with paramilitary operations and psychological warfare.
The CIA’s station chief in South Korea, Colonel Albert Haney, was tapped for the job. Haney’s plan was for a multimillion-dollar “Guatemalan exile” invasion backed by U.S. Marines, helicopters, and C-47 transports, if necessary. The problem was that it was too big to be a covert operation with plausible deniability for the United States. King suggested military aid to bribe the Guatemalan army. “J. C., you’ve had four years to try that approach,” replied Wisner. “Now the situation is worse than ever.”12
The CIA ended up applying many of the psychological warfare tactics it had used against the Huks to convince Arbenz he had lost the support of his country and that he was facing a formidable armed enemy. (Both were untrue, but Arbenz did not know it until he had already resigned.) The CIA’s “Voice of Liberation” beamed to the country a painstakingly edited version of a drunken “call for desertion” by a Guatemalan pilot who had fled. Frightened, Arbenz grounded his air force. It was his first serious error.
This left the skies to CIA pilots. Flying out of clandestine airstrips in Honduras, the bombers pounded Guatemala.13
Unable to silence the CIA’s radio broadcasts, Arbenz contributed to the panic by shutting off Guatemala City’s electricity. This left the CIA’s radio as the only source of “developing news” of mythical rebel columns approaching the city. The capital’s residents promptly set up portable generators to listen—and began to flee. With the CIA’s explosions flashing over the darkened city, the residents of Guatemala City became convinced that they were experiencing something like wartime London during the blitz.
CIA Coup in Guatemala (1954)
This map, which the Agency presented to President Eisenhower, falsely reported popular uprisings in support of the CIA’s coup.
Source: Central Intelligence Agency; map provided by the Dwight D. Eisenhower Library.
Meanwhile, the CIA’s Colonel Carlos Castillo Armas, who had already been interviewed by Kin
g and chosen as “the Liberator,”14 was making official history. The Liberator led a hastily trained “army” of fewer than 300 men, armed by United Fruit, across the Honduran border. After advancing only a few miles into Guatemala, he camped at the national shrine of the Church of the Black Christ. There, symbolically ensconced next to a Mecca for Catholics throughout Central America, he waited.
As bombs fell on Guatemala City, Allen Dulles coordinated CIA operations with his brother’s State Department officials in Washington and New York. The U.S. delegation at the United Nations, led now by Nelson’s friend and ally from Massachusetts, Henry Cabot Lodge, fought against the Security Council taking up Arbenz’s complaint. This was an internal Guatemalan dispute, Lodge argued, which would be referred instead to the OAS.
John Foster Dulles used threats of economic reprisals to ram through a resolution condemning Guatemala.
Between June 18 and June 22, news flashed around the world of the invasion and of protests and riots in Mexico, Chile, Uruguay, Bolivia, Argentina, and even Honduras. The mission was condemned by the government of Ecuador and by the congresses of Argentina, Chile, and Uruguay. King had been right. An invasion was much too big an operation to conceal from the world.
Guatemala’s request for a U.N. observer team to confirm the invasion was rejected by a vote of 10 to 1 in the Security Council, the Soviet delegation casting the one opposing vote (the misgivings of Britain and France were muffled by Dulles’s warning about their need for U.S. support against Nasser over the Suez Canal). Instead, the Security Council declared that this was not a U.S. invasion, but an “internal dispute” that must be referred to the OAS. The president of the Security Council was U.S. Ambassador Henry Cabot Lodge. The Secretary General of the OAS was Nelson’s good friend from the Chapultepec conference, Carlos Davila of Chile.
The end quickly came when the army balked on taking to the field to crush the leader of the coup, Castillo Armas. When Arbenz then asked the generals to distribute arms to the populace, they demanded his resignation. Arbenz, betrayed by his former military colleagues, lost confidence and surrendered.
The missionaries celebrated the fall of the Arbenz government, even as many of their Protestant converts were swept up in the massive arrests that followed. Protestant Indians—including nineteen in Cam’s original mission—“suffered the judgment of God” for being “involved in communism.”15 A woman whom the Townsends had helped become the country’s first female doctor had to flee after her husband was arrested as an Arbenz supporter.16 Over 500 Ixil Maya Indians who participated in the land reform in northern Quiché were exiled to the jungles of Petén. Pocoman Maya Indians who led the local peasants’ union were also jailed. One Cakchiquel pastor could watch his people die only so long before he took to the hills to lead a Cakchiquel guerrilla unit; eventually, he, too, would be killed.
Ironically, a foreign physician, who was thought to have sympathies with Arbenz, was released by the CIA’s E. Howard Hunt as one of his last acts before leaving Guatemala. Perhaps the young man was spared because he had applied for a job with United Fruit or because he came from a respected family in Argentina, with relatives in the United States. Whatever the reason, Hunt would regret letting Dr. Ernesto Lynch Guevara go. Citing the lessons he had learned from Arbenz’s reliance on elections and the standing army, the physician would return to confront the CIA in Cuba as “Che” Guevara.
All lands distributed to the peasantry were returned to their former owners, predominantly United Fruit. More than 500 union locals lost their legal registration, which effectively destroyed the banana workers’ federation.
Guatemala’s lands, its Indians, its plantations, and its mines were now open again to American investment.
Castillo Armas also threw open the country to American oil companies. Dulles’s State Department designed a new petroleum law for Guatemala, restricting Guatemala’s share of profits to a maximum of 50 percent. In addition, the companies were granted a 27.5 percent oil-depletion allowance and were allowed to deduct any losses incurred since the 1945 revolution from any year’s profits.17
By 1956, twenty oil companies had taken out forty-year concessions on over half of Guatemala. Barbed wire went up around oil derricks that were drilling on Indian lands. In 1959, oil was struck in the tropical state of Petén just above the coffee estates of Alta Verapaz. That was the year that William Cameron Townsend, attending an Inter-American Indian Conference in Guatemala City, secretly aided the efforts of the U.S. delegation to muffle the protests of Guatemalan Indians over the rollback of Arbenz’s agrarian reform. In return, SIL would get land from the government for a new headquarters. Behind the rhetoric of God and bilingual democracies, oil and land whispered between the lines of government contracts with SIL. They were the secret of SIL’s power and of Cam’s unique ability to help the United States as an official delegate of Peru at Inter-American Indian Congresses. Cam owed that, too, to a dictator who ruled over a predominantly Indian people: Peru’s General Manuel Odría.
NIBBLING AT THE AMAZON
General Odría had ridden the horse of the Apocalypse to the height of his power in the summer of 1953, when he took an unusual journey into the Peruvian Amazon jungle with two Cold Warriors from the United States. Appropriately “sheep-dipped” (as the CIA put it for military men wearing civilian clothes), the barrel-chested general arrived in Pucallpa in a muddy Chevrolet truck at the head of an armed caravan. With him were William Cameron Townsend and Robert Le Tourneau, a millionaire manufacturer of earth-moving machines from Texas.
After a short speech to the residents, the men drove to the airport, boarded a waiting DC-3, and took off south toward the largest-known oil field in the Amazon. Passing over the domelike ridge that outlined the underground oil pool, Odría pressed his nose to the window. Here, at Ganso Azul and in these Americans, he hoped he had found the panacea for his many problems.
Time was running out for him. Since he formally assumed the presidency three years before, Peru’s economy—and his political fortunes—had boomed off the Korean War. In his first year of office, Peruvian exports to the United States, mostly strategic minerals clawed out of the Andes by Indian miners, had skyrocketed 50 percent. The bonanza in tax revenues had allowed him to resume paying off Peru’s debts in full to anxious New York bankers, and Washington had shown its appreciation by arranging another $60 million loan for his ambitious array of highways, irrigation projects, port renovations, and other public works.
Now, all that was about to end. According to reports from the United States, President Eisenhower would soon end the Korean War. Odría would have to cut his budget drastically if he was to keep the almighty New York banks, and Washington, happy. Unless, that is, he could find some way of convincing foreign oil companies to develop that dome and any others like it down there that were hidden beneath the forest canopy.
Odría already had tried to entice the oilmen. He had summoned Peru’s lawmakers to a special session of Congress and forced through a new petroleum law that gave generous terms to foreign oil companies: forty- to fifty-year concessions, a hefty depletion allowance, and 50 percent of the remaining profits. He ignored the outrage from nationalists on both the left and the right while officials of a dozen foreign firms descended on Lima in January 1953 for five days of bidding.
The companies included Union Oil of California, the fount of donations to Townsend’s Church of the Open Door in Los Angeles. But it was Standard Oil of New Jersey’s subsidiary, International Petroleum, that flew off with most of the prey. The prey, however, would prove gritty eating. Sechura Desert, where large oil pools were thought to exist, cost the oil companies $2.5 million for their concessions; they would spend $27 million more before realizing that it was not going to pay off like the Arabian desert had. For Odría, however, the Amazon bids were the greatest immediate disappointment. Although oil was already known to exist at the Ganso Azul dome near Pucallpa, Odría collected a total of only a little over $1,000 in bids. The general
had special reasons to be dismayed. His closest business associate, Hernando de Lavalle, was a director of the Ganso Azul Petroleum Company. After the curtain fell on Odría’s auction of the Peruvian Amazon, de Lavalle and the Americans on Ganso Azul’s board decided to sell out. The buyer was an American consortium led by Texas Gulf, an independent oil company based in Houston. Texas Gulf’s reach extended straight to the center of power in the American Northeast. Its principal investors, the Reeds of New York, had intimate ties with the Pentagon and the Rockefellers’ trans-Atlantic financial networks.
Other powerful foreign investors were already in the area. Socony held concessions in four Amazonian states. Another 1,816,185-acre concession in the Amazon was held by the Gildemeisters, the powerful German-Peruvian sugar dynasty; still another 929,000 acres were controlled by Canadian investors.
All these holdings, no matter how promising, would languish without a transportation infrastructure. Pucallpa, with Ganso Azul bubbling happily nearby, seemed the most promising site for a trans-Andean pipeline terminus. Now, thanks to Townsend, Odría also had the prospect of a colony of settlers that could alleviate the pressure for land reform in the Andes and along the Pacific Coast while providing a profitable local market for his friends in the oil companies.
As Odría’s plane circled Ganso Azul, the general looked up from the dome and eyed the American sitting next to Townsend who was also peering down at the oil field. This man, Townsend had promised, could help the regime. Robert Le Tourneau had flown down from Texas in his private plane to put a startling proposition to Odría. He would sponsor the development of a colony in the Pucallpa region. He would put up all the houses and install all the water-treatment and sewerage facilities, even a fifty-mile-long paved road linking the colony to the Trans-Andean highway that the United States had built during the war. All he wanted were two things: 1 million acres of land near the Ganso Azul field to harvest tropical hardwood and graze some 5,000 head of cattle, and the designation that the colony could be peopled by North American and Peruvian “Christians.”