Foreign Relations of the United States, 1961–1963, American Republics; Cuba 1961–1962; Cuban Missile Crisis and Aftermath, Volumes X/XI/XII, Microfiche Supplement

153. Memorandum of conversation, December 4, among Ambassador Burrows, Jasper Baker (United Fruit Company), Edward M. Rowell, and John W. Fisher¹

December 4, 1962, 11 a.m.

SUBJECT

• Honduran Agrarian Reform and the United Fruit Company

PARTICIPANTS

• Charles R. Burrows, United States Ambassador to Honduras
• Jasper Baker, United Fruit Company Vice President Resident in Washington
• Edward M. Rowell, OIC, Honduran Affairs, Department of State
• John W. Fisher, Acting Director, Office of Central American and Panamanian Affairs, Department of State (last few moments of conversation only)

Baker reported a conversation between Honduran and United Fruit Company officials which was held in Miami, Florida, on December 1, 1962, at 7:00 PM. The Hondurans were: President VILLEDA Morales, Finance Minister Jorge BUESO Arias, and Presidential Secretary Juan “Jack” AGURCIA Ewing. United Fruit was represented by: Victor C. FOLSOM, Vice President and General Counsel, Jasper BAKER, Vice President resident in Washington, Andrew HOLCOMB, Manager resident in Panamá, and Ben MILLER. The meeting was requested by the Honduran Government. President Villeda did most of the talking for the Hondurans, though toward the end Bueso spoke more frequently. Bueso interpreted for Baker.

According to Baker, Folsom opened the talk in Miami, emphasizing that frankness was essential. He asked Villeda if he thought he could amend the Agrarian Reform Law, reminding Villeda he only had a year left in office. Folsom handed Villeda a letter summarizing the law and suggesting general changes in many articles. Folsom made it plain that the company did not expect all the changes would be made, but some were absolutely essential. (Baker reiterated this last point to Ambassador Burrows.)

Reportedly, Villeda welcomed the frank conversation. Villeda said he is politically stronger now than he was two months ago. He promised to begin working immediately to amend the Agrarian Reform Law. However, the amendments would not be formally presented until the right moment, two or three months from now. Villeda was confident he could amend the law.

Villeda asked the size of United Fruit’s replanting program for Honduras. Folsom said $15 million. Villeda asked if the company would withdraw from Honduras if the Agrarian Reform Law were not amended. He was told “no”, but that there would be no new investment or replanting. Villeda asked if he could announce publicly on his return to Honduras that United Fruit would not withdraw from the country. Folsom said “yes”.

After giving this report, Baker made the following observations:

He believes Villeda was sincere at the Miami meeting and that he will earnestly try to amend the Agrarian Reform Law. Folsom shares this view, though Holcomb does not. The meeting was most cordial. Villeda was not disturbed by the terms of the letter handed to him. However, he did not read it carefully. Thomas Sunderland, President of United Fruit, will accept absolutely Baker’s and Folsom’s favorable view of the meeting. (This last was in response to a question from Ambassador Burrows.)

While neither Baker nor Folsom question Villeda’s sincerity, the composition of the government which will take office in December, 1963, is very much in doubt. Hence, so long as key articles of the agrarian law remain unchanged, future Honduran policy is uncertain, and United Fruit cannot reinvent. Amendment must provide due recourse to the courts for appeal of administrative actions. This change should be accomplished before the law becomes an election issue.

Replying to a question from Ambassador Burrows, Baker said no order of priority was shown in the amendments United Fruit suggested to Villeda. Baker thought Villeda would be able to perceive by himself which were most important to the company.

Noting the great power the law concentrates in the head of the Agrarian Reform Institute, Baker said the present antagonistic director, Miguel CUBERO da Costa, would have to be removed. He implied the company might not reinvest in Honduras so long as Cubero holds his present position, even if the law is amended satisfactorily. This was not discussed with Villeda in Miami.

Baker noted that in preparation and passage the Agrarian Reform Law “had gotten away” from Villeda. He cited the fact that none of the ministers of government were allowed to see the law before it was submitted to the Honduran congress.

Baker said he told Secretary Rusk at dinner on November 30 that the “Hondurans had not moved in on United Fruit”. Answering a question, Baker said he understood that the Agrarian Reform Law seriously affects leased lands, and that United Fruit does have large leased holdings in Honduras. He added that he had no idea how much land these leases covered, though later he informally hazarded a guess that perhaps 50% of the land controlled by United Fruit in Honduras is leased.

Answering another question, Baker said he agreed that a public investigation of Honduran agrarian reform in relation to the Hickenlooper Amendment and United Fruit would not be very helpful at this time. He added that if there is no progress in amendment of the Agrarian Reform Law in two or three months he would want to review this position.

Baker said many are working to ease this problem in Honduras. Reportedly, Eugene Black, President of the World Bank, told Villeda at Blair House on December 1 that it is essential that Honduras maintain a favorable climate for private enterprise. Baker hoped the United States Government would continue to press the matter, and he asked Rowell to keep him (Baker) informed. When President Kennedy meets the Central American Presidents at San Jose in March or April 1963, Baker hopes Villeda will be able to report that the problem with United Fruit has been solved.

During the conversation Ambassador Burrows noted the following:

In view of Honduras’ primitive judicial system, appeal to the courts is not very meaningful. While the Agrarian Reform Law was being passed and submitted to Villeda for signature no one knew what was in the law. Only a copy of the original draft was available. Burrows tried to have Villeda delay final Congressional action on the law until 1963, but this was not possible. The United Fruit Company took no strong action in Honduras regarding the law until it had been passed. Once passed, it was politically impossible for Villeda to veto it. Honduran politics have changed a great deal in the last 30 years.

1. Honduran agrarian reform and United Fruit Company. Confidential. 3 pp. DOS, CF, 715.04/12–462.