Image: Home of Sam Zemurray, the banana man. The third floor crow’s nest was his favorite spot.

Analyzing historical research and viewpoints relating to United Fruit Company between its founding in 1899 and the retirement of its notorious chairman Samuel Zemurray in 1951, a multi-dimensional understanding of the multinational organization begins to crystallize: The company was a great American success story, an embodiment of the risk, hard work, and innovation the American Dream is made of. However, the fruit firm also acted as an instrument of U.S. crony capitalism and imperialism across the Caribbean and Latin America. The firm that in many ways embodied the American Dream also bore responsibility for its integral role in imposing nightmare realities on countless Latin American souls.

The Great American Success Story

United Fruit Company, founded in an 1899 merger between banana merchant, growing, and transportation concerns would grow to become one of America’s first mega-corporations, comparable to a modern-day Google in both stature and profitability. The corporation “acquired and/or purchased a controlling interest in eighteen other shipping firms during the first decade of the twentieth century,” according to Environmental History Professor John Soluri. Between 1912 and 1920, United Fruit’s profits more than sextupled to $33 million, its new worth grew to over $200 million, and its “Great White Fleet” grew from forty-one ships to seventy ships that carried bananas, mail, equipment, and passengers between its tropical outposts and the United States.[1] Fruit Dispatch Company, the firm’s U.S. marketing organization responsible for sales to brokers and wholesalers had by 1925 ballooned to over 50 offices in key markets, including dispatch hubs in major port and railroad cities.[2] By 1926, United Fruit Company, the fruit, sugar, shipping, marketing, and communications conglomerate, “owned 1.6 million acres in the Caribbean and Central America, including 172,000 acres of active banana plantations.”[3]

United Fruit was taken to new heights by Samuel Zemurray, the legendary CEO who stepped in to save the fruit firm from demise after the U.S. economy crashed in the Great Depression. Zemurray, a Russian immigrant who started with nothing, had worked his way up from a small-time banana merchant to build Cuyamel Fruit Company, a significant concern owning large tracts of land in Honduras and 15 ship fleet.[4] While it was only around an eighth the size of United Fruit, Cuyamel was constantly besting the giant firm with its innovations in banana production and marketing. For example, Zemurray was first to use massive irrigation and selective pruning in his banana fields,[5] practices his competitors had deemed unnecessary in rain-soaked tropical climes where their product grew wild.

Zemurray’s innovations dramatically improved crop quality and yield and were soon copied by Cuyamel’s competitors, including United Fruit. Though they were actually an investor in Cuyamel, United Fruit’s management had a chip on their shoulder toward the upstart and its president who competed hard, and always seemed to show up their behemoth fruit firm. In November 1929, larger firm acquired Cuyamel for the price of $13.5 million in United Fruit stock paid to Zemurray.[6] The board also sought to keep their more adept rival out of the banana business for good. The buyout contract included a non-compete clause barring Zemurray from founding or joining a competing firm. However, the contract did not preclude him, as the firm’s largest shareholder, from firing the entire board and installing himself as the new President of United Fruit. Concern over gross mismanagement of United Fruit, and a stock price that had declined approximately 90% since he had been paid in stock for his thriving Cuyamel Fruit Company, forced Zemurray to step in.[7] After a rebuffed attempt to aid the board in turning the company around, wherein they pretended not to comprehend his accent, the Russian presented the board shareholder proxies he had obtained in advance, authorizing him to terminate their services.[8]

Unlike the Boston blue-blood management he ousted, Zemurray was familiar with the lands where bananas grew, the people who tended and loaded them, the mules that carried them. Like many times before, he had traveled to Honduras prior to his trip to United Fruit’s headquarters.[9] He had learned the biggest problem vexing profits at the time was that the company was running boats slow to save fuel while bananas perished in transit. After taking over, Zemurray began to operate United Fruit like he had operated Cuyamel. He immediately fired about a quarter of the executives[10] and placed decision-making authority in the hands of the men in the tropics versus the “bean counters” in Boston.

United Fruit’s profitability and stock price bounced back quickly and kept growing with Zemurray at the helm. He hired the inventor of modern public relations, Edward Bernays to make both consumer markets and political climates more-ripe for profits.[11] As crops switched from Big Mike bananas to more fragile Cavendish, United Fruit quickly began boxing its fruit to prevent bruising in transit.[12] Its boxed and banded bananas were sold under the Chiquita brand, a Bernays brainchild.[13] The “Banana Man,” as he came to be revered, amassed a fortune that exceeded $30 million when he passed away in 1961. His public and private philanthropy in his adopted home city of New Orleans stacked up to untold millions more. Under Zemurray, United Fruit grew to own over 3 million acres and operate 1500 miles of railroad, 15 hospitals, 237 schools in the Caribbean and Latin America. Zemurray biographer Richard Cohen rightly lionizes the Russian immigrant in the title of his book as “The Fish that ate the Whale.” The title is apt. The immigrant who came from nothing to so adroitly head one of America’s largest commercial concerns is the embodiment of the American dream.

The Epitome of American Economic Imperialism

In addition to “American Dream” accomplishments, Cohen’s biography and the majority of scholarship focused on United Fruit and Zemurray also recognize their role in U.S. economic imperialism, a true nightmare for the many souls in Caribbean and Central American countries impacted. Engaging in exploitative labor practices, negotiating one-sided fruit contracts, bullying and bribing foreign regimes, and exporting Jim Crow racism to company “colonies” were among the company’s most egregious standard operating procedures. These practices are a stain on any success story one might tell of United Fruit. Perhaps they account for the fact that the United Fruit story and Zemurray’s many shrewd business moves are neither darlings of business and entrepreneurial historians nor staples of collegiate business and marketing curricula.

To U.S. consumers and media influencers, United Fruit propaganda painted the firm as a positive, “civilizing” force in the tropical sovereignties where it operated. In truth, exploitative labor practices were built into the United Fruit’s business model. In British Honduras for example, United Fruit encouraged the passage of the Fraudulent Labourer’s Act in 1917 which, according to historian Mark Moberg’s article on the firm’s exploitative practices in that country, “fined or imprisoned agricultural workers who broke contracts with their employer.”[14] In Guatemala, according to Whitfield’s overview of Zemurray and his company, the firm actually made a deal with Dictator Jorge Ubico in the mid-1930’s which guaranteed to cap its employees’ wages at 50 cents per day. Ubocio’s reason for requesting the cap: so that Guatemalans outside United Fruit’s employ would not become envious and demand more for themselves.[15]

Not all of the bananas United Fruit marketed were grown on its own plantations by laborers it employed. In localities like Colombia, local entrepreneurs contracted with fruit marketing giant to grow and deliver fruit to its export docks. Its grower partners were treated no better than its laborers. According to Harvard historian Marcelo Bucheli, “United Fruit imposed draconian contracts” on the growers: They could only sell to United Fruit, but the firm was not obliged to buy their fruit. Contracted fruit could be rejected simply because the company did not have shipping capacity to transport the product. And, in the event new taxes were enacted, the growers would contractually bear the costs.[16] Fruit growers and exporters attempting to dodge their contracts and illegally market fruit that could only be sold to United Fruit faced tough obstacles, chiefly that their fruit could and would be seized by U.S. and British customs houses.[17]

Fruit jobbers weren’t the only counterparties subjected to United Fruit’s zero-sum style of deal making. The firm’s executives were experts in exerting control over foreign governments for economic gain. For example, according to Professor Moberg, when the British Government balked at a United Fruit request to install a radio telegraph station in British Honduras, the Colonial Office pleaded their case to parliament: “United Fruit Company is very important to British Honduras … it would be a serious thing for the Colony if the Company’s operations were discouraged.”[18] When the missive went unheeded by the British Empire, United Fruit ceased providing passenger service to the colony on its ships. Passenger service was not restored until the Brits relented on the radio telegraph installation and paid a higher shipping subsidy to boot. While the United Kingdom colony was in no danger of a similar fate, it was well known among those who needed to know that United Fruit’s Sam Zemurray had engineered a Honduran coup when he headed Cuyamel.[19] He covertly installed a Honduran regime more agreeable to his fruit firm’s interests. It was also well known that the fruit company he headed was capable of again deposing governments that attempted to impede its profits.

It seems that just about the only people United Fruit didn’t threaten and treat poorly abroad were the dictators and oligarchs it did business with, and its “first class workers.” These workers stationed in the firm’s tropical production outposts numbered in the tens of thousands, the vast majority U.S. citizens. “First class workers” lived alongside local workers and inhabitants, they lived in “American” villages that, according to Atalia Shragai’s report on United Fruit Company culture, “preserved the cultural scheme of the mother country.”[20] In addition to clothes and luxuries available at the company store, U.S. culture was also exported to United Fruit colonies in the form of Jim Crow racial discrimination.

According to Professor Jason Colby, a historian who has studied the topic in depth, “white Americans were drawing upon domestic racial practices to maintain authority and labor control.”[21] Despite suppositions to the contrary, these practices predate the New Orleanian Sam Zemurray’s leadership of the firm, going back to the firm’s New England roots. In 1907 Victor M. Cutter, who believed that order and progress rested on clear racial hierarchy and segregation, rose to head United Fruit’s Central American division.[22] One of Cutter’s overseers boasted that a native on his plantation would “for the sum of ten dollars remove any negro from sight and no questions asked.”[23] Cutter, in fact, described his work as “the business of banana growing and negro management,”[24] United Fruit, according to Colby,  “implemented Jim Crow colonialism throughout its Caribbean enclaves.”[25]

Conclusion: United Fruit was both venerable and villainous

Surveying current historiography relating to United Fruit yields macro and micro views of how the company operated. The articles reviewed for this paper provide insight into why the firm is both venerated and vilified for its role in global business and the sovereignties in which it operated. Woven through the story of United Fruit, often behind the scenes, is the role that Samuel Zemurray, first a small customer, then a competitor, and finally the firm’s president played in the company’s practices. Current biographical research on Zemurray portrays the man, like the company he led, as deserving both veneration and vilification. However, more scholarly research on the business leader is necessary to make any such statements with surety.

 

Bibliography

Bucheli, Marcelo. “Enforcing Business Contracts in South America: The United Fruit Company and Colombian Banana Planters in the Twentieth Century.” The Business History Review, no. 2 (2004): 181-212. http://www.jstor.org/stable/25096865.

*According to Harvard historian Marcelo Bucheli, “United Fruit imposed draconian contracts” on the growers

Cohen, Rich. The Fish That Ate the Whale: The Life and times of Americas Banana King. New York, NY: Picador, 2013.

Colby, Jason. “”Banana Growing and Negro Management”: Race, Labor, and Jim Crow Colonialism in Guatemala, 1884–1930.” Diplomatic History 30, no. 4 (2006): 595-621. http://www.jstor.org/stable/24915077.

*United Fruit, according to Colby, “implemented Jim Crow colonialism throughout its Caribbean enclaves.”

Colby, Jason. “Race, Empire, and New England Capital in the Caribbean, 1890-1930.” Massachusetts Historical Review 11 (2009): 1-25. http://www.jstor.org/stable/40345978.

*Professor Jason Colby, a historian who has studied the topic in depth, “white Americans were drawing upon domestic racial practices to maintain authority and labor control.”

Moberg, Mark. “Crown Colony as Banana Republic: The United Fruit Company in British Honduras, 1900-1920.” Journal of Latin American Studies 28, no. 2 (1996): 357-81. http://www.jstor.org/stable/157625.

*…historian Mark Moberg’s article on the firm’s exploitative practices in [British Honduras]

Shragai, Atalia. “Do Bananas Have a Culture? United Fruit Company Colonies in Central America 1900-1960.” Iberoamericana (2001-) 11, no. 42 (2011): 65-82. http://www.jstor.org/stable/41677367.

*“First class workers” lived alongside local workers and inhabitants, they lived in “American” villages that, according to Atalia Shragai’s report on United Fruit Company culture, “preserved the cultural scheme of the mother country.”

Soluri, John. “Accounting for Taste: Export Bananas, Mass Markets, and Panama Disease.” Environmental History 7, no. 3 (2002): 386-410. http://www.jstor.org/stable/3985915.

Whitfield, Stephen J. “Strange Fruit: The Career of Samuel Zemurray.” American Jewish History 73, no. 3 (1984): 307-23. http://www.jstor.org/stable/23882622

[1] John Soluri, “Accounting for Taste: Export Bananas, Mass Markets, and Panama Disease.” Environmental History 7, no. 3 (2002), p. 391

[2] Soluri, p. 393.

[3] Soluri, p. 395.

[4] Stephen J. Whitfield, “Strange Fruit: The Career of Samuel Zemurray.” American Jewish History 73, no. 3 (1984), p. 312.

[5] Whitfield, p. 316.

[6] Whitfield, p. 314.

[7] Whitfield, p. 319.

[8] Rich Cohen, The Fish That Ate the Whale: The Life and times of Americas Banana King (New York, NY: Picador, 2013), loc. 3528.

[9] Cohen, loc. 7420.

[10] Whitfield, p. 315.

[11] Whitfield, p. 319.

[12] Soluri, p. 399.

[13] Cohen, loc. 5493.

[14] Mark Moberg, “Crown Colony as Banana Republic: The United Fruit Company in British Honduras, 1900-1920.” Journal of Latin American Studies 28, no. 2 (1996), p. 380.

[15] Whitfield, p. 314.

[16] Marcelo Bucheli. “Enforcing Business Contracts in South America: The United Fruit Company and Colombian Banana Planters in the Twentieth Century.” The Business History Review, no. 2 (2004), p. 189

[17] Bucheli, p. 190.

[18] Moberg, p. 372.

[19] Whitfield, p. 319.

[20] Atalia Shragai. “Do Bananas Have a Culture? United Fruit Company Colonies in Central America 1900-1960.” Iberoamericana (2001-) 11, no. 42 (2011), p. 68.

[21] Jason Colby. “Race, Empire, and New England Capital in the Caribbean, 1890-1930.” Massachusetts Historical Review 11 (2009), p. 1.

[22] Colby, 16.

[23] Ibid.

[24] Jason Colby, “Banana Growing and Negro Management”: Race, Labor, and Jim Crow Colonialism in Guatemala, 1884–1930. Diplomatic History 30, no. 4 (2006), p. 595

[25] Colby, p. 608.