HO–17. Memorandum of Conversation, by the Officer in Charge of Honduran Affairs (Chaplin)1
SUBJECT
- United Fruit Company Plans in Honduras
PARTICIPANTS
- ARA—Assistant Secretary Thomas C. Mann
- Mr. Victor Folsom, General Counsel, United Fruit Co.
- Mr. Joseph W. Montgomery, Director, United Fruit Co.
- Mr. Alfred Giardino, Labor Consultant, United Fruit Co.
- Mr. Dale McConkey, Personnel Director, United Fruit Co.
- Mr. Jasper Baker, Wash. Representative, United Fruit Co.
- Mr. Andrew McClellan, AFL/CIO
- ARA:OAP—Mr. Higdon, Mr. Chaplin
- ARA:RPA—Mr. Hammond
Mr. Folsom and his associates called on Mr. Mann at the latter’s request to discuss the United Fruit Company’s plans for its Honduran operations. Mr. Mann said that uncertainty over the company’s plans in Honduras is so intense as to create a political problem. The problem areas appeared to be in reduction of work force, leasing banana farms to private producers, withdrawal from schools, hospitals, the commissary, and possible turnover of the railroad to the Honduran Government.
Mr. McClellan said that the union (SITRATERCO) did not intend to advise the company on plans for reorganization in the face of the declining economic position of the Honduran banana industry, but felt that the company had an obligation to arrange for transfer of the public services it operates in such a way that these services will continue to operate efficiently. He said that he hoped to arrange a meeting between company officials and the union leaders.
Mr. Folsom outlined the grim outlook for the Honduran banana industry, and noted that at the current rate of spread of the Panama disease, United’s production of the Gros Michel variety will have been reduced to virtually nothing in five years. United has an investment of about $40 million in Honduras, and is doing everything it can to protect that investment. The only solution foreseen at this time is the discovery of a disease resistant banana variety.
The company’s counting on having discovered a disease resistant variety before the existing Gros Michel production is wiped out. The company has established experimental growths of Lacatan and Giant [Typeset Page 827] Cavendish varieties, and the [Facsimile Page 2] associated boxing plants. It was emphasized that there are many shipping, marketing, and consumer acceptance problems to be resolved before the company could say that these varieties are the solution to the disease problem. Mr. Folsom said that the question of maintaining the various public services in effective operation was basic in the company’s plans, but that it was obvious that some of these operations were far more extensive than justified by the current scale of operations, or were businesses which the company should not be engaged. He pointed out that it was vitally important for the company to have the hospitals and railroads continue in operation, and the company was investigating every possibility for effective operation under private or public auspices. He said that United planned to send a team to Honduras to explain the company’s plans in the near future, and hoped that this team could allay the existing apprehension about the company’s plans.
Mr. McClellan said that the union was in a position to take the place of the company’s commissary operation, and the union would be glad to cooperate in assisting the transfer of other public services.
Mr. Folsom said that a mission of Mr. Albert Maverick and Mr. Giardino would go to Honduras in the next three weeks to explain the company’s plans to government and union officials. He said that some of the uncertainty reflected in the Honduran situation was a consequence of the uncertainty of the company’s own policies. He hoped that a wide range of firm programs would have been decided upon before the visit of the mission to Honduras.
Mr. Mann said that Mr. Folsom’s exposition had been very reassuring, and that a similar discussion in Honduras should have desirable effects. He added that he was reassured that the farm leasing, or associate producer, program was being set up in such a way that the farms were large enough and potentially sufficiently profitable so that the operators would be in a position to pay normal wages to their employees.
The urgency of the problem in Honduras was restated, and Mr. McClellan said that he would immediately cable the head of SITRATERCO that the United Fruit Company would be sending a mission to Honduras to discuss company plans in the next three weeks, and that he hoped this news would be reassuring. Mr. Folsom said that the company would proceed with its Honduran programs which had been deferred at Mr. Mann’s request, and would make every effort to present a complete, detailed exposition of company plans to interested groups in Honduras.
- Source: Department of State, Central Files, 815.0511/11–1760. Official Use Only.↩