Everyone Has a Crazy Titanic Theory

The Titanic sank 110 years ago and its sinking touched off a storm of conflicting theories, a maelstrom of wild accusations, and a tidal wave of urban legends.  Suddenly, everyone was an expert on nautical disaster simply because they watched a movie 25 years ago.  (Yes, it has been 25 years since Cameron’s movie “Titanic” came out.  We’re all getting old.)

One of the more outlandish theories is that the Titanic did not sink the night of April 12, 1912, but that the ship that foundered that night was the Olympic—the slightly older sister ship that had been damaged twice in accidents.  According to this absurd theory, the White Star Line staged a switch, substituting the older ship for the newer one, then deliberately ramming the iceberg to to sink her to collect the insurance.  

Exactly how you go about the massive sleight of hand of switching two ships (each over 880 feet long and weighing over 46,000 tons) is never quite explained.  Considering simply that the Titanic was being watched constantly by sightseers and news people, the switch would be impossible.  Nor were the two ships identical:  there were substantial differences between them and many of those which would clearly differentiate Titanic from Olympic have been documented on the wreck of the Titanic. 

Recently, another wild rumor has surfaced:  that the design of the Titanic was known to be flawed and that the ship’s owners deliberately let the vessel sail, anyway.  The ship’s owners supposedly knew that the Titanic could not be repaired and allowed the ship to sail to its doom in order to collect the insurance money.    This theory ignores the fact that the Olympic continued to sail until 1937, during which time the ship earned the nickname “Old Reliable”.

Recently, this last theory has received an update from the most unreliable source imaginable:  QAnon.   I’m not going to waste any time trying to explain these folks, but they have been pushing a rather wild tale that links the passengers on the Titanic to the United States Federal Reserve.  Crucial to this wild tale is that if you cut through the various layers of corporate identities, the real owner of the Titanic was the American tycoon, J. P. Morgan. 

Morgan, says QAnon, was behind the formation of the United States Federal Reserve.  Supposedly, Morgan knew  that the design of the Titanic was flawed, so he cancelled his reservation for the maiden voyage while allowing some of the wealthiest Americans to board at their peril because they were opposed to the creation of the Federal Reserve.

Okay, let’s apply a little reality to this crackpot theory.  Yes, J. P. Morgan did indeed own the Titanic and did support the formation of a central bank.  There is no proof, however, that the prominent millionaires on board the doomed vessel were opposed to the creation of the Federal Reserve.  No one has ever been able to link passengers like Astor or Guggenheim to any opposition to the bank, nor would their opposition have done anything to stop the formation of the bank.  And for even Morgan, sinking a ship full of people was a little over the line.

I was surprised, however, to learn that the historians who follow all things Titanic have never been able to determine why Morgan cancelled his reservation for a luxury suite on the maiden voyage of a famous ship he owned.  So many prominent people had booked passage on the Titanic that it was being referred to as the ‘Millionaire’s Ship’.

I was surprised to learn that this was a mystery.  I think I know why he didn’t make the trip.

For an explanation, we must go to Honduras and move backwards in time a few years.  Honduras was a desperately poor nation that had almost no income other than the taxes it collected for imported goods as ships docked at a handful of port cities along the Gulf of Mexico.  Worse, the country was politically unstable, with revolutions occurring at a frequency  of less than every two years (seventeen administrations in twenty years).  While the country did export a few agricultural products—chiefly bananas—if the government attempted to tax their export, buyers would simply move up or down the coast to a country willing to sell their fruit at a cheaper price.

For decades, each new government had followed the same path:  banish your opposition, move the military into the customs houses, and then borrow money from Europe to pay off your revolutionary army, while pledging future tax monies collected at those vital customs houses against the loans.  With each revolution, the total debt climbed and the interest rate on new loans climbed ever higher.  You have to wonder at the intelligence of some of the people willing to loan additional money to a country that hadn’t made a debt payment in thirty years while having all those different administrations in twenty years.

The European holders of those Honduran bonds began pressuring their countries to do something about the outstanding debts.  England was discussing sending the Royal Navy to take over those customs houses and collect the taxes until the debts had been paid.  This obvious violation of the Monroe Doctrine was particularly egregious since England was the last European power to hold onto territory in Central America, British Honduras (Belize).  

President Taft and J. P. Morgan worked out a complicated scheme to prevent European intervention, to protect American financial investments in Honduras, and to promote political stability in Honduras.  With the eager acceptance of Honduran President Davila, the United States would send the U.S. Navy to protect the ports while Morgan’s bank would take over the customs houses in the ports.  Morgan would buy all outstanding Honduran bonds at the discounted price of 5%. Those who refused to accept five cents on the dollar would receive nothing and their bonds would be declared worthless.   President Davila would benefit by having his government protected by the U.S. Marines and the amount of tax money reaching the capital after Morgan took his cut would probably be more than his own dishonest customs collectors had been sending.  (This was exactly what happened when the U.S. invaded the Dominican Republic and took over its customs houses.)

There was one fly in the ointment, however.  Sam Zemurray, infamous for the actions of the United Fruit Company when he owned it two decades later, had just bought a huge banana plantation in Honduras.  This plantation would be worthless unless Zemurray was able to bring in large amounts of heavy machinery and pumps to develop the plantation—something that couldn’t be done if Morgan was diligently collecting import taxes.  Zemurray appealed to Morgan for an exemption and was denied.  So Zemurray did what had come to be expected in Honduras:  he staged a revolution to overthrow the government of Honduras.

It was a great revolution!  In less than a year, Zemurray bought a surplus ship from the U.S. Navy, the Hornet, he hired six American mercenaries who were led by Lee Christmas, he bought a Colt machine-gun and a case of rifles, and he promptly collapsed the government of President Davila by seizing the only source of income to the Honduran government:  Lee Christmas seized the customs houses.

Zemurray installed his own president, Manuel Bonilla (the former president that then Vice-President Davilla had ousted), who naturally immediately agreed to allow Zemurray to bring in his equipment without the need for paying any taxes.  This brought a halt to the loan from J. P. Morgan.

Morgan was not about to forego the opportunity to make huge profits out of Honduras, which he now expected to be even larger because of the money generated by a modern banana plantation, so he simply restarted the negotiations with President Bonilla, who was more than happy to have both the money Morgan promised and the protection that President Taft could provide.  Negotiations were almost completed when President Bonilla suddenly died of a heart attack in late March 1912.

For the next two weeks, J. P. Morgan was busily communicating via telegrams with his agents in Honduras as negotiations were held with the newly-installed President Bertrand.  These negotiations meant that J. P. Morgan missed the sailing of the Titanic because he was busy protecting his future income from Zemurray’s banana plantation (later known by the trademark Chiquita Bananas).  

So, Christmas and Chiquita Bananas saved J. P. Morgan from dying on the Titanic.