Sam Zemurray: The Banana King Who Overthrew a Government

The greatness of Zamori lies in the fact that he never lost faith in his ability to salvage a situation. Bad things happened to him, as bad things happen to everyone, but unlike so many, he was never tempted by failure. He never felt powerless or trapped. He was, as I said, an optimist. He stood in constant defiance. When the Secretary of State teamed up with J.P. Morgan and the Honduran government in a way contrary to Zamori's interests, he simply changed the Honduran government. When United Fruit drew a line at the Utila River and said, "You shall not cross," he crossed anyway. When he was forbidden to build a bridge, he built a bridge but called it something else. For every move, there is a countermove. For every disaster, there is a recovery. He never lost faith in his own agency. With his fortune fast diminishing, it was time to act. This is the story of Sam Zamuri. Welcome to Ambition, a show about the most ambitious people in history. And what we can learn from them. I'm your host, Justin Gordon, an entrepreneur based in Los Angeles. My main source for this episode is The Fish That Ate the Whale: The Life and Times of America's Banana King by Rich Cohen, which was published in 2012. This is probably one of my favorite books of all time. The story is insane, as you're about to listen to shortly here. Let's get to it. When he arrived in America in 1891 at age 14, Demery was tall, gangly, and penniless. When he died in the grandest house in New Orleans 69 years later, he was among the richest, most powerful men in the world. Sam Demarais saw his first banana in 1893. He was around 15 or 16 years old. And the banana trade by this point in time, it had already begun about 20 years earlier, so it was still in its early stages. And few people at this time had ever actually seen a banana. If they were spoken of at all, it was an oddity, the way a person might speak of an African cucumber today. Zamuri speaks of his product like Estée Lauder or Steve Jobs or Dietrich Mateschitz. It's true love. There's an obsession about the product, just like the other greats we've followed so far on this, on the show. And Sam, who was born in 1877, grew up on a wheat farm in flat country ringed by hills. His father died young, leaving the family bereft, without prospects. Sam traveled to America with his aunt in 1892. The plan was for him to go first and then pave the way for his siblings to come after him. And he was driven by the same raw energy that has always attracted the most ambitious to America, then pushed them to the head of the crowd. A grasping climber— nasty ways of describing this kid who wants what you take for granted. From his first months in America, he was scheming, looking for ways to get ahead. You do not need to be a Rockefeller to know the basic of the dream. Start at the bottom, fight your way to the top. And Sam Zemurray certainly fought his way to the top. It was over decades of time, but constantly finding ways to innovate, constantly pushing, as we're going to hear here. Over time, Sam would develop a philosophy best expressed in a handful of phrases: you're there, we're here, go see for yourself, don't trust the report. He believed in staying close to the action, in the fields with the workers, in the dives with the banana cowboys, You drink with a man, you learn what he knows. There is no problem you can't solve if you understand your business from A to Z, he later said. And that piece of it is so important, understanding your business from A to Z. Zamore would go on to work every position of the banana, banana trade. He fully understood every aspect of the business, which helps him later on in doing probably the most unthinkable things you're gonna, you're gonna hear of in a second here. And there's this other theme that pops up here. Environment matters. We have talked about this in every episode pretty much of the show so far. It's this theme we see again and again, putting yourself in the right environment to be successful in whatever trade or whatever aspect of business you're interested in. And for Sam Zamuri, Selma, Alabama was the perfect spot for a kid like Sam. An incubator, a starter town, picturesque yet faded, grand, but still small enough to memorize. Zamuri's uncle had a store, sometimes described as a grocery, sometimes as a general store. His shop was precisely the sort that Jewish immigrants had been establishing across the South for 50 years. And this is a theme we see with the early exposure to entrepreneurship of other people we studied as well, like Estée Lauder more recently. Sam did not care for crowds and parties. He had a restless mind and a persistent need to get outdoors. He liked to be alone. He did a bunch of different jobs as well. So at his uncle's store, he stacked shelves and checked inventory. Now and then he dealt with the salesmen who turned up with sample cases. He stood in the alley amid the garbage cans and cats asking about suppliers and costs. There was money to be made, but not here. He interrogated customers. He was looking for different work and would try anything, if only for experience. His early life was a series of adventures with odd jobs, one odd job leading to the next. And he was clearly industrious. He jumped from job to job. He was just trying to find the best opportunity for him, like his skillset, something that had potential. And you had to think about his motivation. He's trying to get his brothers and sisters to America. That's why he came. Which makes me think of like, what drives you? What's your motivation? What's fueling you and your business? Sam had a clear why early on. He, he wanted to strive. He wanted to be ambitious because he wanted to get his family to America. So they had a better life. So Sam worked as a tin merchant. He bartered iron for livestock, chickens and pigs. He would search for discarded scraps of sheet metal, pile them on his cart, and look for trades. Wire for a chicken coop in return for one of the Razorbacks in the pen. Once the particulars were agreed upon, Sam would have to catch the animal and tie it up. So it was Zamori's first real job. He was racing through the slop with a rope in his hand. In those days, he told a reporter from Life, I could outrun any pig in Dixie. It paid $1 a week. He kept the job just long enough to know he would rather be the man who owned the hog than the man who collected the junk, and would rather be the man who discarded the sheet metal than the man who owned the hog. We see ambition early on in Sam's life, understanding what he wants to become, and he's willing to put in the work to get there. A series of jobs followed, tried on and thrown off like thrift store suits. He was a house cleaner and delivery boy. He turned a lathe for a carpenter. By 18, he had saved enough to send for his brothers and sisters, half a dozen pale young Jews who turned up in Alabama in the last years of the 19th century. His real life began only when he saw his first banana. He devised a plan soon after. He would travel to Mobile, where the fruit boats arrived from Central America, purchase a supply of his own, carry them back to Selma, and go into business. So that's the setup. A teenager with a pushcart mentality and a family to feed. Now watch what he does the first time he sees a pile of bananas that everyone calls garbage. He sees something else completely. So the Boston Fruit Company, which would become United Fruit, dominated the trade with a fleet that carried bananas from Jamaica to Boston, Charleston, New Orleans, and Mobile. And this is not a trade for the faint of heart, as banana cowboys would tell you. Banana plants are prized nesting places for scorpions. That's just one example. There's so much risk and trouble and challenge that goes into the banana trade, but Sam wanted to learn every detail of the trade. Here's where he finds his opportunity. The bananas that did not pass muster were dumped on the side of the yard where they were further divided. Some were designated as turnings, meaning they were on their way to being worthless. At the end of the day, they were sold at a discount to store owners and peddlers. 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 you have left in the sun that's become as freckled as a Hardy Boy. So these bananas, though still good to eat, delicious even, would never make the cut because they would never make it to 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. Sam noticed everything. The care with which the bananas were handled, the way each boxcar was filled and rolled to a siding, how the men from the banana company, college men, moved through the crowd barking orders. But he paid special attention to the growing pile of ripes. Before refrigeration was perfected, as much as 15% of an average cargo ended up in the ripe pile. Sam grew fixated on ripes. He recognized a product where others had seen only trash. It was the worldview of an immigrant, understanding how so-called garbage might be valued under a different name, seeing nutrition where others only saw waste. He was the son of a Russian farmer for whom food had once been scarce enough to make even a freckled banana seem precious. This is the benefit of having a different worldview. Sam comes from poor family. He's a farmer. So he sees this as a clear opportunity. And what we're about to see is the value of speed, which we just heard about in the Estée Lauder episode about her getting Clinique to market faster than Revlon. Speed comes up again and again with the most ambitious people in history. How fast can you move? Can you move faster than your competition? So, so Murray had $150. That was his stake. He figured it would go farther if he spent it on ripes. He was no fool. He knew what this meant. That he would have to move fast, that he was entering a race with the clock. 3 days, 5 at most, that's how much time he would have. After that, he would be left with a pile of glue. But he believed he could make it. As far as he was concerned, Ripes were considered trash only because Boston Fruit and similar firms were too slow-footed to cover ground. It was a calculation based on arrogance. I can be fast where others have been slow. I can hustle Where others have been satisfied with the easy pickings of the trade. Zamuri's first cargo consisted of a few thousand bananas. This self-confidence, by the way, is something— it reminds me of, hate him or love him, Kanye West has like the most unbelievable self-confidence of almost anyone I've ever seen. I don't know where that comes from exactly, but Zamuri definitely had it. You can see from this, like, he automatically thinks that he can do what the big companies can't. And he's willing to put in the work to try at least. And it's a risk, but what choice does he really have? It's asymmetric. If it works, great, he's in business. If it doesn't work, guess what? He's still relatively poor. Who cares? So of that $150, since the freight charge used the last of his money, Zamori traveled in the boxcar with his bananas, the door open, the country drifting by. Stoplights, temporary holds. What was supposed to be 3 days turned into 5 or 6. With each hour, the bananas became more pungent. He spoke to the conductor who commiserated, saying, what a terrible shame. In a Mississippi train yard where the red brick buildings, feed stores, and tinsmiths crowded close to the tracks, a brakeman hearing Sam's story said, You've got a good product. If you could just get word ahead to the towns along the line, I'm sure the grocery store owners would meet you at the platforms and buy the bananas right off the boxcars. This was very important for Sam. So during the next delay, Sam Murray went into a Western Union office and spoke to the telegraph operator. Having no money, Sam offered a deal. If the man radioed every operator ahead, asking each of them to spread the word to local merchants that dirt-cheap bananas were coming through for merchants and peddlers, Sam would share a percentage of his sales. When the Illinois Central arrived in the next town, the customers were waiting. He sold his last banana in Selma, then went home in the dark. When he tallied his money, it came to $190, his first real success. After accounting for expenses, Sam had earned $40 in 6 days. Sam Murray had stumbled on a niche, ripe, overlooked at the bottom of the trade. It was logistics. Could he move the product faster than the product was ruined by time? This work was nothing but stress. The margins were ridiculously small, like counterfeiting dollar bills. But it was a way in. Whereas the big fruit companies monopolized the upper precincts of the industry, where you needed capital, railroads, and ships to operate in greens, the world of ripes was wide open. Within a few weeks of his return to Selma, Zamori set out again, then again, then again. It was in these months, on train platforms and in small towns, that Zamori first came to be known as Sam the Banana Man. There are 2 things we have to highlight from that section. One being his way in. He just found a way into the trade however he could. He didn't have the capital and resources, all, all of that to like compete with the big companies right away, but he found a way in, which would prove to be one of the most important pieces of this entire story. Finding your wedge as an entrepreneur into whatever industry you're going into. The second important thing was having no money. He offered a deal to the telegraph operator. I think We have to understand that a deal can always be made. Sam didn't have money, but he knew he had something valuable. There's always a deal to be made. I have a sticky note on my computer that says, keep trying to open doors, make sponsors do deals with you. This is from an interview Ari Emanuel did with Invest Like the Best, Patrick O'Shaughnessy, about deal making. And there's always a deal to be made. That's what Sam did early on to get his first Small success, which would turn into more successes. So $40 in six days—it sounds tiny, but he found his wedge. And once Sam the Banana Man had a wedge, he never stopped widening it. One of the largest companies in the industry was Boston Fruit, dominated by New England families. But there were others—as many as 50 small and mid-sized importers. Those are the ones at the top. Finally, at the bottom of the trade, in the cellar beneath the basement. Came the banana peddler, also known insultingly as fruit jobber. For the rest of his life, no matter how high he climbed, the executives at United Fruit referred to Murray as the fruit jobber. So they're always insulting him. This is just like our first episode with Cy Newhouse, where people looked at him as this short immigrant who was running around town and selling newspapers. They looked down on him, and he used that as fuel, as motivation. He built a company that's worth billions of dollars today. Because of that. I always wonder where people's motivation comes from, and both of them, they did it for family, but it was also fueled by people looking down on them and, and doubting them really their entire lives. Sam stood out in the industry and to people in these towns because he's this big, deliberate, strong, and slow person. Nothing could make him hurry. He had this sort of calm that cannot be taught, which actually reminds me of the Wright brothers. They could not be rushed in their experiments. Even when they were doing testing for their airplanes in different places, people always wanted to see them do more and more experiments and like shows. Once they had the plane pretty much ready to go, people wanted to see them. And they were patiently waiting for hours to see the Wright brothers test their planes, which is pretty insane. Not in the early days, but by the end of it. And Sam is the same way. So Sam moved to Mobile soon after he went into business. He lived near the docks now and And if business was slow, took a job. He worked on a ship as part of a cleaning crew scrubbing decks. He worked in a warehouse as a watchman. He soon made his name as a uniquely resourceful trader, the crazy Russian who bought the freckled bananas. He was pure hustle. Every morning before the first light, he was at the docks with a pocket full of bills. Foghorns blew, train wheels rattled, and smoke drifted across the sky. He purchased every ripe and overripe and about-to-be-ripe he could lay his hands on. The importers were happy to get money for what in other towns was considered trash. So we see there, Sam was willing to do anything to succeed. So even early on, yes, he finds bananas and he's starting to sell these, these ripes, but he still took a job to make ends meet. Would you do the same? I know people talk about how they can't quit their job or they can't go full-time in a business. He just did both until he could make it on his own. So in 1899, he sold 20,000 bananas. Solid start. In 1903, a few years later, he sold 574,000, and within a decade, he would be selling more than a million bananas a year. When Andrew Preston, the president of United Fruit, visited Mobile in 1903, he asked to meet Sam Zemurray, the Russian selling the ripes. No photos of this meeting were taken, no minutes recorded, but it was, it was significant. The titan who began the trade was shaking hands with the nobody who would perfect it. Preston later spoke of Sam Murray with admiration. He said the kid from Russia was closer in spirit to the Banana pioneers than anyone else working. He's a risk-taker, Preston explained, and he's a doer. Again, we see this importance of environment. Sam moved to where the action was. And just like William Randolph Hearst wanted to meet Cy Newhouse when Cy Newhouse was on the rise as this budding empire builder in the newspaper industry, Andrew Preston wanted to meet Sam Zemurray. We always see this again and again. The greats in any industry want to meet the up-and-comers. They want to get ideas. They want to see how they're doing things differently. This happens again and again and again. Think of where we're at in the story. A few years before, Zemurray seemed like a fool buying garbage. Now look what he'd accomplished, selling hundreds of thousands of bananas a year. He became one of the biggest traffickers in the trade. And he'd done it without having to incur the traditional costs. His fruit was grown for him, harvested and shipped for free. He was like a bike racer riding in the windbreak of a semi-truck, the semi-truck being United Fruit. And by the way, I love that line. That's an amazing line. Rich Cohen, such a great writer. And by his 21st birthday, he had $100,000 in the bank. In today's terms, he would've been a millionaire. If he had stopped there, his would've been a great success story. So Sam Zamuri's 21 years old. He's got $100 grand in the bank. He's riding in United Fruit's windbreak. Most people would coast. Sam went looking for a partner and a bigger game entirely. Zamuri took a partner circa 1903. This was out of character. He was a solitary sort, a late-night walker and party avoider. He liked to make decisions on his own. He liked to make decisions on his own. Better to ask forgiveness than permission. But he had gone as far as he could go with ripes. He wanted to move into the more respectable precincts of the trade. That's where the real money was. For this, he would need capital and help. Someone to kick in cash and tend the office while he traveled. Ashbel Hubbard was a product of the scene. Having grown up in Mobile, he was the sort of elder statesman respected by everyone in the trade. In him, Zamori would have recognized a member of the club. A mild-mannered man who could reassure investors concerned by Sam's risk-taking. Hubbard had his own contract with United Fruit, which also helps explain the partnership. In Zamori, Hubbard would have recognized the raw talent of a rising star. They joined with an ambitious goal: to traffic yellows and greens. This meant contracting Central American farmers for a percentage of each harvest, which Zamori and Hubbard would import to Mobile, New Orleans, and Galveston. For Sam, who had always kept down his costs, this meant assuming a new level of risk. The Hubbard-Zimmery Company started with $30,000 in capital. So the 2 of them got to work. After hours, they stopped in one of the bars on the water where they would catch up on gossip and market talk. The smallest bit of information meant a possible advantage. That piece is important. They're always looking for an edge, any information they can get. So when they're at these bars talking to all the different men in the banana trade, they're just trying to learn as much as they can. By then, a group of men had gathered around Zamuri, banana men who seemed to defer to him, though he was the youngest on the scene. This ability to attract followers would prove crucial. Though he said little, he was recognized as a leader. His team was better, stronger, tighter. In 1905, Zamuri and Hubbard purchased the Thatcher Brothers Steamship Company, which was in bad financial shape. This acquisition ran upwards of $10,000. Sam put up some of the money, Asheville did the same. The balance was covered by United Fruit at the direction of Andrew Preston. Such partnerships were the way of United Fruit, the style that earned the company the nickname El Pulpo, the octopus. They wrapped their tentacles around every startup in the industry in those days. UF either owned a piece of you or was intent on your destruction. United Fruit took a 25% stake in Hubbard's and Murray but remained a silent partner. Around this time, Hubbard and Zamuri acquired the Cuyamel Fruit Company, founded in the 1890s. The acquisition of Cuyamel, which cost them $20,000, was a gamble. For the moment, the key purchase was the Thatcher Brothers. Picked like a plum from the bottom of the market, with Thatcher, Zamuri became the owner of steamships. This changed his status immediately. It's worth lingering on the ships, as they would remain important for years. Once fancy ocean liners, they had since fallen into disrepair. Chipped and rusty, they retained a certain elegance— an upper deck, a hurricane deck, a sidewheel, a dining room. The ships once made a regular run from Liverpool, England to Argentina. They were said to be the fastest across the Atlantic. They were warhorses and would remain in constant operation for 50 years. Filled with dandies in the beginning, filled with bananas in the end, standing in the the pilothouse, the world would look different to Zamori. His field of operation suddenly expanded. The entire Gulf of Mexico is now open. All the waterfront towns, markets, inlets, and deltas of the Central American Isthmus. That point is so, so important. It actually reminds me, just reading that now, of— there's this quote in— I think it's one of the books about Jeff Bezos. I read all 3 of them, but I think it's John Doerr who said That Jeff Bezos raising real capital was an unlock on his ambition. Basically, like him getting that access to capital unlocked everything. So they would expand obviously way bigger. And today we know the, as the juggernaut of Amazon today, but it was that capital that did it. Him raising more and more funds. For Zamori, it's him getting these ships that really expands the business. And it's important to understand this product of his. So a banana plant under the best conditions, Can grow 20 inches in 24 hours, which of course makes it an ideal crop for a businessman. It's never out of season. A single plant can bear fruit as many as 3 times a year for 20 years or more. And when the stem is finally kaput, and by now you're old and rich, you dig up the rhizome, hack it to pieces, plant each piece, and watch those grow. Thus, another 20 years goes by. And before we go further with Sam, you need to understand the industry he was walking into because the banana trade Had already produced its own brutal lessons and its own giants. The industry of bananas was booming. So in the last years of the 19th century, the sale of bananas doubled and doubled again. One day, no one could identify the yellow fruit. The next day, the banana was more popular than the apple. So this industry has grown like crazy. But the banana is terribly vulnerable to wind and cold, heat, rain, lack of rain. flood, and disease. 3 things are important to success. Getting big. So a banana company needs to be fat enough with enough capital in reserve to weather inevitable freak occurrences such as earthquakes and hurricanes. Second being grow your own. So a banana company needs its own fields so it can control planting and harvesting, thus avoiding ruinous competition in the event of a down season. And third thing being diversify. So get big, grow your own, and diversify. And as far as diversifying, a banana company needs plantations scattered across a vast terrain Growing in far-flung countries so that a disaster that wipes out the crop of a particular region will not destroy the firm's entire supply. So get big, grow your own, diversify. Hold on to these 3 because they explain everything Sam does for the next 50 years. Now quickly, the 3 men who built the giant Sam would one day swallow. Andrew Preston is one of them. He's a massive risk-taker, which you have to be to create any type of fortune. He gets into the banana trade, and by 1899, Boston Fruit Company he found controlled 75% of the banana market. But when the worst happened in 1899, the year without bananas, Preston went back to the banks. Only this time, he went with a pitch. Some think the problem is we've grown too big, but the real problem is that we're still too small. We must get bigger, much bigger. Must grow so many bananas in so many places. That no single storm can ever put us in such dire straits again. In other words, United Fruit was born of disaster. There were 2 ways for the company to grow. Preston could scout property, plant fields, and harvest bananas, or he could find someone who had done those things already. Enter Minor Keith. By his 50th birthday, Minor Keith owned land in 6 republics on the isthmus, and the 100-peso note of Costa Rica showed his face. Small, dark, and filled with mischief. Brooklyn-born, he traveled everywhere before making his way to Costa Rica in 1871, where his older brother Henry, because of family connections, had been hired to build a railroad across the isthmus. But laying track on the isthmus is a nightmare. There is no bedrock in the jungle. As soon as a section of rail had been laid, it began to shift. Now and then, after a big rain, an entire stretch would slide into a valley. Weeds wrapped around the ties. Roots buckled the beds. The workers were tormented by heat and disease. More than 300 died the first year. Just 4 miles of track were completed. Halfway through the second summer, Henry Keith— so that's Miner Keith's brother— was not feeling well. Feverish, hot to the touch, with yellow fever in his eyes. My God, his eyes. Miner told his brother to go home to Brooklyn, Recover, then return. But less than a month later, Henry was back in Puerto Limón. Soon after that, he was dead. Minor moved into his brother's tent and carried on. He sent for his little brother Charlie, as he had been sent for. When that brother died, he sent for his youngest brother, John. When John died, he continued alone. This made him a hero in Costa Rica, a man whose commitment could not be questioned. Who fed his own brothers to the jungle. The railroad made its first run on December 7th, 1885. 15 years and at least 4,000 dead. This, folks, is Minor Keith. So you have Andrew Preston and Minor Keith. So Minor Keith gets into bananas. By 1882, he was growing bananas in Colombia, Ecuador, Costa Rica, Nicaragua, Honduras, Guatemala, and Mexico. In 1883, he shipped 110,000 stems. In 1894, Keith signed a contract with Boston Fruit. He agreed to sell the company his entire banana harvest, but Keith owed millions of dollars to banks that he borrowed to, to complete his railroad. In late 1898, one of these lenders went bankrupt. The creditors who took over gave Keith 90 days to repay $1.5 million. Keith was the biggest supplier of Andrew Preston and Lorenzo Baker, who also got into the trade. So in March 1899, Minor Keith, 49 years old, boards a ship for Boston. The men meet at the office of Boston Fruit. Everything was settled in an hour. There would be neither a loan nor a temporary arrangement. The men would merge companies. Instead, a permanent solution to perpetual problems. Money for Keith, fruit for Preston and Baker. The new enterprise called United Fruit Company was incorporated in New Jersey March 30th, 1899. Preston was the company's first president and director. Keith was the first vice president. Keith was vice president. And I didn't, and I didn't mention this earlier, but Baker was the one who first sold bananas to Andrew Preston. That's how they got to know each other. So this new company is formed and they have, they have these unsold shares as well. So with this in hand, Preston put the second part of the plan into effect. A cunning way to bring order to a chaotic industry. He traveled from port to port, stopping in every city where bananas moved in numbers. He took aside dozens of importers and jobbers, giving each the same pitch: join us, get big, survive. In its first 6 months, United Fruit merged with 27 banana companies. So this M&A brings order to a chaotic industry. 27 different banana companies merged United Fruit. So they got big fast. And it actually reminds me of Dietrich Mateschitz with Red Bull and marketing. So they didn't just start marketing Red Bull with sponsoring 1 or 2 sports teams. They end up sponsoring tons of teams. They buy teams. They, they take this simple idea of marketing an energy drink beverage and take it so seriously to like level 10. It's the same thing with United Fruit in those days, acquiring 27 companies in 6 months. They just go ham. It's crazy. And they keep expanding. So like by 1910, United Fruit owned one of the largest private navies in the world. They have 115 ships. But even earlier than that, by 1905, the banana trade was United Fruit. The company owned the most ships, planted the most fields, had the most money, and controlled both supply and demand. Beginning around this time, UF stationed an agent at the South Ferry Terminal in New York, where the Ellis Island ferry landed. Handing a banana to each immigrant who came off the boat, the agent said, welcome to America. This was to associate the banana with the nation, a delicacy of the New World. And this is just crazy. Like, I think of this as them handing a banana to each immigrant who walks in, essentially enters the country. Is just like Estée Lauder giving away free products again and again and again. Like she gave away so many free products, especially in the early days, but that became her main strategy, like a free giveaway all the time. They're doing the same thing to associate their product with America. And what you do with this is you get a customer for life. So that's the octopus. That's what Sam's and Murray was up against. And where does an ambitious man go when he wants to fight in the big leagues? He moves to the biggest Port in the American South. When Sam Tamari moved to New Orleans, circa 1905, it was for the same reason that driven always moved to the big town: for the action. The city was at its maximum glory. People jammed the streets, which were covered in smog of the industry. The Mississippi was crowded with freighters and sidewheel steamers. At 29 years old, he was rich, a well-known figure in a steamy paradise, tall with black eyes and a hawkish profile. A devotee of fads, a nut about his weight. He experimented with diets, now swearing off meat, now swearing off everything but meat, now eating only bananas, now eating everything but bananas. He spent 15 minutes after each meal standing on his head, which he read was good for digestion. His friends were associates, his mentors and enemies the same. He was a bachelor, alone but not lonely. He was on a mission after all. In quest of the American dream, and he was circumspect and deliberate as a result. He never sent letters or took notes, preferring to speak in person or by the phone. He was described as shy, but I think his actions are more accurately characterized as careful. He did not want to leave a record or draw attention. Cuyamal was operating as an importer, not growing bananas but buying them from Central American farmers. Zamori's worries were about supply, setting a good price, And working out deals with exporters. The firm was grossing several hundred thousand dollars a year, most of which was to pay farmers, sailors, and the local officials who had to be bribed. And Sam's true religion was the waterfront— warehouses and loading bays, iron rails and boxcars. That's where he found refuge, knew just who he was and exactly what to do. He was not a big man in a tourist destination. He was an ambitious man trying to become big in the greatest port in the American South. He knew everyone by name there, but paid special attention to the old-timers who had been in the trade since the days of wind power. And here we're gonna see the value of hiring with some experience, how relationships and problem solving are worthwhile to bring on board. And one of the people he meets is Jacob Weinberger, who had made his own fortune. In his best year, Bluefields shipped a million bananas, but he was a relic when Zamori met him in New Orleans. An ancient gunslinger kept around less for prowess than for color and knowledge. Sam hired him as a troubleshooter, a sort of banana man at large, though past his prime. He knew the terrain and was on speaking terms with every honcho on the isthmus. That's not all. That's not all Jake had to offer. He had a daughter too, a beautiful woman named Sarah. Sam ends up marrying Sarah. They get married in 1908. And after Sam and Sarah have their first child, Doris, who was born in 1909, It changed Sam. He decided he needed to get bigger and make more. The only way to do this was to expand, and the only way to do that was to plant his own bananas. It was a realization that sent Sam Zemurray down the path he would follow the rest of his life, a tortured path that led south into the jungle. So Sam has a new wife, a new daughter, and a decision that would define the rest of his life. Sam was going to stop buying bananas and start growing them. Which meant heading to Honduras. Here's the environment Sam was getting into. Because Honduras had no extradition treaty with the United States, Puerto Cortés had become a criminal refuge filled with Americans on the lam. And Sam goes there in the early weeks of 1910. He was probably around 33 or 34 years old. And he goes there with his business partner. They slept in hotels, in the guest rooms of local traders, or wrapped in blankets on the beach. Now and then they traveled by car, but this was the horsepower age, and the men crossed most of the country by mule. The mules of Honduras were notorious, buck-toothed animals with twitchy ears and black eyes, in constant battle with their riders. The first time, Zamori was thrown on the ground. The second time, the animal bit his toe. The third time, the mule dropped and rolled. The fifth time, the mule carried Zamori to the middle of a river and left him. It remained a point of pride for Zamori that he eventually licked the famously sour mules of Honduras. Zamori was a habitual limit crasher. He loved feats of endurance, proving himself by watching companions flag, throw up their hands and say, cerveza, señor, it's time for cerveza. He crossed Honduras on a muleback so he could learn the country, meet its people, scout its property, and also so years later a person like me would sit and write about the gringo who crossed the country on a mule. Zamori buys his first parcel of land in Omoa. This is this old colonial town in the north coast of Honduras. It was long considered junk land, neither valued nor tended. For $2,000— all of that money that Zamuri borrowed— he got 5,000 acres. He was soon back in New Orleans wondering if 5,000 was enough. Would it give him the supply he needed to compete with United Fruit? Aspel Hubbard told him, we're out of money. It does not matter if you think it's enough. That part's important. There are times when certain cards sit unclaimed in a common pile. When certain properties become available that will never be available again, a good businessman feels these moments like a fall in the barometric pressure. A great businessman is dumb enough to act on them even when he cannot afford to. I remember early on when Zamuri essentially made a trade with the telegraph operator so he could telephone ahead for him. Telegraph, I guess. Telegraph. Telegraph ahead for him so he could sell his bananas. Same idea here. Don't have money? Doesn't matter. You can find a way around it. Which is just what Samuray ends up doing. Samuray returned to Honduras in the spring of 1910 with a plan achingly simple, beautifully effective. He headed north beyond the last paved road in the delta of the Cuyamal River, flashed the roll, and bought as much land as he could until his cash ran out. He was playing with borrowed money, having tapped out every line of credit in New Orleans and Mobile, He had gone on to banks in New York and Boston. Whoever was lending, he was accepting. He was out there, overextended, vulnerable. He must have worried about the risk, but he had to know that this was his moment. The land would not be this cheap forever. Unlike most banana executives, Zamori was comfortable with the people of the isthmus. Sam adapted himself to the ways of life of those he contacted. Fortune reported he cultivated friendship and did not scorn to take a drink with the peasants. He acquired a wonderful command of their language, including swear words, which he didn't hesitate to employ. Zamori told the locals he would bring them wealth and good jobs. When it came to hiring, he offered a wage 10 times the going rate, which angered other employers. In the course of a few months, he accumulated the uncleared acres that would constitute his first plantation. In setting a price for the property, Zamori held the superior information over the local landowners. And he understood something important. To the sellers, the land was swamp, diseased, nothing that would be worth anything in 100 years. Sam knew better because he was raised on a farm. He realized the meaning of all that black soil beneath the weeds. And because he had worked as a jobber, he realized the worth of the fruit that would thrive in that soil. This land, picked up for a song, was in fact among the most valuable in the country and the world. Bananas. That's a perfect example of this informational advantage that Sam had and that we have that exists in the world today. You have information someone else doesn't have. You value something differently than someone else does. There are always, always, always opportunities for that in the world, but it takes a certain understanding, a certain knowledge, a certain background to get that. So Zamori carried on. He went all across Honduras meeting government officials. He sat with emissaries of Miguel Dávila, the president of the country. He was seeking sweetheart deals that would exempt his company from taxes and duties. Such corrupt understandings were common enough in the business to have a name: concessions, unofficial arrangements without which no banana man could succeed. The trade depended on cheap fruit, necessitating cheap labor, cheap land, and no extra fees. The smallest additional cost, a penny per bunch, say, would drive the price above the market rate set by United Fruit. Zamori did eventually secure his concessions by kickback, by bribe. In Honduras, Cuyamel would be exempted from import duties on all equipment such as freight engines, train tracks, railroad ties, and steam shovels, and exempted too from paying property, labor, and export tax. The reality here At this time especially, is that to compete, you had to play the game. I bet many people were not willing to play the game and did not win. Sam was willing to play the game. He wanted to compete, and he was willing to do anything possible to compete with Nyaya Fruit. If asked to sum up Sam in these early days when he was building his first plantation, I would use the word drive. It was drive, ambition, moxie, guts, or whatever you want to call it. That pushed him from Selma to New Orleans, then on to the jungle towns in the Isthmus, where the genie was loosed and the man went wild. Driven to make money, leave a mark, climb the pyramid, beat the bastards who gave him the high hat. Why bananas? Because it was the nearest product at hand. If he had settled in Chicago, it would've been beef. If Pittsburgh, steel. If LA, movies. In the end, it does not matter what you are stocking. Selling is the thing. And Sam played the game and sold bananas better than basically anybody else in the world, which is why it was so fun to read this book, to see a master of his craft playing the game the best it can be played. And as part of playing that game, he was in the thick of everything. In the autumn, when the rains came, he moved to a bungalow in the fields to oversee the workers. most of them Jamaicans, as they cleared the jungle and planted the first bananas. It was the hardest work in the world. If this is the kind of book I want it to be, I will leave you with a sense of the fields, the heat and fear. The snakes in the brush that have to be killed with a single blow. The sting of the poison that makes you want to lie down just for a minute in the shade of a ceiba tree. The scorpions that drop into your shirt in search of exposed skin. The mosquito swarms that portend yellow fever. The malaria dreams, the swampland and broken tools and arsenic trees, the way your health is destroyed, your hands blistered, your back ruined, the way the world appears when you have forgotten to drink enough water, a tiny image seen through the wrong end of a telescope. These are insane conditions, to say the very least. And Zamori worked in the fields besides his engineers, planters, and machete men. He was there with them. He was deep in the muck, sweat-covered, swinging a blade. He helped map the plantations, plant the rhizomes, clear the weeds, lay the track. He was a proficient snake killer, taller than most of his workers, as strong and thin as a railroad spike. He shouted orders in dog Spanish. He believed in the transcendent power of physical labor, that a man can free his soul only by exhausting his body. His years in the jungle gave him experience rare in the trade. Unlike most of his competitors, he understood every part of the business, from the executive suite where the stock was manipulated to the ripening room where the green fruit turned yellow. He was contemptuous of banana men who spent their lives in the north, far from the plantations. Those schmucks, what do they know? They're there, we're here. And Zamori reaped his first harvest in 1910, Soon after he arrived in the country. To get his product out of the country, a team of men worked each run: the conductor in the engine room, the foreman in the caboose, guards on the roof with rifles on the lookout for hijackers. This was wild country, the banana frontier. And thinking about all this with what Zamori is doing to plant bananas and all the things we just mentioned with mosquitoes and the snakes that have to be killed, all of that, It just makes a lot of these like white collar workers now and tech founders and everything seem so soft. Like we're talking about 996 and working at the office, you know, all these hours in the week, but like we're just typing on a computer. I mean, it's like not that serious. This is some insane, insane work conditions out in the sun all day, dealing with all the animals and all the different things that could kill you. It's, it's pretty insane. I mean, this guy literally has people with rifles on his, on his trains to look out for hijackers. This is some serious stuff here. And it adds a bit of perspective to everyone else working in air-conditioned rooms or air-conditioned towers in cities. It's a much different situation. So the first shipment was followed by a second, a third, a fifth, a fifteenth. It's one of the great things about bananas. Unlike corn or cotton or tobacco, they have no season. Or one season that lasts forever. An endless summer broken now and then by a hurricane or drought, a never-ending bounty. So Murray began scouting for still more property, which would mean more rails, workers, and houses, which would require more money, but he was already overextended. He had taken loans from banks across America, and then he realized no creditor would lend him another dime. Of course, if you're Samson Murray, you don't stop here. So he went in search of other sources. Imagine being an entrepreneur at this key moment when you knew you had to risk everything, that this was your shot, but the banks had turned you down and your money was on the table. You had neither wealthy uncles nor elite contacts. Where would you go? The history books and articles say he secured the needed funds from unorthodox sources, borrowed on stringent terms at rates approaching 50%, which of course means Gangsters, wise guys in flashy suits on the corner of St. Claude and Dumaine. Ashbel Hubbard had agreed to the first round of bank loans and land purchases and had agreed to the second, if less enthusiastically. But this was too much. Whereas Zamuri thought everything should be risked now, Hubbard believed the business should be given time to become established. Zamuri must have realized that the business had to get big to survive, to go all in or get out. Sam was young and wanted to bet everything. Great fortunes come from big plays. Hubbard did not have the fortitude for such risk. Asked to describe Zemurray by a New Orleans newspaper reporter, the best Hubbard could say was, he's a man with big ideas. When Hubbard couldn't take it anymore, Zemurray agreed to buy out his share of the company, a 45% stake in Cuyamel Fruit. This left Zemurray with 90% of the company and United Fruit with the remaining 10%. The terms of the deal were never reported, but given what the company was valued at, Zamaria paid something like $160,000, money he surely borrowed from the same nefarious characters who lent him all the other money. What was Sam thinking? Piling debt on debt, risk on risk by buying out Hubbard? He was taking it all on his own shoulders. But what did it matter if he failed by himself? He would lose the same exact amount as if he failed with a partner. Everything. This, folks, is how we build empires. It's just risk on risk on risk. I mean, obviously he takes on his partner's share of the company as well. He takes on questionable deals, but he understood the game and you either go all in or you get out. And so Sam is all in. He's borrowed to the gills. He has mob money on the table. Everything is riding on Honduras. And that's exactly the moment the United States government and JPMorgan show up to change the rules on him, which leads to an insane, insane action by Sam Zamori. Zamori began to hear whispers that all the deals he had made in Honduras or was hoping to make were in jeopardy. The Davalillo government was not the most pliable. Honduras owed millions to bankers in London, far more than it could ever repay. The debt had been outstanding since the 1860s, when the government took out 4 loans issued as bonds with the British banks to finance a national railroad. President William Howard Taft was concerned that anything resulting in European military action in the Western Hemisphere challenged the Monroe Doctrine. Philander Knox, the Secretary of State, devised a plan. He recruited J.P. Morgan, the most powerful banker in America, To buy all of the outstanding Honduran railroad bonds, satisfying the British banks. Morgan would then refinance the debt, issuing $5 million in new loans to the government of President Miguel Dávila. Morgan agreed under the following condition: in return for money and services, officials from the Morgan Bank would be seated in the customs house in Puerto Cortés, where they would collect a duty on all imports. The Knox Plan was good for everyone. In fact, except the people of Honduras and Samuel Zamori, whose business could not function without the concessions and sweetheart deals that would be forbidden by Morgan. The plan depended on men like Zamori paying in every way possible. If enacted, it would add as much as a penny per bunch to cost, driving Cuyamel out of business. Zamori went to work as soon as he learned the terms of the Knox Plan. His goal was simple: Undermine, overturn, undo, kill it dead. In the beginning, he went after this the traditional way, hiring lobbyists. This ended up creating a lot of noise. And so in summer, in the summer of 1910, Zamori received a message from Washington, D.C. He was to report to the office of United States Secretary of State. He had been in America less than a generation, and here he was embroiled at the highest level of national affairs. As Murray would tell the American Magazine at this time, I was doing a small business buying fruit from independent planters, but I wanted to expand. I wanted to build railroads and raise my own fruit. The duty on railroad equipment was prohibitive, a cent a pound, and so I had to have concessions that would enable me to import the stuff duty-free. If the banks were running Honduras and collecting their loans from customs duties, How far would I have gotten? And so Zamori is told not to meddle in any of these things. The government of the United States tells him clearly, do not meddle. Though he tried to put people at ease, Zamori often struck those in power as a man who could not be controlled, which is true because he could not be controlled. If you want to know what he's going to do, forget what he seems to agree to and figure out what's in his interest. And that part is a tremendously important insight. What is in his interest? It's like, don't look at what people say they're going to do or even what they're doing. What is in their interest? And pay attention to that. So Knox told officials from the Department of the Treasury to put a Secret Service team in New Orleans. He wanted the Banana Man monitored. He was not to leave the country, nor were any of his cohorts. Pretend you're Samuel Zemurray. You're 32. You've been in America less than 20 years. You lived in Russia before that, in a poor farming town filled with rabbis. Now you're here, an entrepreneur of considerable means, but still, somewhere in your mind, the little Jew who snuck in the back door. You're a husband and a father with a young daughter and another child on the way. You've been summoned to Washington, called to account by the Secretary of State, warned. What do you do? Put your head down? Shut up? Sit in a corner and thank God for your good fortune? Well, maybe that's what you would do, but not Sam Zemurray. He muttered all the way back to New Orleans, these momsers, don't get involved? How about I overthrow the fucking government? Is that too involved? He made a deal with the President of Honduras, Miguel Dávila. Well, what if Señor Dávila wasn't President anymore? Consider the audacity in defying Philander Knox and J.P. Morgan. Samson Murray was challenging two of the most powerful men in America. It is clear that Samson Murray's ambition and audacity are off the charts. Overthrowing a government—it just brings to mind a question of like: How far are you willing to go to protect your business, to grow your business? To make your business succeed so your family is taken care of, so your ambitions are realized. Are you willing to go this far? And if you're not, understand that some people in the world are. And it's important to realize that those people exist in this world. And you have to be self-aware enough to know how far you're, you're willing to go yourself for your business. And Samson Murray was willing to go All the way. Zamori's scheme can best be described as a coup disguised as a revolution. Dávila would be driven out and a new president put in his place, General Manuel Bonilla, who had been president of Honduras until he was deposed in 1907. Bonilla was cast in the role of insurgent leader for several reasons: because he was living in New Orleans, because he was known in Honduras, because he was trusted by Honduran businessmen, And because Sam knew and liked Bonilla. Zamori worked out the arrangements with Bonilla and Lee Christmas, who was the president's right hand. At the moment, his interests were perfectly in line with those of Zamori. Sam had money, ships, guns, and Bonilla had legitimacy, motivation, and that fine Indian face. In the summer of 1910, Lee Christmas began recruiting Bonilla's Army of Liberation. Tapping the men in the bordellos and dives of the French Quarter, importing others from other port cities in the Gulf. He did this as discreetly as possible, but he was being watched. And Lee Christmas, like most storied mercenaries, was less soldier than showman, a pop star playing a role for mild-mannered America. Born on a cotton plantation in Livingston Parish, Louisiana in 1863, Christmas had refused to play a bit part in life and went adventuring instead. In the book, it goes into way more detail about Lee Christmas, which I think is really interesting. So check out the book if you want to. But that line, I think, is amazing. Refused to play a bit part in life. How amazing, amazing, amazing is that line? Think of yourself. Are you playing a bit part in your own life? Lee Christmas refused to do so, and I love that so much. And we have to take a step back. Sam's Merry partnered with people who had aligned incentives. Incentives are absolutely everything. There's a line from, there's a line from Charlie Munger from Berkshire Hathaway who said, well, I think I've been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I've underestimated it. And never a year passes, but I get some surprise that pushes my limit a little farther. Incentives, incentives, incentives. They drive everything. We have to highlight how important that is. And because Sam's and Murray was aligned as far as incentives with these people, they go on to accomplish something very important for Sam's and Murray and very important for the others involved. So Zamori's mercenary army would have around 100 soldiers, a ragtag band of guns for hire, a pirate gang in cast-off clothes of every shape and color, every weapon and motivation. The first attempt on Honduras actually fails, and Bonilla is fearful of his patron's reaction, but Zamori could not afford to withdraw his support, having staked everything on the general. He decided instead to figure out what went wrong and fix it. This is how Zamori regarded most things in life. As problems to be solved. Though not a military man, Sam was a fine tactician who understood the flow of men and machines. He quickly recognized the reasons for the fiasco. One, the political movement had not been ripe. The people of Honduras were not sufficiently alarmed by the Knox Plan. Friendly newspapermen would soon change that. Two, the insurgents had been outclassed at sea, where they had just one ship, an old tub that was no match for the Honduran Navy. So Murray corrected the imbalance by procuring through a third party a 160-foot warship that could reach 15 knots, faster than anything in Miguel de Avila's fleet. It was called the Hornet. The ship had been part of the American naval fleet. Of course, de Avila gets word of this, and as soon as he gets the news, he orders his army to dig trenches around the port cities on the Atlantic. Then he sends spies to New Orleans, and these men were easily identified in the lobby of the St. Charles Hotel. By their phony gringo wear, which was blue jeans, cowboy boots, and tall hats. And because the US, you know, they have Secret Servicemen monitoring all of Zamora's moves, the Hornet was routinely boarded and searched by Treasury agents. On December 15th, 1910, the captain of the Hornet asked permission to sail from New Orleans. When the Hornet sailed on December 22nd, 3 Treasury agents rode on its deck for 70 miles below New Orleans just to make sure no filibusters snuck aboard at a country landing. But these men disembarked at a river station near the mouth of the Mississippi. And of course, after that, his ragtag army boards the Hornet. And on December 29th, 1910, it materializes out of thin air. So Davila expected an attack on the coastal cities, but Lee Christmas believed the poorly defended Bay Islands Would make a perfect starting point for the war, serving as a base for a broader campaign. This, by the way, is very smart. It, it's always this idea of doing what your enemy is not thinking you're going to do, finding ways to outsmart them. It makes me want to read more about Napoleon, who just won many wars. I think I'll do an episode on him at some point in time, but they end up doing this, which is very smart. And this is not the only thing they did. One, they start with the Bay Islands. But another thing is the city of La Ceba. The myth of La Ceba's invincibility made it a target. Its loss would come as a blow. Such a defeat could end a regime. That's how it was with the Pana Wars. The enemy wins a battle or two, then everyone switches uniforms. The big attack came the morning of January 25th, 1911. A group of rebels approached La Ceba from the ocean side. Drawing fire from the government's Krupp mountain gun. But this was a feint. The real attack came along the supposedly impassable beach road. Christmas's strategy was to surprise by force of will, by doing what others consider impossible. The road descended into marsh, dissolved into weeds. The rebels hacked, waded, and climbed for hours, reaching the fort with a Krupp gun— really a small cannon— at the hottest time of the day. And Christmas sent a note to the US naval commander. He said rebel reinforcements were on the way. Davila must surrender before the battle turned into a massacre. It was a bluff. There were no reinforcements, but it worked. The Americans carried the message to Davila and urged him to give up the city. By sundown, La Ceiba was in rebel hands, along with the silver bars of the state treasury. Puerto Cortés surrendered without a fight. The insurgency was in control of the ports and the treasury. And the US ambassador let it be known that the United States could work with Bonilla. In other words, Flanders Knox had switched sides. On February 9th, after a meeting with the American ambassador, Dávila agreed to a ceasefire and announced his decision to begin peace talks. In the end, Dávila conceded power to a Honduran functionary named Francisco Bertrand, who would serve only until a presidential election could be held. A few months later, Bonilla won office in a landslide. And of course, one of the first official acts was to have Congress give Zamora concessions covering the next 25 years. Zamora's settlement included permission to import any and all equipment duty-free, permission to build any and all railroads, highways, and other infrastructure he might need, a $500,000 loan to repay all expenses incurred while funding the revolution, An additional 24,700 acres on the north coast of Honduras to be claimed at a later date. No taxes, no duties, free land. These were the conditions that would let Sam Zemurray take on United Fruit. By financing the overthrow of Dávila, Zemurray did more than relieve himself of taxes and duties. He entered his name into the black book of Latin American history. He had taken ownership of a nation. Whether he realized it or not, over time, Zamori would become more powerful than even the government of Honduras. Just think about this for a second. He overthrew a government to protect his concessions. Sit with that for a second. Now watch what he builds with them, because this next stretch is a masterclass in operating, and it's how he built a much better business than his competition. Zamori disdained bureaucracy, hated paperwork. So seldom does he dictate a letter that he requires no full-time secretary. He will telephone division managers in half a dozen countries, correlate the reports in his head, and reach his decision without touching a pencil. In the years that followed the coup, Sam spent most of his time in Honduras. Of course, he always wants to be where the action is or where he's needed the most. He had a wife in New Orleans, a daughter and a son, but he must have felt he had no choice. Having established his position on the isthmus, it was time to work like a dog, build his business, pay his creditors. And accumulate his money. By 1913, he had saved enough to buy back the stake United Fruit held in Cuyamel Fruit, a move that would secure Sam's and Murray's independence. And the reason that United Fruit was even willing to sell his stake back to him essentially was they were concerned about antitrust. They didn't want to deal with that, so they were willing to sell it. And by forcing Preston to sell his shares in Cuyamel, the government created a competitive market It did this by assuring Zamori the freedom to develop into a genuine competitor. Years later, when Zamori had grown powerful, analysts spoke of the mistake UF made. They had underestimated a dangerous rival in Zamori. Zamori was respected because he understood the trade. By the time he was 40, he had served in every position from fruit jobber to boss. He worked on the docks, on the ships and railroads, In the fields and warehouses, he had ridden the mules. He had managed the fruit and the money, the mercenaries and the government men. He understood the meaning of every change in the weather, the significance of every date on the calendar. There was not a job he could not do, nor a task he could not accomplish. As far as possible, he refrained from giving interviews, addressing shareholders, or attending functions, all of which took him away from his work. He was one of those men who toiled all day, every day, until They had to be rolled away in a chair. When he failed to appear at a reception in Havana, Cuba, which had been thrown in his honor, a lieutenant tracked him down to the wharf where he was going over manifest documents with a ship's purser. He was wildly ambitious and innovated like mad. As soon as he had full control of his company, he began to visit boatyards. He wanted to build a fleet so he would never again be dependent on other companies to haul his products. So he's vertical integration here. He had acquired 20 ships by 1915, many were purchased from rival companies that had discontinued a route. Some were in service with Cuyamel for only a year before an upgrade made them obsolete. In 1921, Zamora acquired the entire fleet of the Bluefields Fruit Company, the property of his father-in-law. Around this time, Zamora moved his headquarters in Honduras from Omoa to Puerto Cortés, where he built a modern pier that went out past the shallows a quarter mile into the sea. And through this all, the company grew and grew. They acquire more land in Honduras, but Zamori also expands into Nicaragua and Mexico. They follow the same model as United Fruit. They invest in other crops like coconuts and pineapples, palm oil, cattle, timber, sugarcane. This was the hedge against hurricanes and drought, as well as the ups and downs of the market. And it's actually the sugarcane a staple that sells in quantity regardless of the economy, that got Cuyamal through the First World War. So this was a very smart decision by Zamori. And all of these moves is why Miner Keith never underestimated Zamori. He recognized him as one of his own, a throwback to the men who built the industry, who went into the jungle with nothing but trinkets and came out with millions of dollars. And to understand how he operated even more, Zamori was direct in a way that would come across as ruthless. Jake Weinberger came out of retirement and got a nice little banana business going with his son Leopold. Now that they grew the fruit, they bought and sold it, but Zamuri didn't want them competing, particularly in New Orleans and Mobile where Jake was selling at a low price. He went to his father-in-law and said, look, Jake, I want you out of the business. I'm going to give you money so you'll be just fine, but I don't want you fooling around with price. I want to set the price. And Jake said, I'm not going to give it up. I'm making money. So Sam says, well, Jake, either get out or I'm going to cut my price and drive you out and you'll be ruined. Remember, this is his father-in-law. Sam Zimurray is ruthless. I mean, it's just a level of similarity to Cy Newhouse. This is amplified a bit more than Cy Newhouse, but he is ruthless. The reality is he knows what he wants. He knows how his business operates and what's important to it. And controlling the price is a huge part of that. And now we're gonna see a bit more about his founder mentality. Very much so founder mentality, all about growth, innovation, less concerned about preservation. And it makes me think of questions around how can you build a better business? Not necessarily a bigger business, but a better business. How do you become more profitable in every regard? How can you innovate? There is always room for improvement of your product. And how you operate, always. And we're going to see how Sam thought about that here. Unlike other bosses, Zamuri lived in the jungle with his workers, spoke their language, knew what they wanted and what scared them. By 1925, Zamuri had paid off his creditors and was free and clear. He invested most of his profit back in the business. This is important. Cuyamel was the rising star of the banana trade, the first company to challenge United Fruit in a generation. It was not about numbers. When it came to market share and volume, UF was as dominant as ever. Cuyamel was harvesting 8 million bunches a year. United Fruit was harvesting 40 million. Cuyamel employed 10,000 workers. United Fruit employed 150,000. Cuyamel had working capital of $3 million. United Fruit had working capital of $27 million. It was about profit margin, the efficiency of the trade, and the morale and skill of the employees. It was increasingly clear Samuel Zemurray had built the better business. Cuyamal was superior to United Fruit in a dozen ways that did not show up on a balance sheet. UF was a conglomerate, a collection of firms bought up and slapped together. There was a lot of redundancy, duplication of tasks, divisions working against divisions, Rivalries, confusing chains of command. Cuyamal Fruit was the Green Bay Packers, where every decision was made with confidence and authority. Zamora could move without waiting for permission or a committee report. He could take risks without fear of losing his job. He could hire or fire with surety because he actually lived in Honduras and knew the situation on the ground. It was a contrast of styles. The executives who ran United Fruit Had taken over from the founders and were less interested in risking than in preserving. Zamori was the founder, forever on the attack, a work in progress, growing by trial and error, ready to gamble it all. The difference was best seen on the plantations, where Zamori was constantly inventing. Most people looking at a banana saw a delicious fruit. When Zamori looked at a banana, he saw room for improvement. He innovated banana farming, which had not changed since the first days of the trade. And he did this through selective pruning, drainage, silting, staking, overhead irrigation. He found so many ways to innovate in the industry to make the best product. Again, he invested all this money back into the business to make a better business. And guess what? When you make the better business, you attract the best talent, and you attract the best talent You'd build an even, even better business and you'd become the bigger business over time anyways. The result was banana plants exploding with bunches, each filled with the fattest fingers anyone had ever seen. It was not a matter of measurements. You could tell just by looking. The most ambitious banana men began to flock to Zamori. Dozens of them quit United Fruit and caught a ride to Puerto Cortés. Cuyamel was hungry in a way that United Fruit had not been since the retirement of Minor Keith. It was more profitable too, its share price climbing as the price of UF slumped. And this also reminds me of Elon Musk. So many people willing to work with him for his mission, which is super ambitious, but also knowing it's him and him and working for him and understanding what comes along with that, even though it's a ton of work, is worth it. And around this time, Zamuri begins to actively court UF's top talent. He told the reporter he loved poking the monster in the knees, which I find just hilarious. Zamuri knows his role and he knows he's building a better business and he enjoys basically picking off the best pieces of United Fruit. Because of this, United Fruit tries to buy Zamuri. Zamuri says, turning down the offer, Hell, I'm having so much fun and I'm a young man. Why should I quit? I just love that so much. And fun for Sam meant war for United Fruit. And in the late 1920s, this rivalry stops being a metaphor and becomes an actual shooting conflict. At the start of the Banana War, Sam Zemurray is 49 years old and Victor Cutter was 43. So Victor Cutter is leading the way for United Fruit. And here's how this kind of comes about. In 1915, Samuel Zemurray redeemed that promised land claim to a vast tract of territory on the Utila. Jungle land that United Fruit considered a buffer between the companies. And that was the 24,700 acres that he was promised back in 1912. So it took a few years, he finally claimed it. By destroying this neutral zone, Sam's acquisition of the land changed everything. The struggle commenced as a war of pranks, which I find hilarious, with each company taunting and testing its rival agents. From United Fruit, agents crossed the river at night, cut water lines, tipped over trucks, and ripped up train rails. Zamuri sent his own team of brigades across the Utila to retaliate. To colleagues like Frank Brogan, who knew Zamuri, his motivation was clear. He wanted to win and would do whatever it took. He was a self-made man filled with the most dangerous kind of confidence. He had done it before and believed he could do it again. By 1917, the Banana War was centered on a single piece of land, 5,000 acres on the north bank of the Utila that both companies coveted. United Fruit discovered the problem first. The land on territory claimed by both Guatemala and Honduras seemed to have 2 separate legal owners. And here comes the most, like, founder way of operating that I've seen about how you just make things happen. When the mess of deeds came to light, United Fruit did what big bureaucracy-heavy companies always do. They hired lawyers and investigators to search Every file for the identity of the true owner of that land. This took months. In the meantime, Zamari, meeting separately with each claimant, simply bought the land from both of them. He bought it twice, paid a little more, yes, but factoring in the cost of all those lawyers, he probably still spent less than UF, and he came away with the prize. That is just incredible. Find a way to operate faster, In a better way and get the job done. Zamuri played to win, and he did. United Fruit was determined to strangle Zamuri's new plantation and drive him back across the river. When Zamuri sent his workers to clear the fields, plant the rhizomes, and build the houses, United Fruit filed a complaint with the government of Guatemala charging Zamuri with violating an international border. The U.S. State Department asked the presidents of the banana companies to cool the rivalry. The United States feared they would plunge the isthmus into war. Time went by as Zamori continued to clear fields and plant bananas. United Fruit approached Honduran President Tiburcio Carías, a strongman who came into power in 1924. Zamori still received special consideration in the country, but his influence had waned since the death of Manuel Bonilla. Carías had in fact become increasingly close to United Fruit. When Zamori requested permission to build a bridge across the Utila, a bridge Zamori needed to get his bananas to Puerto Cortés, President Carías turned him down. No bridge, no train, no bananas. More time went by. Carías continued to favor United Fruit. How did Zamori respond? By making room in his southbound banana ships, not for produce or seed, but for hardware— guns and bullets that found their way to the liberal insurgents who had taken to the hills in Honduras. It was always an option. If the leader is not in your pocket but in the pocket of the other guy, changed the leader. The State Department, then run by Frank B. Kellogg, received reports of smuggled weapons. A Couyemel boat anchored at a Hudson River pier in New York was searched by the Port Authority. $50,000 worth of weapons were found. Another cache was discovered in New Orleans. Couyemel Fruit was charged with violating the Neutrality Act. At the trial in New Orleans, the company was defended by Joseph Montgomery who, as the New Orleans District Attorney, had previously prosecuted Kuyamal. This was a preferred Zamori tactic: if you meet a truly formidable foe, flip him. When Zamori realized he would never get permission to bridge the Utila, he did what he had always done: innovated, building surreally long docks on both sides of the river, then having his engineers design a temporary bridge, though no one was allowed to call it that. The collapsible device could be thrown from extended dock to extended dock in no time, completing the railroad that ended on one pier and began on the other. This is so crazy to me and so smart. It just makes you think that there is a way around every single problem. And this is how Zamori operates his entire career. He sees a problem and finds a way to fix it. It's like not overcomplicate it. You find a solution. because there is a solution to everything, and he always believes that there is indeed a solution to every single problem he comes across. By the autumn of 1928, what began as a corporate rivalry had turned into an open conflict with soldiers in the fields and ships on the sea. Before long, officials from the U.S. State Department were summoning the bosses of the fruit companies to Washington, D.C. The Banana War threatened American interests, breeding hatred of the United States on the isthmus posing a danger to a region that included the Panama Canal, which is obviously very important. And so both companies get called to the US. It was the spring of 1929. The best solution, the only way to end the feud, would be a merger or a buyout. According to friends, Sam was a sharp trader who knew the prize goes to he who does not lose his head or open his mouth too soon. What cannot be accomplished by threats can often be achieved by composure. Sit and stare and let your opponent fill the silence with his own demons. Kuri Mafuyu was the Murray in the shape of a corporation his personality made manifest, his home and his love, where he tested his theories and formed his philosophy: get up first, work harder, get your hands in the dirt and blood in your eyes. And here he was, preparing to sell to United Fruit. Whereas the young Sam was reckless and immune, a man from nowhere with nothing, There were all sorts of ways the middle-aged Sam could be hurt. Success limited his options and made him vulnerable. In the end, after weeks of bargaining with the threat of a walkout always in the air, the final agreement was worked out in a haphazard way. Casual. Bradley Palmer, United Fruit's largest shareholder and ranking director, tracked Samurri down to a pub in London where he was eating alone. Palmer ordered a pint. Zumwalt ordered a pint himself. 12 pints later, the deal was done. Not a buyout, but a merger, with the smaller company becoming a division of the larger. This was the key for Zumwalt, not only for reasons of pride, but also because it meant none of his workers would be fired, nor any of his plantations shut down. The deal would be structured as a stock swap. Sam would receive 300,000 shares of United Fruit for his share of Cuyamel. His stake after the merger would be valued at more than $30 million, a figure worth considering as it made Sam Zemurray, who had arrived in Samoa with nothing 3 decades before, one of the richest men in America. As part of the agreement, Zemurray, who had now become the largest shareholder of United Fruit stock, agreed to retire from the banana trade. The deal was approved by UF stockholders in December 1929. And by the way, this $30 million at that point in time is around $550 million to $600 million today. According to the Consumer Price Index. So a lot of money. So Sam has $30 million, retirement at the top, everything he ever wanted. And I'll bet you know how long this is gonna last, which is not very long at all. This was a state of affairs circa January 1930 when Sam boarded a steamship in Puerto Cortés to return to New Orleans. In the way of a retiring politician or athlete, he promised to embrace his retirement, spend more time with his loved ones, Pursue causes and fancies. For once in his life, which had been nothing but 16-hour workdays, he would enjoy his success and be happy. It's possible he believed these things as he said them, but in truth, Samurais are not old and was still angry, easy to insult, easy to incense, driven and restless. Show me a happy man and I will show you a man who is getting nothing accomplished in this world. Of course, after decades, of hard work. Sam Zemurray cannot just turn it off as a founder. He is obsessed, and there's just so much more work that he wants to do, and he feels like he can compete, which is why he comes back into the game. One morning in 1931, Zemurray woke early, had a breakfast of figs and water, stood on his head for 15 minutes, and went through his front door across St. Charles Avenue and headed downtown. This was Samson Murray in early retirement, unable to keep away from the wharves, the ships, the machinery. And here's the state of United Fruit. The company, which had weathered the stock market collapse of 1929, was being crushed by the economic depression that followed. As one of the world's first truly global corporations, United Fruit, with its entire product line grown overseas, was uniquely vulnerable in 1930 and 1931. The company diminished in ways that would have stunned Preston and Keith. Collapse of demand, labor unrest, deflation— they were in serious trouble. In 1928, UF had made $45 million in profit. In 1932, it made just $6 million, an 85% decline. This meant fewer workers employed, fewer fields planted, fewer bananas grown, which meant even lower profits, which meant still fewer fields planted and fewer bananas grown. The less we produce, the less we profit. The less we profit, the less we produce. The company was caught in a death spiral. For Zamuri, the collapse of United Fruit would've been devastating. Most of his net worth was tied up in UF stock. The Zamuri fortune, once figured at $30 million, was valued at less than $3 million by 1932. Knowing all of this, how would you respond? To this downturn, how would you dig out? How would you get through these tough times? So Murray had an unwavering self-belief, and basically most of his money was tied up in UF. And he's not going to sit back and let them drive this company into the ground. Where does Murray go for answers? Did he meet with the economic experts and college professors? Did he meet with Daniel Wing, the chairman of UF's board, and Victor Cutter, its president, and ask? Do you have a plan? Even if they did have a plan, so what? These were the same men who had run the company into a ditch. He went to the docks instead, where he spent the winter of 1932 walking through warehouses and standing on the decks of banana boats, talking to fruit peddlers, captains, loaders, and stevedores. The people who really knew. It was the end of his retirement, though few realized it at the time. He peppered them with questions. He wanted specifics: the mood on the isthmus, the color and size of the latest harvest, the speed of the crossing, how fast the company was running her— the boats— whether he was letting out all the stops. In this way, he learned, among other things, that the banana captains were on orders from Boston to lay off the throttle and cross the Gulf at paddle speed, thus saving gasoline. A man focused on the near horizon of costs. can lose sight of the far horizon of potential windfall. So there's all of these issues that Sam Zemurray is seeing, and he's seeing them by personally being in the thick of it where everything's happening, talking to the men who are responsible, the men at the core, not talking to people who just already had run the company into the ground. And Zemurray wrote his findings in a letter, unusual for him, and as he liked to have— as he liked to have no record Which he sent to Boston. He pointed out obvious problems, then went on to paint a troubled picture pieced together from details picked up on the docks. Banana boats running half speed, half full, fruit rife with stumps tossed into the sea, fields of undernourished stems, labor unrest in banana towns where the company had stopped spending. He included suggestions, ideas: repurpose the boats, fell the fields, control supply. The letter went unanswered, which I'm sure must have pissed him off. There must have been a moment when Zamuri felt that the sale of his company to these fools had been the mistake of his life. In June 1932, he travels to Boston for a meeting with the board of directors. And at this meeting, they're discussing a request from a plantation manager who wanted $10,000 to build an irrigation ditch in Guatemala. And so these executives, they call in experts who detail the costs and benefits of the project. And Zamora is growing restless. To him, such a debate is symptomatic of a greater problem. The executives at United Fruit did not understand their role, what they could and could not do. He raised his hand to speak. This man in Guatemala, he's your manager, isn't he? Zamora asked. Yes. Then listen to what the man is telling you. You're here, he's there. If you trust him, trust him. If you don't trust him, Fire him and get a man you do trust in the job. Zamori went on to explain his frustration with how the company was being run, then offered a few ideas. He had some experience and wanted to help. His offer was rejected at the meeting, rejected again later by Victor Cutter, who dismissed Zamori's complaints as the griping of a man who did not comprehend the business cycle. This, of course, is a massive mistake. These men laughed off his letter, They laughed off his ideas. So Sam went shopping for something they couldn't laugh off— proxies. Zamuri went away mad. He was not used to being slighted, condescended to, rebuffed, ignored. He spent the following weeks on the road traveling from city to city, sitting in the offices and living rooms of shareholders. He made the same case over and over: the current management is not up to the task. So Sam is just building up his support. Knowing that he has like firsthand experience or secondhand experience of these problems, and he's using that to tell them about all the issues that are going on and presenting actual solutions. When Zamori spoke to the board again several months later, he had with him a bag full of proxies, the voting rights turned over to him by other stockholders along with his own shares. These proxies could give Zamori control of the company. Though he kept their existence a secret for the moment, the best tycoons are like magicians. They know when to share information and when to withhold. The meeting took place on the 10th floor of the United Fruit Building on 1 Federal Street in Boston on a January morning in 1933. It was an iconic corporate showdown of the era, remembered and discussed to this day. Daniel Gould Wing already knew what Sam could teach him about the business. Nothing. Wing welcomed Zamori without looking up, greeting him as Thomas McCann characterized it, frostily at best. Zamori waited as the board went through its task. When it was finally his turn to speak, he chose each word carefully, explaining his idea in the thick Russian accent he never could shed. When Zamori finished, Wing smiled and said, unfortunately, Mr. Zamori, I can't understand a word of what you say. The men at the table started to laugh. Zamuri's pupils narrowed to pinpricks. His hands turned to fists. He muttered, then stormed out. Perhaps the board members believed Zamuri had been chased away, was fleeing back to New Orleans. In truth, he had only gone to retrieve his bag of proxies. Returning to the boardroom, he slapped them on the table and said, You're fired. Can you understand that, Mr. Chairman? What followed was a sort of graveyard silence in which each board member recalculated his own prospects. You gentlemen have been fucking up this business long enough, Zamuri told them. I'm going to straighten it out. Much later, analysts pointed out the flaw in the non-compete clause Zamuri signed at the time of the merger. It barred Zamuri from working for a rival or starting a new fruit company, but it did not foresee the outlandish possibility of Zamuri taking over United Fruit itself. That is wild, by the way. I think that's crazy. This is the whole fish that ate the whale. That's it. So Victor Cutter was fired. Zamuri retained just a few members of the United Fruit board. One smart move here is that Francis Hart, whom Zamuri made president, Was a figurehead in a position perfect for Hart, who was a link to the old banana royalty. His presence would reassure certain partners and politicians, as well as more traditional-minded investors. Again, that is just so smart. So it looks like it's continuing on like normal in some ways. Like, cool, they have someone from the old regime, the investors are happy, whatever. But it's really not the case. It gave the illusion of continuity, suggesting there had been no radical break. Of course there had been. The past was dead and gone. All power would now be concentrated in the hands of one man, Samuel Zemurray, who named himself United Fruit's managing director of operations. It was in these years that Zemurray became known as the dictator of the banana trade, a man who, with a single phone call, could undermine governments. The return of Zemurray seemed like a godsend. For years, the employees of United Fruit had sent their reports to Boston, and for years, those reports had been rejected or ignored. In Zamuri, the men in the compounds and banana towns recognized one of their own—the hombre who crossed the country on a mule. United Fruit had not had such a leader since the passing of Miner Keith. Zamuri went on the road, announcing straightaway that he would begin his tenure with a six-week tour of the banana lands. He wanted to visit every country where United Fruit owned plantations, ports, and railroads. He wanted to talk to the men in the field. He wanted to see for himself. And in this 6-week tour, he replaced the workforce. He solved the problems of the half-empty ships. He had his holdings reappraised, which saved them millions in taxes. He canceled stipends. He controlled banana price. He diversified products. He showed he was making changes, and the energy shifted. For Zamori, it must have been a second youth. Once again, he had a job and knew just what to do. He overlooked nothing. Wherever he found a man who could not act or was slow to do so, he replaced him with a veteran of Cuyamel. He was putting his own team in position, remaking the behemoth in the shape of his old company. As Murray would tell Fortune, I realized that the greatest mistake the United Fruit management had made was to assume it could run its activities in many tropical countries from an office on the 10th floor of a Boston office building. And the book would say, in a time of crisis, the mere evidence of activity can be enough to get things moving. Though Zamori would stay at the helm for another 20 years, United Fruit was saved in his first 60 days. Even though Sam Zamori saved United Fruit in 60 days, in those next 20 years, everything would be thrown at him. Disease in the fields, A world war on the oceans, and the worst loss of his life. Of course, nothing is easy for Zamori. There are a couple of different diseases that threaten Zamori's crops, his bananas and other things. One is Sigotoa disease, which he fights by quarantine, and each plantation he surrounds with a fence. All these different things. Panama disease is another one. And to fight that, United Fruit hires a biologist to find a banana resistant to the disease. In the meantime, though, that's gonna take time. So in the meantime, Zamora devised a simple solution. He began buying as much virgin jungle as possible, not thousands of acres, but hundreds of thousands. By 1940, the company owned 50% of all private land in Honduras, but cultivated less than 10% of what it owned. And more than 100,000 people would work for the company at the peak. But when the war starts, this war fills the oceans with U-boats, which is obviously bad for business. And then in 1939, the British government, looking to save money and resources, declares the banana a luxury. All shipments to Britain and its colonies were banned. So one day the British market accounted for 20% of United Fruit's profits. The next day, gone. For Zamori, this was a game of survival, but he didn't complain. He's all about action. His profits went down as ships were sunk in the ocean, but he just presses forward, even though UF would lose 19 ships in the course of the war. And between 1942 and 1944, an average of 70,000 tons of United Fruit bananas rotted in the fields. So what do you do when your product rots? You find something else to sell. And my note here is just that every challenge or move for like, for everything you go through, there is a counter. Every challenge has a way to overcome it. There is always an action to be taken, and that is what Samuels and Murray focus on— action. So he begins to look for other crops he could grow on his plantations, crops that could be classified as necessities with no quota. He was especially interested in plants critical to the war effort. And by 1944, he had thousands of acres bearing strange fruit. As he later told reporters and friends, it was among the proudest achievements of his life. He was a farmer at heart, and here he was behaving like a farmer in the midst of a locust blight, innovating his way out of ruin. But tragically, in the war, Samuel Zemurray Jr.— Samuel Zemurray's son— loses his life in a plane crash in Africa. It was the blackest period of Sam Zamora's life. Everyone who the author spoke to told him that the death was the greatest tragedy of the old man's life. He came out of it and got back to work, but he was never the same. And the final act of Sam Zamora's career would take place in Guatemala, where winning would cost him more than losing ever had. Zamora was one of the richest and most powerful men in the United States. Yet he was able to avoid publicity and keep his name out of the papers. But there was a problem. It's the one problem he could never solve. Having designed a uniquely powerful position for himself on top of the company, tailored to his character and style, Zamuri could not find anyone else to fill it. And eventually, with, with success of United Fruit— I mean, the company at the time owned By 1942, the company owned 70% of all private land in Guatemala and controlled 75% of all trade and owned most of the roads and power stations, phone lines, the only Pacific port, and every mile of railroad. In 1944, the whole country of Guatemala blew. So life expectancy in Guatemala was 47 years. Most people made less than $300 a year. On October 20th, 1944, a group of junior officers killed over 100 of his superiors Securing the revolution. Arbenz won the presidency with 85% of the vote, the first popularly elected leader in the history of Guatemala. He took the oath of office on March 15th, 1945, and his inaugural address promised a new age. But to the CIA, who had agents scattered in the crowd, every word of his speech would have sounded like a threat. In 1951, Arbenz was succeeded by his vice president, Jacobo Arbenz. One of the young officers who had purged the old regime, and the CIA classified Jacobo Arbenz as an enemy of the United States. Arbenz was a different sort of president than his predecessor. Aravalo condemned United Fruit but never undermined the company or challenged Murray directly. He was cautious and deliberate. Arbenz advanced soldier style by quick, decisive strokes. He was a man aware of time who wanted to push through his program before the weather changed. He did not fear Zamori. A new urgency was evident from the first days of his rule. The new government sought to undermine the founding myths of El Pulpo. A company, like a nation, cannot survive without its mythology. And by the way, this is the power of story and myth. This is important for every single company— owning your narrative, your own story. And telling it in a compelling way. So in June— so June 27th, 1952— Arbenz signed Decree 900. This gave the government the right to expropriate uncultivated portions of large plantations. And of course, who is the only landowner that held many of these great parcels? It's United Fruit. Hundreds of thousands of acres were confiscated from United Fruit, broken into plots, and divided among the thousands of peasant farmers. In return, the company reportedly paid $627,000. United Fruit's officials complained to the Guatemalan government and to the U.S. State Department. Even if the seizures were legal, the price seemed grossly unfair. Auditors valued the land at $16 million. Then there was a formal complaint filed, and the demand for full payment of the property's real value came not from United Fruit But from the US State Department, a detail our Ben should have noticed. And at this time, Zamori, who defeated the jungle with the sweat of 100,000 workers, amassing great fortune and empire in the process, was in part undone by 42 lines of poetry. There's this poem against Zamori basically talking about his presence in the country. And the author says if he exaggerates, it's only a little bit. In these years, a new Central American narrative was being written, a new foundational myth. United Fruit was going to be the devil in this narrative, the snake in the garden. Zamori understood this at some level and tried desperately to forge a new company identity, hence all the money for universities and hospitals. But it was too late. And Zamori actually tries to retire a few years before, but he returns to handle the Guatemala situation. And to do so, he gets government men to help him, ones that have interests aligned with him as well, and so many people in government that by 1954 the network of connections had grown so extensive it was hard to tell where the government ended and the company of United Fruit began. That was the point of all of Sam Zemurray's hires. If he can perfectly align the interests of his company with the interests of top officials in the U.S. government, not the interest of the country but the interests of the people in charge of the country, then the United States would secure his needs. Zamori's most important hire was Edward Bernays, the man who invented modern public relations in an age of mass media. Like a scientist in search of general principles, which he recorded in articles and books, crystallizing public opinion, propaganda, the engineering of consent, he had 2 basic insights from which everything else followed. Modern society, with its millions, is essentially ungovernable. The drivers of history are not the people, in other words, nor the elite who influence the people, but the PR men who influence the elite who influence the people. We are governed, our minds molded, our tastes formed, our ideas suggested, largely by men we have never heard of. The people can be made to behave as you want them to behave. If you appeal to the subconscious of the public mind. And Bernays is a key, key figure here as we talk about— he would say, if you want to advance a private interest, turn it into a public cause. And his grand strategy was indirection. His firm was the most influential. He actually coined the term public relations. Before that, practitioners had been known as press agents. And by the 1930s, Bernays was a leading media figure in the United States. His client list included everyone from General Motors to the government of India. A good example of this indirection: rather than fight for a single season of sales, as with book sales, he would make the world more friendly to his product. In the 1950s, a consortium of publishers including Harcourt, Brace, and Simon& Schuster, concerned about dipping numbers, hired Bernays. Did he go into schools and make the case for books? No, he talked to the architects and contractors who were designing the new suburban homes and convinced them a house is not modern if it does not include built-in bookshelves. Indirection. So Zamori hires Bernays in 1944. Bernays was asked to help him grow the banana market. His belief in indirection kept him focused on the big picture. When Zamori finally accepted the seriousness of the Guatemala situation, he called Bernays into his office and asked him what should be done. Bernays said he needed to study the problem. Zamori told him to go down, take a look, and report back. Bernays devised a strategy built on the trademark tricks. By 1952, Arbenz was the issue, yet the solution was not direct confrontation, which would only increase Arbenz's standing, threatening United Fruit. If the company could turn its corporate challenge into a problem for the United States, which would be that communists are infiltrating the isthmus, the U.S. government would take care of the rest. Which is so, so, so, so smart. So Bernays sets various goals: convince the American people of the communist presence in Guatemala, convince members of Congress the issue is a winner, convince the CIA, which can actually do something on the ground, that it's time to act. Bernays wouldn't make the world better for bananas. He would make the world better for American politicians. Who would make the world better for the CIA? Which would make the world better for bananas? Indirection. That's his goal. Indirection. Bernays's plan began to show results by the summer of 1951. The situation on the isthmus, unheard of, unheard of a few months before, moved onto the national agenda. That is powerful. Where it was described not as a threat to corporate interests nor as a threat to the region, but as a threat to the American way of life. Eisenhower gave the go-ahead for Guatemala in August 1953 at a meeting of something called the Ten-Two Committee. Operation Success would replace the Árbenz government, defeating communism on the isthmus. The CIA eventually selected Carlos Castillo Armas, a 39-year-old disaffected officer in the Guatemalan military living in exile in Honduras, because he agreed to all the conditions and because, according to Hunt, he had that good Indian look, which was great for the people. What's more, Castillo Armas had an interesting biography, always helpful as a distraction for the media. If you don't want them to find the truth, give them a better story. That is an interesting point that I think is very true. So in this war, Sam was in New Orleans monitoring the situation from afar. Each morning he read the papers and met with underlings. Each afternoon he got the news from Bernays and others, took it all in, offered ideas and suggestions of his own, saying fine, fine, fine. And of course the coup worked. The land came back to United Fruit. United Fruit won everything. But that victory is exactly what destroyed it. And here's the danger from too lopsided a victory: the unintended consequences. So by 1955, the hundreds of thousands of acres seized from the company had been returned. Rarely does a skirmish end so decisively, with the disputed issues resolved in such satisfactory fashion. It was the most lopsided victory in the history of United Fruit. Too lopsided. Did Samuri realize the danger his company faced, not as a result of its losses, but as a result of its wins? Sam should have known, must have known, that the coup in Guatemala violated a rule he had practiced all his life: do not draw unnecessary attention. This is very important. At the time of the coup, UF led its industry by every measure in profits, market share, and volume. It wasn't even close. Within a generation, it would trail standard fruit in nearly every category. The overthrow had all the ingredients of irony. Meant to prevent the establishment of a communist beachhead in the hemisphere, it would help create such a beachhead in Cuba. Meant to make Guatemala friendly for the company, it would engender such hostility that the company was eventually forced to abandon the isthmus altogether. 5 days after Árbenz abdicated, The Justice Department filed a massive lawsuit against United Fruit, charging the company with violating the antitrust laws, just what Zamuri feared when the State Department pushed him to merge with his biggest competitor. The antitrust suit was settled in 1958. UF promised to sell 33% of its fields and facilities to an independent fruit company. This would mean the end of United Fruit as it had been envisioned first by Preston, then by Keith, then by Zamuri. Not wanting to advantage its main competitor, Standard Fruit, later purchased by Dole, United Fruit eventually sold the remainder of its properties in Guatemala to Del Monte, then a distant third in the trade. Within a few years of the sale, United Fruit had fallen out of first place in market share, a position it had held since the start of the century. The lead went back and forth after that, but United Fruit never regained its dominance. In 1950, the company cleared $66 million in profit. By 1955, The number had fallen to $33.5 million. In 1960, United Fruit earned just $2 million. And things did not look good for Zamori either. When things got so hot, the truth could not be missed. He saw himself for one terrible moment as he was seen: a pirate, a puppet master, a banana king. In an instant, the work of your life reveals itself to be the opposite of what you had always considered it. He reacted with a burst of activity. He tried to change his legacy at the end of the game. He built roads and hospitals, train depots, water systems, but it was too late. The story of United Fruit had been written. I feel guilty about some of the things we did. All we cared about was dividends. Well, we can't do business that way today. We have learned that what's best for the countries we operate in is best for the company. Maybe we can't make the people love us, We will make ourselves so useful to them that they will want us to stay. That was the reckoning. Let's close this episode on the man himself. Zamuria lived one of the great lives of his time. He devoured his years, consumed as much as he could reach. He was not as famous as many. I would put his story beside the most heralded. Sam Zamuria's life is the true story of the American dream, not only of his success, but of the price paid for the ambition that led to that success, paid by the people of the isthmus, by the men who battled him in the Banana War, and by Zamori himself. Sam's defining characteristic was his belief in his own agency, his refusal to despair. No story is without the possibility of redemption. With cleverness and hustle, the worst can be overcome. I can't help but feel, after all the talk of America's decline, that we would do well by emulating Sam Zamori, not the brutality of his conquests, But the righteous anger that sent the striver into the boardroom of laughing elites, waving his proxies, shouting, you gentlemen have been fucking up this business long enough. I'm going to straighten it out. And in Zamuri, personally, I see how one person can be the difference maker. Not millions, not hundreds of thousands, not thousands, not hundreds, not tens. One person, Sam Zamuri. Was the one person that was a difference maker. That I find motivating and inspiring. And also in thinking of him living one of the great lives of, of his time, who else has lived the greatest life? How can you live your greatest life? Guess what? We get to define what that means for us. But we have to think of the way you achieve that is with dogged persistence, day by day, never letting a day go by where you're not working on yourself, working on your business. Working on whatever it is you're trying to be great in. And you get to fill those pages of your own book, your own life, with what makes you great. Sam Demery was indeed a great man. I found this story incredibly inspiring. Obviously, there's bad things he did. There's things he regrets, as every person has in their life. But I think it still inspires you to Have agency over your own life. Understanding all the challenges that Samson Murray went through to achieve what he achieved and how it makes our problems in everyday life seem, seem much smaller, much easier to overcome. You can definitely overcome them. Thank you so much for listening to this episode. If you enjoyed it, please, please leave a rating and review in your podcast player or star in the Overcast app. And also, if you can tell a friend about the show, share it on social media. I'm early in this show. We're only 6 episodes in. I wanna do this for a very long time. That only happens if the show grows much, much larger. So I appreciate any help you can spend in sharing the show. Also, if you made it this far, I'm hosting a summit called the Ambition Summit on September 24th in Los Angeles. You can find that in the show notes below as well. It is gonna be an amazing event. 150 people, a curated startup summit. Currently have 7 speakers, might have a couple more. It's gonna be a great time curating the room to have a bunch of ambitious people together to share ideas, learn from each other. It'll be fun. Find the link below, sign up. Looking forward to seeing you there, and I will talk to you in the next episode. Thanks again.