The Fish That Ate the Whale: The Life and Times of America’s Banana King by Rich Cohen

The Rabbit Hole is written by Blas Moros. To support, sign up for the newsletter, become a patron, and/or join The Latticework. Original Design by Thilo Konzok.

  1. The story of Sam “The Banana Man” Zemurray who created Cuyamel Fruit from the ground up. He began as a poor Russian immigrant but would soon become one of the wealthiest men in America and come to lead United Fruit, Cuyamel’s much larger competitor. Zemurray can be seen as that era’s quintessential model of American success, the Don Corleone of the Isthmus.
Key Takeaways
  1. Zemurray was born in 1877 in Russia, came to the US in 1892 to Selma, Alabama to live with an uncle. From the beginning he had nothing and was hungry for success – “he wanted what you take for granted”
  2. A master of ‘touching the medium’, of knowing his business inside out and interacting with it first hand.
    1. “He believed in staying close to the action – in the fields with workers, in the dives with the banana cowboys. You drink with a man, you learn what he knows. There is no problem you can’t solve if you understand your business from A to Z.”
    2. He was respected because he understood the trade. There was not a job he could not do, nor a task he could not accomplish. He considered this a secret of his success
  3. Started his business by attacking the niches, the unloved corners of the banana business – ripes. “He recognized a product where others saw only trash. It was the world view of the immigrant: understanding how so-called garbage might be valued under a different name, seeing nutrition where others saw only waste…I can be fast where others have been slow. I can hustle where others have been satisfied with the easy pickings of the trade.”
  4. Nothing could make him hurry. He had the kind of calm that can’t be taught
  5. Signed a deal with United Fruit to automatically get all their ripe bananas and was soon selling over 500,000 per year
    1. United Fruit, due to their dominance and influence, became known as El Pulp, or The Octopus
    2. Zemurray partnered with Ashbell Hubbard to form Hubbard-Zemurray and with the additional capital was able to expand their reach and buy boats, land in Honduras to cultivate bananas and come to own every part of the process. Hubbard later backed out and was bought out by Zemurray
  6. Key business tenets of the banana trade was to get big (with enough capital in reserve one can survive inevitable freak occurrences), grow your own (control planting and harvesting and surviving down seasons), diversify (plantations across different terrains)
  7. The world is a succession of fortunes made and lost, lessons learned and forgotten and learned again
  8. United Fruit became worried about anti-trust regulations which is why they tolerated Zemurray’s relatively small upstart and soon even sold back their small ownership in Cuyamel to him
  9. Zemurray was a tough and strategic businessman. He knew what it took to get stuff done and as was common in the time and location, often used concessions (bribes) with Central American leaders and government to be able to compete with United Fruit. Zemurray even went so far as standing up to Philander Knox and JP Morgan by taking matters into his own hands, helping to overthrow the Honduran government and put in power a puppet leader who would be friendly to his requests, relieving Cuyamel of taxes and duties and in effect, took over a nation.
    1. Dialectical Materialism – “Every great victory carries the seed of ultimate defeat.” Zemurray, although successful in getting a puppet leader in power, would stain his name in Honduras and even with the US government because he was too successful in doing so
  10. It’s the neediest among us who go the farthest
  11. When you lose your reputation, you lose everything
  12. Soon it became increasingly clear that Zemurray had built a better business than United Fruit. It was about profit margin, the efficiency of trade, the morale and skill of the employees
  13. Personality and style are the great unaccounted factors in history
  14. Banana War – spat between United Fruit and Cuyamel for 5,000 prime acres sparked a rivalry between Guatemala and Honduras
  15. If you meet a truly formidable foe, flip him (onto your side)
  16. Prize goes to the man who keeps his cool and doesn’t talk too soon
  17. Eventually a merger agreement was reached in 1930 and Cuyamel would become a division of United Fruit but part of the stipulation was that Zemurray had to retire. Zemurray began a life of philanthropy at this point as he was now one of the richest men in America. He always gave anonymously as he believed that “giving with display is not giving, but trading” (for prestige, power, etc.)
  18. “…some of the most profound moments of any life are lived between 3 and 4 in the morning, when you stare at the ceiling as the silence roars.”
  19. People tend to accept the world as they find it
  20. Helped FDR with implementation of the New Deal as he realized that the poor, struggling man of the Great Depression was him just 20 years earlier
  21. Faced off with Huey Long for some time as Long depicted Zemurray as the fat cat who was taking a disproportionate amount of wealth but Long was killed before anything came of it. Some speculation that Zemurray was behind it but the author is skeptical
  22. Zemurray never lost faith in his agency, never felt trapped or lost. He became disgruntled enough at how poorly United Fruit was run that he began gathering proxies and soon after ousted the Board when they failed to listen to him. He then took over and it was at this point that the “fish ate the whale”
  23. The best tycoons know when to share and when to hide information
  24. In a time of crisis, mere evidence of activity can be enough to get things moving
  25. United Fruit became so large and so dominant that at one point they owned more than 50% of the private land in Honduras
  26. The death of Zemurray’s son, Sam, was devastating and he found a meaningful outlet by helping establish Israel. He had enough means and influence that he was able to cajole, strong-arm and bribe leaders of Latin American countries to vote ‘yes’ to the formation of Israel
  27. A company, like a nation, cannot survive without its mythology
  28. In the context of the US intervening in Central American affairs – “Where did the interest of United Fruit end and the interest of the United States begin? It was impossible to tell. That was the point of all Sam’s hires: If I can perfectly align the interests of my company with the interests of top officials in the US government – not the interests of the country, but the interests of the people in charge of the country – then the US will secure my needs.”
  29. If you want to advance a private interest, turn it into a public cause
  30. Potential unfriendly government to Zemurray lead him to hire Bernays who spun the Guatemalan revolt as Communist-inspired and this was enough to get the American government involved and help fund a coup. However, the coup was too successful and brought too much attention to the situation. The Guatemalans were soon upset with United Fruit and Zemurray no longer the ‘hero’ he once was. A generation later, after poor management and an unfriendly government (American and Guatemalan) United Fruit was only a shadow of its former self
  31. “A corporation is a product of a particular place at a particular time. US Steel was Pennsylvania in the 1890s  Microsoft was Seattle in the 1980s  It’s where and when their sense of the world was fixed. The company brain is hardwired. Which is why a corporation, though conceivably immortal, tends to have a life span, tends to age and die. Unless remade by a new generation of pioneers – in which case it’s a different company – most corporations do not outlive the era of their first success. When the ideas and assumptions prevalent at the time of their founding go out of fashion, the company fades.”
  32. Many events tend to happen slowly and then all at once
  33. By taking over United Fruit when he did, Zemurray gave the company 25 more years of existence but it soon fell apart after he stepped down. Eli Black bought the company in 1969, merged it with a number of his other holdings and named the conglomerate United Brands. It was at this point that the author considers United Fruit to have finally fallen
What I got out of it
  1. Zemurray’s deep fluency of the banana business – from planting to harvesting to shipping to storing to selling to advertising. He knew every part of the business and was why he was so respected and effective. Also learned a lot about the context and times of the 1920s-1950s and the struggles and confrontations of Central America