At the end of the XIX Century, the government of Honduras was intent on building an inter-coastal railroad that would connect Tegucigalpa, the capital of Honduras, with both the Caribbean Coast as well as with the Pacific Ocean. Several different companies signed big land concessions with the government in exchange for their commitment to build and operate railroads in Honduras that would eventually reach Tegucigalpa and the Pacific coast. There were four big land concessions that were issued: The Truxillo Railroad Company was assigned the land from Trujillo towards the east into the Sico River Valley. The Vacaro Brothers Company, which later became the Standard Fruit Company, was assigned the territory to the east of the City of Tela towards the Aguan Valley, including this valley and the area around the city of Olanchito. A third company, the Tela Railroad Company was assigned the area from Tela into the Sula Valley, including San Pedro Sula, and finally the Cuyamel Fruit Company was assigned the area between San Pedro Sula and the Cuyamel River area, including the cities of Omoa and Puerto Cortes.
In time, the Tela Railroad Company and the Cuyamel Fruit Company merged into one larger company, retaining the name of the first. The Truxillo Railroad Company gave up its investments in Honduras in the nineteen thirties because of the black sigatoka disease that struck their banana fields. Incredibly, the government of Honduras actually allowed them to pick up the railroad tracks and take them out of the country. Their plan was to use the used tracks build a railroad in Costa Rica, however the government of Costa Rica did not allow them to use old parts and forced them to build a railroad with freshly made tracks.
The Banana Companies ruled the country throughout the first part of the twentieth century. They paid their employees with tokens that could only be exchanged at the company stores. The unfair, capitalistic system finally gave way to employee discontent, and led to the great banana strike, that actually stopped the banana production in Honduras for several weeks. Although the strike originated in the city of El Progreso, within the Tela Railroad employees, it quickly spread to La Ceiba to the Standard Fruit Company plantations.
The strike gave way to better conditions for the workers, and eventually set a time schedule for the railroads to be transferred over to the government of Honduras.
It was said that the US banana companies based in Honduras actually ran the government, and helped over through a legitimate president whenever it was convenient, Perhaps the most famous banana scandal of all times took place in 1975 when the chief executive officer of United Fruit Brands, owner of the Tela Railroad Company committed suicide by jumping out of his 40th story office in the Pan-Am Building in Manhattan. The Scandal became known as Banagate and eventually led to the ousting of the Honduran president in turn.
Once the railroads where the only way to get around the north coast of Honduras. Unfortunately, once these were turned over to the government in the nineteen seventies, they were let to slowly die. Today there are no more railroads in Honduras, however the legacy of the original Banana Republic can still be seen. The old Banana Capitals of Honduras, Tela and La Ceiba retain much of the architecture from days long gone. Near La Ceiba, you can still follow part of an old “banana road” that connected La Ceiba with the Aguan Valley, following the path of the Cangrejal River over the Nombre de Dios Mountains and then down to the Aguan Valley. The area today has become an hub for active adventure seekers as well as eco-tourists looking for nature related vacations. The area is truly a unique scenic destination worth visiting when you travel to Honduras and the Bay Islands!