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Kindle Notes & Highlights
by
Rich Cohen
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January 18 - January 22, 2025
Why did he do it? Why didn’t he strike a deal? To understand this, you have to understand Zemurray’s personality—personality and style being the great unaccounted factors in history.
When this mess of deeds came to light, United Fruit did what big bureaucracy-heavy companies always do: hired lawyers and investigators to search every file for the identity of the true owner. This took months. In the meantime, Zemurray, meeting separately with each claimant, simply bought the land from them both. He bought it twice—paid a little more, yes, but if you factor in the cost of all those lawyers, probably still spent less than U.F. and came away with the prize.
Respect? What a stupid word! Zemurray was in Honduras before U.F., which had previously grown most of its bananas in Costa Rica, Guatemala, and Jamaica. U.F. came to the country only after Sam Zemurray proved it was immensely productive.
More time went by. Carías continued to favor United Fruit. How did Zemurray respond? By making room in his southbound banana ships, not for produce or seed but for hardware, guns, and bullets that found their way to the liberal insurgents who had taken to the hills in Honduras. It was always an option: if the leader is in the pocket of the other guy, change the leader.
It’s how our government operates, lurching from crisis to crisis, trustbuster to peacemaker: now there is not enough competition, now the competition is too chaotic and free.
What cannot be accomplished by threats can often be achieved by composure. Sit and stare and let your opponent fill the silence with his own demons.
Cuyamel Fruit was Zemurray in the shape of a corporation, his personality made manifest, his home and his love, where he tested his theories and formed his philosophy: get up first, work harder, get your hands in the dirt and the blood in your eyes. And here he was preparing to sell it to United Fruit.
There was also the matter of the stock market. One Friday in October, as the men were negotiating, news came of the collapse in New York. In the course of a day, the wealth accumulated over a decade by the blue-chip companies of America vanished. U.F. stock was not greatly affected, not at first, nor was Cuyamel stock, but a tremendous sense of insecurity followed the crash. For a man like Zemurray, who was as sensitive as a weather vane, it must have seemed like a propitious moment to attach his fate to the fortunes of the behemoth. Just ask Christopher Columbus, tossed by wind and rain for
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To them, the deal was aimed less at acquiring extra capacity than at driving their greatest competitor from the field. They wanted to get rid of Zemurray, bury him under a pile of stock. Sam agreed to retire, promising to neither work for a rival nor start a new fruit company of his own. A standard noncompete clause.
It’s possible he believed these things as he said them, but, in truth, Zemurray was not old and was still angry, easy to insult, easy to incense, driven, and restless. Show me a happy man and I will show you a man who is getting nothing accomplished in this world.
Zemurray wanted to build an educated Central American class independent of the trade; the overreliance of the people on the fruit companies had become a problem for everyone.
To Long, Zemurray represented everything that was wrong in America: the fat cat who had taken more than his share, the tycoon whose fortune was built on the backs of the poor. His brain is money; his teeth are rifle shells; his eyes are the stolen jade of the Mayan highlands; his fingers are ripes; his diet is human misery and human blood.
As one of the world’s first truly global corporations, United Fruit—its entire product line grown overseas, most of its market domestic—was uniquely vulnerable. In 1930 and 1931, the company diminished in ways that would have stunned Preston and Keith. Collapse of demand, labor unrest, deflation—there was serious trouble. In 1928, U.F. had made $45 million in profit. In 1932, it made just $6 million, an 85 percent decline.
This meant fewer workers employed, fewer fields planted, fewer bananas grown, which meant even lower profits, which meant still fewer fields planted and fewer bananas grown. The less we produce, the less we profit; the less we profit, the less we produce. The company was caught in a death spiral.
When Sam merged with United Fruit, its stock was trading at just over $100 a share. Two years later, the same shares were going for $10.25. The Zemurray fortune, once figured at $30 million, was valued at less than $3 million by 1932.
The greatness of Zemurray lies in the fact that he never lost faith in his ability to salvage a situation. Bad things happened to him as bad things happen to everyone, but unlike so many he was never tempted by failure. He never felt powerless or trapped. He was, as I said, an optimist. He stood in constant defiance.
He started by asking two questions. First: Are the challenges facing United Fruit part of the systemic failure of the global economy, meaning there’s nothing to do but hope and pray? Second: If the answer to the first question is no, what can be done to move the product, increase profits, resuscitate the company? How can U.F. be saved?
Where did Zemurray go for answers? Did he meet with economic experts and college professors? Did he call Daniel Wing, the chairman of U.F.’s board, and Victor Cutter, its president, and ask, “Do you have a plan?” And even if they did have a plan, so what? These were the same men who had run the company into a ditch. He went to the docks instead, where he spent the winter of 1932 walking through warehouses and standing on the decks of banana boats, talking to fruit peddlers and captains, loaders and stevedores—the people who really knew.
By quick calculation, Sam realized that whatever money was being saved on fuel was being lost on the high percentage of fruit that ripened during the extra days on the water. The schmucks! They’re losing more than they’re saving.
Zemurray wrote his findings in a letter—unusual for him, as he liked to leave no record—which he sent to Boston. He pointed out obvious problems, then went on to paint a troubled big picture pieced together from details picked up on the docks: banana boats running half speed, half full, ripes dumped into the sea, fields of undernourished stems, labor unrest in banana towns where the company had stopped spending.
Having been well paid for his silence, he was supposed to stay away and shut up. The letter went unanswered.
His concerns, which had been those of an investor—three hundred thousand shares!—grew into something deeper. More than anger, it was the rage of the self-made man who’s been treated like something he used to be: the fruit peddler, the immigrant, the schnorrer.
He raised his hand, stood to speak. “This man in Guatemala, he’s your manager, isn’t he?” Zemurray asked. Yes. “Then listen to what the man is telling you. You’re here, he’s there,” said Zemurray. “If you trust him, trust him. If you don’t trust him, fire him and get a man you do trust in the job.”
Zemurray went away mad. He was not used to being slighted, condescended to, rebuffed, ignored. He spent the following weeks on the road, traveling from city to city, sitting in the offices and living rooms of shareholders. He made the same case over and over. The current management is not up to the task. Don’t believe me? Just look at the most recent quarterly report.
When Zemurray finished, Wing smiled and said, “Unfortunately, Mr. Zemurray, I can’t understand a word of what you say.”
The men at the table started to laugh. Zemurray’s pupils narrowed to pinpricks, his hands turned into fists. He muttered, then stormed out. Perhaps the board members believed Zemurray had been chased away, was fleeing back to New Orleans. In truth, he had only gone to retrieve his bag of proxies. Returning to the boardroom, he slapped them on the table and said, “You’re fired! Can you understand that, Mr. Chairman?”
“You gentlemen have been fucking up this business long enough,” Zemurray told them. “I’m going to straighten it out.”
Much later, analysts pointed out the flaw in the noncompete clause Zemurray signed at the time of the merger: it barred Zemurray from working for a rival or starting a new fruit company, but it did not foresee the outlandish possibility of Zemurray taking over United Fruit itself. “[I didn’t want to watch] the greatest company in the world go to hell in a hand bucket,” Zemurray explained.
Victor Cutter was fired. He had run United Fruit for eight years, had served in its ranks for thirty. His earlier triumph over Zemurray had suddenly been revealed as stage one of his eventual defeat. By mergi...
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Those who did know Zemurray—the veterans of Cuyamel, the roughnecks and banana cowboys—believed the company finally had the right leadership. Many of them also believed it would not matter. When Zemurray took over, United Fruit was plagued by inefficiency, debt, angry workers, low morale. The stock had collapsed. The company was failing. Zemurray might be the best man, but it seemed he’d arrived too late.
Wherever he found a man who could not act or was slow to decide, he replaced him with a veteran of Cuyamel.
“I realized that the greatest mistake the United Fruit management had made was to assume it could run its activities in many tropical countries from an office on the 10th floor of a Boston office building,”
laid down what might be called a constitution for the company. This constitution provided for a maximum of home rule in the field. It was established as a fixed policy that if [a plantation manager] could not handle his difficulties reasonably satisfactorily, we would appoint some man who could.”
going here and there, working, working, working. In a time of crisis, the mere evidence of activity can be enough to get things moving. Though Zemurray would stay at the helm for another twenty years, United Fruit was saved in his first sixty days.
By 1940, the company owned 50 percent of all private land in Honduras, but cultivated less than 10 percent of what it owned.
He promised to meet the military demand with supplies grown in our own hemisphere, making America more self-sufficient. He explained in an essay: WAR CROPS When the Jap blitz cut off rubber, hemp, quinine, and other vital supplies, it opened our eyes to the potential riches of Latin America. Here the head of the world’s largest tropical farming organization tells how, with the aid of our Southern neighbors, we are developing the essential products we formerly got from the Far East.
In those days, when the fighting started, you went. If you did not go, there was something wrong with you—a defect, a malfunction. What’s more, Sam Jr., who was smart and surely understood history, the general history of Europe and the particular history of his father, would have known that this was no ordinary war. It was the war, the sons of darkness against the sons of light.
In New Orleans, the squares filled with sailors. The men got drunk. The mothers wept with joy. Sam did not know what they were celebrating. The first peacetime shipment of bananas arrived soon after. He did not care. Everyone I spoke to who knew Zemurray—there are fewer each year—told me the death of Sam Jr. was the great tragedy of the old man’s life. He came out of it and got back to work, but he was never the same.
The men met several times that year. Their conversations lasted for hours, drifting from English to Russian to Yiddish, whatever language best expressed the thought of the moment: English for money, Russian for struggle, Yiddish for the heartaches faced by a Jew in the world.
“Throughout all [his] success Zemurray retained his simplicity, his transparent honesty, his lively interest in people and things, and his desire to serve,” Weizmann wrote. “His chosen studies in leisure hours were mathematics and music, and he got a great deal of satisfaction out of them.”
It was the culmination of his career, the hour when Zemurray could finally use everything he had learned to play a secretly decisive role on the world stage.
Asked to name a hero, most South American liberals of that era would mention FDR, specifically citing his four freedoms: freedom of expression, freedom of worship, freedom from want, freedom from fear. In short, the Central Americans heard our words and actually believed them.
The call for increased rights and freedoms was a challenge to United Fruit, which depended on compliant governments and cheap labor. What’s more, with the start of the cold war, the struggle on the isthmus got tangled up with the global battle between capitalism and communism, which turned even the smallest feud into a test of ideologies. The region was flooded with fears of implication and precedent. If you wanted to open the gates of hell, all you had to do was point and say, “Communist.”
By 1942, the company owned 70 percent of all private land in Guatemala, controlled 75 percent of all trade, and owned most of the roads, power stations and phone lines, the only Pacific seaport, and every mile of railroad.
Zemurray, who defeated the jungle with the sweat of a hundred thousand workers, amassing a great fortune and empire in the process, was, in part, undone by forty-two lines of poetry. If I exaggerate, it’s only a little. In these years, a new Central American narrative was being written, a new foundational myth. United Fruit was going to be the devil in this narrative, the snake in the Garden. Zemurray understood this at some level and tried desperately to forge a new corporate identity. Hence all the money for universities and hospitals. But it was too late. By 1953, when Guevara started his
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First: modern society, with its millions, is essentially ungovernable. The public must instead be controlled by manipulation. The men who do this manipulating, in government or not, are the true leaders, philosopher-kings. They need not manipulate all the people, only the few thousand who set the agenda. The drivers of history are not the people, in other words, nor the elite who influence the people, but the PR men who influence the elite who influence the people.
“Those who manipulate [the] unseen mechanism of society constitute an invisible government which is the true ruling power,” wrote Bernays. “We are governed, our minds molded, our tastes formed, our ideas suggested, largely by men we have never heard of.”
Second: the people can be made to behave as you want them to behave via the subconscious of the public mind—no one else believed such a thing existed—which can be directed with symbols and signs. “If we understand the mechanism and motives of the group mind,” asked Bernays, “is it not possible to contro...
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In a letter to FDR, Supreme Court Justice Felix Frankfurter characterized Bernays and others in his trade as “professional poisoners of the public mind.”
In 1933, a Hearst reporter told Bernays that Crystallizing Public Opinion was a favorite book of Joseph Goebbels, the minister of propaganda in Nazi Germany,
