Quick summary: On 17 June 1952 Guatemala published Decreto 900, an agrarian reform law that allowed the state to expropriate uncultivated land on large estates and pay for it in 3% bonds with terms of up to 25 years, valued on each owner’s tax declaration as of 9 May 1952. In 1953-54 the government expropriated about 234,000 acres of United Fruit Company land near Tiquisate and 172,532 acres near Bananera; the US government pressed the company’s claim for compensation. A covert CIA operation, PBSUCCESS, armed and supported Carlos Castillo Armas; President Jacobo Árbenz resigned on 27 June 1954. The CIA’s role was left out of the State Department’s first published record in 1983 and documented in a 2003 volume.
This page sticks to primary documents: the text of the law, and the US State Department’s Foreign Relations of the United States (FRUS) series, which includes diplomatic notes, State Department intelligence reports and declassified CIA records. It quotes what each document says and dates it. Characterisations inside a document, such as calling a government Communist, belong to that document’s author and are attributed as such. All sources were read on 8 October 2026.
Timeline from the documents
| Date | Event | Document |
|---|---|---|
| 1945 | The new Constitution provides for the expropriation of unused private lands with prior compensation | State Department intelligence report, 5 March 1953 (FRUS Guatemala, doc. 35) |
| 9 May 1952 | Cut-off date for the tax valuations used to set compensation | Decreto 900, Art. 6 |
| 17 June 1952 | Agrarian Reform Law published in the Diario Oficial, No. 86 | Decreto 900 |
| December 1952 | Workers at United Fruit’s Tiquisate and Bananera subsidiaries file expropriation applications | FRUS Guatemala, doc. 35 |
| January 1953 | Árbenz signs the first expropriation of private farms, four of them | FRUS Guatemala, doc. 35 |
| 26 February 1953 | Order to expropriate approximately 234,000 acres of United Fruit land near Tiquisate | FRUS 1952-54 vol. IV, editorial note (doc. 420) |
| 18 March 1953 | Guatemala’s Supreme Court denies the company’s appeal | FRUS vol. IV, doc. 420 |
| 25 March 1953 | US aide-mémoire: bonds are not prompt and effective compensation | FRUS vol. IV, doc. 420 |
| 26 June 1953 | Guatemalan note: the lands were unproductive and vacant; expropriation is a matter of national sovereignty | FRUS vol. IV, doc. 420 |
| August 1953 | The Operations Coordinating Board directs the CIA to take responsibility for operations against the Árbenz government | CIA memo of 12 May 1975 (FRUS Guatemala, doc. 287) |
| 27-28 August 1953 | US aide-mémoire sets out the legal basis of the company’s claim and asks for direct negotiations | FRUS vol. IV, doc. 420 |
| 5 February 1954 | US renews the request and suggests international arbitration | FRUS vol. IV, doc. 420 |
| 24 February 1954 | Final expropriation of an additional 172,532 acres near Bananera | FRUS vol. IV, doc. 420 |
| 20 April 1954 | US presents a formal claim on the company’s behalf for the Tiquisate lands | FRUS vol. IV, doc. 420 |
| 17-18 June 1954 | Five shock teams trained by the CIA cross into Guatemala | CIA memo, 1975 |
| 14-29 June 1954 | About 80 air missions: cargo, propaganda drops, strafing and bombing | CIA memo, 1975 |
| 27 June 1954 | Árbenz resigns and hands power to the chief of the armed forces, Carlos Enrique Díaz | CIA memo, 1975 |
| 28 June 1954 | Díaz decrees a junta with Colonels José Ángel Sánchez and Elfego Monzón | US Embassy telegram, 28 June 1954 (FRUS Guatemala, doc. 256) |
| Early July 1954 | Castillo Armas becomes President of the Junta, with Major Enrique Oliva and Monzón | CIA memo, 1975 |
What Decreto 900 said
The Ley de Reforma Agraria was published in the Diario Oficial on Tuesday 17 June 1952. Its key articles:
| Article | What it provides |
|---|---|
| Art. 1 | The aim: to end feudal property in the countryside and the relations of production behind it, to develop capitalist farming, and to prepare the way for Guatemala’s industrialisation |
| Art. 2 | Abolishes all forms of servitude, including unpaid personal service by farm workers and paying rent in labour. Rent paid in kind is allowed only on uncultivated, non-affectable land and may not exceed 5% of the harvest |
| Art. 5 | Expropriation is for social interest and requires prior compensation, paid in “Bonos de la Reforma Agraria” |
| Art. 6 | Compensation is based on the owner’s declared value in the rural property tax register as of 9 May 1952 |
| Art. 9 | Land that can be affected includes idle land, land not cultivated by or for its owner, land rented out in any form, and the state-owned Fincas Nacionales |
| Art. 10 | Exempt: rural properties up to two caballerías (90 hectares, 25 areas, 13 centiareas) whether cultivated or not; properties of two to six caballerías with two-thirds under cultivation; the lands of indigenous and peasant communities; and land of farming enterprises growing technical or economic crops, a list that names coffee, cotton, bananas, sugar cane and others; this last exemption excludes land not directly serving the enterprise and land worked under personal-service arrangements or to replace or supplement deficient wages |
| Art. 32 | Private land over six caballerías not cultivated by its owner, or rented out, or worked through personal-service systems in any of the last three years, counts as a latifundio and is to be expropriated |
| Art. 43 | The bonds pay 3% a year, with a maximum term of 25 years |
Article 10 matters to the United Fruit story: land of a farming enterprise growing bananas was exempt, except land not directly serving the enterprise or worked under the arrangements the article excludes. The State Department’s own intelligence report of 5 March 1953 says the agrarian commissions approved the expropriation of the company’s uncultivated lands.
The United Fruit Company’s land
The 5 March 1953 State Department intelligence report summarises both sides of the 1952-53 proceedings. The company argued that much of its acreage was exempt because it was forest, pasture or under technical crops, and that its uncultivated land was a reserve to replace banana acreage lost to plant disease. It also argued that compensation based on tax book value would be inadequate, noting that it had sought to have its land revalued between 1948 and 1951, and that agrarian bonds would be heavily discounted if cashed early. Both commissions overruled these arguments.
The governments then disagreed in writing:
- The US position (aide-mémoire of 25 March 1953): deferred payment in agrarian bonds was not prompt and effective compensation, and the amount offered was inadequate under established principles of international law.
- The Guatemalan position (note of 26 June 1953): the expropriated lands were unproductive and vacant and of no benefit to the company; the expropriation was an exercise of national sovereignty and not subject to international discussion; and all foreign-owned property in Guatemala was fully protected.
On 20 April 1954 the US presented a formal claim against Guatemala for the Tiquisate lands. A CIA dispatch from PBSUCCESS headquarters dated 2 June 1954 refers to the claim as “$15 million (or so)”; the editorial note in FRUS does not give the amount.
The CIA operation, in the CIA’s own words
The most direct account of the operation is a CIA memorandum of 12 May 1975, titled CIA’s Role in the Overthrow of Arbenz, printed in the 2003 FRUS Guatemala volume. It says:
- In August 1953 the Operations Coordinating Board directed the CIA to take responsibility for operations against the Árbenz government. The plan called for cutting off military aid to Guatemala, increasing aid to its neighbours, diplomatic and economic pressure, attempts to subvert or win over army and political leaders, psychological warfare and paramilitary action.
- About 85 members of Castillo Armas’s group were trained in Nicaragua; about 250 men were in Honduras and El Salvador as shock troops and specialists.
- A clandestine radio station was set up in Nicaragua.
- The agency fabricated reports of Soviet arms deliveries by submarine. A real shipment of 2,000 tons of Czech weapons and ammunition then arrived.
- On 17-18 June 1954 five shock teams crossed into Guatemala; about 80 air missions were flown from 14 to 29 June.
- On 27 June Árbenz resigned. After negotiations and further bombing, Castillo Armas became President of the Junta in early July.
- The budget was $3,000,000, and the actual cost, less recoverable assets, was just under it.
The memo’s “Background” section describes Árbenz’s government in the CIA’s terms of the time, including a claim that his 1950 election was fraudulent. Those are the memo’s words, reported here as the agency’s view.
The FRUS volume also records allegations from the period. In a memorandum of conversation dated 8 October 1953, a Guatemalan opposition officer, Colonel Roberto Barrios Peña, told a State Department official it was notorious in Central America that Castillo Armas received large sums from the United Fruit Company. The memo records his allegation; it does not confirm it.
Why the record took decades
The preface to the 2003 FRUS Guatemala volume explains that the original 1983 volume (FRUS 1952-1954, Volume IV, American Republics) did not document the CIA’s role in the ouster of Guatemala’s elected president. The historian who compiled it knew the compilation was “incomplete and flawed”; his references to the covert operation were denied in declassification, and the volume was published without a disclaimer. Partly in response to the criticism, Congress passed a law in 1991 requiring the series to be a thorough, accurate and reliable record. In the early 1990s, Directors of Central Intelligence acknowledged eleven early Cold War covert actions, Guatemala among them, and State Department historians gained fuller access to the CIA’s files. The declassification review of the new volume ran from 1999 to 2002, and its preface is dated April 2003.
Where it happened
The two United Fruit subsidiaries named in the record were at Tiquisate, on the Pacific side, and Bananera, on the Caribbean slope. Our Tiquisate municipality page covers the town today.
Related
- Tiquisate
- Is Guatemala a poor country?
- Are Guatemalans Hispanic or Latino?
- UNESCO heritage in Guatemala
- All guides
Sources
- Congreso de la República de Guatemala, Decreto 900, Ley de Reforma Agraria (scanned original): https://www.congreso.gob.gt/assets/uploads/info_legislativo/decretos/1952/gtdcx900.pdf (read 8 October 2026). The scan has no text layer; article wording was read against the Wikisource transcription of the Diario Oficial text: https://es.wikisource.org/wiki/Decreto_900,_Ley_de_Reforma_Agraria_(Guatemala)
- US Department of State, Office of the Historian, FRUS 1952-1954, Volume IV, American Republics, editorial note on the United Fruit expropriation: https://history.state.gov/historicaldocuments/frus1952-54v04/d420 (read 8 October 2026).
- FRUS 1952-1954, Guatemala (2003): preface https://history.state.gov/historicaldocuments/frus1952-54Guat/preface ; intelligence report of 5 March 1953 https://history.state.gov/historicaldocuments/frus1952-54Guat/d35 ; memorandum of conversation of 8 October 1953 https://history.state.gov/historicaldocuments/frus1952-54Guat/d57 ; PBSUCCESS dispatch of 2 June 1954 https://history.state.gov/historicaldocuments/frus1952-54Guat/d169 ; Embassy telegram of 28 June 1954 https://history.state.gov/historicaldocuments/frus1952-54Guat/d256 ; CIA memorandum of 12 May 1975 https://history.state.gov/historicaldocuments/frus1952-54Guat/d287 (all read 8 October 2026).
Information current as of 8 October 2026.
Frequently Asked Questions
What happened in Guatemala in 1954?
President Jacobo Árbenz resigned on 27 June 1954 during an armed operation run by the CIA. A 1975 CIA memo, published in the State Department’s Foreign Relations of the United States series, says the agency was directed in August 1953 to take responsibility for operations against the Árbenz government, trained members of Carlos Castillo Armas’s group in Nicaragua, flew about 80 air missions between 14 and 29 June 1954, and that Castillo Armas became President of the Junta in early July.
What was Decree 900?
Decreto 900, the Ley de Reforma Agraria, was published in Guatemala’s Diario Oficial on 17 June 1952. It allowed the expropriation of uncultivated and rented land on large estates, paid for with Agrarian Reform Bonds at 3% a year over up to 25 years, valued on the owner’s tax declaration as of 9 May 1952. Farms of up to two caballerías (about 90 hectares) were exempt whether cultivated or not.
How much United Fruit Company land was expropriated?
A State Department editorial note in the Foreign Relations series records an order of 26 February 1953 expropriating approximately 234,000 acres of United Fruit Company property near Tiquisate, and a final expropriation announced on 24 February 1954 of an additional 172,532 acres near Bananera. Both were to be paid in agrarian bonds.
Did the United Fruit Company cause the 1954 coup?
The documents show several things side by side and do not settle the question in one line. The US government formally pressed United Fruit’s compensation claim from March 1953 and filed it on 20 April 1954. The CIA’s 1975 summary of its operation describes the reasons in Cold War terms. A 2 June 1954 PBSUCCESS dispatch called the State Department’s support for the company’s claim unfortunately timed for the operation. This page sets out each record with its date.
Is Guatemala owned by a fruit company?
No. In the 1950s record, the United Fruit Company appears as a landholder and employer in Guatemala, with subsidiaries at Tiquisate and Bananera, whose uncultivated land was expropriated under the 1952 agrarian law. None of the documents on this page describe it as owning the country. This page does not cover the company’s present-day operations.
