My Personal Summary
This book is about how Sam Zemurray became a self-made millionaire and the king of the banana trade in the early 1900’s.
- Sam was born in Russia in 1877 and immigrated to Selma, Alabama in 1892 where his uncle owned a shop.
- Sam learned that the United Fruit Company imported bananas from Jamaica to Mobile, Alabama. He traveled there and bought ripe bananas that would go bad in 3-5 days and that the major dealers didn’t care about selling. He loaded the bananas on a train car and sold them to shop owners in towns on the way back to Selma. This was his first foot in the door in the banana business.
- In 1899, Sam sold 20,000 bananas. By 1903, he sold 570,000 per year. By age 21 he was a millionaire in today’s dollars.
- Sam partnered with Ashbell Hubbard in 1905 and together they bought a small company that owned steamboats. This meant they could start importing their own bananas directly from Central America.
- A single banana plant can yield fruit three times per year for 20 years. Bananas are exclusively grown in countries along the equator because conditions are perfect – lots of rainfall and a humid environment.
- United Fruit had a monopoly on the banana trade in the early 1900s and had tons of money and owned banana farms in Jamaica, Honduras, and several other countries in Central America.
- In 1910 Sam traveled to Honduras and bought 5,000 acres of land to plant bananas.
- “One word that describes Sam in those days: drive. He only used bananas to get wealthy because it was the product nearest at hand. If he was in Chicago, it would be beef; Pittsburgh – steel, LA – movies.”
- In 1910 Sam bought out his partner so he could own 90% and United Fruit owned 10%.
- The Honduras government owned Britain millions of dollars and JP Morgan offered to buy their debt but this would mean Sam could no longer receive benefits of tax-free imports in Honduras, which would sink his business. Sam put together a small military group and overthrew the Honduras government and was rewarded with land and tax-free imports/exports which would allow his banana business to thrive in the future.
- United Fruit had banana plantations in Guatamala and Sam’s company, Cuyamel Fruit, had plantations in Honduras to the south, and the two companies often had disagreements and feuds over the land on the border. This caused the U.S. government to become nervous and encouraged the companies to merge into one.
- Cuyamel Fruit merged with United Fruit in 1929 and Sam received shares in United Fruit worth $30 million, making him the largest shareholder in the company.
- United Fruit stock dropped from $100/share in 1928 to $10/share by 1932. Since most of Sam’s wealth was tied up in stock, he was furious. He rallied enough shareholder votes to overtake the company in 1932, firing most of the existing board. People started to call Sam “ the fish that ate the whale.”
- Sam donated tons of money to Tulane University where he lived in New Orleans and today the president of the university lives in Sam’s old house. He also donated money to build several schools and hospitals.