United Fruit Obeys

One day last summer Samuel ("Sam") Zemurray of New Orleans strode belligerently into a room at No. 1 Federal Street, Boston, where the directors of potent, far-flung United Fruit Co. were holding a meeting. Down on the long table in front of his old enemy, President Victor Macomber Cutter, he flung a handful of proxies. Said he: "You've been ----ing up this business long enough. I'm going to straighten it out." The Bostonian directorate was profoundly and properly shocked. Nevertheless, before they adjourned they had created a new office-- Managing Director in Charge of Operations--and elected Samuel Zemurray to fill it.

By last week, when they met again, United Fruit's directors were quite accustomed to shocks. They were not surprised, therefore, when President Cutter tendered his resignation. They immediately elected him board chairman, an office which had not previously existed. To be president they chose their fellow director Francis Russell Hart, Boston banker (Old Colony Trust Co.), onetime U. S. consul in Colombia, historian, gourmet. As president Mr. Hart would not interfere with Sam Zemurray's direction of United Fruit; as board chairman Mr. Cutter could not.

The Zemurray-Cutter feud is 20 years old. Victor Cutter was opening new tropical divisions for United Fruit. Samuel Zemurray, Polish-Jewish immigrant who out of his savings as a fruit jobber in New Orleans had formed Cuyamel Fruit & Steamship Co., was trying to wrest control of the Caribbean Sea from United. They clashed in Guatemala when each backed a different country in the dispute, not yet settled, over the Guatemalan-Honduras boundary line. They clashed in Honduras when United invaded the country Mr. Zemurray had made his own through a $200,000 revolution. Mr. Cutter, smooth-haired Dartmouth graduate, was replacing tropical tramps on his plantations with ambitious graduates of agricultural and engineering schools. Sam Zemurray did not care where his men came from and he preferred them tough.

In 1930 Cuyamel sold out to United for 300,000 shares of stock, distributed share for share. Slightly more than half of these shares Mr. Zemurray owned: the rest he controlled (his wife is daughter of his original partner, Jacob Weinberger). Sam Zemurray became largest stockholder in United Fruit and a director. His cash resources he put into government securities and bided his time.

When United Fruit bought Cuyamel its stock was selling for 105. Last June it reached its record low of 10 1/4. Mr. Zemurray, with some $12,000,000 profits from 20 years' operations at his finger tips, got busy. When he appeared in Boston in July he owned almost enough stock to dictate United Fruit's policies. For the rest he held proxies.

Sam Zemurray's brief direction of United Fruit has been vigorous, aimed to bring United Fruit stock up above the 26 figure it sold for last week. In 1931 the company earned only $6,700,000 compared with its profits of $20,000,000 in 1928. In the first half of 1932 it earned only $1,500,000. Mr. Zemurray has not cut salaries; last year before he took charge they were cut 10% and another 15%. But he has cut personnel 25%, has sharply curtailed loans to independent planters from whom United Fruit buys bananas. He has revalued United Fruit properties at $50,000,000 less than the Bostonian reckoning, thereby enabling the company to save millions of dollars in depreciation charges and to show correspondingly higher earnings. Since tariffs have practically eliminated profits from Cuban sugar and Depression has shrunk the profits of the 98 steamships of the Great White Fleet, nearly all the company's revenue has come from bananas, more than half of which the company raises itself on its plantations in Honduras, Guatemala, Costa Rica, Panama, Jamaica, Colombia. Last year's shipments were about 50 million bunches, ten million less than in 1931, which were five million below 1930. Throughout the plantations on the Caribbean Mr. Zemurray has replaced many United Fruit men with veterans of his Cuyamel.

United Fruit's new President Hart is learned, studious, convivial. After leaving M. I. T. he tried farming in Jamaica, later managed the Cartagena-Magdalena Railway in Colombia (which United Fruit has just taken over from the government). In 1908 he became a director of Old Colony and United Fruit. He is famed for his ability to mix Jamaica's famed planters' punch (one part lime, two parts syrup, three parts rum), is a moving spirit in the Club of Odd Volumes, whose headquarters is a former stable on Beacon Hill. He has written three books on the Caribbean, owns many an odd volume, belongs to a dozen learned societies and most of Boston's swank clubs. He likes to sail and fish. He is the only member of the United Fruit directorate whose father was a member of the original Boston Fruit Co. which was formed in 1899. He was 65 last week.

Far different from President Hart and the other Caribbean-ruling Bostonians is United Fruit's de facto head, Sam Zemurray. He is thin, bony, angular, with black domineering eyes and a hawk nose. Tropical-sun-tanned, he might be a Spaniard. He speaks English with a slight accent except when he is cursing, speaks Spanish with no accent at all. He is quiet in public, precisely dressed, has never been interviewed and likes to be left alone. His name appears neither in Who's Who nor in the New Orleans Social Register. His daughter Doris two years ago married Roger Thayer Stone of Boston, last summer furnished Mr. Zemurray with a grandson at 56. His son, Samuel Jr., last year played tackle on Tulane's football team, was its light-heavyweight boxer. Now he is at Harvard. Mr. Zemurray, when in Boston, lives at the Ritz. In Tangipahoa Parish 50 mi. north of New Orleans he has a vast country place, stocked with wild deer, pheasant and quail. Its artificial lakes are planted with duck potato to lure wildfowl. It also has a golf course on which its owner occasionally breaks 100. Mr. Zemurray endowed a Department of Middle American Research at Tulane for $1,000,000, gave it the famed Gates collection of Mayan relics.

When his three chief revolutionists arrived in Biloxi, Miss., on the Zemurray yacht one cold December night in 1910 on their way to Honduras, Samuel Zemurray went below and cooked a dinner for Manuel Bonilla, next President of Honduras. He left his coat over the shoulders of shivering General Bonilla. Said he: ''Hell Manuel, I've shot the roll on you. I might as well shoot the coat too." He is now shooting his roll on United Fruit and few expect him to lose it.

This file is automatically generated by a robot program, so reader's discretion is required.