Mark Twain’s Portfolio, Part 1: Existential Hedging & The United Fruit Company

Among the most common and resilient myths in Mark Twain Studies is that Samuel Clemens was economically illiterate and financially incompetent. This myth was born during his lifetime, specifically during the widely publicized bankruptcy of his publishing house following the Panic of 1893. Clemens made little effort to defend his reputation as a businessman, even as he became, by his own accounting, wealthier in the final decade of his life than he had been at any time before. Though the exact size of Clemens’s estate was disputed following his death in 1910, all agreed that it was enviably large. Still, the first several generations of Twain scholars placed far more emphasis on the fortune Twain lost than upon the fact that he made that fortune in the first place, or that he remade it. A few scholars have attempted to complicate the standard account of Twain’s fiscal foolishness, but many more treat it as established fact.

In “Mark Twain’s Portfolio,” I am going to take a closer look at Clemens’s investments. While I am, as I expect readers to be, curious as to whether these investments were profitable, in most cases I will not be able to reduce their returns to a reliable dollar figure because the exact dates of purchase and sale by Clemens or his heirs are rarely part of the public record. But we do have a fairly comprehensive record of what Clemens’s portfolio looked like at the time of his death, as well as discussions of investing in public and private writings during his life. Beyond evaluating whether these specific investments were “good” or “bad,” I will be attentive to whether and how they reflected the worldview expressed in Twain’s published works and public discourse.

Clemens’s investing practices intersect with his politics in complicated and sometimes conflicting ways. This is probably nowhere more evident than in his ownership, at the time of his death, of at least 165 shares of United Fruit Company. This was, in purely pecuniary terms, a great investment. Two weeks before Clemens’s death, the Wall Street Journal reported that United Fruit was trading at $174 per share, making Clemens’s block worth, adjusted for inflation, more than $740,000. The share price was up over 40% in the preceding year and United Fruit was reliably paying a 2% quarterly dividend to shareholders. Clemens’s United Fruit stock was generating passive income as well as appreciating exchange value.

United Fruit stock had by no means peaked by the time of Clemens’s death. Indeed, the share price would rise 12% in the next four months alone and the company would pay an additional 10% dividend before the end of the calendar year. The Wall Street Journal reported that United Fruit’s capitalization had increased by more than 400% in less than a decade. A market reporter for the Boston Globe wrote in September that “holders of United Fruit will not sell the stock at any reasonable price.” By 1920, United Fruit would report $44.6 million in earnings ($569.9 million in 2019 dollars). Even after adjusting for inflation, that was at least ten times the profits the company made in the final year of Clemens’s life. Presuming the administrators of Twain’s estate held on to his shares, they would’ve contributed to rapid growth in the 1910s and 1920s, and United Fruit would remain a reliable asset through most of the 20th century.

Of course, behind every great fortune lies a great crime. United Fruit was and would remain one of the most notorious corporations of the 20th century. Their commercial and political machination in Guatemala, Honduras, and throughout Central America and the Caribbean are presumed to have inspired O. Henry to coin the term “banana republic” in 1904 and to be the basis for the rapacious corporate monster in Gabriel Garcia Marquez’s One Hundred Years of Solitude. United Fruit’s sordid history includes too many violent labor disputes, political scandals, and cruel exploitations for me to catalog here, but numerous books have been written on the subject, notably Bitter Fruit (1982) by Stephen Schlesinger and Stephen Kinzer, Bananas (2008) by Peter Chapman, and Banana Cowboys (2018) by James W. Martin.

In his contribution to Banana Wars (2003), Philippe Bourgois describes United Fruit as “the quintessential model for the institutional form of the multinational corporation that changed the face of the world during the twentieth century.” It was a “government sponsored international trade monopoly” which “was buttressed by the political, military, and economic might of the U.S. government.” In other words, United Fruit’s spectacular performance as an investment was subsidized by U.S. taxpayers through the intermediary of the proudly imperialist Republican administrations of the early 20th century.

Mark Twain was an outspoken and aggressive critic of U.S. imperialist adventuring throughout the final decade of his life. In 1900 he famously stated “I am an anti-imperialist. I am opposed to having the eagle puts its talons on any other land.” By his own account, he came to this position by observing U.S. actions in the Philippines, which he wrote about at length. He would also publicly critique imperialism in Cuba, China, and the Belgian Congo, explicitly attacking how the moral, religious, and democratic justifications for American and European interventions in sovereign states were always masks for programmatic economic exploitation. “There must be two Americas,” he wrote, “one that sets the captive free, and one that takes that once-captive’s new freedom away from him, and picks a quarrel with him with nothing to found it on; then kills him to get his land.” As these words were being written, United Fruit was in the early stages of becoming one of the largest landholders in the world, eventually amassing 3.5 million acres of real estate across a dozen countries. These annexations and appropriations frequently met with resistance and resulted in violence.

So far as I surmised, Twain never spoke publicly of the United Fruit Company and made only passing comments about U.S. involvement in the countries where United Fruit’s operations were already becoming notorious. However, Sam Clemens and his close friend, Henry H. Rogers, who also happened to be his primary financial advisor from 1893 forward, did visit and tour a United Fruit Company outpost in Portland, Jamaica in March of 1902. The visit does not seem to have been planned. Rather, as the log of Rogers’s yacht (quoted in this section of David Fears’s Mark Twain Day By Day) reports, the pleasure cruisers “took refuge” from a “wild and tumbly” sea in the harbor at Port Antonio, described as “a deep & smooth little blue-water bay whose hilly shores were densely clothed in cocoa-palms.” Clemens, Rogers, and their fellow yachters visited what they called the “company’s hotel,” which was located on Titchfield Hill, a cliff with ocean views on all sides. There they met “some Bostonians” and became “guests of the company,” enjoying a rail tour of the plantations, including a ruined sugar mill at Golden Grove. This rail system had only recently been installed and helped to make Port Antonio “one of the wealthiest communities on the island” according to the 1903 “Handbook of Jamaica” produced by the British consul.

While Sam makes no mention of the fruit company in his letters to Livy during the cruise, he does corroborate some of these events. From the yacht on March 29 he wrote:

“We got no further than this place (40 miles [from Kingston]) when the barometer presaged a storm and we came in and anchored. It is a deep and sheltered bay, and the water is delicate green in color and limpid and brilliant. The shores and hills and mountain sides are solid with coca-groves. We spent the whole afternoon until after dark in a drive behind fast mules, through the great hills, the most prodigal and marvelous exhibition of tropical vegetation imaginable. It realized the most frantic dreams of the travel-books. The mere multitudinous names of the rare plants and trees was enough to bewilder the mind…It was a grand day, and makes all the other days of the trip poor and commonplace by comparison.”

Letter to Olivia Clemens, 29 March 1902, part of the Mark Twain Papers at Bancroft Library, UC-Berkeley

Clearly, the excursion through United Fruit Company real estate in Portland, Jamaica left an impression upon Mr. Clemens, yet he does not allude to the company, its properties, or its influence over the region, even to his wife. If it was soon after this chance encounter with the operations of United Fruit that Clemens and Rogers chose to invest in the company, that investment surely paid off, but so far as I can tell, they never discussed it, as they did many of their other mutual ventures.

The ethics of the banana and sugar trades, and of the government intervention on behalf of U.S.-based corporations, were heartily debated in many of the publications Clemens regularly read, including the North American Review, where several of his anti-imperialist polemics were published. Given the consistency and vehemence of Twain’s anti-imperialism, I feel safe speculating that he knew United Fruit’s dividend payments were tainted and that he did not receive them with unalloyed delight, even though they may have reminded him of a happy day in the tropics.

“There is no sadder sight than a young pessimist or an old optimist.” – Mark Twain

Twain’s increasing cynicism about mankind generally, and 20th-century America in particular, is reflected in his portfolio. As I will discuss in future installments, there were investments which Twain was enthusiastic about because he believed the business would prove a boon to society. But he also practiced what we might call “existential hedging,” taking a personal stake in companies he likely believed were complicit in making the world a worse place, but which he nevertheless expected to flourish, expressly because they adopted a business model he found morally reprehensible. By owning a piece of publicly-traded corporations like United Fruit, he could, at least, reap monetary reward from the geopolitical agenda which enraged him.

One can see Twain’s investment in United Fruit as both an acknowledgment of his own futility – an admission that his anti-imperialist writings weren’t making a damn bit of difference – and a clever way of contriving to make his political enemies subsidize his dissent. Perhaps in part because he could count on the equivalent of $50,000-$60,000 a year from his United Fruit shares (among many other investments), Twain was finally free, in the final decade of his life, from having to publish and lecture in order to sustain himself and his household. This meant that he lectured and published less frequently. It also meant he was more overtly political and polemical. He could afford to be booed, as he was in 1901 after saying that U.S. soldiers defending economic exploitation abroad were dying under a “polluted flag.”

Closely examining Mark Twain’s portfolio forces one to consider more carefully what makes an investment “good.” If returns are the only metric, than shares in United Fruit were among the best assets an investor could hold in the early decades of the 20th century. From another perspective, Twain’s sizable stake in United Fruit reveals the utmost hypocrisy, as he privately profits from Roosevelt-ian imperialism even as he berates it in public. This contradiction is characteristically Twainian.

This piece of Twain’s portfolio also leaves open a third interpretation of good investing practice. “Activist investing” has become something of a misnomer, as contemporary “activist investors” frequently use their shareholding simply to lobby for better returns. But the original ideal of “activist investing,” as articulated in the The Ethical Investor (1972), was to use shareholding to pressure publicly-traded corporations to adopt more progressive policies, including improving labor conditions, increasing employee profit-sharing, and embracing consumer protections. Was Clemens’s block of United Fruit stock part of an attempt to circumvent the government entirely and exert direct influence on a company whose interests were increasingly intertwined with U.S. foreign policy? Perhaps Clemens simply saw every share he held as one which would not fall into the hands of the war hawks he hated.

In a dialogue he wrote in 1902, “The Dervish & The Offensive Stranger,” which touches on both the history of colonialism and the contemporaneous Boer Wars, Twain demonstrates the difficulty of judging goodness. The stranger says, “England has succeeded in her good purpose of lifting up the unwilling Boers and making them better and purer and happier than they could have become by their own devices…But there are only eleven Boers left, now.” He uses this to ironically support his thesis that, “Half of the results of good intention are evil; half the results of evil intention are good.” This is about as compelling a rationalization as I can come up with for owning United Fruit Company stock.

Editor’s Note: An earlier version of this post did not include discussion of Clemens and Rogers visiting the United Fruit Company outpost in Jamaica. Barbara Schmidt of drew my attention to the passage in Mark Twain Day By Day which referenced the trip.