Banana Republic

Banana Republic : A small country (especially in Central America) that is politically unstable and whose economy is dominated by foreign companies and depends on one export (such as bananas)

The perjorative term now used to describe a generally unstable or "backward" dictatorial regime, especially one where elections are often fraudulent and corruption is rife was coined by O. Henry (the American author of much loved short stories like "The gift of Magi", "The last leaf" and others) in reference to Honduras, a Central American nation. "Republic" in his time was often a euphemism for a dictatorship, while "banana" implied an easy reliance on basic agriculture and backwardness in the development of modern industrial technology.

Why bananas? Read on.....

Banana production first began in the Caribbean by smaller banana companies; until 1870 the bananas grown in the region were produced for local consumption. Once bananas hit the U.S. market they exploded in popularity and soon passed from being an exotic novelty to join apples, grapes, as the standard in U.S. fruit baskets. With the formation of the United Fruit Company by Keith Minor in 1900; banana growing was moved to Central America. United Fruit made several of these Central American nations into “banana republics”, countries that served as production platforms for the banana-exporting enterprise. The United Fruit Company became known throughout Latin America as “el pulpo” (the octopus) because of its far-reaching hand in economic power and political arrangements in its host country. The United fruit kept elected officials in their corporate pockets; they were able to acquire vast amounts of land and establish a banana monopoly.

Why Honduras? Read further.......

In Honduras the United Fruit company dominated the country's key banana export sector and support sectors such as railways. Sam Zemurray, a Russian by birth and later an American businessman (his parents emigrated to US when he was 14) entered the banana trade at the age of 18. By the age of 21, he had amassed considerable wealth but soon found himself in heavy debts. He left for Honduras when the country was working to reschedule its national debts. When US tax authorities did not help Zemurray, he smuggled the deposed Honduran president, Manuel Bonilla from US back to Honduras and a revolution was fought in 1910 that led to Bonilla's return to power. Bonilla granted Zemurray land concessions and low taxes that saved his business. Later, in 1933, Zemurray will take over United Fruit in a hostile bid .

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