Ch. 1 · The Landless Majority

Decree 900.

~4 min read · Ch. 1 of 7

In 1952, Guatemala held a stark contradiction. The nation boasted a high gross domestic product, yet the distribution of its wealth remained deeply fractured. Two percent of the population controlled seventy-two percent of all arable land. Most citizens owned nothing and lived in poverty with associated health problems. Indigenous people had been treated as subordinate for hundreds of years since the Spanish conquest. They became increasingly impoverished and dependent on wages from plantation work. Many indigenous workers were required to serve as migrant laborers through legal coercion. This system expanded rapidly as the coffee industry grew from the 1870s through the 1930s. The 1879 Constitution excluded the indigenous population from citizenship entirely. Spanish and mestizo rights to land were restricted through nationalization efforts focused on coffee production.

Mechanics Of Redistribution

Decree 900 did not redistribute land automatically upon passage. It created a National Agrarian Department known as DAN to oversee the process. People without land had to file requests with Local Agrarian Committees called CALs. These committees made decisions about how to reappropriate land from major owners. Landowners could dispute these decisions through an appeals process reaching up to the President. The committees formed from local groups intended to foster community control and local political power. The law gave new landowners the option of choosing lifetime tenure instead of private ownership. This goal aimed to prevent large landowners from simply buying back the land. Fincas Nationales were available only through this lifetime tenure option. Finally, the law established a system using bonds to compensate people who lost acres to peasants. Property owners received bonds maturing in twenty-five years based on previous year tax claims.

Production And Prosperity

By 1954, one hundred thousand families had received land along with bank credit and technical aid. This represented five hundred thousand individuals or one sixth of the country's population. Production of corn, coffee, and bananas increased significantly during the eighteen months the law was active. Contrary to detractors' hopes, Decree 900 did not result in agricultural collapse. Data indicated that agrarian reform unleashed new productive energies for both peasants and previously idle finqueros. High coffee prices bolstered the national economy and offset the flight of foreign capital. A U.S. Embassy report from 1954 stated the Guatemalan economy was basically prosperous while coffee prices remained high. The government dispensed over three million dollars in loans during 1953 alone. Around ninety percent of these loans had been paid back by July 1954. This repayment rate stood as a historically unusual success in lending within Guatemala's history.

Domestic Resistance And Violence

In 1953 Árbenz announced Guatemala was expropriating approximately one hundred thousand acres from the United Fruit Company. United Fruit owned four million acres representing forty-two percent of the nation's arable land. The company received six hundred twenty-seven thousand five hundred seventy-two dollars in bonds for the expropriation. This amount matched what United Fruit had claimed the land was worth for tax purposes. However, United Fruit proceeded to claim its land was worth significantly more than the bond value. It held close ties to U.S. officials and lobbied the U.S. government for intervention. The US State Department claimed the land was worth fifteen million eight hundred fifty-four thousand eight hundred forty-nine dollars on behalf of the company. Because of the Agrarian Reform Law, the Wm. Wrigley Jr. Company announced it would no longer purchase Guatemalan chicle in August 1952. Since Wm. Wrigley Jr. Company had been the sole buyer of the product, the

The United Fruit Company

Árbenz government suddenly had to provide massive aid for chicle harvesters. After aborting Operation PBFortune, the United States renewed efforts to unseat Árbenz with Operation PBSuccess. The CIA sought to develop relationships with members of the Guatemalan military and instituted an arms blockade. A key agent for a possible coup was the exiled colonel Carlos Castillo Armas. The CIA intensified propaganda campaigns to isolate Guatemala among Central American nations. Radio Liberation broadcast pro-Castillo Armas propaganda designed to neutralize the army from outside Guatemala. Nonexistent civilian uprisings and bogus incidents of sabotage were reported over these transmitters. In June 1954, Árbenz Guzmán was overthrown by a multi-faceted coup operation involving a small army led by Castillo Armas. Scattered right-wing violence in the countryside combined with U.S. Navy blockades and bombardment by CIA planes. Although Armas's ground invasion was quickly defeated, Árbenz resigned his post and Armas won control from the vacuum of power. Carlos Castillo Armas became president on July 8th and quickly repealed

Intervention And Overthrow

Decree 900. He reversed ninety-five percent of the redistribution that had occurred during the previous eighteen months. All land formerly owned by United Fruit was restored to the company immediately. Government documents pertaining to Decree 900 were destroyed to erase evidence of the reform. Armas created a new Agrarian Commission and passed two new laws restoring control over land policy to government officials. Some land changed hands as a result of these laws but the scope of reform was substantially reduced. Armas also abolished government support for labor unions and denounced their members as communists. A long period of civil war followed with indigenous and poor Guamaltecos fighting against landowners and the military. Peace accords reached in 1996 repudiated Armas's policy and called for a return to the idea of land as a social good.

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Common questions

What was the main purpose of Decree 900 in Guatemala?

Decree 900 aimed to redistribute land from large owners to citizens without property. The law created a National Agrarian Department to oversee reappropriation and established Local Agrarian Committees to make decisions about land distribution.

How many families received land under Decree 900 by 1954?

By 1954, one hundred thousand families had received land along with bank credit and technical aid. This represented five hundred thousand individuals or one sixth of the country's population.

Why did the United Fruit Company lose its Guatemalan lands during the reform?

The Árbenz government expropriated approximately one hundred thousand acres from the United Fruit Company because it owned four million acres representing forty-two percent of the nation's arable land. The company received six hundred twenty-seven thousand five hundred seventy-two dollars in bonds for the expropriation based on previous year tax claims.

When was Decree 900 repealed after the coup in Guatemala?

Carlos Castillo Armas became president on July 8th and quickly repealed Decree 900. He reversed ninety-five percent of the redistribution that had occurred during the previous eighteen months.

What happened to indigenous people before Decree 900 was passed in Guatemala?

Indigenous people had been treated as subordinate for hundreds of years since the Spanish conquest and became increasingly impoverished and dependent on wages from plantation work. Many indigenous workers were required to serve as migrant laborers through legal coercion under a system that expanded rapidly as the coffee industry grew from the 1870s through the 1930s.

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