The Fish That Ate the Whale

by Rich Cohen

  Thinking about Sam Zemurray’s career, I ask myself: Just who was this man and where does he fit in the history of the isthmus? Was he akin to the conquistadores, who came and devastated and set themselves up as aristocrats? Or is this a pirate story? Was he akin to Captain Morgan and Jean Lafitte, arriving with a navy to plunder the Spanish Main? Is he Francis Drake in search of the golden city, for Zemurray, too, sought his fortune in the jungles of the New World? Or is he a Yankee businessman building a multinational company, everywhere and nowhere, whose sins are the sins of capitalism?

  I think Zemurray was a transitional figure, a bridge between the world of the privateer and the world of high finance. Cuyamel was not faceless in the way of many modern corporations—Sam’s face was, if anything, too much in evidence. The culture of Cuyamel was his personality. That was the company’s great achievement and its great failing. Its triumphs and overreaching were the triumphs and overreaching of a single human will. It’s why his company was less sinful than many of the other banana companies. Unlike other bosses, Zemurray lived in the jungle with his workers, spoke their language, knew what they wanted and what scared them. (As Zemurray liked to say, “You’re there, we’re here.”) It’s why he was hated and why he was loved. Because he was a person and a person you can disagree with and be angry at but still admire, whereas United Fruit was faceless in a way that terrifies. It’s why banana workers rallied to the big Russian as their own hedge against El Pulpo. It’s why some people in Honduras still speak of Samuel Zemurray with rueful affection.

  By 1925, Zemurray had paid off his creditors, was free and clear. He invested most of his profit back in the business. Cuyamel was the rising star of the banana trade, the first company to challenge United Fruit in a generation. It was not about numbers. When it came to market share and volume, U.F. was as dominant as ever. Cuyamel was harvesting eight million bunches a year, United Fruit was harvesting forty million; Cuyamel employed 10,000 workers, United Fruit employed 150,000; Cuyamel had a working capital of $3 million, United Fruit had a working capital of $27 million. It was about profit margin, the efficiency of trade, the morale and skill of the employees. It was increasingly clear: Samuel Zemurray had built the better business.

  Cuyamel was superior to United Fruit in a dozen ways that did not show up on a balance sheet. U.F. was a conglomerate, a collection of firms bought up and slapped together. There was a lot of redundancy, duplication of tasks, divisions working against divisions, rivalries, confusing chains of command. Cuyamel Fruit was the Green Bay Packers by comparison. Every decision was made with confidence and authority. Zemurray could move without waiting for permission or a committee report. He could take risks without fear of losing his job. He could hire or fire with surety because he actually lived in Honduras and knew the situation on the ground. It was a contrast of styles: the executives who ran United Fruit had taken over from the founders and were less interested in risking than in preserving. Zemurray was the founder, forever on the attack, at work, in progress, growing by trial and error, ready to gamble it all. The difference was best seen on the plantations, where Zemurray was constantly inventing. Most people, looking at a banana, see a delicious fruit. When Zemurray looked at a banana, he saw room for improvement. He innovated banana farming, which had not changed since the first days of the trade, in the following ways:

  • Selective pruning His men walked the fields, ripping out runts and dwarfs, which was seen by some as madness.

  • Drainage Most banana plantations were built in river valleys, which offered natural drainage. Zemurray augmented this with spillways and canals, making good drainage better.

  • Silting United Fruit built levees to prevent its fields from flooding. Zemurray allowed certain fields to be inundated, resulting in an accretion of silt, an excellent fertilizer.

  • Staking At Cuyamel, each tree was tied to a length of bamboo, which protected stems against high winds and kept them on the straight and narrow.

  • Overhead irrigation Traditional banana men considered watering a waste of resources, since the sky delivered two hundred inches of rain a year. Zemurray argued that, as all that rain was not evenly distributed, with the wet season followed by two months of scorchers, the sky could use some help. He filled fields with overhead sprinklers that mimicked the fall of rain and went on with a click.

  The result was banana plants exploding with bunches, each filled with the fattest fingers anyone had ever seen. It was not a matter of measurements: you could tell just by looking.

  The most ambitious banana men began to flock to Zemurray. Dozens of them quit United Fruit and caught a ride to Puerto Cortés. Cuyamel was hungry in a way that United Fruit had not been since the retirement of Minor Keith. It was more profitable, too, its share price climbing as the price of U.F. slumped. Zemurray was at first slow to hire these turncoats, suspecting a trick. But when Victor Cutter, who succeeded Andrew Preston as president of United Fruit, denounced the traitors, Zemurray began to actively court U.F.’s top talent. He told a reporter he loved “poking the monster in the knees.”

  Victor Cutter was driven to distraction by Zemurray. Had he waited all these years to run United Fruit just to be humiliated by a fruit jobber? Cutter bad-mouthed Cuyamel, but nothing stuck. People on the isthmus championed Zemurray as their only protection against El Pulpo. “The press and analysts of economic affairs liked Zemurray,” Peter Chapman explains in Bananas: How the United Fruit Company Shaped the World. “He didn’t seek publicity but, when he got it, it portrayed him in his favored guise as the small guy pitted against unfavorable odds.”

  Whenever previously challenged, United Fruit had responded in one of two ways: buyout or crush. In 1925, Victor Cutter tried the first option, dispatching Bradley Palmer, a prominent company officer, to talk terms with Zemurray.

  Turning down the offer, Zemurray said, “Hell, I’m having so much fun, and I’m a young man. Why should I quit?”

  12

  The Banana War

  A corporation ages like a person. As the years go by and the founders die off, making way for the bureaucrats of the second and third generations, the ecstatic, risk-taking, just-for-the-hell-of-it spirit that built the company gives way to a comfortable middle age. Where the firm had been forward looking and creative, it becomes self-conscious in the way of a man, pestering itself with dozens of questions before it can act. How will it look? What will they say? If the business is wealthy and strong, the executives who come to power in these later generations will be characterized by the worst kind of self-confidence: they think the money will always by there because it always has been. They sit in their private clubs and railroad cars, saying, “Everyone knows all the land north of the Utila belongs to the company.” Or, “What’s that little Russian up to now?”

  Victor Cutter was born in 1881. His father owned a grocery store in Dracut, Massachusetts, outside Lowell, which is a suburban wasteland now, an eyesore on distant expressway hills, but was booming a hundred years ago with factories and mills, the money pouring in, the product pouring out. Cutter regaled reporters with stories of his early days working on the horse wagon, hawking beets, carrots, and tomatoes. He was setting himself alongside Sam the Banana Man, as in, I, too, was a peddler. I, too, came up the hard way. I, too, know what the Russian knows. But if Cutter ever did work as a peddler, and I have my doubts, he did so in the way of a summer job, as my friend Greg Spitz worked each summer on the line at his father’s paper plant. This did not make Greg Spitz a factory worker any more than working at the grocery store made Victor Cutter a fruit jobber. Cutter’s work was done by way of character building, a luxury of the middle class. Zemurray’s work was done in order to survive.

  You might picture the leaders of the banana trade side by side in 1903: Cutter, six foot something, two hundred–plus, standing with his graduating Dartmouth class, in cap and gown, indistinguishable from the rest; Zemurray, big in another way, all elbows and angles, sinew and bone, racing through the Mississippi del
ta in a boxcar, the ripes piled behind him like a wall. Cutter studied history as an undergraduate, with a major in Latin America and a minor in Spanish. He was preparing himself for the market that boomed in the Torrid Zone in the wake of the Spanish-American War. He went on to earn a graduate degree from Dartmouth’s Tuck School of Administration and Finance. Hired by United Fruit in 1904, he began to climb, helped along by connections made on the golf course and in exclusive societies. Zemurray, who was rejected by even the Jewish clubs, learned to golf only late in life, when he built his own course. Time, the conservative fiefdom of Henry Luce, told readers everything they needed to know when it described the course “on which the owner [Zemurray] occasionally breaks 100.”

  Cutter began as a “timekeeper” for United Fruit, a standard entry-level position for college recruits. Young men were fitted in khaki and pith helmets, then sent to live in modest but comfortable bungalows on banana plantations. The job was a manufactured affair, busywork to give Ivy Leaguers an experience of the South without scaring them away. The day began at dawn, with the timekeeper walking the groves, clipboard in hand, continuing to the warehouse and train depot, stopwatching cutters, packers, loaders, and engineers, searching for inefficiencies. Now and then, he boarded the caboose of a train, drank coffee, and looked out the window as the tracks wandered down to Tela, the Honduran headquarters of United Fruit, where he stood on the docks taking notes as the banana boats were loaded. Each task was timed, the numbers included, along with a report, in the packet carried by courier to Boston.

  Cutter was famous for his stories, told in an ironic Dartmouth way. He spoke of escapades on the isthmus, but no one believed him because he had the manner of the office creature. It was not his fault. He’d been born too late—after the wild days. “During the previous generation banana lands had been among the most primitive of American frontiers and, appropriately, many rough and tough men had come to open them,” Charles Wilson wrote in Empire in Green and Gold. “But by the [time of] Cutter, the primitive simplicity of the banana frontiers had gone.” He was well suited for the new corporate habits of the trade and rose quickly through the ranks. In 1924, he became the first president of United Fruit who had not been a founder. This marked a crucial change in the career of the company. Though probably the best of the second generation, Cutter was simply not made of the stuff of the old-time banana men. “During the 1920s, death had taken the two great leaders of the trade, Andrew Preston and Minor Keith, and the new management was relatively inexperienced,” Wilson wrote. “A few of the more perceptive students of the trade asserted that the most likely contender for leadership was [not these new U.F. men, but] Sam Zemurray, still being described by [Cutter] as ‘that little fellow in Honduras.’”

  * * *

  The isthmus, crossed by the equator, hangs at the center of a balance, day and night in equal proportion, the weather maddeningly moderate, the seasons drifting into years, and the years, without the bone of the seasons, becoming an indistinguishable mass. Even though it might not seem like it, time passes. The years turn into decades. A generation goes by. Then another.

  At the start of the Banana War, Samuel Zemurray was forty-nine years old, Cutter forty-three. For a period, the men dwelt on opposite banks of the Utila, a gentle river that meanders from the peaks of the Cordillera to the Atlantic Ocean. Over the millennia, the river has carved the Motagua Valley, the most fertile banana land in the world. It’s a beautiful country, fields upon fields, mountains beyond mountains. The Utila roughly follows the Honduras/Guatemala border, itself long in dispute. It also marked the frontier between United Fruit, which followed the northern bank of the Utila, and Cuyamel Fruit, which stood near the southern bank. In the mid-1920s, the border turned hot, as each corporation tried to gobble up the last remaining uncleared acres in the valley. These tensions excited national aspirations. Over time, the rivalry between U.F. and Cuyamel came to be seen as a proxy, with the struggle between the banana companies standing for the struggle between Honduras and Guatemala. In pressing north into the domain of United Fruit, Zemurray seemed to be carrying the banner of Honduras, reclaiming land taken by Guatemala. (Ditto United Fruit and Guatemala’s southern border.) In this way, a battle between American corporations threatened to turn into a regional conflict.

  Was there an event akin to the assassination of Archduke Franz Ferdinand that sparked the Banana War?

  Indeed there was.

  Do you remember the promise Manuel Bonilla made when he returned to power in Honduras in 1912? How, in addition to concessions, Sam Zemurray was promised 24,700 acres of land to be given at a future date?

  In 1915, Zemurray redeemed that promise, laying claim to a vast tract of territory on the Utila, jungle land that United Fruit considered a buffer between the companies. Left wild, it kept the enemies apart. (Sparks flew wherever they touched.) By destroying this neutral zone, Sam’s acquisition of the land changed everything. As far as Cutter was concerned, any agreements, formal or informal, that had regulated the competition were null and void.

  The struggle commenced as a war of pranks, with each company taunting and testing its rival. Agents from United Fruit crossed the river at night, cut water lines, tipped over trucks, ripped up train rails. Zemurray sent his own team of brigands across the Utila to retaliate. These were the last of the roughnecks who had wandered away from Texas, riding south as the frontier closed, a brooding tribe out of time, each with a horse and pistola, working for next to nothing. I want here to sing an ode to the banana cowboy, that wild, unshaven, hell-raising fighter of yore, terror of the isthmus, hired gun in time of conflict, filibuster in time of revolution, arrived from the streets of New Orleans and San Francisco and Galveston, no good for decent society, spitting tobacco juice and humping extra shells in his saddlebag. These roughnecks found a benefactor in Zemurray, who rode and drank with them. When the Banana War came, they were his avant-garde, crossing the frontier at night, raising hell in the fields.

  From the outside, the Banana War seems unfathomable. Zemurray had taken on an enemy of superior resources and size over a few thousand acres that could add only marginally to his wealth. 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. Strength, charisma, shrewdness, power—his defining characteristics were the sort not recorded in photos or articles, which can make him seem mysterious, strange. What drove him? Didn’t he know you can’t take it with you in the end? (Yes, but this is not the end.) To colleagues like Frank Brogan who knew Zemurray, his motivation was clear: he wanted to win. And would do whatever it took. Here was a self-made man, filled with the most dangerous kind of confidence: he had done it before and believed he could do it again. This gave him the air of a berserker, who says, If you’re going to fight me, you better kill me. If you’ve ever known such a person, you will recognize the type at once. If he does not say much, it’s because he considers small talk a weakness. Wars are not won by running your mouth. I’m describing a once essential American type that has largely vanished. My Grandpa Ben was like that, and so were the tycoons who built Hollywood: studies in sublimation, men who channeled all their love and fear into the business, the factory, the plantation, the shop. Did he love his wife, his children? Of course he did, but he needed the company more. Think of him as a gambler in the midst of a run, whose mind is fixed on the one thing. If he does not look up, it’s not because he is shallow or stupid. It’s because he knows the moment he looks up, the spell is broken and the game is lost.

  By 1917, the Banana War was centered on a single piece of land: five thousand acres on the north bank of the Utila that both companies coveted. United Fruit discovered the problem first. The land, which was on territory claimed by Guatemala and Honduras, seemed to have two separate legal owners. I do not know who these two parties were, but let’s say one was an old woman in Guatemala City, a widow who, upon the death of her husband, a la
ndowner and livestock breeder, came into possession of a box of certificates, deeds to land scattered across the isthmus, including these five thousand disputed acres. She has not seen the land, does not care much about it, but yes, here’s the title and the receipt on taxes, right here. Let’s say the second owner was a speculator from Tegucigalpa. For him, the five thousand acres was a bet, made long ago, that with the explosive growth of the banana business, prices in the Motagua Valley would soar.

  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.

  Victor Cutter was infuriated—there was no small degree of humiliation, too. As far as he was concerned, Cuyamel had committed a breach. The north bank of the Utila had always been considered U.F.’s territory. By purchasing the land, Zemurray had crossed a line everyone was supposed to respect.

  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.

  United Fruit was determined to strangle Zemurray’s new plantation and drive him back across the river.

  When Zemurray sent his workers to clear the fields, plant the rhizomes, build the houses, United Fruit filed a complaint with the government of Guatemala, charging Zemurray with violating an international border; Cuyamel was a Honduran company but the territory was claimed by Guatemala. This resulted in an inquiry and a referral to the international court. A hearing was scheduled, ratcheting up tension between the neighboring countries. Guatemala issued belligerent statements. Honduras did the same. The U.S. State Department asked the presidents of the banana companies to cool the rivalry. The United States feared they would plunge the isthmus into war.