Decree 900

• 1. Introduction

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  Decree 900, signed into law at 1:45 in the morning on the 17th of June 1952, was no ordinary piece of legislation. It aimed to take unused land from Guatemala's wealthiest estates and hand it to the people who had worked that land for generations. President Jacobo Árbenz Guzmán had a specific number in mind: 100,000 families, roughly 500,000 people, or one-sixth of the entire country's population.

  The questions this law raises are not just about Guatemala. Who holds land, and how they came to hold it, shapes everything from who eats well to who wields political power. Decree 900 lasted only eighteen months. Yet in that time it provoked a constitutional crisis, a CIA covert operation, a military coup, and the beginning of decades of civil war. What was in this law that made it so dangerous to so many powerful interests?

• 2. A Country Divided

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  When Árbenz won the 1951 election, Guatemala's economy was not small or stagnant. It had a high GDP. But the distribution of what that economy produced was extreme: 2% of the population controlled 72% of all arable land. Of that land, only 12% was actually being farmed.

  Indigenous Guatemalans had been pushed off their land since the Spanish conquest. By the time Árbenz took office, they had spent centuries as subordinate laborers, often bound to plantation work through legal coercion. Guatemala's coffee industry, which expanded rapidly from the 1870s through the 1930s, ran partly on indigenous migrant labor that people were legally required to provide.

  The landless poor also faced serious health problems, compounding economic deprivation with physical vulnerability. Árbenz believed that the path forward was not socialist redistribution but a transformation from what he called pseudo-feudalism into capitalism. Spreading land ownership and building infrastructure, in his view, would create the competitive market conditions Guatemala needed.

• 3. Writing the Law

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  Árbenz received political support from an unexpected corner: the Communist Party of Guatemala, known by its initials PGT. The PGT believed that capitalist development had to come before any communist revolution, so land reform served their long-term goals even if it was not their endgame. Árbenz accepted the PGT's help and counted its leaders among his personal friends.

  The Guatemalan Congress worked through Saturdays and Sundays for five weeks to refine the law. One significant change Congress made was restoring provisions for producer cooperatives, which Árbenz had removed from the draft. The AGA, the association representing existing landowners, opposed the bill throughout.

  The law that emerged was precise about which land qualified. Estates larger than 672 acres had all uncultivated portions subject to redistribution. Estates between 224 and 672 acres were subject only if less than two-thirds of the land was being farmed. Government-owned fincas nacionales, which together produced a quarter of the nation's coffee, were transferred entirely. Landowners whose property was taken received government bonds maturing in 25 years, with compensation values based on what the owners themselves had declared to tax authorities the previous year.

• 4. Reform in Practice

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  The law created local structures rather than operating from the top down. Landless Guatemalans filed requests with Local Agrarian Committees, called CALs, which were drawn from community members and intended to foster local political power. Landowners could appeal committee decisions, with cases going all the way to the President.

  José Manuel Fortuny, the PGT leader who helped draft the law, later explained what the CALs were meant to accomplish: the committees would lay the groundwork for the eventual radicalization of the peasantry and give peasants a strong sense of their common needs.

  For new landholders, the law offered a choice between private ownership and lifetime tenure. Lifetime tenure was designed to prevent wealthy landowners from simply repurchasing the land they had lost. The fincas nacionales were available only through this lifetime tenure option.

  Credit came next. Additional legislation in 1953 established the National Agrarian Bank, which dispensed the equivalent of $3,371,185 in loans during 1953. By July 1954, around 90% of those loans had been repaid, a repayment rate that observers described as historically unusual. Literacy programs followed in 1954, forming the third major component of the reform effort.

• 5. Conflicts and Complications

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  Implementation was not smooth. Some peasants, believing the law gave them a mandate to act, seized land without filing requests through the CALs. In some areas, competing groups of peasants fought over who would receive a particular piece of land. Historian Neale Pearson documented isolated cases in which peasants burned crops to have land declared uncultivated and therefore eligible for expropriation.

  Landowners pushed back too. Some closed private roads through their estates to prevent union representatives from reaching peasants and informing them of the new law. The government responded by declaring all roads public. Some local police forces initially sided with landowners, though government pressure eventually brought them into compliance.

  In 1953, the Supreme Court ruled that the law's lack of judicial oversight was unconstitutional and blocked further implementation. Congress, at Árbenz's urging, voted to impeach four judges. Anti-government demonstrations followed, and one person was killed in the course of them.

  Historian Douglas Trefzger noted that the law's benefits were not evenly distributed across ethnic lines. Ladinos gained more from the redistribution than indigenous Guatemalans did, even though the indigenous population had been the most deprived. Political consciousness among indigenous communities did increase, but poverty persisted.

• 6. United Fruit and the United States

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  In 1953, Árbenz announced that Guatemala was expropriating approximately 234,000 acres of uncultivated land from the United Fruit Company. The company held 550,000 acres in Guatemala, representing 42% of the nation's arable land. Guatemala compensated United Fruit with $627,572 in bonds, using the value the company itself had declared on its tax returns.

  United Fruit argued its land was worth far more. The U.S. State Department, acting on the company's behalf, told Guatemala that the land was worth $15,854,849. The company had close ties to U.S. officials and lobbied intensively for intervention.

  A separate blow came from the Wm. Wrigley Jr. Company, which in August 1952 announced it would no longer buy Guatemalan chicle because of the agrarian reform. Since Wrigley was the sole buyer of chicle, the Árbenz government had to quickly build a support program for chicle harvesters who lost their market overnight.

  The U.S. State Department's own Office of Intelligence Research noted that the reform would directly affect only around 1,710 landowners. Even so, it expressed concern that the law would strengthen communist influence in Guatemala. The CIA had already attempted a coup called Operation PBFortune before renewing its efforts through Operation PBSuccess, running from 1953 into 1954. That operation built relationships inside the Guatemalan military, imposed an arms blockade, and ran a psychological warfare campaign intended to make the Árbenz government look on the verge of collapse.

• 7. Coup and Repeal

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  In June 1954, Árbenz was overthrown. The operation combined a small ground invasion led by exiled colonel Carlos Castillo Armas, CIA planes that bombed targets in Guatemala, a U.S. Navy blockade called Operation Hardrock Baker, and an orchestrated campaign of psychological warfare. Armas's ground forces were quickly defeated militarily. But the broader operation had demoralized Árbenz and prompted military defections. He resigned, and Armas filled the vacuum.

  Armas became president on the 8th of July 1954. Within days, Decree 900 was repealed and 95% of the redistributions were reversed. Every acre formerly belonging to United Fruit was returned to the company. Government documents relating to Decree 900 were destroyed. Armas abolished state support for labor unions and labeled their members communists.

  The land reform had by then reached 1,400,000 acres and 100,000 families. It had also affected some of Árbenz's own land, 1,700 acres of which had been expropriated under the law's terms, along with 1,200 acres belonging to foreign minister Guillermo Toriello.

  The peace accords reached in 1996, more than four decades after the coup, repudiated Armas's policies and called for a return to treating land as a social good rather than purely private property.