The Fish That Ate the Whale
'The Fish That Ate the Whale' is an elegantly written cautionary tale about how hubris can destroy a powerful company.
(Page 2 of 3)
United Fruit’s march to prominence – and monopoly – was due to the efforts of three men: New Englander Lorenzo Baker, who developed banana fields in Central and South America; Boston Fruit’s Andrew Preston; and Brooklyn-born Minor Keith, who constructed the first cross-Panama railroad and planted the first banana “rhizomes” in the region. In 1899, Baker, Preston, and Keith sealed a partnership that created United Fruit. Zemurray, as he moved into the business, joined forces with Mobile native Ashbell Hubbard, who had his own contract with United Fruit. Together, with Zemurray’s $20,000 investment, the two men acquired two smaller companies, Cuyamel Fruit Co., and Thatcher Brothers, the latter of which provided the new enterprise with steamships. This put the young company squarely in United Fruit’s crosshairs, and, as Cohen makes clear, the emerging colossus dealt with competitors in only two ways: “absorb or crush.” Zemurray was not about to be crushed.Skip to next paragraph
Subscribe Today to the Monitor
Having moved to New Orleans in 1905, four years before United Fruit would win a Supreme Court case alleging that they had violated the Sherman Antitrust Act, Zemurray met Jake “The Parrot King” Weinberger, an itinerant merchant who had extensive knowledge of Central America. (Zemurray would later marry Jake’s daughter Sarah). In 1910, Zemurray traveled to Honduras, where he bought 5,000 acres of land and met “characters” such as fugitive Texas embezzler William Sidney Porter (the author O. Henry). Zemurray found he was easily able to “grease the skids” of his enterprise by bribing officials of the heavily indebted Dávila government and by paying for Washington lobbyists to kill a plan by US Secretary of State Philander Knox to place a duty on all imports, bananas included.
Finally Zemurray decided to quietly overthrow the Honduran government. The new leader, General Manuel Bonilla, gave Zemurray essentially a free hand in expanding his business interests in the country.
The inevitable “banana war,” as Cohen describes it, pitted Zemurray, the “gringo” who rode with the roughnecks of the isthmus, against the starch-collared Brahmins of Boston of United Fruit, who seemed to operate from another planet. They sought to cut off Zemurray’s supply chain but, seeing that Zemurray was unrelenting, they arrived at a deal, brokered by United Fruit board member Bradley Palmer, that offered Zemurray 300,000 shares of United Fruit stock to leave the banana trade. Zemurray accepted but – still volatile, restless, and driven – he was nowhere near ready to relax and rest on his laurels. As Cohen sums up his world view: “Show me a happy man, and I will show you a man who is getting nothing accomplished in the world.”
The board of United Fruit were from Boston’s business elite. They had little use for this hard-headed and raving Russian. Zemurray, seeing the value of his United Fruit stock dwindle from $30 million initially to $3 million in 1932, spent the months before United Fruit's January, 1933, board meeting secretly gathering voting proxies against the United Fruit board. At that winter’s meeting, Zemurray made a personal appeal, saying the board had continually ignored his advice. At the end of it, board chairman Daniel Gould Wing sneered at him, saying, “Unfortunately, Mr. Zemurray, I can’t understand a word of what you say.” Zemurray then angrily left the room and returned with the large sack of proxies, which he threw on the table, saying “You're fired! Can you understand that, Mr. Chairman?” In the Central American isthmus, the demoralized population viewed Zemurray’s ascent to the head of United Fruit as a godsend. But Boston’s anti-Semetic gentry had reserved one last insult. As a Jew, Zemurray was essentially blackballed in the city, and when homeowners wouldn’t sell to him, he gave up, taking an apartment in the Ritz Carlton instead.