#255 Sam Zemurray (Banana King)

What I learned from rereading The Fish That Ate the Whale: The Life and Times of America's Banana King by Rich Cohen. ---- Get access to the World’s Most Valuable Notebook for Founders at Founders Notes.com ---- [0:47] This story can shock and infuriate us, and it does. But I found it invigorating, too. It told me that the life of the nation was written not only by speech-making grandees in funny hats but also by street-corner boys, immigrant strivers, crazed and driven, some with one good idea, some with thousands, willing to go to the ends of the earth to make their vision real. [4:56] Tycoon's War: How Cornelius Vanderbilt Invaded a Country to Overthrow America's Most Famous Military Adventurer by Stephen Dando-Collins (Founders #55) [6:00] Unlike Vanderbilt's other adversaries William Walker was not afraid of Cornelius when he should have been. [8:21] The immigrants of that era could not afford to be children. [8:42] The Adventures of Herbie Cohen: World's Greatest Negotiator by Rich Cohen [8:54] 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. Grasper, 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 a way to get ahead. You did not need to be a Rockefeller to know the basics of the dream: Start at the bottom, fight your way to the top. [10:01] There is no problem you can't solve if you understand your business from A to Z. [13:08] Sam spotted an opportunity where others saw nothing. [14:17] 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. [14:42] The kid on the streets is getting a shot at a dream. He sees the guy who gets rich and thinks, yep, that'll be me. He ignores the other stories going around. // There's no way to quantify all that on a spreadsheet, but it's that dream of being the exception, the one who gets rich and gets out before he gets got that's the key to a hustler's motivation. —Decoded by Jay Z. (Founders #238) [22:36] He was pure hustle. [24:15] Preston later spoke of Zemurray 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, “he's a thinker, and he's a doer.” [26:33] They don't write books about people that stopped there. [28:48] Titan: The Life of John D. Rockefeller by Ron Chernow (Founders #248) and John D: The Founding Father of the Rockefellers by David Freeman Hawke. (#254) [30:22] He seemed to strive for the sake of striving. [30:44] If you're on a mans side you stay on that mans side or you're no better than a goddamn animal. [31:11] The world is a mere succession of fortunes made and lost, lessons learned and forgotten and learned again. [35:41] A man whose commitment could not be questioned, who fed his own brothers to the jungle. [36:00] The Forgotten Highlander: An Incredible WWII Story of Survival in the Pacificby Alistair Urquhart. [37:02] Why the Founders of United Fruit were the Rockefellers of bananas. [43:23] He kept quiet because talking only drives up the price. [44:19] There are times when certain cards sit unclaimed in the 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. [49:30] He believed in the transcendent power of physical labor—that a man can free his soul only by exhausting his body. [58:04] He disdained bureaucracy and hated paperwork. So seldom did he dictate a letter that he requires no full-time secretary. [1:00:01] He was respected because he understood the trade. By the time he was 40 he had served in every position. There was not a job he could not do nor a task he could not accomplish. He considered it a secret of his success. [1:01:02] Rick Rubin: In the Studio by Jake Brown. (Founders #245) [1:04:00] Zemurray was the founder, forever on the attack, at work, in progress, growing by trial and error. [1:06:44] Here 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. This gave him the air of a berserker, who says, If you're going to fight me, you better kill me. If you’ve ever known such a person, you will recognize the type at once. If he does not say much, it's because he considers small talk a weakness. Wars are not won by running your mouth. I'm describing a once essential American type that has largely vanished. Men who channeled all their love and fear into the business, the factory, the plantation, the shop. [1:07:44] Founder Mentality vs Big Company Mentality: When this mess of deeds came to light, United Fruit did what big bureaucracy-heavy companies always do: hired lawyers and investigators to search every file for the identity of the true owner. This took months. In the meantime, Zemurray, meeting separately with each claimant, simply bought the land from them both. He bought it twice paid a little more, yes, but if you factor in the cost of all those lawyers, probably still spent less than United Fruit and came away with the prize. [1:09:04] His philosophy: Get up first, work harder, get your hands in the dirt and blood in your eyes. [1:13:02] For every move there is a counter move. For every disaster there is a recovery. He never lost faith in his own agency. [1:13:57] A man focused on the near horizon of costs can sometimes lose sight of the far horizon of potential windfall. [1:16:22] You gentlemen have been fucking up this business long enough. I'm going to straighten it out. [1:19:03] In a time of crisis the mere evidence of activity can be enough to get things moving. [1:19:42] Zemurray was never heard to bitch or justify. He was a member of a generation that lived by the maxim: Never complain, never explain. [1:23:08] The Father of Spin: Edward L. Bernays and the Birth of Public Relations by Larry Tye [1:24:14] He should link his private interest to a public cause. [1:25:32] In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons who understand the mental processes and social patterns of the masses, who harness old social forces and contrive new ways to bind and guide the world. [1:28:28] 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 that we would do well by emulating Sam Zemurray–not the brutality or the conquest, 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. ---- Get access to the World’s Most Valuable Notebook for Founders at Founders Notes.com ---- “I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested, so my poor wallet suffers. ” — Gareth Be like Gareth. Buy a book: All the books featured on Founders Podcast ---- Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work. Get access to Founders Notes here. ---- “I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth Be like Gareth. Buy a book: All the books featured on Founders Podcast

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00David Senra?

  When he arrived in America in 1891, at age 14, Zemurray 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. In between, he worked as a fruit peddler, a banana hauler, a dockside hustler, and the owner of plantations in Central America. He battled and conquered United Fruit, which was one of the first truly global corporations. Zemurray's life is a parable of the American dream, not history as recorded in the textbooks, but the authentic version, a subterranean saga of kickbacks, overthrows, and secret deals. The world as it really works.

• 0:45David Senra?

  This story can shock and infuriate us, and it does. But I found it invigorating, too. It told me that the life of the nation was written not only by speech-making politicians, but also by street-corner boys, immigrant strivers, crazed and driven, some with one good idea, some with thousands, willing to go to the ends of the earth to make their vision real. It meant anyone could write a chapter in that book, be part of the story, vanish into the jungle, and reemerge as a figure of lore. If you want to understand the spirit of our nation, the good and the bad, you can enroll in college, sign up for classes,

• 1:28David Senra?

  take notes, and pay tuition. Or you can study the life of Sam the Banana Man. That was an excerpt from the book that I'm going to talk to you about today, which is "The Fish That Ate the Whale: The Life and Times of America's Banana King", and it was written by Rich Cohen. I had originally read this book many years ago. It was originally Founder's, episode number 37. It's one of the best-written books that I've read so far for the podcast, and Sam Zemurray's life story may not have an equal. And so I wanted to reread it again and then put it into context with everything else that we've learned over the last, what, 200, almost 230 founder biographies that you and I have gone over since episode number 37. So I want to jump right into the prologue. At this point in the story, Sam Zemurray is 33 years old, and he is organizing a coup to overthrow the Honduran government.

• 2:14David Senra?

  Sam Zemurray spoke in no accent, except when he swore, which was all the time. He was a big man, six foot three, nothing but muscle and bone, and with the wingspan of a condor. He had a crisp, no-nonsense manner. At 33 years old, he was already a colorful figure. After 10 years in the South, so he starts out in Alabama and then eventually moves to Louisiana, to New Orleans. After 10 years in the South, he was known by a variety of nicknames: Zee, the Russian, Sam the Banana Man, El Amigo, the Gringo. He arrived on the docks at the start of the last century with nothing. In the early years, he had to make his way in the lowest precincts of the fruit business, peddling

• 2:56David Senra?

  ripes, bananas other traders dumped into the sea. We'll talk more about that idea right there, the idea that he identified a very profitable niche that was just hiding in plain sight. He worked like a dog and defied the most powerful people in the country. By 1905, he owned steamships that crossed the Gulf of Mexico, heading south empty and returning with bananas. He had traveled the width of Honduras on a mule, because he wanted to know the terrain, get his hands in the black soil. At 33, Zemurray was in the process of overthrowing a foreign government. That is not hyperbolic, that is actually true. He had been warned by Philander Knox, the US Secretary of State,

• 3:38David Senra?

  who ordered federal agents to tail him. So there's going to be more, there's this legendary meeting that Zemurray has before the events that are taking place right now in the book, with the Secretary of State Knox, and there's going to be a cameo because Knox was working with JP Morgan. So I'll talk more about that in a little bit. So he'd been warned by the Secretary of State, hey, basically told him, stay out of Honduras, I don't care about your banana company, we have, there's bigger interest in the US government, so stay away. Obviously, Zemurray didn't listen. But he didn't care. If Sam failed, he faced ruin. But if he succeeded, he would become a king in Bananaland. And so the prologue talks about the beginning of what is going to wind up being a successful coup. Zemurray recruits General Bonilla. General Bonilla had been previously been the president of Honduras.

• 4:22David Senra?

  And so this line right here describes Sam's thinking to us, "With the right kind of help, Bonilla could be president again." And so he's going to give Bonilla money, ships, guns, support. There's all these mercenaries that are waiting to meet up with Zemurray at this point in the story. I just want to pull out something here because it's fascinating that they actually mention this guy that I did a podcast on a long time ago. So these are the mercenaries that are meeting around, they're drinking, they're waiting for Zemurray. They told stories about mercenary heroes like Lopez, who left New Orleans with 100 men, landed in Cuba, and nearly reached Havana before he was caught and hung in a public square. They talked about William Walker. This is the guy all the way back on Founders number 55. I read one of the craziest books I've ever read. It's called Tycoon's War. The subtitle of the book will tell you exactly what the book is about.

• 5:07David Senra?

  And it says, "How Cornelius Vanderbilt invaded a country to overthrow America's most famous military adventurer." America's most famous military adventurer is William Walker, which is the guy that these guys are sitting in the bar toasting to. William Walker made the fatal mistake of confiscating some of Cornelius Vanderbilt's company property, so Cornelius Vanderbilt sought to have him killed. William Walker is going to wind up being killed. He had a lot of enemies, not just Cornelius Vanderbilt. But that just gives you an insight of like, there's a lot of people who are like, you might be able to compare like an entrepreneur from the past, maybe 150 years ago, to somebody today, but you can't really do that with Cornelius Vanderbilt. The only person in present day that reminds me of Cornelius Vanderbilt is, I would say

• 5:49David Senra?

  he's like more like a Vladimir Putin than any other founder that's alive today. Just his, he had like nation-level wealth, and he was also completely ruthless. In fact, the opening line of that podcast I did was, "Unlike Vanderbilt's other adversaries, William Walker was not afraid of Cornelius when he should have been." So it's interesting how this all ties together because the mercenaries that Zemurray is hiring to overthrow the Honduran government are looking up to William Walker, and they give a description of him here, which is really weird, why you'd look up to somebody who actually, well, this is what it says, "William Walker, who captured Nicaragua with 84 soldiers, but was later stood up against a wall in Honduras and shot full of holes." And that's interesting because the way I remember it, I thought he was shot to death,

• 6:31David Senra?

  blindfolded on a beach. But in any case, the end is the same. They caught him and they killed him. So these mercenaries are waiting on a boat. They're waiting for another boat, which is going to be Zamuri. They're right off the coast of New Orleans. So let's go right there. They're talking to each other. What now? We wait for El Amigo. A boat appeared on the horizon. It was Zamuri. He hops on board. He says he led the way to a cabin filled with weapons, grenades, rifles, a machine gun, enough ammunition to fight a war. Then he stood in the galley cooking breakfast, steak and eggs, a bottle of whiskey. He drank a shot for himself. He told the captain to raise anchor and motor over to another ship, which is called the Hornet. So this is the boat that he's going to give the mercenaries. The Hornet was a fearsome armor-clad cruiser that had seen action in the Spanish-American War. Zamuri had brought the ship secretly through a third party for

• 7:16David Senra?

  his mercenaries. Then Zamuri jumps off to another boat. Zamuri said goodbye to the men. He then stood deck on his ship, watching the Hornet pass the barrier islands and sail into the open sea. Okay, so from there, the book starts telling the story. Like, how do you get to that point? You just said he arrived at 14 years old, from Russia, immigrant, no education, no money. And then, was that 15, 16 years later, he has enough money and he's built up this business where he decides to overthrow a government because that government is hostile to his business interests. So let's go to his early life. And the note on this page is simple. He was driven, ruthless, and relentless. He was born in 1877 in western Russia. His father died young, leaving his family penniless without prospects. Sam traveled to America

• 8:00David Senra?

  with his aunt in 1892. He was, this is what his family told him to do. He was to establish himself and then send for the others, his mother and his siblings. He pops up in Selma, Alabama, where his uncle owned a store. He was 14 or 15, but you would guess him much older. Now, this is a crazy sentence that I've seen over and over again, the idea behind this sentence over and over again in these books. The immigrants of that era could not afford to be children. By sixteen, he was hardened, a tough operator, a dead-end kid, coolly figuring out the angles. Where's the play? What's in it for me? His humor was black, his explanations few. And this is another great sentence. The writing, I just ordered another one of Rich

• 8:42David Senra?

  Cohen's books. He just actually published a biography of his father. But this is, he's one of the best writers I've ever come across, in terms of just making a founder biography. Not only is there like a ton of interesting lessons in here, but it's hard to put down the book. It's just absolutely fantastic writing. He was driven by the same raw energy that had always attracted the most ambitious to America, then pushed them to the head of the crowd. Grasper, 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 did not need to be a Rockefeller to know the basics of the dream. Start at the bottom, fight your way to the top.

• 9:23David Senra?

  Over time, Sam would develop a philosophy best expressed in a handful of phrases. So these are what I would call Zemurrayisms. They're spread throughout the entire book. Here's a few here. You're there, we're here. Go see for yourself. That's like essentially his modus operandi for management. Don't trust the report. And we'll get into that more of this later, but he kept his entire business inside his head. He did not like writing things down. Though immensely complicated, he was, in a fundamental way, simple. He believed in staying close to the action, in the fields with the workers, in the dive bars with the Banana Cowboys. You drink with the man and you'll learn what he knows. And this, to me, is the most important sentence in the entire book. There is no problem you can't

• 10:06David Senra?

  solve if you understand your business from A to Z, he said. And there's a few more highlights to give you a good idea, like his personality. You get a good idea of who he is as a person, or who he was as a person. And then we get into like some of the first jobs. He just did anything he could for money. Sam did not care for crowds and parties. He had a restless mind and a persistent need to get outside. He liked to be alone. So he starts out stacking shelves and checking inventory in his uncle's store. He dealt with the salesman who turned up with the sample cases. He stood in the alley amid the garbage cans, asking about supplies and costs. There was money to be made, he realized, but not here. He interrogated customers. He was looking for different work and would try anything. His early life was a series of adventures, with odd job leading to odd job. Much of the color that would later

• 10:50David Senra?

  And the reason, this is, this sentence describes why I'm reading this section to you. "Much of the color that would later entertain magazine writers," because Sam's life had the dimension of a fairy tale, "were accumulated in these first few years in Alabama. He was employed by an old timer. Now and then, the old timer would offer Sam some wisdom. Banks fail, women leave, but land lasts forever." So this guy's job, well, this is what this guy did for a living and what he's hiring Sam to do. "The guy combed trash piles on the edge of town, searching for discarded scraps of sheet metal. Then he would pile it on a cart and push it from farm to farm, looking for trades. 'All trade you some wire for a chicken coop in return from one of those pigs that you got in the pen.'" After the particulars were agreed on, Sam was told to get moving.

• 11:35David Senra?

  Catch and tie that animal, boy. It was Zemurray's first real job. Remember this sentence for later. "He was paid a dollar a week." A dollar a week. And then this next part demonstrates, at least is what I wrote to myself when I got to this section. "He may be young and poor, but he's got a brain, and you clearly see that now. He kept the job long enough to know that he would rather be the man who owned the hog than the man who collected the junk. And he'd rather be the man who discarded the sheet metal than the man who owned the hog." A series of odd jobs followed. He was a house cleaner. He was a delivery boy. By 18, he had saved enough money to send for his brothers and sisters. But his real life began only when he saw that first banana.

• 12:19David Senra?

  He devised a plan soon after. He would travel to Mobile, Alabama, where the fruit boats arrived from Central America, purchase a supply of his own, carry them back to Selma, and go into the business. So he goes down to the dock and he's looking for opportunity. There's a line here that just is really a main theme of the book. The main theme of the book is that you should learn every detail of your trade. He just said the reason he's doing this, because if I know everything you need to see, there's no problem I can't solve. He wanted to learn every detail of the trade. The bananas that did not make the cut were designated as ripes and they were heaped in a sad pile. A ripe is a banana you have left in the sun that has become freckled. These bananas, though they're still good to eat right now, would never make it to the market in time. In less than a week, they'd begin to soften and stink.

• 13:02David Senra?

  As far as the banana merchants were concerned, before Sam, that's the important part, these were trash. So they're telling us Sam's essentially spotted an opportunity where others saw nothing. Sam grew fixated on the ripes. He recognized a product where others had seen only trash. It was the worldview of the 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 poor Russian farmer for whom food had once been scarce enough to make even a freckled banana seem precious. That's another main theme of the book. That'll pop up over and over again. That is the primary way he viewed himself, as just a farmer.

• 13:45David Senra?

  Sam walked down to the pier to talk to the company agent. Zemurray had saved $150. That was his stake. He figured it would go further if it was spent on ripes. He was no fool. He knew what this meant, that he'd have to move fast, that he was entering a race with the clock. As far as he was concerned, now, keep in mind, I'm going to tell you what I thought about this paragraph after I read it, but I'm going to tell you it before I read it to you. This is going to remind me of Jay-Z and I'll explain where that connection is coming from. As far as he was concerned, ripes were considered trash only because Boston Fruit and similar other firms were too slow-footed to cover ground. It was a calculation based on arrogance.

• 14:30David Senra?

  I can be fast where others have been slow. I can hustle where others have been satisfied with the easing pickings of the trade. So all the way back on Founders 238, if you haven't listened to it yet, I read Jay-Z's autobiography. You never know when you release a podcast. Which ones are going to resonate for some reason? That one resonates a lot. I constantly hear back from people that love that podcast. I love the book because I've been a huge Jay-Z fan my whole life. There's two things that came to mind immediately when I got to that section. And there's two paragraphs. They're either on, one's on page 75 of Jay-Z's autobiography, one's on page 76. I'm going to read them because this is exactly where I feel the mentality that Jay-Z had, very similar to the mentality we see from a young Sam Zemurray. And this is what Jay-Z says. This is the kid on the street.

• 15:14David Senra?

  The kid on the streets is getting a shot at a dream. He sees the guy who gets rich and thinks, yep, that'll be me. He ignores the other stories going around. And I'll get to the second paragraph in a minute, but Zemurray's making that same calculation. There's a ton of people getting rich in the banana trade, right? There's a bunch of people, and he winds up hiring these people that were at one point rich or one point successful and then fell off. And so he hires them to make sure that he avoids their fate, which is actually really smart that he does that later on. But this idea is like, yeah, okay, I'm not going to worry about the people that tried this and failed. I'm going to assume the guy that, I'm going to assume I'm the person. I'm the guy that got, that get rich, that got rich and thinks, yep, that'll be me. The second paragraph that I think also illustrates Sam's thinking here.

• 15:58David Senra?

  There's no, and this is so dead on with what's happening in the book. There's no way to quantify all this on a spreadsheet, but it's the dream of being the exception, the one who gets rich and gets out before he gets got. That is the key to a hustler's motivation. And that's mind blowing to me because Jay-Z is describing the early days of his life. Now you go and you put in, you place that in context with the early days of Sam Zemurray's life, and it's the exact same thought applied to a different domain. It was a calculation based on arrogance. I can be fast where others have been slow. I can hustle. It's interesting they use the same word. He's using that as a verb. Jay-Z's using it as a noun. I can hustle where others have been satisfied with the easy pickings of the trade. Let's go back to the book. Zemurray's first cargo consisted of a few thousand bananas.

• 16:43David Senra?

  He did not spend all his money, but retained a small balance, which was used to rent a box car on the railroad. The trip to Selma, where he's taking the bananas, was scheduled to take three days, meaning he would have just enough time to get the fruit to market before the sun did its worst. Since the, and this is so wild, since the freight charge used the last of his money, Zemurray traveled in the box car with the bananas. And this is just fantastic writing. It seems appropriate, Zemurray sleeping beside his first haul, attending to his product like a baby in a nursery. And so we see another trait that Sam has his whole life. He's always listening. He wants the information that you have because that information, if I shut up, if I use my ears more than my mouth, that's how I get smart, right? And so he winds up talking to a brakeman, just a guy working on the railroad that gives him a great idea.

• 17:28David Senra?

  And this is what the guy said to him. You've got a good product there. If you could just get word ahead of the towns along the line on the railroad, I'm sure the grocery owners would meet you at the platforms and buy the bananas right off the boxcar. During the next day, Zemurray went in, and then we see the relentless resourcefulness that is a hallmark of Zemurray's entire life. Zemurray went into a Western Union office and spoke to a telegraph operator. He had no money, so Sam offered a deal. If the man radioed every operator ahead, asking each of them to spread the word to local merchants, dirt-cheap bananas coming through from merchants and peddlers, Sam would share a percentage of his sales. When the railroad arrived in the next town, the customers were waiting. He sold the last banana. Then he went home in the dark where he tallied his money. I ask you to remember that he was making a dollar a week chasing pigs, right?

• 18:12David Senra?

  This is just a few years before this is happening. It came to $190, his first real success. After accounting for expenses, Sam had earned $40 in six days. Or put another way, 40 times his weekly earnings just a few years before. Zemurray had stumbled on a niche, Ripes, overlooked at the bottom of the trade, where the big fruit companies monopolized the upper precincts of the industry. And to do so, you needed capital, railroads, ships to operating in the greens, which is like you're essentially farming your own bananas, is the way to think about that. The world of Ripes was wide open. It was in these months, on train platforms, all in the small towns in American South,

• 18:56David Senra?

  that Zemurray first came to be known as Sam the Banana Man. And more great writing that I think really puts the image in your mind of Sam the Banana Man at this point. "As a salesman of a perishable product, he was skirting the line between wealth and oblivion, health and rot. A rider of railroads, a chaser of time. It was life. Move the fruit now or you're ruined forever. He became a gambler by necessity, a risk-taker, a salesman, a brawler. That little fellow, as the big executives in Boston called him. But that little fellow would build a kingdom from Ripes."

• 19:37David Senra?

  So for the next few years, he's going to focus on this profitable niche that he identified. And he realized, oh, I can grow fast and wait till we get to how fast he grew. It was remarkable. Some more background here that just talks about the, you know, you and I have talked about this idea over and over again, that I think most people that I've ever lived overestimate or underestimate, maybe that's the right word. A lot can change in one lifetime. I think that's the key reason to read this book and what I got the most of rereading it the second time, is it completely like takes whatever's in your mind about what one person can accomplish in one lifetime, takes your brain out of your skull and like stretches it. It's like, oh, you can do so much more. And as long as you don't limit your options, cap your upside by any means, which Sam obviously never did, this is what I mean.

• 20:19David Senra?

  So it talks about, you have a Supreme Court Justice, this is just like throwback to what's going to happen in his life a few decades from now. You have a Supreme Court Justice writing a letter to the President of the United States about Sam Zemri, the 14-year-old Russian immigrant that came to America with no education, no money. That is wild. So it says, he had the sort, Sam was big, deliberate, strong, and slow. He stood out from the beginning. He's also quiet. He had the sort of calm that cannot be taught. Years later, in a letter to FDR, Supreme Court Justice Felix Frankfurter described Zemri as, quote, "one of the few statesmen among businessmen that I have ever encountered.

• 21:01David Senra?

  He has the qualities that one usually finds in a great personality." That is just remarkable. So back to this time in the early career of his, in his early career, rather. He was a kind of colossus. Dismissals of him as a little fellow were comical. They're referencing, so you have this company, the whale and the fish, right? In the title, the whale is United Fruit. Now, the founders of United Fruit, there's going to be three founders, I'm going to introduce you to them in a minute. They're all, they all, what's fascinating to me is like they saw, they were much older than Sam.

• 21:33David Senra?

  They said they're like, oh, like he's, he's another me, right? Maybe a younger version of me. They never, ever, ever underestimated him. In fact, they did the smart move and they partnered with him. Now, when they die and this gigantic company they went up building from nothing is taken over by these executives, they're, they do the exact opposite. And you and I have talked about this over and over again. It pops up in the book. There is no upside. Never underestimate your opponent. It is all downside and no upside. And that's exactly what they do. They underestimated one of the most formidable individuals to ever live. And they would call him the little fellow. And so that's what the author's saying. It's like the idea that you call him a little fellow was comical. Not only because he was gigantic in size, you know, six foot three, all muscle. You know, he's gonna, like, they're in an office in Boston. He's like hacking a machete and building and planting banana plants in Honduras.

• 22:18David Senra?

  So he says he moved to Mobile, we're not there yet, though. He moved to Mobile, Alabama, soon after he went into ripes. Better to live near the docks. If business was slow, he took a job. He worked, he would work on a ship as part of a cleaning crew scrubbing decks. He had soon made his name as a uniquely resourceful trader. This crazy Russian who bought all the freckled bananas. He was pure hustle. There's that word again, used by both Jay-Z and Sam Zemurray and the author. 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. This is going to bring him to the attention of Andrew Preston. Andrew Preston is going to be, maybe there's three founders in, in United Fruit. He might be the most important one. And he's the one, he's like, hey, I want to meet this kid. And that is, Zemurray is a kid at this time.

• 23:03David Senra?

  It's really hard to understand that. Because Zemurray discovered a patch of fertile ground previously untilled, his business grew by leaps and bounds. So what does that mean? In 1899, he sold 20,000 bananas. Four years later, he sold half a million. Within a decade, he'd be selling more than a million bananas a year. Andrew Preston, the president of United Fruit and one of the founders, asked to meet Zemurray, this Russian selling all the ripes. No photos of this meeting were taken, no minutes recorded, but it was significant. The Titan who began the trade, that is not hyperbolic either. And we'll get into like how technology unlocks the, before the banana trade was, it was all local. He mentioned the steamship, that, that new technology, the steamship winds, turns it into a global business. That's why the, the book starts out with like,

• 23:46David Senra?

  You have to understand, United Fruit was one of the first truly global corporations. In fact, there's like this antitrust suit that gets taken against United Fruit all the way up to the Supreme Court of the United States, and that decision affects the future of all these international companies that occur after this. So I think I bring that up later on, but I want to get to what Preston's talking about, like his impression of Zemurray, which I thought was very interesting. So it says, "But it was significant. The titan who began the trade, shaking hands with the nobody who would perfect it. Preston later spoke of Zemurray 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. "He's a thinker. He's a doer."

• 24:30David Senra?

  And so what do you think Preston's going to do when he comes across somebody? He's like, "Oh, I need to sign this kid." Zemurray signed a contract with United Fruit that year, putting their arrangement in writing. And so there's going to be this dance throughout their entire, throughout Zemurray's entire life, because Preston's eventually going to, he's a lot older than Zemurray, so he's going to pass away. But this is like the first dance, the first song in the dance that they're going to have throughout their careers, where you have Zemurray's company, which he's going to formalize here in a little bit, and eventually, like, it's going to have a partnership with United Fruit. Then there's all these antitrust allegations from the Justice Department of the United States, causes Preston to be forced to sell back to Zemurray. I think he owned like 10% of the company, something like that, which is going to lead

• 25:12David Senra?

  to Zemurray building the most formidable competition that United Fruit's ever seen. And then eventually, there's what the entire book's about, is how the hell does this fruit jobber, right? This little guy from the docks is what they called him. How does he take over, how does he take over and then run for 25 years, one of the first truly global corporations? He's going to wind up taking over Preston's company. He does it after Preston dies. But it's just wild when you think about, wow, all the way back in 1903, they're just meeting on the docks in Mobile, Alabama, and you have Preston be like, "Hey, I need to be on this guy's team. I see me in him." So let's go back to the book. A few years before, Zemurray seemed like a fool buying garbage. Now, look what he accomplished. Selling hundreds of thousands of bananas a year, he'd become one of the biggest traffickers in the trade.

• 25:56David Senra?

  And he'd done it without having to incur the traditional costs. What does that mean? His fruit was grown for him, unlike Preston's. Harvested and shipped for free, unlike Preston's. He was like a bike racer riding in the windbreak of a semi truck. That's a really, what a fantastic, like that, like you get to that part, it's like, oh, immediately in your mind's eye, you like, I picture that. So it says, he was like a bike racer riding in the windbreak of a semi truck. The semi truck being United Fruit. By his 21st birthday, he had $100,000 in the bank. In today's terms, he would have been a millionaire. If he had stopped there, his would have been a great success story. But here's the thing, they don't write books about people that stopped there. So we know Zemurray obviously didn't stop there. It's not his personality. In fact, he starts, so he starts working in the trade, what?

• 26:40David Senra?

  He's 18, 19 years old. He has like a few, this is such a crazy story. I know I've said that over and over again, but it is really one of the crazy stories I've ever come across. Eventually, the United States government's gonna force Zemurray to sell his business to United Fruit because they're about to go to war. The two companies are, literally go to war in Central America and they had interests. So there's, throughout the life of Sam Zemurray, there's times where the government wants him, wants him and United Fruit to divest. And then there's, and a few years later, they forced them to partner. But so he has like a, you know, a few year break, like a year or two break. I forgot the exact time. And then, but outside of that year or two break where he's forced out of the industry, he works in the banana industry till he's, I want to say 74, 76?

• 27:23David Senra?

  So starting at 18, 76, and he dies, I think, at 84. So let's go to his next step. Obviously, there's a lot more detail. Highly, highly, highly recommend. If you haven't read the book, and I know a ton of people listening founders have, because I've talked to them about it. But if you haven't, you gotta pick it up because it's just so crazy. And it's only like, I got a lot of highlights, but you know, 250 pages. It's just absolutely fantastic. So let's get to the next part in Zemurray's life. How is he gonna move up the stack, right? He's like, alright, well, I'm not gonna just stay, I'm not content to just stay with Ripes forever. I want to expand. He realizes, hey, I gotta take on a partner, even though it kind of goes against his nature. Sam Zemurray took a partner in 1903. This was out of character. He was a solitary sort, a late night walker and a party avoider. He liked to make decisions on his own, better to ask forgiveness than permission. But he had gone as far as he could with Ripes.

• 28:07David Senra?

  He wanted to move into the more respectable precincts of the trade. That was where the real money was. For this, he would need capital and help. So he takes his partner and says Hubbard, that's the guy's name, is gone now, dead and buried and forgotten. He was a poor bastard who lacked the nerve, who sold out too early, who quit the game a minute before the number came in. That happens in the future, though. At this point, they joined with an ambitious goal to traffic yellows and greens. This meant they'd have to contract Central American farmers for a percentage of each harvest, which Zemurray and Hubbard would then import. For Sam, who had always kept costs down, this meant assuming a new level of risk and that risk, his high tolerance. There's a lot of echoes because I just reread two books, or I reread Titan and then read

• 28:50David Senra?

  another biography of Rockefeller. We're going to see that they think, oh, they think very similarly. So does Andrew Preston in regard to Rockefeller. But that high tolerance for risk makes Hubbard, in the future, extremely uncomfortable. And that's going to lead to Zemurray buying him out. Zemurray and Hubbard purchased Thatcher Brothers Steamship Company, which was in bad financial shape. The acquisition ran upwards of $10,000. Sam put up some of the money, and Hubbard did the same, and the balance was covered by the United Fruit, by United Fruit Company at the direction of Andrew Preston. Preston followed Zemurray's progress as the general, this is such a great description of what Preston's doing. Preston followed Zemurray's progress as the general manager of the Yankees

• 29:31David Senra?

  might follow a flamethrower making his way through the miners. Such partnerships were the way of United Fruit, the style that earned the company the nickname "The Octopus." They wrapped their tentacles around every startup in the industry. In those days, United Fruit either owned a piece of you or was intent on your destruction. And then as a result of buying this company, having steamships, doing a partnership with both Hubbard and Preston, this is a great way to think about this, his field of operations suddenly expanded. The entire Gulf of Mexico was now open. So I want to skip ahead because I want to talk to about the founders of United Fruit, which I thought this section was absolutely fascinating. And so it says, "In certain ways, Sam Zemurray was without precedent.

• 30:14David Senra?

  The pushcart Nebbish, the fruit jobber from the docks. He came from nowhere to create not just a fortune, but an archetype. He was the gringo in platonic form. He seemed to strive for the sake of striving, to hustle to prove it could be done. Swinging his machete as the sun beats down, face bathed in sweat. You see him astride his white mule. He's in the doorway of the cantina. His voice is gruff, saying, 'If you're on a man's side,' this is another Zemurrayism, you can think about it that way. 'If you're on a man's side, you stay on that man's side, or you're no better than a goddamn animal,' he would say. Was there a precursor?" And we already know the answer to this question because that's a major point of studying the history of entrepreneurship.

• 30:59David Senra?

  Of course there was. There always is. It's just the same personality type that just keeps appearing over and over again throughout hundreds of years of history. It's remarkable. Of course there was. "The world is a mere succession of fortunes made and lost, lessons learned and forgotten and learned again. In truth, Zemurray was following a path blazed by three men who had gone into the jungle a generation before. Here I speak of the Titans, who built the greatest banana company in the world, United Fruit, the octopus, reviled even now, decades after its empire collapsed in the South." So the three founders, they're all going to come together for different reasons.

• 31:43David Senra?

  It's Lorenzo Baker, Andrew Preston, and Minorkey. So Lorenzo Baker, this goes on for quite a bit, so I'm just going to give you the top level highlights, so this podcast will be like five hours long. Lorenzo Baker, he's the one, he's going to buy the ship. And so he's making money because gold prospectors are saying, "Hey, will you take us down?" To somewhere, I think this might be in Bolivia. I can't remember exactly. And he's like, yeah, I'll take that. That's fine. And so on his route back up to America, he's at a bar in the Caribbean and he sees his first bananas. And he's like, what are those? And there's an entire like history of the banana in this book, which is also fascinating. I found out a bunch of things, things that were surprising to me, like a banana is not a fruit. It's a berry technically. It's not a tree. It's the world's tallest grass.

• 32:24David Senra?

  It can grow, a banana plant can grow 20 inches in 24 hours. All kinds of like mind blowing stats in the book. But anyways, he sees his first banana, he's like, what are these? And he didn't even know how to open it. And so then he's like, oh, this is delicious. I'm going to buy them. So he bought 160 bunches. He's in Jamaica this time. He bought 160 bunches at 24 cents a bunch. So he gets back in this point, I think his destination is Jersey. He gets there and he sells them. So he paid 24 cents a bunch. He sold all of his bananas for $2 a bunch. He's like, oh, this is extremely profitable. So then he makes this trip a few times. In July 1871, he sailed into Boston with the biggest load of bananas the city has ever seen. Why is that important? Because his soon to be co-founder is on the docks. This is Andrew Preston, who had just met with Zemiri.

• 33:07David Senra?

  This is obviously, you know, many decades before he met Zemiri. Andrew Preston was on the docks that afternoon, the load came in. Preston took a special interest in perishables. He had made a career of recognizing a prize at a distance. He bought Baker's entire hall. And then he starts making a lot of money on bananas. This is a fantastic sentence, I think, describes why this is so important. Andrew Preston would not stop talking about bananas, like Baker before him and like Zemiri after. He had spotted a niche. So Preston and Baker are going to team up. They're going to import bananas, they're going to sell them. Eventually they're going to team up. Well, let me just read this to you. So it's actually easier just for me to read it. Preston meant to change the model of the business. It had been low volume, high price.

• 33:50David Senra?

  He would make it high volume with cheap bananas sold up and down the economic scale, which is the world that we live in now. Right? To achieve this, Baker and Preston had to increase supply and control quality. And so they're going to go down, they're going to meet this guy Minor Keith, who's in Costa Rica at the time, if I'm not mistaken. This is incredible writing. This is going to be the third party, the third partner in United Fruit. I'm going to read the entire, there's like two and a half paragraphs here. There's just remarkable because Minor Keith is not down there. Like bananas was not his primary goal. Minor Keith is trying to build the first railroad in the area. Building a railroad in a jungle is not easy and not safe. It is not clear when he realized the work was going to be a lot harder than he imagined.

• 34:35David Senra?

  A few days into the job is my guess. Laying track in a jungle is a nightmare. There is no bedrock in the jungle. As soon as a section of rail had been laid, it would begin 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, and just four miles of track were completed. Minor Keith is down there with his brother, Henry. Halfway through the second summer, Henry Keith was not feeling well. Feverish, hot to the touch, and his eyes, my god, his eyes, yellow fever.

• 35:17David Senra?

  Minor told his brother to go home to Brooklyn, recover, then return. But less than a month later, Henry was back. Soon after, 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 younger brother, 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 7, 1855. Fifteen years and at least 4,000 dead.

• 36:00David Senra?

  The best audiobook that I've ever heard is, there's a similar story in here where, it's called The Forgotten Highlander. If you have an extra credit on Audible, highly recommend you picking it up. It's like a long podcast. I think it's three hours and 14 minutes long. The book is The Forgotten Highlander by Alastair Urquhart. He was actually, he was captured in World War II by the Japanese and forced to build a railroad in a jungle by the Japanese Imperial Army, and he did it mostly butt naked. The story's incredible. So let's get into how Minor gets in the banana business and then how he winds up teaming up with Andrew and Baker. So it says Keith thought that bananas would serve as a cheap food for his own workers. So that was his original intent, but then he has a realization, he's like, wait, there's

• 36:43David Senra?

  a tremendous market for bananas in the north. And that's where Preston and Baker find him. In 1894, Keith signed a contract with Boston Fruit. He agreed to sell the company's entire banana harvest. And so think about the next page, they talk about how they're starting, again, one of the world's first truly global corporations. The note on this page is just a way to think about them. They're the Rockefeller of the bananas. Everything was settled in less than an hour. There would be neither loan nor temporary arrangement. The men would merge companies instead, a permanent solution to perpetual problems. It would give money to Keith, fruit for Preston and Baker. The new enterprise would be called the United Fruit Company. And so they go around all the Caribbean, the Dominican Republic, Cuba, Jamaica, Costa Rica, Honduras, Colombia, et cetera, et cetera, and they're buying land.

• 37:28David Senra?

  With this in hand, Preston put the second part of his plan into effect. This is like the Rockefeller of bananas. A cunning way to bring order to a chaotic industry. What an interesting line there, because that's exactly how Rockefeller thought about what he was doing with Standard Oil. He traveled from port to port, stopping in every city where bananas moved in numbers. He took aside dozens of importers, giving them each the same pitch. Join us, get big, survive. In return for shares in their small companies, these men would receive United Fruit stock. This is the Rockefeller of bananas. It's so wild to me. After the year without bananas, most of the traders who survived were willing to swap independence for security. So what does that mean? I think it was 1899 exactly. They were heavily dependent on weather for their crop, as you could expect. I think it was a hurricane, I can't remember exactly.

• 38:11David Senra?

  I'm surprised I didn't take notes on this, but some kind of climatic event caused them to not have, there was like a year where they couldn't harvest any of their fruit. And so what happens? Just like Rockefeller, who was always operating from a position of financial strength way greater than his competitors, he just waited for a downturn and he'd just buy up your property. This is exactly what Preston's doing here. After the year without bananas, most of the traders who survived were willing to swap independents for security. In the first six months, United Fruit merged with 27 banana companies. Come on. That's exactly... This is crazy, the parallel here. You and I just went over the fact that, was it 22? I can't remember the number. 22, 24, something like that, that Rockefeller swallows up, the Cleveland massacre, Rockefeller swallows up like 22 or 24, something like that, other refineries in like a few month period in Cleveland. We're seeing the exact same thing

• 38:55David Senra?

  here. Six months later, excuse me, within six months, United Fruit merges with 27 banana companies. Rockefeller bananas. Okay, so that's the background with the founders. All these guys are gonna know Zemurray. All of them are gonna respect him. They're much older, obviously, than he is. Let's go back to Zemurray. Obviously, we're gonna fast forward. Starting when he's 14, then he's 18, then he's 21. Now he's 29. This is a few years before he's gonna do this Honduran coup. At 29, he was rich, a well-known figure in a steamy paradise. Now, he's already in, he's moved his operations to New Orleans. His friends were associates. His mentors and enemies, the same. He was a bachelor and alone, but not lonely. He was on a mission. He was in quest of the American dream and was circumspect and deliberate as a result. He never, so this is more about how he operates his business. He never sent letters or took notes, preferring to speak in person or by

• 39:40David Senra?

  phone. He did not want to leave a record or draw attention. And so, we already talked about how he's trying to get to the next level, right? Starts out with ripes. Then he's like, hey, I want to import. I want to own my own ships. Now, he's gonna like, he always takes, he's like, okay, that's step one. Took step one as far as I can go. Now, we go to step two. Let's take step two as far as I can go. And now, he's going to go to step three. He's like, I need my own land. I need to, like, he's vertically integrating, right? His company was operating as an importer, not growing bananas, but buying them from Central American farmers. Zemurray's worries were about supply, setting a good price, working out deals with exporters. His firm was grossing several hundred thousand dollars a year, most of which went to pay farmers and sailors and local officials who had to be bribed. If you had looked into his eyes, you would see the machinery turning.

• 40:23David Senra?

  That is what Frank Brogan told me. It's just the sort of person he was, explained Brogan, who had worked for Zemurray in South America. He was one of those guys. Part of him is always figuring things out. You listen to a man like that. He knows something that can't be taught. So he's going back and forth between Central America and New Orleans at the time. So it says, "When he was in town, meaning in New Orleans, he was on the docks, trading, questioning, comparing manifest, the cargoes, making sure he wasn't getting ripped off. He knew everyone by name there, but paid s- oh, this is what I mentioned earlier. This is really smart, if you think about what he's doing. Like, you study those that came before you so you can avoid their fate. Getting rich is one skill, staying rich is another. Zemurray was able to master both those skills. The guys that he's talking to only mastered one. He knew everyone by name, but he paid special attention to the

• 41:07David Senra?

  old timers, who had been in the trade since the days of wind power, before the technology of steamship, which I mentioned to you earlier. They were grizzled and tobacco stained, as sunburned as pirates. They were former big timers, now just trying to survive. He winds up giving a bunch of these guys jobs. Again, he always wants to know what you know. And so we get into his thinking at this part, when he's 29, "The only way to do this was to expand, and the only way to do this was to plant his own bananas. It was a realization that sent Zemurray down the path he would follow for the rest of his life, a tortured path that led him into the jungle." So not only is this a fascinating biography of a formidable individual, but it's also a really interesting story about what the world was like in New Orleans, and Central

• 41:50David Senra?

  America, and the Caribbean in the early 1900s. He sets up shop in Honduras. This is night, the year is 1910. And it says, "When Zemurray arrived, it was a kind of frontier town. It was untouched by government or law. There was gunplay every night. The streets were awash in liquor and gold." And why is it attracting so many, like, ruffians, to use the word of Alexander Graham Bell? Because Honduras had no extradition treaty with the United States. And because of that, it had become a criminal refuge, filled with Americans on the lam. So this is where he becomes famous, because he crosses the entire country by mule. I mentioned this earlier. "His first time on a mule, Zemurray was thrown to the ground. The second time, the animal bit his toe. The third time, the mule dropped and rolled.

• 42:35David Senra?

  The fifth time, the mule carried Zemurray to the middle of a river and left him there." But the point is, is that the reason this story is in there is because he's, he has incredible levels of endurance and persistence. So it says, "Zemurray was a habitual limit crasher. He loved feats of endurance, proving himself by watching his companions flag, throw up their hands, and say, 'Let's take a break for a beer.' He crossed Honduras on muleback so he could learn the country, meet its people, and scout his property." And it says Honduras is the size of Pennsylvania. And all this research and crossing the land is what opens up for his moment. This is what's going to build like the foundation of this incredible business that he's in the process or in the middle of building.

• 43:20David Senra?

  And this is just a great line. So he's going around, obviously, looking for land, right? "He kept quiet because talking only drives up the price. Zemurray bought his first parcel of land on the edge of the north coast of Honduras. Much of the property ran along the southern bank of the QML River." That's what his company's going to be called, by the way. "This was long considered junk land. For $2,000, all of it borrowed, he got 5,000 acres. He was soon back in New Orleans, wondering if 5,000 acres was enough." And this is where he's going to start having beef with his partner. "It does not matter if you think it's enough, Hubbard said to him. We're out of money." And this is, this is amazing. I've referenced this paragraph on past episodes of Founders as well, because it's just amazing. A way to think about this, right?

• 44:04David Senra?

  So he's like, hey, have this opportunity, no, like, there's cheap land, right? No one sees the value in it. There's no limit to how much I could buy, the only limit being money. What should I do? My partner's saying I'm crazy." And this is just fantastic writing. "There are times when certain cards sit unclaimed in the common pile. When certain properties become available that will never be available again. A good businessman feels those moments like a fall in the barometric pressure. A great businessman is dumb enough to act on them even when he cannot afford to."

• 44:41David Senra?

  And so how is he gonna do this? Oh, man. Okay, Zemurray returned to Honduras in the spring of 1910 with a plan that was very simple and beautifully effective. Head north beyond the last paved road into the delta of the river, flash a bankroll, and buy 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 to the banks in New York and Boston. Whoever was lending, he was accepting. This is very similar to what we just learned about Rockefeller, and it is his career too. He was out there overextended and vulnerable. He might, he must have worried about the risk, but had to know this was his moment. This land would not be this cheap forever. In the course of a few months, he accumulated the uncleared acres that would constitute his first plantation. And why is that?

• 45:26David Senra?

  Because, go back to what he said, if you know your business from A to Z, there's nothing problem you can't solve. How many of the executives in, later on in the United Fruit Company, which is headquartered in Boston, are going to be scouting land by mule? None. He had superior information, understood something important, lost on Honduras. To the peasants that he was buying the land from, the land was swamp and disease. Nothing that will be, that will still be nothing 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. Because he worked as a jobber, he realized the worth of the fruit that would thrive in that soil.

• 46:08David Senra?

  This land, picked up for a song, was in fact the most valuable banana country in the world. Zemurray then went all across Honduras, meeting government officials for that. So he needs a ton of money, right, that he's gotta borrow? He needs it to buy land from people that don't think it's valuable, and then he needs it because he's going to pay off every single politician that he ever comes across. Flat-out corruption, not even trying to hide it, this is a result of this corruption. His company would be exempted from import duties on all equipment, exempted too from paying property, labor, and export tax. Zemurray's bananas would arrive in the United States unencumbered by such fees. This meant he could sell his product just as cheaply as United Fruit. If asked to sum up Sam in these early days when he was building his first plantation,

• 46:53David Senra?

  I would use the word "drive." And then a few sentences later, the author does my job for me. Why bananas? Because it was the nearest product at hand. If Sam had settled in Chicago, it would have been beef. If he was in Pittsburgh, it would have been steel. If he was in LA, it would have been movies. In the end, it does not matter what you're stocking. Selling is the thing. And then we get to the part why Zemurray was so respected by so many of his employees, and also developing skill set that his competitors are going to lack because he's the one, he's with his workers in the field. He liked doing physical labor. And he talks about why he does, why he likes that later on. But this is a description of what they're doing. It was the hardest work in the world. If this is the kind of book I want it to be, it will leave you with a sense of the fields,

• 47:37David Senra?

  the heat and the 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, the scorpions that drop into your shirt in search of exposed skin. So scorpions, I didn't know scorpions nest in banana plants and banana trees. The mosquito swarms that deliver yellow fever. The malaria dreams. The swamp land 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. And just keep that in mind because that's what he's experiencing. You know, he's in his early, late twenties, early thirties, you know? And then he's going to have to go up against banana executives who've taken over for the

• 48:22David Senra?

  company founders that have long since died. And it's just like, the experience that Sam endured and then went through, just the knowledge that he gets from being involved in every single step of the process. The idea that you're going to wind up having some kind of information advantage over this person is just silly. And not only that, he's clearly demonstrated a high capacity to take pain. Zemurray worked in the field besides his engineers, planters, and machete men. He was deep in the muck, sweat covered, swinging a blade. He helped map the plantations, plant the rhizomes. I don't know if I'm pronouncing that correctly, but every banana comes from the banana that came before it. They said essentially like, the banana that we eat is just like a billion, it's like a clone, like a, there's billions and billions of clones of just whatever species of banana we're eating, they're all exactly the same.

• 49:06David Senra?

  They describe the process in the book, but like, there's this thing on the plant that you cut. And then you can cut them into like pieces and then wherever you plant them, they're just gonna like essentially build clones of them. But that's what the rhyme zone is. I didn't remember that the last time. So it says, "Help out the plantations, plant the rhymes zones, clear the weeds, lay the track. He was a proficient snake killer. He shouted orders in dog Spanish." And this is why, also what he liked about it. "He believed in the transcendent power of physical labor. That a man can free his soul only by exhausting his body." And then the author makes the point, I guess just the point I was trying to make to you. "His years in the jungle gave him experience rare in the trade. Unlike most of his competitors, he understood every part of the business.

• 49:48David Senra?

  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." We're gonna see another Zemurrayism here. "Those schmucks, what do they know? They're there, we're here." And so this plan, this mass expansion on borrowed money, makes, this is gonna lead to his breakup. Because his partner thought Zemurray was too bold, just like Rockefeller's early partners in the oil business thought he was too bold. Hubbard had agreed to the first round of bank loans and land purchases. Then he agreed to the second. But this was too much. Whereas Zemurray thought everything should be risked now while the opportunity presented itself, Hubbard believed the business should be given time to become established.

• 50:31David Senra?

  "First, plant the land we've acquired, pay off our loans, and then we can think about acquiring more acres." Zemurray must have realized the business had to get big to survive. "Go all in or get out," Sam said. Sam was young and wanted to bet everything. Hubbard did not have the fortitude for such risks. Asked to describe Zemurray by a New Orleans newspaper reporter after they broke up, this is fantastic. "The best Hubbard could say was, 'He's a man with big ideas.'" So he's gonna buy him out. "What was Sam thinking, piling debt on debt, risk on risk? He was taking it all on his own shoulders. But what did it matter? If he failed by himself, he would lose the exact same amount as if he failed with a partner. Everything."

• 51:12David Senra?

  So now we get to the coup. And there's a whole, this entire chapter has like this backstory here. It's really fascinating, but it's a disagreement between multiple nations, right? And we've seen this play out over and over again. One nation lends another poorer nation money, high interest rate, they wind up defaulting. There's all these things that happen as a result of that. But the United States government is trying to step in because there's, and trying to, there's going to be Secretary of State Knox, and then JP Morgan makes his cameo here, where he's going to refinance and cash out these British bankers and get their railroad bonds that are taking place, I think, in Honduras. But I'm going to give you like the high level, like what's going on here and why Sam's doing what he's doing, right? And there's more, obviously more detail if you want to hear the backstory in the book.

• 51:55David Senra?

  "The Knox Plan Was Good For Everyone, In Fact Except The People Of Honduras And For Sam Zemurray, Whose Business Could Not Function Without The Concessions And Sweetheart Deals That Would Be Forbidden By Morgan." Remember, previously Zemurray had bribed for advantageous financial, like economic exemptions, like a few years before this is happening. Morgan's plan is going to wipe all that out. It would add as much as a penny per bunch to each banana bunch, which would drive Zemurray out of business. Zemurray went to work as soon as he learned the terms of the Knox Plan. His goal was simple: undermine, overturn, undo, and kill it dead. And so this is where Zemurray is going to be summoned to the Washington DC. And it says, "On what must have been one of the strangest days of his life, Zemurray received a message from Washington DC. He was to report to the Office of the United States Secretary of State.

• 52:40David Senra?

  He had been in America less than a generation, and here he was, embroiled at the highest level of national affairs." And so the author says, "I've pieced together from various sources, their exchange. This is something, this is very similar to what happened." It starts with Knox, and then you'll understand who's saying what. Knox says, "You've not been brought here to haggle, sir. Then why have I been brought here? To be told that I'm finished? That's not my concern. Look, Mr. Secretary, if a few simple accommodations could be worked out..." "I'm not discussing this, Mr. Zemurray. I'm not bargaining. I'm telling you the policy of the United States. Now that you know the policy, I'm advising you, as nicely as I can, to go home and stay out of it. Do not meddle in Honduras.

• 53:24David Senra?

  It is not your concern." "But it is my concern, Mr. Secretary. The treaty will mean the end of my business. That's unfortunate, Mr. Zemurray, but my purview is larger than your banana business." When Zemurray stood to leave, Knox warned him a second time. "Don't meddle, stay out of it. I better not hear you've got yourself mixed up in the politics of Honduras." Zemurray nodded and seemed to agree, but Secretary Knox was not so sure. Though he tried to put people at ease, Zemurray often struck those in power as a man who could not be controlled. Yeah, that's an understatement. If you want to know what he's going to do, forget what he seems to agree and figure out what's in his interest. As soon as Zemurray was gone, Knox made some calls, so he winds up having him, Zemurray

• 54:07David Senra?

  winds up being put under surveillance. And so this is just more great writing. "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. Now you're here, an entrepreneur of considerable means. But still, somewhere in your mind, the little guy 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. Don't get involved. How about I overthrow the fucking government?

• 54:51David Senra?

  Is that too involved? You made a deal with the President of Honduras. Well, what if he's not President no more? Consider the audacity. In defying Knox and JP Morgan, Sam Zemurray was challenging two of the most powerful people in America. Zemurray's scheme can be described as a coup disguised as a revolution." So that brings us back to the events that were taking place in the very beginning of the book, where he's giving them weapons, money, an old warship that served in the Spanish-American War. And so the book goes into more detail. I just want to give you the results of the coup, and it's just fascinating.

• 55:33David Senra?

  Says the US Ambassador, "Let it be known that the United States could work with Bonilla." Bonilla had overthrown the government. This is obviously the guy that Zemurray funded. In other words, and so why is that important? In other words, the Secretary of State Knox had switched sides. His point being, "I really don't care who the President is, as long as I can control him," which is obviously, unfortunately, the history of Central and South America to a large degree. So he's like, all right, fine. We'll deal with that guy as long as we can control the person. It doesn't matter. And so it says, uh, this is a result for, for Zemurray's business. Though Bonilla did not forget his benefactor. One of the first official acts was to Congress, oh, was to have Congress give Zemurray concessions covering the next 25 years.

• 56:17David Senra?

  Uh, Zemurray's settlement included permission to import any and all equipment duty free to build any and all. This is just corruption, right? I mean, unfortunately, this takes place back then, takes place today all over the world. It's not what you and I want to see as obviously as entrepreneurs. It's more like crony capitalists, but it is the environment that, that we live in. Zemurray's settlement, settlement included, uh, permission to import any and all equipment duty free to build any and all railroads, highways and other infrastructure that he might need. He also got a $500,000 loan to repay all expenses incurred while funding the revolution. That is crazy. As well as an additional 24,000 acres of land on the north coast of Honduras to be claimed at a later date. No taxes, no duties and, and free land. These were all conditions that would let Sam Zemurray take on United Fruit. So he's going to spend years down in Honduras.

• 57:02David Senra?

  He goes back and forth, but he spends a lot of time in Honduras. Uh, this is a little bit of his routine at this point in his career. He's up early each morning and eats breakfast of raw vegetables and bananas. In other cases, I might not linger on what a man had for breakfast, but such details fascinated and confused Zemurray's competitors. Executives at United Fruit were bewildered by reports of the jungle dwelling Russian who had been living for weeks on nothing but figs or who was taking a fast cure and not eating anything for 20 days, or who had been standing on his head besides a shade tree in the process of proving or disproving that inversion benefits the digestion. Okay. So that's something he did a lot in his life. For some reason, after he'd eat, he'd stand on his head. Uh, and then the note that I left myself on here was hilarious. He's the Jay-Z of banana moguls.

• 57:47David Senra?

  He writes nothing down and keeps it on his head because Jay-Z is famous on not writing his raps. He just does it all in his mind. As for the reports, sales figures and yields, the length of the average banana, the market rates per stem, et cetera, et cetera. Zemurray went through these fast, scanning them, a few mental notes, and he was done. He disdained bureaucracy and hated paperwork. So seldom does he dictate a letter that he requires no full-time secretary. He will telephone division managers in a half a dozen countries, correlate their 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. By 1913, he had saved enough money to buy back the stake that United Fruit owned in his company, a move that would secure Zemurray's independence.

• 58:31David Senra?

  This is how the fish and the whale become competitors. Preston did not want to sell back his stake. Selling back these shares was unusual for United Fruit, but the company was forced to by outside events. This is when they're getting-- the Justice Department keeps bringing all these different lawsuits against United Fruit, or the threat of a lawsuit, I guess is the-- they do have-- I guess it's the Supreme Court, but that happens in a few years from now. But they're essentially being threatened and forced to do this because they're like, hey, we know you're a monopoly. Though the Justice Department never filed any charges, the investigation had the desired effect. By forcing Preston to sell his shares back to Zemurray, the government created a competitive market. It did this by assuring Zemurray the freedom to develop into a genuine competitor. This is really important because, again,

• 59:14David Senra?

  I want to hound on the fact that founders understand founder mentality. They clearly see it in other people. So they see this. Preston sees this in Zemurray. And not only Preston, but Keith and everybody else. This is in later years, when Zemurray had grown powerful. Analysts spoke of the mistakes that United Fruit made. They had underestimated a dangerous rival in Zemurray. In fact, Preston and Keith understood the genius of Zemurray from the beginning. They had long been dazzled by his rise from the docks, but it was a matter of triage. They had to cut off the leg to save the body. Cut free the banana man to save the company. And so we're going to fast forward a few years. This is Zemurray at 40 years old. So now he's got 20 years in the banana trade. Again, I'm going to read this whole thing to you because this is just incredible writing

• 59:59David Senra?

  about an incredible founder. He 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, on the railroads, in the fields, in the 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 weather, the significant significance of every date on the calendar. There was not a job he could not do, nor a task he could not accomplish. He considered-- this is so important for us to internalize in our own careers-- he considered it a secret to his success. He was up every morning at dawn, having breakfast, standing on his head, walking in the fields. As far as possible, he refrained from giving interviews, addressing shareholders, or attending functions,

• 1:00:43David Senra?

  all of which took him away from his work. He was one of those men who toiled every day, 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, this is, so I talked about on the Rick Rubin podcast I did, it's episode 245, I was like, listen, this is the most inner scorecard shit I've ever seen. Inner scorecard, obviously, being Buffett's idea that you should be doing things based on what you feels right, not an external scorecard, which is doing things on what other people might think or feel. And I said, like, the fact that Rick Rubin was such a recluse and so, such a workaholic, that he didn't even pick up his Grammy. He was too busy working. And I was like, that's the most inner scorecard shit I've ever seen. We're gonna see the exact same thing here with Zemurray.

• 1:01:27David Senra?

  When he failed to appear at a reception in Havana, Cuba, which had been thrown in his honor, didn't even show up to a party in his honor, his lieutenant tracked him down to the wharf, where he was going over manifest documents with a ship's purser. Come on, man. That's the exact same thing. He was wildly ambitious and innovative 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 another company to haul his product. And then this is what the founders, one of the founders of UF said about Zemurray, or knew about Zemurray, that Zemurray could play as dirty as anyone else in the game. And this is coming from Minor Keith. Minor Keith is this dude that, they said, that the locals in Costa Rica said he fed his brothers to the jungle.

• 1:02:10David Senra?

  Like, imagine the kind of person you have to be to build a railroad in a jungle. And then, as a side hustle, wind up starting, that's not enough, wind up starting the largest banana company the world has ever seen. And so, this is perfect, this is exactly what I've been trying to make this point multiple times so far. That is why Minor Keith never underestimated Zemurray. He recognized him as one of his own. A throwback to the sort of man, excuse me, the sort of man who built the industry, who went into the jungle with nothing but trinkets and came out with a million dollars. And this is like where we're in the peak of his career, where it's just saying, there's just like some highlights, like something that you and I have talked about over and over again. One of my favorite quotes I've ever read about Steve Jobs was that Apple was just Steve Jobs with 10,000 lives.

• 1:02:53David Senra?

  The culture of his company, meaning Zemurray, and obviously applies to Jobs and everybody else, the culture of his company was his personality. And so it goes up to this point, it's like by 1925, it's the biggest competitor of United Fruit. United Fruit still has way more workers, they have a little bit, like they're more revenue. Zemurray's profit margin's a lot higher, though. And so they just pull out, they just want to pull out a couple of things as the author compares both businesses. It was increasingly clear that Sam Zemurray had built a better business. His company was superior to United Fruit in a dozen ways that did not show up on the balance sheet. So it talks about the fact that UF is a conglomerate, there's a lot of redundancy, duplication of tasks, I'll skip over this part, but at this point, the founders are not longer there. So it says, "Every decision for Zemurray was made with confidence and authority.

• 1:03:37David Senra?

  Zemurray could move fast without waiting for permission or for a committee report. He could take risks." Essentially, they're describing the difference between a founder and executive, right? "He could take risks without fear of losing his job. He could hire or fire with sureness 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." Zemurray was the founder, forever on the attack. I love that line, "forever on the attack, at work, in progress, growing by trial and error." He was constantly inventing. Most people, this is such, I love this guy. I don't like the things he did, like he was, I like his approach to business.

• 1:04:20David Senra?

  I obviously don't like the corruption and, you know, all the other stuff, obviously. And he knows that, like, towards the end of his life, he's like, "I have a bunch of regrets in some of the stuff I did." But I like his attitude towards business. Zemurray was constantly inventing. Most people looking at a banana see a delicious fruit. When Zemurray looked at a banana, he saw room for improvement.

• 1:04:38David Senra?

  And so the result too is the people inside United Fruit can see the difference, right? So it says, "The most ambitious banana men began to flock to Zemurray. Dozens of them quit United Fruit." And so this is going to be, bring Zemurray into war with the guy that succeeded Andrew Preston as president of United Fruit. It's the guy Victor Cutter. They hate each other and this is the guy that Zemurray is going to wind up firing when he takes control of the company. But at this point, they're like, hey, we can't compete with Zemurray, so we need to buy him. Buy him. And so they, Cutter sends this guy down to one of the company's officers to talk and like, hey, let's come to an agreement here. Just sell me your company. And Zemurray says this, turning down the offer, Zemurray said, "Hell, I'm having so much fun and I'm a young man.

• 1:05:22David Senra?

  Why should I quit?" And so this is where we see a conflict in Cutter's own psychology because he's like, at the same point, he realizes, hey, this is my most, this is like my most formidable competitor, so much so that I'm trying to buy the company. And then when he gets turned down, he like, he constantly is insulting. He's constantly insulting Zemurray. Cutter became the first president of United Fruit who had not been a founder. Though he was probably the best of the second generation, Cutter was simply not made of the stuff of the old time banana men. During the 1920s, death had taken the two great leaders of the trade, Andrew Preston and Minor Keith. A few of the more perceptive students of the trade asserted that the most likely contender for leadership was not these new UF men, but Sam Zemurray, who was still being described by Cutter as that little fellow in Honduras. And so now I'm going to fast forward. We get into the banana war.

• 1:06:07David Senra?

  This is the war that is going to take place between Zemurray and Cutter. And this is the war that the United States government has to step in and end. And they do that through, by forcing them to merge. And so this is, there's this entire chapter on this. There's a ton of information that's happening here. I just want to tell you like broad strokes, like what is the banana war about? And there's just, again, great writing about Zemurray, who he was. "From the outside, the banana war seems unfathomable. Zemurray had taken on an enemy of superior resources and size, over a few thousand acres that would only add, only marginally add to his wealth. Why would he do this? To colleagues who knew Zemurray, 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.

• 1:06:51David Senra?

  This gave him the air of a berserker who says, 'If you're going to fight me, you better kill me. If you've ever known such a person, you will recognize the type at once. If he does not say much, it's because he considers small talk a weakness.'" Wars are not won by running your mouth. I'm describing a once essential American type that has largely vanished. Men who channeled all their love and fear into the business, the factory, the plantation, the shop. And so this is what they're fighting over. The banana war was centered on a single piece of land, 5,000 acres that both companies coveted. United Fruit discovered the problem first.

• 1:07:35David Senra?

  The land was on territory claimed by Guatemala and Honduras, and it seemed to have two separate legal owners. And in a paragraph, the author does a great job giving us a metaphor from the way a big company thinks and the way an entrepreneur thinks. Two different approaches to acquiring disputed land. When this mess of deeds came to light, this is one of my favorite paragraphs in the entire book. When this 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. This took months. In the meantime, oh, I love this part so much. In the meantime, Zemurray, meeting separately with each claimant, the two different people

• 1:08:19David Senra?

  claiming the land, simply bought the land from both of them. He bought it twice, paid a little more, yes, but if you factor in the cost of all those lawyers, he probably still spent less than UF, and he came away with the prize. And so the government actually catches Sam importing weapons. United Fruit is doing the same. And so this is where they're gonna have this, like, I'm essentially telling you, like, the result of this government-mandated merger, but I want to point out, like, he's aggressive and ruthless, but he's also rich now. And so he actually has something to lose. That means he's got a vulnerability that he didn't have when he was young. And so it says, "Zemurray's fruit company was Zemurray in the shape of a corporation. His personality made manifest.

• 1:09:01David Senra?

  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. But he had since become a man of means. Whereas the young Sam was reckless and immune, from nowhere, with nothing, there were all sorts of ways the middle-aged Sam could be hurt." This is such an interesting thought in a short sentence. Check this out. "Success limited his options and made him vulnerable."

• 1:09:32David Senra?

  And so he is 53 years old when this is happening. This is a result, Sam would have received 300,000 shares of United Fruit. His stake after the merger would be valued at more than $30 million, a figure worth considering as it would make Zemurray, who had arrived in Alabama with nothing three decades before, one of the richest men in America. So if you use one of those inflation calculators online, that's like a half a billion dollars today. As part of the agreement, Zemurray, who would now would now become the majority owner of United Fruit stock, agreed to retire from the banana trade. And so this is happening. The deal was actually approved in December 1929, three months after the stock market crash. So Zemurray's older, very rich, very well-known. He develops a series of enemies, very powerful enemies.

• 1:10:17David Senra?

  One of these is Huey Long. Huey Long is going to be the former governor of Louisiana and a sitting US senator when he's assassinated. It's not clear who killed him, but he also had a bunch of enemies. So it says, "When Huey said, 'Let's soak the rich,' Sam heard, 'Let's soak Zemurray.' When Huey said, 'Let's crush the rings,' Sam heard, 'Let's crush Zemurray.'" To Long, to Huey Long, Zemurray represented everything that was wrong in America. The fat cat who had taken more than his share. So what's happening is Huey Long would go around and he'd make public speeches talking about how evil Zemurray is and other rich people, other rich people. He compared it, his thought was like, hey, what if we invited 10 people to a barbecue and we have one guy that took 90% of the food? He's like, "We wouldn't allow that. We shouldn't allow it in economic terms." You know, he wanted the redistribution of wealth.

• 1:11:02David Senra?

  He wanted all these other things. And he made very powerful enemies. And unfortunately, one of these enemies, and people never found out who, is going to have him killed. On foreign policy, Long seemed to have just one concern. He did not want US troops sent to Central America, where Long claimed they would protect the interests of Zemurray, who Long denounced on the floor of the US Senate. It seemed the conflict would turn into something truly ugly. Then it did, or maybe it didn't. But on September 8, 1935, Senator Long was approached by a man in the hall of the Capitol Building. How crazy is this? And his name was Carl Weiss. Weiss shot Long in the chest, then struggled with his bodyguards, who knocked the assassin to the ground and shot him 30 times. Long was taken to the hospital where he died. He was 42 years old.

• 1:11:47David Senra?

  And so Rich Cohen did a lot of research, and this is what he says. "I'm not saying Zemurray was behind the Huey Long assassination. There was enough doubt to warrant a full-scale investigation by the Justice Department in the fall of 1935. I once knew one of the investigators. When I asked him about the killing, he said, 'It's Louisiana. You never know.'" So let's get to the part where Zemurray starts realizing, hey, I'm gonna have to take over this company. He's not the type to persist in a flawed situation. That's very obvious about him. So you could think of this section as like, how would you respond to a 90% drop in your net worth? So it says, "For Zemurray, the collapse of United Fruit stock would have been devastating. Most of his net worth was tied up into it. The greatness of Zemurray lies in the fact that he never lost faith in his ability to salvage a situation.

• 1:12:30David Senra?

  Bad things happened to him, as bad things happened to everyone, but unlike so many, he was never tempted by failure. He never felt powerless or trapped. He was 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 his interests, he simply changed the Honduran government. When United Fruit drew a line at the river and said, 'You shall not cross,' he crossed anyway. When he was forbidden to build a bridge, he built a bridge and 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.

• 1:13:14David Senra?

  But how could UF be saved? Where did Zemurray go for answers? Did he meet with the economic experts and college professors? Did he call the chairman of the board? Did he talk to the president and ask, 'Do you have a plan?'" And 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 decks of banana boats, talking to fruit peddlers and captains and loaders and the people who really knew. And so the first problem he realizes, he learns that the banana captains were on orders from Boston to lay off the throttle and cross the Gulf at paddle speed because they were interested in saving gasoline.

• 1:13:57David Senra?

  But a man focused on the near horizon of costs can sometimes lose sight of the far horizon of potential windfall. By his quick calculations, Sam realized that whatever money was being saved on fuel was being lost on the higher percentage of fruit that ripened during the extra days on the water. "The smox. They're losing more than they're saving," he said. So he goes next year to the board of directors, and he goes to the meeting. At this meeting, they were discussing a request from plantation managers who wanted $10,000 to build an irrigation ditch in Guatemala. The executives called on experts who detailed the costs and benefits of the project. Zemery grew restless. To him, such a debate was symptomatic of a greater problem. "This man in Guatemala, he's your manager, isn't he?"

• 1:14:42David Senra?

  Zemery asked. "Yes," they said. "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." So the summary here is he's offering all these suggestions, and they're not being listened to. So he's like, "Okay, I'm not going to just go away mad. I'm going to solve the problem." He goes around, and remember, he's the largest shareholder, so he goes and has these secret meetings with all these other shareholders. And he's like, "Hey, give me your proxies." He spent the following weeks on the road, sitting in the offices and living rooms of shareholders. He made the same case over and over again. The current management is not up to the task. When Zemery spoke to the board again several months later, he had with him a bag full of proxies.

• 1:15:26David Senra?

  So those are the voting rights turned over to him by other stockholders. So they are lining up behind Zemery. Along with his own shares, these proxies could give Zemery control of the company, though he kept their existence a secret. And this is wild. This is when the fish is going to eat the whale. The chairman of the board was Daniel Wing, the president. He was also the president of the First National Bank of Boston. To him, Zemery was still Sam the banana man, the fruit jobber from the docks. He already knew what Sam could teach him about the business: nothing. When it was Sam's turn to speak, he chose each word carefully, explaining his ideas in a thick Russian accent. When Zemery finished, Wing said, "Unfortunately, Mr. Zemery, I can't understand a word of what you say." The men at the table with Wing started to laugh. Zemery's hands turned into fists.

• 1:16:14David Senra?

  He went to the other room to retrieve his bag of proxies. He came back, slapped him on the table and said, "You're fired. Can you understand that? You gentlemen have been fucking up this business long enough. I'm going to straighten it out." And this is just a fantastic, this is mind blowing, this just blew my mind, this paragraph. "Much later, analysts pointed out the flaw in the non-compete clause Zemurray signed at the time of the merger. It barred Zemurray from working for a rival or starting a new fruit company. But it did not foresee the outlandish possibility of Zemurray taking over United Fruit itself." So he's going to run this company for another 25 years, but he saves the company in the first 60 days.

• 1:16:59David Senra?

  This is what happens. He overlooked nothing. Whenever he found a man who could not act or was slow to decide, he replaced him. He said, "I realized the greatest mistake that 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," Zemurray said. I should, I guess I should have told you, I mean, it's pretty predictable what his move was going to be up until before this. He just went straight to the field. So that's where, that's where it's saying he overlooked nothing. "Executives on the spot were treated like messenger boys. I completely reversed that policy. I laid down what might be called a constitution for the company," Zemurray said. "It was established as a fixed policy that if a plantation manager could not handle his difficulties, we would appoint some man who could." And so over the next 60 days, he's just going through every single, he's like doing an inventory of every single part of the company.

• 1:17:43David Senra?

  And he's there in person, talking to the people actually doing the work. He saw the problem of half-empty ships, selling some ships, renting out space in others. A United Fruit ship did not leave the port until it was packed. He had United Fruit's holdings reappraised. The value of the machines and the land had collapsed during the depression, which saved the company millions in taxes. He left fields follow, further decreasing banana supply so he could control the market price. On some plantations, he replaced bananas with sugarcane, a staple that was always in demand. He looked for other crops to plant, like coconuts and pineapples. From Boston to Bogota, he weeded out superfluous employees until one of every four was gone. So he lays off 25% of their workforce. It was not these policies alone that turned things around.

• 1:18:27David Senra?

  It was also the energy behind the policies. The six-week tour, the firing and the firing, the tough decisions made about the fleet and the fields. A firm hand had taken hold of the company. The stock price doubled in the first two weeks of Zemurray's reign. This had less to do with tangible results. It was too early for that. Then it had less to do with the tangible results because it was too early for that. Then the confidence of investors. If you looked at the newspaper, you would see the new head of the company landing his plane on a strip in the jungle, anchoring his boat on the north coast of Honduras, going here and there and working and working and working. In a time of crisis, the mere evidence of activity can be enough to get things moving. That's a fantastic sentence. Let's repeat that sentence.

• 1:19:12David Senra?

  At a time of crisis, the mere evidence of activity can be enough to get things moving. Though Zemurray would stay at the helm for another 25 years, United Fruit was saved in his first 60 days. So, fast forwarding about a decade, World War II is going to make the sale of his primary product, the banana, very difficult. In fact, like Britain says, hey, you can't import them anymore. It's like a luxury. And so, the reason I want to like point this out to you is because Zemurray's reaction to this is just perfect. He chose innovation over despair. Zemurray was never heard to bitch or justify. He was a member of a generation that lived by the maxim, never complain, never explain. What do you do when your product rots? You find something else to sell.

• 1:19:56David Senra?

  Zemurray began to look for other crops he could grow on his plantations, crops that could be classified as necessities, meaning they would not have a quota, right? Like some countries, you couldn't import any bananas. And then other countries said, you know, we have a limit of how many we're going to import. So, that's obviously not good. If countries are limiting how much of your product you can sell. He sent agents in search of plants and trees that grew in the tropics on other parts of the globe, so around the equator, right? He was especially interested in plants critical to the war effort, but whose import from Asia had been blocked by the Japanese during World War II. So, he grew things like hemp and rubber trees and essentially figured, hey, we're going to make America more self-sufficient and we're going to pick things that are in high demand by the military. By 1944, Zemurray had thousands of acres bearing strange fruit. It was among the proudest achievements of his life.

• 1:20:41David Senra?

  He was a farmer at heart, and here he was behaving like a farmer in the midst of a locust blight. He was innovating his way out of ruin. So by this point in his life, Zemurray's a much older man. His son is 31 years old. He's a pilot and he volunteers to fight in World War II. Sam Zemurray Jr. enlisted shortly after the attack on Pearl Harbor. In those days, when the fighting started, you went. If you didn't go, there was something wrong with you. Sam Jr. was attached to the Western Desert Air Force in northern Africa. It was extremely dangerous work. Here's a photo of Sam Jr., taken in the fall of 1943. He's broad-shouldered and handsome in his flight suit, hands in his pockets, smiling. He flew dozens of missions.

• 1:21:26David Senra?

  On January 7, 1943, Sam Jr. took off at sundown. Major Samuel Zemurray Jr., 31, having lost his way in heavy fog, flew his P-51 into a mountain. There was a flash when the fuel tanks ignited, and then darkness. I don't know when Zemurray Sr. got the news. It's impossible to express the horror he must have felt. One moment, there was a world full of people and markets. The next moment, there was nothing. It was the blackest period in his life. Historic events transpired: the invasion of Normandy, the dropping of the atomic bomb, but he did not notice.

• 1:22:10David Senra?

  The war ended, the squares filled with sailors, the men got drunk, the mothers wept with joy. Sam did not know what they were celebrating. The first Peace Time shipment of bananas arrived soon after. He did not care. Everyone I spoke to who knew Zemurray told me that the death of Sam Jr. was the great tragedy of the man's life. He came out of it and got back to work, but he was never the same. And that part was really hard to get through because you're almost at the end of the book. You feel like you know who this person is. And then, obviously, I'm a father. I have not only a son, but also a daughter. And you immediately start thinking of your kids.

• 1:22:50David Senra?

  And like, I just, immediate, your eyes fill up, at least mine did, with just tears. It's just unbelievably devastating.

• 1:23:00David Senra?

  And so a few years later, Zemurray is going to hire this guy named Edward Bernays. Edward Bernays is considered like the founder of the public relations industry. I just ordered a biography on him, just because there's two paragraphs in here and I need to understand how this guy thinks. This coup is really taken over by the US State Department, the CIA. Zemurray, it's in his interest, it plays a role, but this is not like under his direction like the first one was. And this one actually backfires and causes like public relations disaster for the company and eventually the break, the United Fruit gets broken up. And you know, this is like the apogee of the company. But I just want to pull out Edward Bernays. I'm pretty sure he's, I'm pretty sure he's going to be the next episode of Founders. Because he's, just the way this guy thinks is very unusual. And so there's just a few paragraphs that are going to occur over several pages.

• 1:23:45David Senra?

  "Where did the interests of United Fruit and in the interests of the United States begin? It's impossible to tell. That was the point of all Sam's hires. If I can perfectly align the interests of my company with the interests of top officials in the US government, not the interests of the country, but the interests of the people in charge of the country, then the United States will secure my needs." And so Bernays has been hired by all kinds of people. A bunch of like Fortune 500 companies is an example of that. He winds up running the public relations campaign to convince women to start smoking. Bernays told Hill that he should instead link his private interest, which is to get women to smoke more, to a public cause. With this in mind, he planted newspaper articles that challenged the taboo, the taboo against female public smoking, arguing that cigarettes were neither a dirty habit nor a weight loss

• 1:24:29David Senra?

  tool, but a symbol of empowerment. So his whole thing is in direction. That is everything that Bernays does, or at least in this book, and I'll learn more when I read his biography, it's all about in direction. Here's another example. And this is his solution to falling book sales. "Rather than fight for a single season of sales, he would make the world more friendly to his product. In the 1950s, a consortium of publishers hired Bernays. They were concerned about a dip in numbers. Did Bernays go to school, into schools and make the case for books? No, he did not. He talked to 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. In direction."

• 1:25:11David Senra?

  And finally, this is exactly Bernays's plan to help Zemurray. Bernays would not 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. In direction. And so later on, Bernays is describing exactly why his methods were so effective. In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or ethical thinking, we are dominated by the relatively small number of people who understand the mental processes and social patterns of the masses, who harness old social forces and contrive new ways to bind and guide the world.

• 1:25:53David Senra?

  He is obviously a master at that. So Bernays gets the CIA to run this coup. I just want to pull out one thing. I'm not going to spend too much time here. The CIA eventually selects this guy named Carlos Armus. He's a 39-year-old former officer in the Guatemalan military. And there's going to be-- the end of the sentence of this paragraph is just incredible writing and incredible thought. So the prehistory of Carlos is he was-- should have-- he almost died in battle, but he winds up escaping when he was supposed to be executed. And the way he escapes is based on a partnership between the ages of Minor Keith and Sam Zemurray. This will make more sense in a minute.

• 1:26:34David Senra?

  Carlos was defeated and 16 of his men were killed, himself among them, or so it seemed. While being dragged across the field to the cemetery, he moaned. He was taken to a hospital and put back together. He was tried for treason and sentenced to death. He escaped six months later, just two days before he was about to be executed. He slipped out of prison through an abandoned tunnel of the International Railways of Central America, which had been founded by Minor Keith. That's one of the founders of United Fruit. Think about it. Here was Keith, the former vice president of UF, collaborating through the ages with Zemurray, providing the tunnel that saves the general who overthrows the president and restores the banana land.

• 1:27:19David Senra?

  And that is the apogee of the United Fruit Company. It's prosecuted, broken up. The book details more of the economic fallout from that. Sam Murray retires. Sam Murray actually retired from the United Fruit Company two years before that. He was 74 and he lives till he's 84. While no one was looking, Sam Zemurray had grown painfully, shockingly, bitterly old. It's like this. You leave the house in the morning and you're young and fit and strong and you whistle as you walk down the street. Then you turn a corner and bang, you run right into your own decrepit 78-year-old self going the other way. He retired from the banana trade for the last time. He left Honduras, Costa Rica, Guatemala, Cuba, Ecuador, Colombia, forever.

• 1:28:04David Senra?

  At a certain age, no matter which direction you walk, you're walking away. Sam Z. Sam the banana man. El amigo, the big Russian, the gringo. He was not an easy person, nor is his biography without controversy. To some, it is the story of a great man, a pioneer in business, a hero. To others, it's the story of a pirate, a conquistador who took without asking. 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.

• 1:28:49David Senra?

  I can't help but feel that we would do well by emulating Sam Zemurray. Not the brutality or the conquest, 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."

• 1:29:13David Senra?

  And that is where I'll leave it. For the full story, highly, highly recommend reading this book. I think every founder should have it in its library. Talk to your friends that have read the book. I have never come across anybody that has not done anything else but enthusiastically recommend reading the book. It is fantastic. This is the second time I've read it. I'm sure in the future, maybe a few years from now, I'll read it again. If you buy the book using the link that's in the show notes to your podcast player, you'll be supporting the podcast at the same time. If you want to see every single book in reverse chronological order, you can order them. It's amazon.com/shop/founderspodcast. You'll see every single book. And if you buy on that Amazon shop, you will also be obviously being supporting the podcast at the same time. That is 255 books down, 1,000 to go. And I'll talk to you again soon.