An American Company: The Tragedy of United Fruit
The author of this book was for twenty years a senior official of United Fruit1 and one fact must be put down at the outset: it is about as bad as a book can be and still get printed, which is now very bad. The writing is grammatical but vacuous—“free enterprise simple Simon” I believe the style is called. Its author cannot always stay with a thought for a paragraph and never in any organized way for a chapter. He has little understanding of the modern corporation and, I believe, he gets the story of United Fruit wrong, And yet in a curious way the book is interesting, the interest being in what so disingenuous and agreeable a man says about his depraved job and about a company with which, always on the seamy side, he was associated for so long.
His story is of an aristocratic business instrument of proper Bostonians which for several generations recruited executives on the basis of family connections and social excellence, and thus got people who were personally elegant but administratively incompetent. And so secure that it did no good to tell them they were inadequate. Things would have been worse except that the actual operations in the banana republics were in the hands of hard-bitten independent plantation satraps. Since there was no social life or Boston symphony down there, these were Southerners or Texans who also knew how to get production out of the natives and cooperation of a suitably submissive sort from the local governments. The inadequacy of the Boston managers was thus manifested mostly in marketing and overall planning.
The author holds that there was a revival for a brief time in the Thirties when Samuel Zemurray took over. Zemurray was a Romanian Jewish banana and shipping entrepreneur from the fruit markets of Mobile and New Orleans; the monopoly-minded United Fruit bought him out with a distressingly large issue of stock. As one heard the story in Boston in those days, Zemurray became troubled by the way the company was going during the bad years and wrote offering help. The management, being anti-Semitic as well as incompetent, naturally did not stoop to reply. So Zemurray came himself to the next annual meeting with his proxies and voted himself in.
After Zemurray, by the author’s account, the company slipped, then recovered very well until 1968 when a shoe-string operator named Eli M. Black, head of the then much smaller AMK Corporation (mostly Morell Packing), staged a raid on United Fruit, which meantime had enlarged its operations with some acquisitions as required by the age of conglomeration. Black paid for the stock he purchased for control with money borrowed, in effect, against the assets of the company he was trying to take over—an exercise in financial levitation which the corporation laws allow, to the benefit of no one but such thimble-riggers. Under Black things went from good to very bad. This was not noticed for some time; a highly successful public…
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