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 10¼. 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.