The Banana Republic
The banana industry that developed in the late nineteenth century was to become the dominating factor in Honduras's future. More than happy to accept government concessions, which included exemption from customs duties and ownership of mineral rights, US fruit companies began to move into the rich agricultural lands of the north coast. Three companies - United Fruit, Vacarro Bros (later Standard Fruit) and the Cuyamel Fruit Company (bought out by United Fruit in 1929) - soon became dominant, all but wiping out small-scale producers. Further concessions, granted in return for promises to build railways, allowed the companies to steadily increase their holdings, which by 1924 amounted to two thousand square kilometres on the north coast and control of seventy percent of Honduras's total exports. Through expansion of interests, the companies also gained control of the country's railways, principal factories and major energy and telegraph companies, set up banks and acted as intermediaries in negotiations over foreign loans. Political power and influence followed economic might. Cuyamel cultivated strong links with the Liberal Party, while United Fruit - whose support extended to instigating armed uprisings - bankrolled the Conservatives, now known as the National Party. A succession of weak and shortlived governments struggled to keep control in the face of the dominant interests of the fruit companies and, behind them, the United States, as the virtually autonomous north coast spun away from the impoverished centre and south
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