1963 Honduran coup d'état

The 1963 Honduran coup d'état was a military takeover of the Honduran government on 3 October 1963, ten days before a scheduled election. Oswaldo López Arellano replaced Ramón Villeda Morales as the President of the country and initiated two decades of military rule.

Villeda Morales had instituted progressive labor laws and an agrarian reform policy, which prompted accusations of Communist sympathies from the right wing in Honduras and the United States. His intention to expropriate land from United Fruit Company, though never carried out, was a particular source of friction.

Civil–military relations in Honduras had deteriorated since 1957. A coup attempt in 1959, suppressed by students and unionist supporters of Villeda Morales, provoked intense hostility towards the military and the creation of an autonomous presidential guard. Politicians discussed abolishing the military. Modesto Rodas Alvarado, the Liberal Party's candidate for president, ran on a demilitarization platform and was expected to win the election on 13 October. The military acted pre-emptively and seized control of the government.

Background

For much of the 20th century, the economy of Honduras was largely controlled by the United Fruit Company. Beginning with a successful general strike in 1954, workers pushed for better pay, shorter hours, job benefits, unionization, and land reform.[1]

Although Ramón Villeda Morales, a reformist physician with the Liberal Party of Honduras (Partido Liberal de Honduras, PLH) won a plurality votes in the 1954 presidential election, he was 8,869 votes short of a majority and was blocked from becoming president.[2][3] Vice President Julio Lozano Díaz attempted to seize power, dissolving the legislature and declaring himself interim president. On 7 October 1956, Lozano Díaz held a Congressional election which both of the country's major parties declared unfair and boycotted. This election (in which Díaz's party won every seat) provoked a military takeover on 21 October.[4] In a new election held on 22 September 1957, the PLH won a majority of seats. The new Congress appointed Villeda Morales as President for a six-year term.[4]

Villeda Morales presidency, 1957–1963

Villeda Morales introduced wide-ranging progressive platform, including infrastructure development, school construction, labor regulations, and agrarian reform. His policies generally won him praise from the Kennedy administration, but animosity from anticommunist hardliners (i.e. landowners and business executives) in Honduras and in the United States.[5]

Agrarian reform

Honduran farmers

Tension over land in Honduras was rising, as increasing production of bananas, cotton, cattle, and coffee drove many people off their land. Haciendas used barbed wire to enclose more and more land, provoking violent conflict with peasants.[6] The Villeda Morales government sought to quell this violence with moderate reforms, including the distribution of national land and the creation of a national peasant organization.[7]

Under Villeda Morales, Honduras joined the Alliance for Progress initiated by the United States under John F. Kennedy. Enthusiastic about liberalization, Villeda promoted a land reform law to defuse the anger of peasants, restore illegally occupied land, and increase the amount of land under cultivation.[8][9] The law would have expropriated uncultivated lands owned by U.S. Companies, including the United Fruit Company and the Standard Fruit Company.[9]

Villeda Morales resisted pressure from Ambassador Charles F. Burrows to prioritize the interests of U.S. companies.[10] His actions were not well-received by business interests in the United States. United Fruit president Thomas Sunderland wrote to Secretary of State Martin:[11]

The events of today indicate that the situation in Honduras is growing more serious with the passing of time. In spite of the affirmations made by President Villeda Morales in the presence of the American Ambassador that a copy of the proposed law would be shown to us today, Honduran government officials have declined to show us the bill. . . . We urgently need action by the State Department through the American Ambassador with the goal of obtaining a copy of this proposal before it is too late to take action to defend American interests.

The U.S. Senate threatened to withhold aid from Honduras if it expropriated possessions of a U.S. company .[12] The Kennedy Administration pressured Villeda Morales directly, and after a visit to the White House in 1962 he made significant policy changes to undercut the power of the land reform law.[13] By October 1962, U.S. Assistant Secretary of State Edwin M. Martin announced that Honduras had agreed to protect the banana companies interests—but United Fruit was unconvinced, insisting that with its new agrarian reform law, Honduras was travelling "on the path of Cuba and Communist China."[14]

Politics of anticommunism

To prove his anticommunist credentials, Villeda Morales routinely denounced Communism and cut diplomatic relations with Cuba in 1961.[15] Many U.S. officials, however, warned that the liberal Villeda Morales government was not sufficiently hardline on Communism.[16]

A Helluva Situation

"We have a helluva situation down here and unless really forceful action is taken we are going to have a little Commie Chine [sic] right in our own backyard."

Whitting Willauer, U.S. Ambassador to Honduras.[17]

The Federal Bureau of Investigation sought to identify Communists within the Liberal Party.[18] The Central Intelligence Agency worked actively in Honduras to alienate the country from revolutionary Cuba. When Villeda Morales cut ties with Cuba, one week after the Bay of Pigs invasion, it was probably at the urging of U.S. agents in Honduras.[19]

As with other Latin American countries, the United States had cultivated a relationship with the Honduran military. A 1954 agreement between the two countries promised military aid from the US in exchange for resource extraction.[20] The military sent representatives to meetings of the US-orchestrated Central American War Ministers group, which became CONDECA (Consejo de Defensa Centroamericana).[21] During the Villeda Morales presidency, the Honduran military had greater allegiance to the U.S. than to the Liberal Party government—thereby exerting constant pressure on the government to follow U.S. policy mandates.[22]

Tensions between military and civilian government

Tension between the civilian government and the military began after the election, when it seems that military officers coerced Villeda Morales and the PLH to adopt a new Constitution. The Constitution of 1957 envisioned a political role for the Honduran military, stipulated that the military could operate from a secret budget, and allowed the military to disobey "orders that violate the spirit or letter of the Constitution".[23] The military used its newly expansive powers, demanding changes in the civilian government and abusing Honduran citizens with impunity.[24] PLH leader Francisco Milla Bermúdez argued that Honduras should abolish its military completely, as Costa Rica had done. Resentment against the military was rising, and Milla Bermúdez's proposal received unexpected popular support.[25]

1959 coup attempt

On 12 July 1959, a coup led by Colonel Armando Velásquez Cerrato killed numerous people in an attempt to gain power. This attempt was supported by the National Police and by the powerful Somoza forces of Nicaragua, but did not have complete support from within the military. This coup was defeated when students and unionists came to the government's defense. The head of the armed forces interceded, allowed Velásquez Cerrato to escape, and declared a return to the status quo.[26]

The attempted coup provoked further alarm about the power of the military, and led to active civilian efforts to restrict its power. Public opinion turned further against the military, and demilitarization was discussed as a viable political option. Ildefonso Orellana Bueno argued, in a speech to the Constituent Assembly (and republished in El Cronista), for a reform of the 1957 Constitution:[27]

The group of individuals clustered with the pompous name of 'Armed Forces' wants to convert themselves into a privileged and all-embracing caste, shielding itself to reach its goals in Title XIII of our fundamental law, from whose trench they are preparing to stab the back of the Honduran people, having now been converted not only in the devouring octopus of the national budget, but also in a real social threat, in an imminent danger for our own security, and in an enemy of the functioning democracy in which we have dedicated our faith.

President Villeda organized a militarized Civil Guard (Guardia Civil), which reported to the President and sometimes fought openly with the military. After the Civil Guard defeated the Army in a March 1961 soccer game, soldiers killed 9 members of the Civil Guard. In September 1961, the Civil Guard killed 11 soldiers and civilians who were attempting another coup against Villeda.[28][29]

1963 election campaign

Villeda himself had lost support within the Liberal Party, due to his concessions to the National Party, the military, and the United States. Modesto Rodas Alvarado became a leader of the Liberal Party opposition to Villeda, and won the party's nomination for the election scheduled for 13 October 1963. Rodas Alvarado won substantial popular support based on campaign promises to abolish the military.[30][31]

Colonel Oswaldo López Arellano was offered the nomination of the National Party (Partido Nacional de Honduras, PNH) by the influential General and former President Tiburcio Carías Andino. He turned it down, citing "reasons beyond my control". This cryptic response led to charges among the National Party (and the press) that the U.S. had pressured López Arellano not to participate in the election, because of Kennedy's opposition to military governments.[32] The eventual nominee of the National Party, Ramón Ernesto Cruz, had served past dictatorships and was not popular with farmers, organized labor, or liberals in San Pedro Sula. Ernesto Cruz's chances were weaked further when General Carías Andino formed a splinter party (the Popular Progressive Party).[33]

Rumors in the middle of the year suggested the possibility of a coup. The U.S. was also aware of this possibility.[34] Kennedy himself opposed a coup, threatening to cut off economic aid to a military junta. This threat was disregarded by conservatives in the military, who expressed confidence (according to Burrows) that the US "would be back in six months".[14]

Coup

On 3 October 1963, the military conducted a violent coup, beginning with an attack on sleeping Civil Guardsmen. More civilian resistors and Civil Guardsmen were killed in the following days.[35][36]

Colonel López Arellano was proclaimed President and issued a declaration which described problematic elements of the former regime:[37]

  1. The existence of a Guardia Civil, converted into a political army, duly armed and in open opposition to the Army, with its only goal to achieve the elimination of [the Army] in order to proceed afterward to submit the citizenry in general to the capricious sectarian desires of its leaders.
  2. The evidence that the Government of the Republic favored the goals of the [Guardia Civil], helping it achieve those goals materially and morally. . . .
  3. The infiltration and freedom of action of extreme leftist elements, who in frank and open contrivance with government functionaries had undertaken a campaign of discrediting the Armed Forces as an initial step in implanting a climate of unrest that permits the rise of totalitarianism.
  4. The violation of the principles of free election, through the adulteration of electoral censuses and interference . . . [and the passage] of an unconstitutional election law (Gobierno Militar de Honduras 1963: 8–9).

Villeda Morales and Rodas Alvarado were immediately deported to Costa Rica.[38]

Responses

The government of San Pedro Sula, led by Mayor Felipe Zelaya Zelaya of the Liberal Party convened on 5 October to determine a response. They decided to remain in office, within the state of Honduras, if the Arellano regime agreed to respect the autonomy of the municipal government.[39]

The Voice of America quoted Ambassador Burrows stating that the "military golpe was justified due to the Communist infiltration into the government of Ramón Villeda Morales". The statement was denied by the United States Information Agency on the following day.[40]

Kennedy publicly condemned the coup after it took place, calling it "self-defeating" because "dictatorships are the seedbeds from which communism ultimately springs up".[41] The coup seemed to counteract the values espoused by the young Alliance for Progress.[42][43] On Kennedy's orders, the US ended diplomatic relations with the Honduras government.[41] Kennedy was assassinated on 22 November 1963. The new U.S. President, Lyndon B. Johnson, recognized the military government on 14 December 1964.[44]

Aftermath

Honduran soldiers collaborate with the US occupation of the Dominican Republic, 1965

The era of military government begun by the 1963 coup lasted solidly until 1982.[45]

In January 1965, López Arellano deposed the San Pedro Sula officials and replaced them with his allies in the National Party.[39] Many Liberal Party politicians did not accept the legitimacy of the 1965 Congressional and Presidential elections, but were pressured to accept the results. The U.S., via Ambassador Burrows, also urged politicians to participate in the new government. Adolf Berle, who had earlier visited Villeda Morales to investigate him for the CIA, now convinced him to acquiesce to the military regime.[46]

The U.S. increased its economic control of Honduras, while the country fell further into debt. U.S. companies controlled the fruit industry and the mining industry; the two largest Honduran banks were acquired by American companies. Land ownership remained disproportionate, unemployment rose, and the distribution of wealth grew more unequal than it already was.[47][48]

References

  1. ↑ Leonard, History of Honduras (2011), p. 141. "Despite the limited gains, the 1954 strike marked a major turning point in the growing strength of the Honduran labor movement and the decline of the fruit companies over state affairs. Coupled with the 1949 labor law, the settlement of the 1954 labor strike paved the way for the full unionization of Honduran labor in 1955, when the state legalized 50 unions, including the North Coast banana workers."
  2. ↑ Mylene Bruneau, "Ramón Villeda Morales: The “Little Bird” Who Brought Big Changes and Honor to Honduras”, Council on Hemispheric Affairs, 8 May 2009.
  3. ↑ Bowman, "Public Battles over Militarisation and Democracy in Honduras" (2001), p. 551.
  4. 1 2 Leonard, History of Honduras (2011), p. 144.
  5. ↑ Bowman, Militarization, Democratization, and Development (2002), pp. 166–167.
  6. ↑ Schulz & Schulz, The United States, Honduras, and the Crisis in Central America (1994), pp. 28–29. "In contrast, the big cotton plantations and cattle ranches tended to expand outward, absorbing neighboring land by evicting tenants and squatters and fencing in their new acquisitions with barbed wire. In southern Honduras, between 1952 and 1966, two haciendas alone acquired some 54,000 acres through such 'competitive exclusion.' Moreover, as land grew more scarce, the purchase and rental price of property rose, driving even more people into landlessness. These developments could not but produce a reaction. As peasant desperation grew, agrarian conflict increased. Campesinos began to resist the encroachments of the big commercial farms. Land invasions and violence became more frequent. Peasant militancy and organization increased."
  7. ↑ Schulz & Schulz, The United States, Honduras, and the Crisis in Central America (1994), p. 29. "In response, the government set up a colonization program. Between 1958 and 1960, some 75,000 acres of land were distributed. In 1961 a National Agrarian Institute (Instituto Nacional Agrario—INA) was established to oversee the process. A year later Villeda sponsored a new peasant union, the National Association of Honduran Peasants (Asociación Nacional de Campesinos de Honduras—ANACH), to counteract a more radical organization."
  8. ↑ Schulz & Schulz, The United States, Honduras, and the Crisis in Central America (1994), p. 29.
  9. 1 2 LaFeber, Inevitable Revolutions (1993), pp. 179–180. "But Villeda Morales became too acute about the Alliance's objectives. At the 1961 Punta del Este meeting, he took the Kennedy administration's rhetoric so seriously that he drafted an agrarian reform law which threatened the massive uncultivated lands owned by United Fruit and Standard Fruit."
  10. ↑ Euraque, Banana Republic Honduras (1996), p. 113. "Charles F. Burrows, the U.S. Ambassador, had long been reviewing the projected law with Villeda Morales so that, according to State Department official Edwin M. Martin, Villeda Morales and other Honduran officials 'would be aware of our interest in ensuring that the law was both constructive in its effects on agricultural productivity and incomes and would not adversely affect the legitimate interests of the present property owners, including United States corporations.' Despite Burrow's early discussions with Villeda Morales, the liberal leader apparently still felt that he could demonstrate some independence from Washington and the banana companies. For example, he 'failed' to show United Fruit Company officials copies of agrarian legislation prior to debate in the Honduran Congress."
  11. ↑ Bowman, Militarization, Democratization, and Development (2002), p. 172.
  12. ↑ Schulz & Schulz, The United States, Honduras, and the Crisis in Central America (1994), p. 30.
  13. ↑ Bowman, Militarization, Democratization, and Development (2002), p. 172. "Two months after signing the Agrarian Reform Law, Villeda was summoned to Washington to meet with Kennedy at the White House. After this meeting, Villeda removed the progressive director of the National Agrarian Institute (INA) and 'agrarian reform shifted drastically from expropriation of private property to colonization or resettlement projects upon state-owned land' (MacCameron 1983, 113; also see Brocket 1991). Villeda had seen what happened to Arbenz when the CIA and the UFCO decided he was a threat. Land reform continued in a watered-down version and country headed into the 1963 election."
  14. 1 2 Euraque, Banana Republic Honduras (1996), p. 113.
  15. ↑ Euraque, Banana Republic Honduras (1996), p. 114. "Starting in 1961, the president's enemies had viciously red-baited his regime, despite Ambassador Burrows's reassurances to Villeda Morales and despite Villeda Morales public denunciations of communism in general and its Cuban variety in particular. Villeda Morales suspended diplomatic relations with Cuba in April 1961—before he signed the alliance charter in August. Even right-wing opponents recognized his constant recriminations against 'Castro-Communism.' Nonetheless, by the time López Arellano ousted Villeda Morales, it was a foregone conclusion that the new regime would justify the coup at least partly because of 'the communist menace' to local civilization, property, and so forth."
  16. ↑ Euraque, Banana Republic Honduras (1996), p. 108. "Berle's confidence in Villeda Morales's regime actually belied, at least by 1962, a suspicion that liberals like Villeda Morales and others in the region were often still too soft on communists and 'crypto-Communists.'”
  17. ↑ Bowman, Militarization, Democratization, and Development (2002), p. 157. "Willauer had never set foot in Central America before he arrived in Honduras in February 1954. [...] The new American ambassador had actually been originally nominated to go to Guatemala and oversee the overthrow of Arbenz but was switched to Honduras where he starred in a supporting role by keeping the Honduran government in line and providing the training of the Castillo Armas forces. The Great Banana Strike hit Honduras soon after Willauer's arrival and he saw 'Pinkos' as the source of the trouble. In a letter to General Chenault of the Flying Tigers, Willauer wrote: 'We have a helluva situation [...]."
  18. ↑ Bowman, Militarization, Democratization, and Development (2002), p. 156.
  19. ↑ MacCameron, Bananas, Labor, and Politics (1983), p. 113. "More realistically, Villeda Morales appeared to have followed explicit policy directives of the United States embassy in Honduras. Throughout Latin America, the CIA and the State Department were working assiduously to precipitate ruptures in diplomatic relations with Castro (Agee 1975:138–316, passim). The perpetration of a classic CIA ploy became evident in Honduras a month prior to the Bay of Pigs invasion, when Roberto Dominguez Argucia, supposedly a leading intellectual of the Honduran Communist Party and a member of the Committee of Friends of the Cuban Revolution, surfaced to publicly assail the 'tyranical ambitions' of Fidel Castro. Such statements of political disavowal more than faintly resembled the actions of such CIA agents as the Guatemalan Manuel Pellcer."
  20. ↑ LaFeber, Inevitable Revolutions (1993), p. 182. "In an underdeveloped country, the military had become the most developed political institution. The United States played a vital role in fashioning that army. In the 1954 agreement that established the military relationship, the United States promised military aid and in return Honduras promised to open for U.S. Exploitation any 'raw and semi-processed materials required by the United States of America as a result of deficiencies or potential deficiencies in its own resources.' (That provision and other parts of the treaty resembled clauses in the 1903 pact in which the United States made a virtual colony out of Panama.)”
  21. ↑ Bowman, Militarization, Democratization, and Development (2002), p. 154.
  22. ↑ MacCameron, Bananas, Labor, and Politics (1983), pp. 114–115. "Even as Villeda Morales offered near-total cooperation with CIA front organizations in Honduras, the autonomous nature of the Honduran military served as a constant reminder of his government's very real fragility. The constitutional leverage which the military exerted on the presidency probably determined to some extent the final forms of the labor and agrarian laws. In view of Ropp's thesis (see chapter three) that the Honduran military owed its institutional strength exclusively to United States military aid and assistance, and indeed relied for its continued strength upon the same source, there was every reason to believe that the army would not allow national legislation to undermine the strength of United States economic interests in Honduras. Villeda Morales certainly recognized and understood this political fact of life, and carefully heeded it in governing the country."
  23. ↑ Bowman, "Public Battles over Militarisation and Democracy in Honduras" (2001), p. 554.
  24. ↑ Bowman, "Public Battles over Militarisation and Democracy in Honduras" (2001), p. 555. "It soon became apparent to the Liberal Party that the constitutional prerogatives and power provided to the Honduran armed forces were incompatible with democracy. The military made constant demands on the civilian government, including requests for changes in the cabinet. Beatings and even the shooting of civilians by the security forces occurred, and with the constitutional independence of the military no civilian charges could ever be brought. The press began to question the 'constant brutality' committed by soldiers. The murder of two students at the hands of the military in 1959 resulted in a surge of protests."
  25. ↑ Bowman, "Public Battles over Militarisation and Democracy in Honduras" (2001), p. 555. "The generals were furious with the Milla statement. Yet it is striking and significant that the general public was not. In an article entitled 'Popular Opinion Says Suppress the Army', the country's independent daily reported that the public response to the Milla comments was completely unexpected; the people wanted the soldiers to abandon the barracks and 'seek other more dignified means of daily sustenance'. The university students also seconded Milla's proposal."
  26. ↑ Bowman, "Public Battles over Militarisation and Democracy in Honduras" (2001), p. 555. "Velásquez, who was closely associated with the National Party, Somoza in Nicaragua and the most reactionary forces in the country, was supported above all by the National Police. The coup was violent, leaving many dead and injured. For the first few hours, the 'loyal' members of the armed forces stood on the sideline waiting to see if the coup would gain momentum. Students, labour and other members of civil society rushed to Villeda's defence and fought valiantly against the rebels ; Universidad Nacional Auto!noma de Honduras students and labour saved Villeda."
  27. ↑ Bowman, Militarization, Democratization, and Development (2002), p. 169.
  28. ↑ Bowman, “Public Battles over Militarisation and Democracy in Honduras” (2001), pp. 555–556.
  29. ↑ MacCameron, Bananas, Labor, and Politics (1983), p. 115.
  30. ↑ Bowman, "Public Battles over Militarisation and Democracy in Honduras" (2001), p. 558
  31. ↑ MacCameron, Bananas, Labor, and Politics (1983), pp. 115–116.
  32. ↑ Euraque, Banana Republic Honduras (1996), p. 115. "What forces beyond López Arellano's control could have kept one of the country's most powerful men from the presidency? In early March 1963 Ambassador Burrows found himself denying National Party accusations that the U.S. Government had persuaded López Arellano to reject the Carías nomination.
  33. ↑ Euraque, Banana Republic Honduras (1996), p. 116.
  34. ↑ Bowman, Militarization, Democratization, and Development (2002), pp. 173–174.
  35. ↑ Bowman, Militarization, Democratization, and Development (2002), pp. 174. "On 3 October 1963, a mere ten days before the election, the military staged a preemptive coup. Cognizant of the support of civil society and students in the previous coup attempt, the military unleashed one of the most violent coups in the history of Central America. Scores of civil guards were killed as they slept and violence against civilians continued for days. Attempts by students and Liberal Party supporters to challenge the overthrow of democracy were met with brutal reactions by los gloriosos.”
  36. ↑ ”Resistance Attempt Fails in Honduras”; St. Petersburg Times (UPI), 7 October 1963.
  37. ↑ MacCameron, Bananas, Labor, and Politics (1983), p. 117.
  38. ↑ Euraque, Banana Republic Honduras (1996), p. 108.
  39. 1 2 Euraque, Banana Republic Honduras (1996), pp. 116–117.
  40. ↑ MacCameron, Bananas, Labor, and Politics (1983), pp. 117–118.
  41. 1 2 LaFeber, Ineevitable Revolutions (1993), p. 181.
  42. ↑ Schulz & Schulz, The United States, Honduras, and the Crisis in Central America (1994), p. 31. "Villeda had been one of John F. Kennedy's favorites: a democrat and a reformer but also a fervent anticommunist who respected private property. He was, moreover, the fourth democratically elected Latin American president to be overthrown since 1962. Such coups undercut one of the basic assumptions of the Alliance for Progress—namely that the way to prevent Castro-style regimes was to eliminate the conditions that gave rise to them.”
  43. ↑ Morris W. Rosenberg, “Coup Setback for Alliance: Military Oppose U.S. Plan”; Evening Independent, 4 October 1963.
  44. ↑ Schulz & Schulz, The United States, Honduras, and the Crisis in Central America (1994), p. 31. "His successor, Lyndon Johnson, abruptly changed course. When the new head of the Honduran government Colonel Oswaldo López Arellano, proved willing to pay the necessary lip service to democracy, relations were restored. Even had Kennedy lived, it is unlikely that things would have turned out differently."
  45. ↑ Bowman, "Public Battles over Militarisation and Democracy in Honduras" (2001), pp. 558–560.
  46. ↑ Euraque, Banana Republic Honduras (1996), pp.118–119. "López Arellano's removal of San Pedro Sula's authorities in January 1965, as part of a national strategy, strengthened his party there and countrywide on the eve of Constituent Assembly elections scheduled for February. The results of those elections, now supervised by the nationalists and local military commanders, paved the way for López Arellano's assumption of 'legitimate' constitutional power. [...] The liberal deputies protested, but most eventually joined the body that soon transformed itself into a Congress, again following the liberal practices of 1957. Liberal deputies came under great pressure from many quarters to accept the situation, including from Ambassador Burrows. Villeda Morales himself joined the chorus demanding subservience, aruging that the deputies should 'assume a virile and energetic attitude and defend the interests of democracy and the country.' The aged Adolf Berle visited Villeda Morales in those days and, 'with a great deal of soul-searching,' advised him 'not to go into revolution.'”
  47. ↑ LaFeber, Inevitable Revolutions (1993), pp. 182–184. "U.S. direct investment declined in Honduras during 960 and 1961, rose during 1962 and 1963, and then doubled between 1963 and 1971 to well over $200 million (in book value). Despite this inflow, U.S. Companies took more out of Honduras after 1963 than they put in: in 1968 the outflow reached $22.4 million and in 1969, $17.7 million. The country exported more goods than it imported, yet its current account balance swam ever deeper in red ink until it threatened to drown amidst the benefits of the Alliance for Progress. The United States continued to control the banana industry, the largest mining companies, and key parts of the infrastructure including the two most important railroads. The two largest commercial banks, Atlantide and Bank of Honduras, came under the respective control of Chase Manhattan in 1967 and National City Bank of New York in 1965.”
  48. ↑ Schulz & Schulz, The United States, Honduras, and the Crisis in Central America (1994), p. 34. “The 1960s witnessed a rapid increase in foreign—mostly U.S.—economic penetration. Between 1963 and 1967, U.S. investment doubled. Of the sixty-three major companies in the country, thirty-five were set up between 1960 and 1968. One hundred percent of the production of the five largest Honduran firms was controlled by U.S. multinationals; the comparable figures for the twenty and fifty largest companies were 88.7 percent and 82 percent, respectively.”

Bibliography

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