In November 1950 Arbenz was elected president of Guatemala, ushering in four years of continued reform. Agrarian reform was the linchpin of Arbenz's agenda. Enacted in 1952, this saw more than 100,000 peasants receive land confiscated mainly from Guatemalan hacendados (large landowners) and, most significantly, from the American-owned United Fruit Company (UFCO). Arbenz also encouraged unionization among agricultural workers.
Only a few communists played a part in the reform process, and the Arbenz government saw itself as merely bringing a semifeudal society into the twentieth century. Seen through the prism of the Cold War, however, it appeared to Washington that Arbenz was flirting with socialism, if not communism. Early in the Arbenz presidency, Guatemala became the first major laboratory for what would later become known as political destabilization. The U.S. Central Intelligence Agency (CIA) and State Department, headed by Allen W. and John Foster Dulles, respectively, brothers who had ties to UFCO, undertook a disinformation campaign that undermined Arbenz's legitimacy among the country's upper and middle classes and, especially, the armed forces.
A shipment of Czechoslovak arms to Guatemala in May 1954 provided the United States with "evidence" that Arbenz was tilting toward the Soviet bloc and, therefore, had to be removed from power. The United States helped train a contingent of Guatemalan exiles in Honduras who, in June 1954, invaded Guatemala and forced Arbenz's resignation on 27 June. A pro-American military regime led by Colonel Carlos Castillo Armas then came to power. Arbenz left Guatemala, eventually settling in Mexico. He died in Mexico City on 27 January 1971.
Schlesinger, Stephen C., and Stephen Kinzer. Bitter Fruit: The Untold Story of the American Coup in Guatemala. Garden City, NY: Doubleday, 1982.