The Fish That Ate the Whale
Page 16
The chairman of the board was Daniel Gould Wing, who descended from an old New England family. The president of the First National Bank of Boston, Wing looked askance at uncredentialed, ill-bred strangers who wandered in off the street. To him, Zemurray was still Sam the Banana Man, the fruit jobber from the docks. He already knew what Sam could teach him about the business: nothing.
Wing welcomed Zemurray without looking up, greeting him, as Thomas McCann characterized it, “frostily at best.” Zemurray waited as the board went through its tasks. When it was finally his turn to speak, he chose each word carefully, explaining his ideas in the thick Russian accent that he never could shed. It was the accent of neither the Russian bourgeois nor the peasant; neither the voice of Tolstoy nor the voice of Khrushchev. It was the voice of the Jewish Pale of Settlement, the Yiddish-inflected voice of our grandparents, the fruit peddler, the street haggler, the Yid.
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?”
What followed was the sort of graveyard silence in which each board member recalculated his own prospects.
“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 merging with Cuyamel, he had invited the wolf into the house. Zemurray retained just a few members of the United Fruit board, including T. J. Coolidge, who would become one of Sam’s confidants, and Francis Hart, whom Zemurray made president, a figurehead position perfect for Hart, who was a link to the old banana royalty. His presence would reassure certain partners and politicians, as well as more tradition-minded investors. It gave the illusion of continuity, suggesting there had been no radical break. Of course, there had been. The past was dead and gone. All power would now be concentrated in the hands of one man: Samuel Zemurray, who named himself United Fruit’s managing director of operations. When Francis Hart died several years later, Zemurray added “President” to his title.
It was in these years that Zemurray became known as the dictator of the banana trade, a man who, with a single phone call, could undermine governments. It was a moment of triumph, a decisive coup d’état in a career that was nothing but coup followed by coup. When Zemurray showed up at the first meeting of the new board, he said, “I’m ready to go to work.”
Here’s how the above events were reported in Time on January 23, 1933:
One day last summer Samuel (“Sam”) Zemurray of New Orleans strode belligerently into a room at No. 1 Federal Street, Boston, where the directors of the potent, far-flung United Fruit Co. were holding a meeting. Down on the long table from his old enemy, President Victor Macomber Cutter, he flung a handful of proxies. Said he: “You’ve been ____ing up this business long enough. I’m going to straighten it out.”
To most of the reporters and stock analysts who covered United Fruit, Zemurray was a mystery. The New York Times called him “the fish that swallowed the whale.” “Except for a comparatively limited circle of friends and acquaintances in Honduras and Louisiana, few people actually knew him,” Charles Morrow Wilson wrote in Empire in Green and Gold. “Outside of the New Orleans telephone directory, where his residence and office addresses were listed, the new boss’s name was not to be found in any widely used directory. For the most part Eastern financiers knew Zemurray only by name, if at all. During his occasional attendance [at] directors’ meetings in Boston and New York, United Fruit men knew him only as an extremely tall, rather well-dressed man, who listened thoughtfully, spoke little, rarely wrote letters, occasionally argued vehemently and asked questions of devastating directness, then lapsed into deeply reflective silence. Observers also noted that the hombre from the far south had an amazingly good memory, that he knew Honduras like the contours of his hands, which he frequently studied thoughtfully while listening to others talk.”
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.
15
Los Pericos
Word of Zemurray’s takeover went through the isthmus like a jungle fire. In the tin-roof cantinas of Tela and Puerto Cortés, where the men strummed Spanish guitars and the young women cried because they’d been rejected in love, the field hands and the plantation managers raised their glasses of fermented cane to drink one for the Gringo. The return of Zemurray seemed a godsend. For years, the employees of United Fruit had sent their reports to Boston and for years those reports had been rejected or ignored. The company had been governed by missive, edicts issued by a king as he soaked in his tub: your request for $10,000 for a ditch has been denied for reasons sufficient to Boston. As a result, many of the company’s decisions seemed irrelevant or just plain wrong. In Zemurray, the men in the compounds and banana towns recognized one of their own, the hombre who crossed the country on a mule. United Fruit had not had such a leader since the passing of Minor Keith.
Zemurray wanted to reassure the workers from the start, change their mood by showing them things would be different. There is the substance of what you do, then there is the style, the subtext of your story told not in words but in how you go about your business. Unlike other incoming chiefs—here I’m thinking of CEOs who take over bureaucracy-heavy companies in trouble—Zemurray did not begin his work at company headquarters. He did not spend his first days with accountants, nor coop himself up with reports, nor shout his head off at meetings. He went out on the road, announcing straightaway that he would begin his tenure with a six-week tour of the banana lands. He wanted to visit every country where United Fruit owned plantations, ports, railroads. He wanted to talk to the men in the fields. He wanted to see for himself.
He boarded a ship at Thalia Street Wharf, in New Orleans, say, where the city is fog shrouded and blue with rain. It was his first trip to the isthmus in some time. He had left as an ambitious player who had cashed in his chips. He was returning as the man who had won the casino itself, who, in the way of Kublai Khan, possessed everything as far as the eye could see. United Fruit had over a million acres under cultivation, owned hospitals and schools, thousands of miles of highway and railroad, piers, warehouses. Zemurray visited as much of it as possible, stopping in Honduras, Guatemala, Colombia, Panama, Nicaragua, Costa Rica, Mexico, Cuba. He walked in the heat, stood in the fields, strolled through the towns, drank in the bars, laughed with the vaqueros. His manner was as informal as can be, just another banana man in mud-caked boots and khaki pants, tall and friendly, standing in the shade of the great fronds, watching the cutters cut and the loaders load, examining the straw-filled boxcars, lingering in the dives where men got drunk and spoke the truth, now and then asking a seemingly simple question: Have you considered combining the sugar and the fruit in one haul?
Thus began the “Zemurray era” of United Fruit. He fired thousands of employees, the deadwood and wishy-washy. Legend later had him discarding a full 25 percent of the workforce, but Sam denied this, saying he replaced only those who failed. He solved the problem of half-empty ships, selling some, mothballing some, renting out space in others. A United Fruit ship did not leave port until it was packed. The Great White Fleet, which had been costing the company to operate, began to earn. He had U.F.’s holdings reappraised—the value of the machines and land had collapsed during the Depression—saving millions in taxes. He canceled stipends paid to independent growers who had been augmenting the company’s banana supply. He left fields fallow, further decreasing banana supply, controlling market price. On some plantations, he replaced bananas with sugarcane, a staple always in demand. Realizing the company had become overly dependent on a single product, he looked for other crops to plant: coconuts, pineapples, quinine trees. “From Boston to Bogotá, he weeded out superfluous employees until one of every four was gone,” reported The Wall Street Journal. “In place of managers he did not like, he put in veterans of his Cuyamel organization and ordered them to whittle down 5,000,000 in loans that had been made to independent planters. He pushed through a re-evaluation of properties at 50,000,000 below their previous figure of nearly 250,000,000, thereby saving some 4,000,000 a year in depreciation charges.”
It was not these policies alone that turned things around; it was also the energy behind the policies: the six-week tour, the firing and hiring, the tough decisions made about the fleet and the fields. A light was burning in the pilothouse, a firm hand had taken hold of the tiller. United Fruit’s stock price stabilized, then began to climb. It doubled in the first two weeks of Zemurray’s reign, reaching $26 a share by the fall of 1933. This had less to do with tangible results—it was too early for that—than the confidence of investors. If you looked in the newspaper, you would see the new head of the company landing his plane on a strip in the jungle, anchoring his boat on the north coast of Honduras, 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.
* * *
Over time, Zemurray realized the company faced a problem bigger than half-empty ships or weak managers, a problem that could be solved neither by smart hires nor by the recovery of markets. The product itself—the Big Mike, the only banana that most Americans had ever tasted—was shadowed by ecological calamity.
Sigatoka disease appeared in the South Pacific in the 1900s, specifically on the banks of the Sigatoka River in Fiji, where the palm trees danced in the evening breeze. It was initially reported by fishermen who forded the river, old-timers who remarked on the pestilence that had beset the banana plants, darkening their leaves to the ground. It looked like the trees had burned. Within a year, great stretches of jungle had turned black. Walking the country was like entering a haunted wood. It was spooky, uncanny, ominous, disturbing, strange. It was the rustle of dead fronds on dead stems.
Sigatoka is a fungus that sweeps through banana country, killing around half the plants. For a time, Preston, Keith, and the other banana men simply hoped it would stay in Fiji. It did not. The disease spread by boat, train, plane, in the black mud on the migrant’s boot. In 1930, it was spotted in Colombia. A leaf turned black, then a stem, than a field. Dismay filled the offices of the banana companies. Without a cure, Sigatoka would be the end of the Big Mike.
Bananas are especially vulnerable. Because they have no seeds. Because each stem is a cutting, a rhizome hacked off another rhizome, which was hacked off another. When you look at a banana, you’re looking at every banana, an infinite regression. There are no mutts, only the first fruit of a particular species and billions of copies. Every banana is a clone, in other words, a replica of an ur-banana that weighed on its stalk the first morning of man. This has been the strength of the industry, and its weakness. The strength because talk about quality control! The weakness because the lack of diversity puts each banana species at risk. Given the opportunity, a disease that kills one Big Mike is going to kill them all.
Zemurray fought Sigatoka the way empires have always fought barbarians: by quarantine, lockdown, inspection, wall. Each plantation was surrounded by a fence. On entering the fields, farmhands walked across serrated grates, which scraped microbe-carrying mud off their boots. Being modern, Zemurray knew these were only temporary measures. The long-term solution would have to be supplied by chemistry. Zemurray had scientists at work in jungle labs, concocting and applying potions. In the mid-1930s, one of them came up with the first effective poison, a compound made of copper sulfate and lime powder. He called it the Bordeaux mixture. When the first test results were reported at headquarters, Zemurray said, “You put the medicine on the leaves and that cures the disease?”
“It’s not that simple,” said the scientist. “Sigatoka is an airborne spore. We think the Bordeaux mixture—”
“Please, Sport, don’t confuse me. You put the medicine on the leaves—”
“It’s only an experiment.”
“We’ll spray five thousand acres,” Zemurray said.
The poison was applied by overhead irrigation and airplane. Soon, this was being done on an industrial scale, the sprinklers going on with a click, the crop dusters appearing in the west, the roar of the engines, the faces of the pilots, the copper sulfate falling like rain. When the wind blew, the mixture carried into the banana towns. The dinner jackets of the honchos turned turquoise. The dirt turned blue in the groves, the fruit the same.
Starting around 1936, U.F. bananas were rinsed in a solution that turned blue bananas green again. For the best results, men had to walk the fields as the mixture was applied, making sure the poison dispersed evenly. Over time, these workers began to experience certain abnormalities. They lost their olfactory sense and their appetite. Everything from shrimp to beans tasted like paste. After a month, they could not keep down food. They wasted away but kept volunteering for the hazard pay. After two months, the men began to turn color. After three months, they were blue. On the plantations, they were referred to as Los Pericos, the Parakeets.
Los Pericos constitute a subchapter in the history of Zemurray and United Fruit. The outcasts of the trade, these men swapped taste and smell for money. In this, they represent the isthmus as a whole, simultaneously enriched and destroyed. Some Pericos recovered. Some survived but could never again enjoy food. Some died. Perhaps hundreds, perhaps a thousand. These men became part of the lore, the hymn of Los Pericos, blue in the morning, blue in the evening, the blue heart of a blue business, the victims without whom there’d be no sliced banana on the cornflakes in the sunny American ki
tchen nook.
After Sigatoka was curbed, an even worse pestilence threatened the industry. Unlike Sigatoka, which destroyed plants, Panama disease destroyed earth, rendering vast stretches of jungle a ruinous waste for bananas. It lived in the soil, attacking the roots of the plant, then the rhizome. The leaves withered to a husk, the tree fell on its face. The disease was spread by the banana men themselves, carried on clothes and equipment. They sowed it with the rhizomes in each plantation. It remained asymptomatic for years, not attacking for a decade or more, then striking everywhere, wiping out acres of plants in the course of a season. After that, the plantation itself was diseased and had to be abandoned.
Panama disease reached the isthmus from Southeast Asia in the early 1900s but did not become a serious problem until the 1920s. Scientists at Imperial College London’s Department of Tropical Agriculture began searching for a cure in 1922. United Fruit hired the biologist A. J. Chute to find a banana resistant to the disease the following year. There are thousands of varieties of bananas undiscovered in Asia even today. In the meantime, Zemurray devised a simple solution, rife with unintended consequences. He began buying as much virgin jungle as possible. Not thousands of acres, but hundreds of thousands, most of it left uncultivated, laid in like canned goods. When a plantation fell to disease, he simply reached up for one of the cans on the shelf. In this way, he kept moving from virgin jungle to virgin jungle, forever one step ahead of the disease. U.F. came to possess tremendous stretches of wilderness as a result. By 1940, the company owned 50 percent of all private land in Honduras, but cultivated less than 10 percent of what it owned. The company became a symbol of concentrated wealth in these years, more powerful, in many countries, than the government itself. In its endless quest for disease-free land, United Fruit would become too big for its own good.