Sam Zemurray (The Fish That Ate the Whale)

25:33He'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 become one of the biggest traffickers in the trade 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 uh so it says he was like a bike racer riding in the windbreak of a semi -truck the semi -truck being United Fruit.

26:21By 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 Zamuri obviously didn't stop there. It's not his personality. In fact, he starts working in the trade. What? He's 18, 19 years old? He has like a few, and 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 is going to force Zamori to sell his business to United Fruit because they're about to go to war.

26:56The two companies literally go to war in Central America, and they had interests. So throughout the life of the Sam Zamori, there's times where the government wants him and United Fruit to divest. And then a few years later, they force him to partner. So he has 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 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 got to 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 Zamori's life how is he going to move up the stack right he's like all right well I'm not going to 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 Zamori 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 and permission but he had gone as far as he could with ripes he wanted to move into the more respectable precincts of the trade.

28:10That 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. 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 Zamuri 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 reread Titan and then read another biography of Rockefeller.

28:51We're going to see that, 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 Zemmury buying them out. Zemmury 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 Company at the direction of Andrew Preston. Preston followed Zemmury's progress as the general. This is such a great description of what Preston is doing.

29:27Preston followed Zumuri's progress as the general manager of the Yankees 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.

30:01The entire Gulf of Mexico was now open. So I want to skip ahead because I want to talk to you about the founders of United Fruit, which I thought this section was absolutely fascinating. And so it says, in certain ways, Samza Murray was without precedent. 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.

30:36He's in the doorway of the cantina. His voice is gruff, saying, if you're on a man's side, this is another Zemuri, Zemuri -ism, if 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 know we already know the answer to this question because that's a major point of studying the history of entrepreneurship of course there was there always is it's just the same personality type that just keeps appearing over and over again throughout thousands 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.

31:17In truth, Zamuri 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. It's Lorenzo Baker, Andrew Preston, and Minor Keith. 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.

31:55And 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 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.

32:24It can grow a banana plant, can grow 20 inches in 24 hours. All kinds of 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 $0 .24 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 $0 .24 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.

32:57In 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 Zamuri. This is obviously, you know, many decades before he met Zamuri. 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 haul. And then he starts making a lot of money on bananas. This is a fantastic sentence, I think, describes why this is so important.

33:27Andrew Preston would not stop talking about bananas. like Baker before him and like Zamiri 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. 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.

34:01And 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 and 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.

34:35A 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.

35:17Minor told his brother to go home to Brooklyn, recover, then return. But less than Then 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 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. 15 years and at least 4 ,000 dead. The best audiobook that I've ever heard is, there's a similar story in here where it's called The Forgotten Highlander.

36:07If you have an extra credit on Audible, highly recommend you picking it up. It's like a long podcast. I think it's 3 hours and 14 minutes long. The book is The Forgotten Highlander by Alistair 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 is 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.

36:39So that was his original intent. But then there's a he has a realization. He's like, wait, there's 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 of myself 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.

37:09The 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, etc., etc., and they're buying land. 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.

37:40He 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.

38:11I'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 just buy up your property. This is exactly what Preston's doing here. After the year without bananas, most of the traders were willing to swap independence or security. in the first six months, United Fruit merged with 27 banana companies. Come on. That's exactly, this is crazy, the parallel here.

38:41You 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 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 going to know zamuri all of them are going to respect him they're much older obviously than he is let's go back to zamuri uh obviously we're going to fast forward story when he's 14 then he's 18 then he's 21 now he's 29 that's a few years before he's going to do this honduran coup at 29 he was rich a well -known figure in a steamy paradise now he's already in uh he's moved his operations to new aliens uh his friends were associates his mentors and enemies the same he was a bachelor and alone but not lonely.

39:28He 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 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 up with ripes. Then he's like, Hey, I want to import. I want to own my own ships. Now he's going to like, he always takes it. He's like, okay, let's step one, took step one as far as I can go. Now we go to step two.

39:56Let'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. He's vertically integrating, right? His company was operating as an importer, not growing bananas, but buying them from Central American farmers. Sir Murray'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. That is what Frank Brogan told me.

40:25It's just the sort of person he was, explained Brogan, who had worked for Zemuri 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 manifesto cargoes, making sure he wasn't getting ripped off. He knew everyone by name there, but paid... Oh, this is what I mentioned earlier. This is really smart if you think about what he's doing.

40:53You study those that came before you so you can avoid their fate. Getting rich is one skill, staying rich is another. Zamuri 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 old -timers who had been in the trade since the days of wind power before the technology of the 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.

41:25And 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 Zamuri 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 America and the Caribbean in the early 1900s. He sets up shop in Honduras. This is the year 1910. And it says, when Zamuri arrived, it was a kind of frontier town.

42:00It 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 would 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, Zemuri was thrown to the ground. The second time, the animal bit his toe. The third time, the mule dropped and rolled.

42:35The fifth time, the mule carried Zemuri to the middle of a river and left him there. But the point is, the reason this story is in there because he has incredible levels of endurance and persistence. So it says,

43:01And 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 the foundation of this incredible business that he's in the process or in the middle of building. 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. Zamari 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 is going to be called, by the way.

43:39This 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 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? So he's like, hey, have this opportunity. There's cheap land, right? No one sees the value in it. There's no limit to how much I could buy.

44:13The 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 and so how's he gonna do this oh man okay so murray 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 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.

45:02He 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 in the early days of his career too. He was out there overextended and vulnerable. 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? because to 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 later on in the United Fruit Company, which is headquartered in Boston, are going to be scouting land by mule?

45:40None. He had superior information, understood something important, loss on Hondurans. To the peasants that he was buying the land from, the land was swamp and disease. Nothing 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 this land picked up for a song was in fact the most valuable banana country in the world zamuri then went all across honduras meeting government officials for that so he needs a ton of money right that he's got to 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.

46:30Flat 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 to from paying property, labor and export tax. So Murray'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

46:56And 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 Zamuri was so respected by so many of his employees. and also developing skill set that his competitors are going to lack because he's with his workers in the field. He liked doing physical labor, and he talks about why he likes that later on.

47:30But 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, 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. I didn't know scorpions nest in banana plants and banana trees. The mosquito swarms that deliver yellow fever. The malaria dreams. The swampland and broken tools and arsenic trees. The way your health is destroyed.

48:05Your 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 20s early 30s you know and then he's going to have to go up against banana executives who've taken over for the the company founders that have long since died and it's just like the experiences he that sam endured and that 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.

48:42Zamori 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. There's billions and billions of clones of just whatever species of banana we're eating. They're all exactly the same. 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 pieces and wherever you plant them, they're just going to essentially build clones of them.

49:16But that's what the rhyme zone is. I didn't remember that the last time. So it says, help map the plantations, plant the rhyme zones, clear the weeds, lay the track. He was a proficient snake killer. He shouted orders in dog Spanish. And this is 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.

49:48From 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 going to see another Zemurism here. Those schmucks, what do they know? They're there. We're here. And so this plan, this mass expansion on borrowed money, this is going to lead to his breakup. Because his partner thought Zamuri 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.

50:21Then he agreed to the second. But this was too much. Whereas Zamuri thought everything should be risked now while the opportunity presented itself, Hubbard believed the business should be given time to become established. First, plant the land we've acquired, pay off our loans, and then we can think about acquiring more acres. Zamuri 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 Zamuri by a New Orleans newspaper reporter after they broke up.

50:51This is fantastic. The best Hubbard could say was, he's a man with big ideas. So he's going to 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. So now we get to the coup. And there's an entire chapter that has this backstory here. It's really fascinating. But it's a disagreement between multiple nations. 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.

51:28There's all these things that happen as a result of that. But the United States government is trying to step in because there's going to be Secretary of State Knox and then J .P. 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 the high level of what's going on here and why Sam's doing what he's doing. And there's obviously more detail if you want to hear the backstory in the book. The Knox plan was good for everyone, in fact, except the people of Honduras and for Sam Zemuri, whose business could not function without the concessions and sweetheart deals that would be forbidden by Morgan.

52:05Remember, previously, Zemuri had bribed for advantageous economic exemptions a few years before this was 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 Zemuri out of business. Zemuri 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 Zamari is going to be summoned to Washington, D .C. And it says, On what must have been one of the strangest days of his life, Zamari received a message from Washington, D .C. He was to report to the office of the United States Secretary of State.

52:40He 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. 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. Zamuri. I'm not bargaining. I'm telling you the policy of the United States.

53:14Now 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. 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. Zamuri, but my purview is larger than your banana business. When Zamuri 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. Zamuri nodded and seemed to agree, but Secretary Knox was not so sure. Though he tried to put people at ease, Zemuri often struck those in power as a man who could not be controlled.

53:55Yeah, 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 Zemuri was gone, Knox made some calls. So he winds up having him, Zemuri is wind up being put under surveillance. And so this is just more great writing. Pretend you're Samuel Zemuri. 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.

54:31You'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? 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 J .P. Morgan, Sam Zemuri was challenging two of the most powerful people in America. Zemuri's scheme can be described as a coup disguised as a revolution.

55:16so 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 war ship that was 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 says the u .s ambassador let it be known that the united states could work with bonilla bonilla had had overthrown the government this is obviously the guy that that that Zamari funded. In other words, and so why is that important? In other words, the Secretary of State Knox had switched sides.

55:48His point being, I really don't care who the president is as long as I can control him, which is obviously, unfortunately, 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 says this is a result for Zamari's business, though bonia did not forget his benefactor one of the first official acts was to congress was to have congress give zamuri concessions covering the next 25 years uh zamuri 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 is more like crony capitalists, but it is the environment that we live in.

56:34Zamuri's settlement included 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 free land. These were all conditions that would let Sam Zamuri take on United Fruit. So he's going to spend years down in Honduras. He goes back and forth, but he spends a lot of time in Honduras.

57:05This 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 Zamuri'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.

57:37Okay, so that's something he did a lot in his life. For some reason, after he'd eat, he'd stand on his head. And then I left myself on here, which is hilarious. He's the Jay -Z of banana moguls. 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 on his mind. As for the reports, sales figures and yields, the length of the average banana, the market rates per stem, etc., etc., Zamuri 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.

58:11He 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 Zemuri's independence. 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 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 it gets up to the Supreme Court, but that happens in a few years from now.

58:54But 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 Zamuri, the government created a competitive market. It did this by assuring the Zamuri the freedom to develop into a genuine competitor. This is really important because, again, 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 Zamuri. And not only Preston, but Keith and everybody else.

59:26This is in later years when Zamuri had grown powerful, analysts spoke of the mistakes that United Fruit made. They had underestimated a dangerous rival in Zamuri. In fact, Preston and Keith understood the genius of Zamuri 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 Zamuri 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 about an incredible founder.

1:00:01He 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 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.

1:00:33He 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, all of which took him away from his work. He was one of those men who toiled 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... So I talked about it 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.

1:01:07Inner scorecard obviously being Buffett's idea that you should be doing things based on what you feel is 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 such a workaholic that he didn't even pick up his Grammy. He was too busy working. I was like, that's the most inner scorecard shit I've ever seen. We're going to see the exact same thing here with Zamuri. 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.

1:01:35His 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 innovated 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 Zamuri. Or knew about Zamuri. that Zamari 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, the locals in Costa Rica said he fed his brothers to the jungle.

1:02:10Like 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 zamuri he recognized him as one of his own a throwback to the sort of man excuse me the sort of men 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 the culture of his company meaning Zamuri, and obviously applies to jobs and everybody else, the culture of his company was his personality.

1:03:01And so it goes up to this point. It's like by 1925, it's the biggest competitor to United Fruit. United Fruit still has way more workers. They have a little bit like they're more revenue. Zamuri's profit margin is a lot higher, though. And so they just want to pull out a couple of things as the author compares both businesses. It was increasingly clear that Sam Zamuri 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.

1:03:30I'll skip over this part. But at this point, the founders are not longer there. So it says every decision for Zamori was made with confidence and authority. Zamori 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 a 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.

1:04:01Zermury 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 a, I love this guy. I don't like the things he did. Like he was, I like his approach to business. 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 and some of the stuff i did but i like his attitude towards business zemuri was constantly inventing most people looking at a banana see a delicious fruit when zemuri looked at a banana he saw room for improvement 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 zemuri dozens of them quit United Fruit.

1:04:48And so this is going to be brings a Murray into war with the guy that succeeded Andrew Preston as president United Fruit. It's the guy, Victor Cutter. They hate each other. And this is the guy that that's Murray 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 Murray, 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, okay, let's come to agreement here. Just sell me your company. And Zamuri says this, turning down the offer, Zamuri said, hell, I'm having so much fun and I'm a young man.

1:05:22Why 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 constantly is insulting. He's constantly insulting Zamuri. 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.

1:05:51A 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 Zamuri, 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. This is the war that is going to take place between Zamuri and Cutter, and this is the war that the United States government has to step in and end. And they do that by forcing them to merge. And so this is an 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?

1:06:23And there's just, again, great writing about Zamuri, who he was. From the outside, the Banana War seems unfathomable. Zamuri had taken on an enemy of superior resources and size, over a few thousand acres that would only marginally add to his wealth. Why would he do this? To colleagues who knew Zamuri, 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. This gave him the air of a berserker who says, If you're going to fight me, you better kill me.

1:06:58If 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. The land was on territory claimed by Guatemala and Honduras.

1:07:39and 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.

1:08:13In the meantime, Zamuri, meeting separately with each claimant, the two different people claiming they own the land, simply bought the land for 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 going to 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.

1:08:48And so he actually has something to lose. That means he's got he's got a vulnerability that he didn't have when he was young. And so it says Zemuri's fruit company was Zemuri in the shape of a corporation. His personality made manifest 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.

1:09:26Check this out. Success limited his options and made him vulnerable. And so he is 53 years old when this is happening. This is a result. Sam would receive 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 Zamuri, 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, Zamuri, who would now become the majority owner of a United Fruit stock, agreed to retire from the banana trade.

1:10:03And so this is happening. The deal was actually approved in December 1929, three months after the stock market crash. So Zamuri's older, very rich, very well -known. He develops a series of enemies, very powerful enemies. One of these is Huey Long. Huey Long is going to be the former governor of Louisiana and a sitting U .S. 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 Hurd, let's soak Zamuri. When Huey said, let's crush the ring, Sam Hurd, let's crush Zamuri. To Long, to Huey Long, Zamuri represented everything that was wrong in America.

1:10:39The 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 Zamuri 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 percent 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. 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.

1:11:11Long seemed to have just one concern. He did not want U .S. troops sent to Central America, where Long claimed they would protect the interests of Zamuri, who Long denounced on the floor of the U .S. Senate. It seemed the conflict would turn into something truly ugly. Then it did. Or maybe it didn't. But on September 8th, 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.

1:11:45He was 42 years old. And so Rich Cohen did a lot of research, and this is what he says. I'm not saying Zamuri was behind the Huey Long assassination. 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 Zamuri starts realizing, hey, I'm going to 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.

1:12:18So it says for Zamuri, the collapse of United Fruit stock would have been devastating. Most of his net worth was tied up into it. The greatness of Zamuri lies in the fact that he never lost faith in his ability to savage a situation. 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 State teamed up with J .P. Morgan and the Honduran government in a way contrary to his interest, he simply changed the Honduran government. When United Fruit drew a line at the river and said, you shall not cross, he crossed anyway.

1:12:57When he was forbidden to build a bridge, he built a bridge and called it something else. For every move, there is a counter move. 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. But how could UF be saved? Where did Zemuri 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 are the same men who would 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.

1:13:45And 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. 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 smux, 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.

1:14:23At 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 cost 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? 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.

1:15:01So he's like, okay, I'm not going to just go away mad. I'm going to solve the problem. He goes around and he, 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 Zamuri spoke to the board again, several months later, he had with him a bag full of proxies. So those are the voting rates turned over to him by other stockholders.

1:15:29So they are lining up behind Zamuri. Along with his own shares, these proxies could give Zamuri 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. He was also the president of the First National Bank of Boston. To him, Zamuri 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 Zamuri finished, Wing said, unfortunately, Mr.

1:16:04Zamuri, I can't understand a word of what you say. The men at the table with Wing started to laugh. Zamuri's hands turned into fists. 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, just mind blowing. This is blew my mind, this paragraph. Much later, analysts pointed out the flaw in the non -compete clause Zemuri signed at the time of the merger. It barred Zemuri from working for a rival or starting a new fruit company.

1:16:45but it did not foresee the outlandish possibility of Zamuri 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. 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, Sam Murray said. I guess I should have told you. I mean, it's pretty predictable what his move was going to be up before this.

1:17:19He just went straight to the field. So 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, Sam Murray 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 doing an inventory of every single part of the company 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 and others a united fruit ship did not leave the port until it was packed he had united fruits 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.

1:18:11He 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. It was also the energy behind the policies. The six -week tour, the hiring and the firing, the tough decisions made about the fleet in the fields. A firm hand had taken hold of the company. The stock price doubled in the first two weeks of Zamuri's reign. This had less to do with tangible results. It was too early for that. It had less to do with the tangible results because it was too early for that.

1:18:50Then 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. At a time of crisis, the mere evidence of activity can be enough to get things moving. Though Zamuri 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.

1:19:32In fact, like Britain says, hey, you can't import them anymore. It's like a luxury. And so the reason I want to point this out to you is because Zemuri's reaction to this is just perfect. He chose innovation over despair. Zemuri 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. Zemuri 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.

1:20:08And 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 you can, 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.

1:20:35By 1944, Zamuri had thousands of acres bearing strange fruit. It was among the proudest achievements of his life. 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, Zamuri is a much older man. His son is 31 years old. He's a pilot and he volunteers to fight in World War II. Sam Zemuri 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.

1:21:11It was extremely dangerous work. Here's a photo of Sam Jr. taken in the fall of 1943. He's broad shoulder and handsome in his flight suit, hands in his pockets, smiling. He flew dozens of missions, missions. On January 7, 1943, Sam Jr. took off at sundown. Major Samuel Zemuri 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 Zemuri 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.

1:21:59It 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. 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 peacetime shipment of bananas arrived soon after. He did not care. Everyone I spoke to who knew Zamuri 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.

1:22:43You 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 to your kids. And I just, immediate, your eyes fill up, at least mine did, with just tears. It's just unbelievably devastating. And so a few years later, Zamari's going to hire this guy named Edward Bernays. Edward Bernays is considered 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 U .S.

1:23:15State Department, the CIA. Zamori, 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 Fruits 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.

1:23:45Where did the interest of United Fruit and in the interest 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 interest of my company with the interest of top officials in the U .S. government, not the interest of the country, but the interest of the people in charge of the country, then the United States will secure my needs. And so Bernays had 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.

1:24:20With this in mind, he planted newspaper articles that challenged the taboo against female public smoking, arguing that cigarettes were neither a dirty habit nor a weight loss tool, but a symbol of empowerment. So his whole thing is indirection. That is everything that Bernays does, at least in this book, and I'll learn more when I read his biography, It's all about indirection. 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.

1:24:51They 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. And finally, this is exactly Bernays' plan to help Zamuri. 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.

1:25:53He 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 Armas, right? He's a 39 -year -old former officer in the Guatemalan military. And there's going to be an end. 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 Samari.

1:26:33This will make more sense in a minute. 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 Zamuri, providing the tunnel that saves the general who overthrows the president and restores the banana land.

1:27:19And that is the apogee of the United Fruit Company. it's prosecuted broken up the deep the book details more of the like the economic fallout from that so murray retires so 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's murray 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.

1:27:53He retired from the banana trade for the last time. He left Honduras, Costa Rica, Guatemala, Cuba, Ecuador, Colombia, forever. 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.

1:28:44With cleverness and hustle, the worst can be overcome I can't help but feel that we would do well by emulating Sam's Murray 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 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.

1:29:42It's amazon .com forward slash shop forward slash founders podcast. You'll see every single book. And if you buy on that Amazon shop, you will obviously be supporting the podcast at the same time. That is 255 books down, 1 ,000 to go. And I'll talk to you again soon.