In 1945, a young university professor named Juan José Arévalo assumed the presidency in Guatemala. With the ratification of a new constitution that same year, a labor law was enacted. But the landowning elite had long used the state to further their own interests above all else. The Arévalo regime found itself under constant attack, beating back one attempted coup after another. In 1947, the Ministry of Labor was established. For the first time, the state would oversee the conduct of planters. The UFCo refused to obey the new labor laws.
In 1948, Arévalo’s government arbitrated a strike on the United Fruit Company’s plantations. The company aggressively ramped up its campaign of anticommunism. The ruthlessness of the planter elite allied with the company was matched only by the increasing militancy of the newly formed labor unions. A rural laborer recalled, “I entered the union because, as a campesino worker, one needs the support of the Constitution of the Republic. We know we’re just workers, and that without that we’re worth nothing.” In 1950, Arévalo’s presidential term came to a close.
President Jacobo Arbenz took office in 1951. His chief concern was not that the United Fruit Company owned so much land in Guatemala, but that three-quarters of it lay fallow. The company immediately tested Arbenz by laying off 3,746 workers in its Pacific division and more than 3,000 in its Atlantic division. In Arbenz, agricultural workers found an ally.
After eight arduous years of workers organizing in the countryside, on June 17, 1952, Arbenz issued decree 900 to distribute land to the peasantry. This decree enabled the government to expropriate uncultivated land on any farm larger than 223 acres. The United Fruit Company had abandoned farms because of Panama disease. The government redistributed 100,000 acres, compensating former landholders based on the amount they had stated their land was worth when they filed their taxes. The UFCo had been cheating on its taxes by grossly underreporting the value of its land.