Globalized Fruit, Local Entrepreneurs. Douglas Southgate
afterward, Preston quit his old job so that he could work full time selling the fruit imported by Baker up and down the eastern seaboard. This partnership was formalized in 1885, when the two men joined ten private investors to establish Boston Fruit.7
Another of the four large firms supplying bananas to the United States during the late 1800s, the Tropical Trading and Transport Company, was headed by Minor Keith, whose career in railroads included construction of a line linking the Caribbean coast of Costa Rica with the highland capital of San José. Yellow fever and other diseases cost the lives of thousands of men whom Keith had brought down from New Orleans to work on the project. All three of his brothers died in Costa Rica as well. Yet the reward for completing the railroad was a sprawling grant of land, some of which was cleared and planted to bananas.8
As the nineteenth century was drawing to a close, Boston Fruit possessed an impressive fleet of steam-powered vessels, which brought in most of the U.S. banana supply.9 Due largely to Preston’s efforts, it also had the best network of ice-cooled railcars and warehouses for delivering fruit far into the continental interior from coastal ports. But aside from 540 hectares that Baker had bought in Jamaica, Boston Fruit’s holdings of tropical farmland were negligible.10 In contrast, the holdings of Tropical Trading and Transport were extensive, far outstripping its assets for shipping and distribution. Each firm’s shortcomings were overcome by the merger of Boston Fruit and Keith’s business that created United Fruit less than a year before the turn of the twentieth century. Vertically integrated, the combined enterprise could grow bananas in the tropics, ship fruit across the ocean without delay, and dispatch produce quickly to customers throughout the United States.
Preston reinforced United Fruit’s dominance of the U.S. market by arranging for the company to purchase shares in dozens of smaller competitors. To avoid being charged with violating the Sherman Antitrust Act of 1890, the company made sure never to control more than 49 percent of the banana business in any of the cities where it operated.11 Tacit cooperation was routine between the commercial leviathan formed by Baker, Preston, and Keith and the other firms. But even as United Fruit came to be known as The Octopus for wrapping its figurative tentacles around those firms, their continuing existence helped create a legal defense that could be used in the event of antimonopoly litigation.
Among the many businesses United Fruit invested in was Elders and Fyffes, the leading supplier of bananas in Great Britain. Known as Fyffes after it became a wholly owned subsidiary of the U.S. multinational in 1910, the British enterprise previously had competed directly with The Octopus for bananas harvested by Jamaican growers.12 United Fruit also took a stake in the Standard Fruit and Steamship Company. Established the same year as the industry leader, Standard Fruit had a foothold in the southern United States because one of its founders, an Italian immigrant named Joseph Vaccaro, had purchased or constructed a number of ice factories along the Gulf Coast.13 Like its larger rival, the company owned plantations in northern Honduras: a Central American setting reached by sailing south from New Orleans or Mobile and then past the Yucatan Peninsula, which is too dry for banana production. These properties had been received from the Honduran government in return for building a railroad,14 exactly like Keith’s holdings in Costa Rica.
Aside from the construction of railroads, which were needed to transport harvested fruit speedily to coastal harbors, plantation development involved the clearing of jungles and the preparation of land. Vertically integrated firms invested in oceangoing vessels with refrigerated holds (commonly called reefer ships) and climate-controlled facilities for the distribution of perishable produce. Also, United Fruit pioneered the use of two-way radios for the careful orchestration of banana harvesting, transoceanic shipping, and offloading at import terminals.15
Thanks to all these investments and technological advances, fruit supplies multiplied in the United States, which caused prices to plummet. As historian Virginia Scott Jenkins observes, few Americans in 1880 had ever seen a banana. Thirty years later, the fruit had ceased to be a luxury item and was instead a dietary staple for the poor—especially their offspring, whose first food after weaning almost always consisted of mashed bananas.16 The value of bananas coming in from Central America and the Caribbean, which was less than two million dollars in 1885 and amounted to six million dollars in 1899, doubled during the first decade of the twentieth century in spite of a dramatic price reduction.17
The dietary importance bananas acquired so quickly in the United States during this period was underscored when a duty of five cents a bunch was proposed in 1913. The tariff might have seemed a trivial matter in light of the ratification earlier that year of the constitutional amendment that established the federal income tax. Not so. The National Housewives’ League urged its two million members to protest to President Woodrow Wilson, who had been inaugurated in March and supported the banana duty. By October, the idea had been dropped.18
Sam the Banana Man
Along with United Fruit and Standard Fruit, another vertically integrated enterprise, the Cuyamel Fruit Company, raised bananas in northern Honduras for the U.S. market. The driving force behind this firm was Samuel Zemurray, who had been born on a wheat farm in present-day Moldova in 1877. Having lost his father at a young age, Zemurray traveled with an aunt to New York in 1892 and from there to Selma, Alabama, to join an uncle who had a small store.19
Entrepreneurial derring-do had to wait until the adolescent immigrant had brought his widowed mother and all his younger siblings to the United States, paying their fares out of earnings from a series of menial jobs. But with the entire family reunited in Alabama by 1895, when Zemurray turned eighteen, there was no reason not to roll the dice. He staked $150 on bananas that were about to be discarded in the port of Mobile because they had ripened during the passage across the Caribbean Sea and the Gulf of Mexico.20 With no money to spare, Zemurray offered a telegraph operator a percentage of sales revenues in return for lining up buyers along the route of the train he was to take with his perishable cargo. The operator accepted the deal, so all the ready-to-eat bananas found customers—at low prices, though still at a profit.21 After three years of wholesaling “ripes,” Sam the Banana Man (Zemurray’s lifelong nickname) had $100,000 in the bank.22
In 1903, Zemurray sold 574,000 bananas, up from 20,000 in 1899. That same year, he met with Preston in Mobile and signed a contract with United Fruit to take bananas that were fully mature. In 1905, Zemurray and a local partner named Ashbell Hubbard purchased a financially troubled steamship company, with partial backing from United Fruit.23 The two businessmen also bought Cuyamel and its 2,000 hectares planted to bananas in northern Honduras from the American who had founded the firm and had received agricultural real estate as a reward for railroad construction.24 Around this time, Zemurray relocated to New Orleans, still shy of his thirtieth birthday.
The acquisition of Cuyamel and its Honduran farms coincided with an upswing in the U.S. government’s interest in Central America. During the nineteenth century, official Washington had paid little attention to the region—even after its economic isolation had been alleviated by the completion of a railroad across the Panamanian Isthmus in 1854, which made it profitable to ship coffee produced in the Central American highlands to Europe and the eastern United States from Punta Arenas, Costa Rica, and other harbors along the Pacific coast. But circumstances were different after 1903, when the United States facilitated Panama’s separation from Colombia and started excavating an interoceanic canal across the narrow country. U.S. leaders were concerned that past borrowing by Central American governments in Europe had rendered them susceptible to influence from outside the Western Hemisphere. To keep this influence in check, the United States engaged in Dollar Diplomacy, with U.S. financiers purchasing unpaid debts from their European counterparts and the U.S. government guaranteeing loan payments by taking over the collection of export and import duties in the indebted countries.
Dollar Diplomacy was put into practice in Nicaragua in 1911, which marked the beginning of more than two decades of colonial-style administration of the country by the United States.25 The policy’s application around the same time in Honduras derived from bonds that national authorities had sold to London investors during the 1860s to finance a railroad. Due mainly to fraud, the railroad was never completed,