July 23 (Bloomberg) -- Just weeks after 1929’s Black Friday, a corporate merger sent Sam “the Banana Man” Zemurray into early retirement, as giant United Fruit swallowed his company in a stock swap.
The deal appears only halfway through Rich Cohen’s colorful quasi-biography “The Fish That Ate the Whale,” so it’s clear there’s more to be heard from the Banana Man, the hungry fish of the title.
Zemurray came to America from Russia in 1891 at age 14 and worked in an uncle’s store in Selma, Alabama. He got started as a banana peddler by selling the “ripes” that traders thought wouldn’t make it to market in time. By age 21, “he had a hundred thousand dollars in the bank,” Cohen writes.
As he expanded, he acquired companies and ships and in 1910 began buying land in Honduras, where he set up plantations. Along the way, Cohen sketches the banana’s trade history, marketing and cultivation, and brings on intriguing minor players. The term “banana republic” was coined by a Texas newspaperman turned bank robber who fled to Honduras and wrote under the name O. Henry.
Cohen captured eccentrics and business in his 2006 “Sweet and Low,” which recounted how his own family amassed and messed up an artificial-sweetener fortune. With Zemurray, the author has a larger, grittier version of the American dream. The Banana Man had no qualms about getting his hands dirty in the fields or in the foreign offices where he paid bribes for trade concessions.
When U.S. policy threatened his Honduran interests, he tried to lobby the problem away and then financed a coup that installed a friendly leader who protected the Banana Man’s interests.
The centerpiece of this outsize life is the battle with United Fruit Co. The company was huge in the 1920s, yet Zemurray’s operation was big enough to force a showdown that led to the merger. Zemurray retired and became an attentive shareholder, with a U.F. stake initially valued at $30 million.
Then he saw mismanagement cut profit 85 percent between 1928 and 1932; the value of his stake sank to less than $3 million. When he offered to help, the board unwisely dismissed his complaints “as the griping of a man who did not comprehend the business cycle,” Cohen writes.
The next shareholder meeting featured Zemurray’s dramatic flourish of controlling proxies as he fired the insulting board chairman. The banana peddler took over the fruit empire.
The stage and the stakes were much bigger. When Guatemala appropriated U.F. land in 1952, the man who built a business with sweat, smarts and chutzpah now had lobbyists, flacks, Old Boys and Uncle Sam to supply a trumped-up Commie-ousting coup in 1954 dubbed Operation Success.
Yet the fallout in public relations was costly. The heyday of the gringo who could throw his weight and money around in Latin America had passed. Post-coup critics noted U.F.’s extensive government links in an operation that looked like national policy in the service of corporate interests. The Justice Department, maybe not coincidentally, sued the company for antitrust violations.
“It was an image problem that became acute,” Cohen writes. U.F.’s profit dropped to a little more than $2 million in 1960 from $66 million a decade earlier.
Zemurray retired again. When he died in 1961, he was worth about $30 million, up from the $40 he made on his first “ripes” deal. He had lived what Cohen calls “a parable of the American dream,” with a moral that might be: There’s always one deal too many.
“The Fish That Ate the Whale: The Life and Times of America’s Banana King” is published by Farrar, Straus & Giroux (270 pages, $27). To order this book in North America, click here.
(Jeffrey Burke is an editor with Muse, the arts and leisure section of Bloomberg News. The opinions expressed are his own.)
Muse highlights include Manuela Hoelterhoff on the arts and Jeremy Gerard on theater.
To contact the writer on the story: Jeffrey Burke in New York at email@example.com.
To contact the editor responsible for the story: Manuela Hoelterhoff at firstname.lastname@example.org.