Analysis of the third kind
24 September 2014 04:14 (South Africa)
Business

How Sam 'The Banana Man' Zemurray explains capitalism, and Marikana

  • Richard Poplak
  • Business
C:\fakepath\poplak on banana man

A new book about Sam “The Banana man” Zemurray reminds us of the meaning of untrammelled capitalism. Zemurray began life in Bessarabia and ended it as the de facto regent of South America. South Africans, embroiled in a burgeoning social crisis related to an important commodity, should take note. By RICHARD POPLAK.

Towards the end of his life, when he lived in the grandest mansion in New Orleans and was worth more money than almost anyone on earth, Sam Zemurray could pick up the phone and topple governments in South America. In this, he becomes a sort of avatar for American capitalism, a lesson in both the brilliance and the evils of the system. As head of the United Fruit Company, the corporation involved in so much malfeasance in Southern America, Sam the Banana man is a forgotten legend. And in forgetting him, we lose an important link with how the modern system of capital developed. 

In other words, Sam Zemurray explains Marikana.

But we’re getting ahead of ourselves. Rich Cohen’s new book, The Fish that Ate the Whale: The Life and Times of America’s Banana King, introduces us to a boilerplate Jewish immigrant urchin: uneducated, near penniless, possessed with an innate ability to navigate the shoals of late nineteenth century capitalism. Walking the docks of Mobile, Alabama, Zemurray noticed a chain of men handling 40 kg banana stems, newly arrived off steamships from South America, and passing them along a line before packing them into train carriages. 

“The bananas that did not make the cut as greens or turnings were designated ‘ripes’ and heaped in a sad pile. A ripe is a banana left in the sun, as freckled as a Hardy boy. These bananas, though still good to eat, delicious even, would never make it to the market in time. In less than a week, they would begin to soften and stink. As far as the merchants were concerned, they were trash,” Cohen writes.

As far as Zemurray was concerned, they were a business opportunity. Seventeen years old, with $140 in his pocket, he purchased stems of ripes and loaded them into a rented boxcar. He telegraphed ahead, letting peddlers and grocers know that he was passing through Alabama with product. What the Boston Fruit Company, run by that city’s gentile elite, thought was garbage, Zemurray knew was gold. It was about speed of access to market – about being fleet, where the big guys were staid. What Boston Fruit didn’t know was that in leaving those ripes on the Mobile dock, they’d signed their own death warrant.

Zemurray moved his way up the banana business, from ripes to turnings to greens. And the banana business was an ugly thing to behold. By 1900, Zemurray was in a contract with Boston Fruit (which had become the United Fruit Company), running two tramp steamers from Honduras packed with bananas. With a partner, he formed the Cuyamel Fruit Company, purchased 5,000 acres near the tiny port of Omoa and started pumping Honduran bananas into American bellies. 

Which is where Zemurray ran afoul of pesky State Department rules. According to the United Fruit Historical Society, “In those years the US and the Central American republics often reached agreements for the payment of debt to European countries. According to some of these agreements the US Morgan Bank would pay these countries foreign debts, and they would re-pay the Morgan Bank by allowing its agents to sit in the customs houses of both countries (US and the Central American republic) and collect revenues from exports and imports. Zemurray wanted to reach his own agreement on custom taxes with the Honduras Government and side-step with the Morgan Bank, but he was warned by Secretary of State Philander Knox to not continue.”

Did Zemurray listen? Indeed, he did not. He retained the services of two mercenaries, Guy “Machine Gun” Malony and Lee Christmas, and along with an ex-president of Honduras, Manuel Bonilla, bought a cache of arms and headed into the jungle. They vanquished the government forces in short order, an election was held and – surprise! – Bonilla was installed as president. Zemurray got his terms: an enormous tract of land and an exemption from paying taxes for 25 years. This wasn’t his first time finagling with mercenaries and banana cowboys, and it wasn’t his last.

Cuyamel grew, as did its stock prices, while the grandees at United Fruit watched their shares plummet. In a desperate move, they acquired Cuyamel for $30 million worth of stock, and Sam Zemurray commenced his first retirement in New Orleans as a very rich man. It didn’t last. United continued to mismanage their assets, and like an overripe banana that rots on the plate Zemurray’s $30 million became two. 

Which is about the time he stormed into the United Fruit headquarters in Boston, and confronted chair Daniel G. Wing (who also ran a big Boston bank.) “I’m sorry Mr. Zemurray,” said Wing, “but I can’t understand a word you’re saying” – thick immigrant accents being something of a rarity in Boston boardrooms. But Zemurray was done talking. Enraged, he gathered enough proxies to stage a takeover, and in 1932, became the de facto company head. He was named president in 1938.

He swept through the company like a plague, firing all the dead weight and restructuring operations. United Fruit came to own 61 ships and chartered 11 more, becoming the largest private fleet in the world, called the Great White. “By 1946 the company had 83,000 employees and owned 116,214 acres for the cultivation of bananas, 95,755 for sugar cane, and 48,260 for cacao,” according to the United Fruit Historical Society. 

For all his nightmarish meddling in South America’s affairs, Zemurray will be remembered as an über-colonialist, a man who took over countries with a machine gun and, later, a phone call. His most notorious move was to hire an advertising agency to spread propaganda about the democratically elected president of Guatemala, Jacobo Árbenz, spinning him as a commie enthralled by the Soviet Union. The CIA sponsored a coup, using United Fruit distribution lines to send weapons and men. The ensuing war killed thousands and set back the country’s development by half a century.

But Zemurray is also considered one of the continent’s great philanthropists, establishing the Escuela Agrícola Panamericana in Honduras, a school dedicated to agricultural innovation. He financed the protection of Mayan ruins, established a faculty devoted to the study of Mayan art and Central American research at Tulane University, and he created the Lancitilla Botanical Garden in Honduras. He gave many millions to charities and was instrumental in setting up the liberal publication The Nation. He was a fully contradictory figure, and as emblematic an American capitalist as one is likely to come across.

So how does Zemurray come to explain South Africa’s current contretemps, which the ANC is determined to categorize as a colonial hangover, one of a number it hasn’t gotten around to remedying in the first 17 years of local democracy. Zemurray proved that capitalism is a sword that cleaves through shoddy governance and weak political systems, leaving heaps of corpses – and vast wealth – in its wake. Men like Zemurray were quick on their feet and uncompromising in vanquishing both roadblocks and enemies. Zemurray’s role in life was to make money selling bananas.

It is government’s job to curtail that impulse when it becomes more evil than good. Its government’s job to wind its way through lobbyists’ guff and industry puffery and to develop sound regulation in troubled sectors. Boys will be boys, and government’s job is to circumscribe their playing field.

Zemurray’s incredible life and compromised legacy is a reminder that any commodity – even something as innocuous as a banana – can leave a trail of blood. Best to have one’s house in order, so that the Zemurrays of the world get rich on fair terms. His job was to take care of his shareholders. It was the Honduran and Guatemalan and American governments’ jobs to take care of their constituents. That’s the lesson Zuma and his cronies may want to take from Sam the Banana Man, who could have been a South African mining magnate had his ship from Bessarabia taken a wrong turn at the right time. DM

Read more:

Excerpt from The Fish that Ate the Whale: The Life and Times of America’s Banana King on Slate

Photo: Sam "The Banana Man" Zemurray.

  • Richard Poplak
  • Business


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