Cuyamel Fruit Company

Cuyamel Fruit Company was founded in the 1890s by William Streich, a speculator who bought land near the Cuyamel River in Honduras. The company soon ran out of money and was purchased around 1905 by the Russian born Samuel Zemurray, who used it as part of the beginning of his growing banana trade operation. Zemurray started selling bananas in Mobile, Alabama as a teenager before moving to New Orleans, Louisiana. He discovered that United Fruit, the major importer, was discarding bananas that were ripened earlier than others within the rest of a shipment. He found that they could be sold to the public at a discount and made arrangements to act as an intermediary. He set up a network of agents in the Southern region to sell at major rail stops. With the growth of his network, he relocated from Mobile to New Orleans to be closer to the docks. After earning enough profit selling bananas working from New Orleans, Zemurray helped start a steamship line to import bananas from independent growers in the tropics to sell in the United States. This firm was known as the Hubbard-Zemurray Steam Ship Company. Zemurray was able to expand his company by reducing banana spoilage in transit. Though information on this early incarnation of the company is scarce, records show that the Hubbard-Zemurray group was involved in at least one case before the Supreme Court of the United States. ==Growth in Honduras==

After his achievements in New Orleans, Zemurray headed to Honduras to expand his company into banana production. Honduras, a Central American country close to the Equator, is well-suited for growing bananas. With its new operations in Honduras, Hubbard-Zemurray would eventually become Cuyamel. ==Competition==

Zemurray and his firm were not without competition. The main player angling for control of the Honduras banana market besides Cuyamel Fruit was a firm called “Vaccaro Brothers and Company.” The organization was started by three American brothers of Sicilian heritage- Joseph, Felix, and Lucca Vaccaro- and their brother-in-law, Salvador D'Antoni. Vaccaro would become the Standard Fruit Company, which in turn would later be purchased by the company now known as Dole Foods. ==The Honduras "Banana Republic"==

Regardless of this cooperation, it was the nature of the three companies' competition that led to political discord in Central American states in the early 20th century. Zemurray had played an active role in Honduran politics since he first arrived in the country. In 1910, the administration of President Miguel R. Dávila granted the Vaccaro Brothers' Company land for railroad construction and prohibited competitors from building a competing railroad within 20 kilometers of the Vaccaro line. Zemurray was no fan of the Dávila administration, having provided encouragement and financial aid in a failed 1908 coup attempt against Dávila. The 1908 failed coup and the Bonilla coup would mark a tradition in Honduras and other Central American states of banana companies intervening in government affairs. This practice would last up until the 1970s. The most famous of these interventions is probably the CIA-backed Guatemalan Coup of 1954. However, unlike other countries surrounding it, Honduras was unable to urbanize or diversify its economy beyond the banana industry. The country became the paragon "banana republic" with an economy dominated by oligarchic banana plantations serving as a playground for foreign-owned companies. ==The uneasy peace and the 1920s==

Historians classify the period between 1911 and 1920 as a time of "relative stability" for Cuyamel and Honduras. There were no more coups in the country through the end of the decade, but Zemurray's Cuyamel Fruit was in fierce competition with Vaccaro and United. What's more, Cuyamel's development of a previously empty strip of land along the Guatemala-Honduras border almost led to an outbreak of war between the two states, but this was halted by United States mediation. This incident of near-war strained relations between pro-Honduras Cuyamel and pro-Guatemala United, and this tension would not fully cool off until the two companies became one in 1929. The stock of Cuyamel fell by 20 points that same year. In 1925, the firm issued $5 million in bonds backed by such prestigious firms as Lehman Brothers and Goldman Sachs to finance the company's purchase of land along the Ulúa River in western Honduras. Sales data from 1927 shows that Cuyamel accounted for about 14% of the bananas imported and sold in the United States that year. ==Sale to United Fruit==

In 1929, after the October crash of international financial markets, Zemurray sold Cuyamel to United Fruit in exchange for stock and retired. Black Tuesday sent Cuyamel shares into a tailspin, forcing the combination of the two companies (Vaccaro, known by 1929 as the Standard Fruit Company, remained independent). For his sale of the Cuyamel Fruit Company, Zemurray received 300,000 shares of United Fruit, with a market valuation of $31 million, which would be about $420 million today. With the sale, United Fruit secured its domination of the United States banana market for the better part of the 20th century. At the end of his tenure, United Fruit was able to motivate the U.S. federal government to back a coup against Guatemalan President Jacobo Arbenz. This coup led to years of civil war and unrest and is perhaps the most famous incident in United Fruit's history. ==Legacy==

Zemurray used the proceeds and the influence afforded to him by his ownership of Cuyamel and later United to support a number of philanthropic causes. He was a supporter of progressive political movements in the United States such as Franklin Roosevelt's New Deal. He also supported the left-leaning magazine The Nation. A Jewish businessman from Eastern Europe, he contributed to Jewish nationalist groups. His home is today the residence of the president of Tulane University in New Orleans. ==See also==