Sam Zemmuray and the History of the Banana Trade

Sam Zemmuray, also known as Sam the Banana Man, was the ruler of the banana industry for decades. Zemmuray’s parents were poor farmers in Russia before Zemmuray made his way to Central America. He was no joke though, standing at over six feet high and made of only skin and bone. A good businessman, but the meanest. Starting out at the docks as a fruit jobber, he worked his way to starting his own banana industry, Cuyamel Fruit. He retired and merged companies with United Fruit (their big competitor) soon after, taking some years of peace with his 300,000 shares and in a crazy incident, became the CEO of United Fruit for some time before stepping down.

Zemmuray was born in 1877 in Russia. He moved to New York when he was young before making his way to Selma, Alabama, where his uncle owned a store. He saw his first banana in 1893 and he knew that this banana was his future. People do not know the exact details of how that banana came to him. “All of the claims have came from reportage to mythology,” according to Eric Cohen in his book The Fish that Ate the Whale. It is likely that he saw his first banana from a peddler close to his father’s store. The banana at that time was practically unknown in the US and not many people had heard of it at all; even though the industry had started about 20 years ago by the banana cowboys who arrived in the Central Americas, looking to make their fortune.

Zemmuray moved to the banana docks soon after seeing his first banana. He had already devised a plan: he would go down to mobile, where the fruit boats went from Central America; he would purchase his supply, carry it back to Selma and go into business. “Arriving in Mobile, he wanted to learn every detail of the trade,” wrote Cohen. he watched the agents scour the bananas to look for imperfections such as “freckles” or “ripes,” as wrote by Cohen. These bananas were worthless because they would just rot on the way to their destination. He watched the men load the bananas onto the big ships to be carried away to the US. Sam grew very interested and fixated onto the ripes which the agents and the merchants considered trash. He believed that they still had value.

Zemmuray went down to the docks to try and buy his supply of ripes to ship to Alabama. He had $150; that was it. He knew that he would have to work fast to prevent his supply from turning into a pile of banana mush. However, he thought that he could do it. Zemmuray’s first supply consisted of only a few thousand of the so called “worthless” bananas. He had very little money left in which he was going to use to rent part of a boxcar on the Illinois Central railway. The trip was scheduled for three days on the road to Selma. He had to sit on the boxcar with his bananas because he had ran out of money. The trip turned into four, five, six days as the bananas started turning into banana mush.

During the next delay, Zemmuray went into a Western Union office and spoke to a telegraph operator, he asked him if he could spread the word to the towns across the line. Having no money, he did this for a percentage of his profit. He was greeted in Selma by merchants and peddlers and grocery store owners, “ten for eight, thirteen for ten!” said Zemmuray. He broke off a many bunches and put the money into his pocket. $190! A success, after accounting for expenses he earned $40. He did this again and again and again. He eventually decided to live in Mobile so that he could stay close to his business.

In 1903, Zemmuray took a partnership and started a business. He started the business with Ashbell Hubbard; taking a partner was not like the dark and stormy Zemmuray, but he had to do it. He named the business the Hubbard-Zemmuray company and the business started with $30,000 in capital. The two men rented an office in Mobile, going out to bars trying to find the latest banana gossip that might be of value to him. He bought the Thatcher Brothers Steamship Company which was not in very good shape. United Fruit helped buy the company for them, and they took a 25% stake in the Hubbard-Zemmuray company as well, remaining a silent partner.

Close to this time the Hubbard-Zemmuray company acquired Cuyamel Fruit, a banana company founded by William Streich, who owned a hundred acres on the Cuyamel river in the Honduras before running out of money completely. This business was sold to several different corporations who had invested some money into it before it finally getting passed along to Zemmuray and Hubbard. The company cost $20,000, so it was definitely a gamble. This profit approach worked the same way his business worked on the docks. He believed that he could succeed and make a profit. The most important gamble at that time though was buying the Thatcher Brothers Steamship Company, which then allowed them to make their way across the ocean to Boston and New Orleans.

In 1905, Zemmuray moved to New Orleans. He went back and forth from Mobile. He was operating by buying the bananas from farmers and selling and shipping them in Mobile. He worried that in order to compete with his competitor, United Fruit, he had to own his own land and grow his own produce. He looked at land in Honduras, which seemed perfect for him. He bought 5000 acres for $2,000, still worried that wasn’t enough property and power to compete with the gigantic United Fruit.

For the next few years he bought more and more and more land. He acquired a lot of it as the company grew, but his partner worried that it was not worth the risk. What did he do? He bought him out and took all of the risk onto his own shoulders. Zemmuray knew that Cuyamel fruit was the better company, he knew it. United Fruit, once their friend, had become their competition. Now he was intent on crushing them. In the earlier years, United Fruit either tried to crush you or owned a piece of you. Zemmuray had bought back the shares of Cuyamel fruit and United Fruit couldn’t do anything about it because of the Sherman Antitrust Act.

United Fruit owned lots of land in Guatemala while Cuyamel fruit owned lots of land in the Honduras. The last remaining land was in the middle of the borders and they both badly wanted it. Two different random people in both countries had contracts that said that the land was theirs. The reason was because both Guatemala and Honduras thought that they owned the land. Instead of getting into some big stink about it, Zemmuray payed double and bought the land from both of them. This made United Fruit very mad and they started to play some “pranks” on each other; the two companies would hire someone to cross the river that divided them and rip up train rails or cut water lines. This was the start of the Banana War.

Zemmuray had bribed the government of Honduras and United Fruit had bribed the government of Guatemala to get more land and labor. This intent on making money was turning into a border war. Zemmuray wanted to build a bridge across the river so that he could get his bananas to the other side and the government of Guatemala had refused, favoring United Fruit. Zemmuray hired his engineers and they built a bridge connecting the river. The bridge was only a temporary bridge and could be taken down in only three hours. When United Fruit accused them of making a bridge, Zemmuray denied it, saying that it wasn’t a bridge at all. United Fruit was mad.

United Fruit had been fed up for the last time and they knew just what to do. They bought 5000 acres in Colombia. Zemmuray couldn’t figure out what they were doing, then he realized. That river controlled the headwaters that led to all of his banana plantations and if United Fruit changed the flow of that river, then Cuyamel Fruit would be ruined! These rising tensions attracted the US government and they were both invited to a meeting in Washington, DC to settle out the conflict. The judges eventually decided that there were only two options: merger or buyout.

Zemmuray pondered this question for days. He looked at the numbers and still couldn’t decide what to do! He met with Victor Cutter, the CEO of United Fruit, at a restaurant to decide what they were going to do. They talked for hours and they eventually decided upon what the decision would be. The answer was to merge. Zemmuray swapped Cuyamel Fruit for 300,000 shares of United Fruit after signing a contract that he would not join a competitor nor start another company. The deal was done. The deal was approved by United Fruit stockholders on December 1929. Zemmuray, after only three decades of the banana business, retired and became one of the richest people in America.

Over the next few years since Zemmuray sold Cuyamel Fruit, United Fruit was not doing so well. Zemmuray tried to get his voice heard from the officials, but he couldn’t. United Fruit seemed to be doing everything wrong and Zemmuray still couldn’t help them. He watched the price of the shares go down and down and he didn’t want to lose all of his money. He saw what was happening. All the bananas were going bad because the captains were instructed to turn off the engines of the ships for part of the journey to save gas. This was all wrong. He went to a board meeting to discuss what was happening. He made a long speech about the problems that they found and at the end of the speech, Daniel Gould Wing, descended from an old New England family, said “unfortunately Mr. Zemmuray I didn’t understand a word you said.”

The men at the table started to laugh. Zemmuray clenched his fists and squinted his eyes hard, he stormed off only to come back with his proxies and a smile. “You’re fired Mr. Chairman,” said Zemmuray, “can you understand that?” Silence overcame them. “You gentlemen have been fu***** up this business for too long,” said Zemmuray, ” I am going to straighten it out.” Victor Cutter, the CEO of United Fruit was fired and Francis Hart was made CEO. When he died several years later, Zemmuray made himself President. Zemmuray ruled United Fruit for decades, until he died. Today, United Fruit is part of the Chiquita Brands International, and remains one of the top sellers of the fruit from the Americas.

When you see the banana on your kitchen table, it should remind you of Zemmuray. He was the banana cowboy who rangled the banana and brought it to your kitchen counter. He was the businessman who took over United Fruit. Furthermore, he was the jew from Russia who was not playing in the sand of the Honduras. In conclusion, he was the king who led the banana wars and built the empire. Smart, strong and powerful Zemmuray was. He was the big little fish that ate the whale.

Categories History, People

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