The Disturbing Business of Bananas

the banana industry is responsible for massacres revolutions War and secret deals with the CIA at one point the world's largest banana company practically acted like a government in Central America controlling most of their land and infrastructure they were responsible for overthrowing presidents who tried to give workers more rights and installing leaders who helped the banana companies make more money honestly after this video you will never look at a banana the same way again this is the disturbing true story of the banana business now in episode one of this series we looked at the rise of Sam the banana man how a penniless immigrant made a fortune selling ripe bananas and worked his way up to becoming a major player in the banana business if you haven't yet seen episode 1 you can click here or click the link in the pinned comment below but in this episode we're gonna look at what happened next as once Samba came involved with a company called United Fruit the story takes a much darker turn thank you [Music] foreign taxes and fees Sam had made lots of shady private deals with government officials in Honduras but what do you do when a politician you've bought becomes unboards and stops following the deal you've agreed this was the situation Sam faced as he began to hear rumors that all the deals and bribes he'd made were in doubt the reason for this was because in the 1870s Honduras had started an ambitious national railroad project and they'd taken out loans from British Banks to fund it however the project ran out of money before it ever finished leaving them with Mars of track that didn't go anywhere and no income to repay the loans by 1900 those loans had been accruing years of compound interest and in total Honduras owed around 100 million dollars to British Banks far more than it could afford the bankers were now demanding settlement and suggested if Honduras didn't pay up the British Navy could get involved the United States was concerned by obese any European military action could violate the Monroe Doctrine which would basically mean the US had to get involved in the conflict so the US government proposed a different idea they recruited the help of the most powerful Banker in America JP Morgan and asked him to buy all the outstanding Honduran railroad bonds refinance the debt and issue new loans in return JP Morgan asked to take ownership of the Honduran railroad system and for his bank to collect taxes on All Imports to Honduras The Proposal worked for almost everyone it worked for the British as they got their loan repaid it worked for the Honduran and American governments as there'd be no military conflict and they worked for JP Morgan as in the long run he'd make a lot of money there were really only two groups who didn't benefit from the deal number one was the people of Honduras who considered the terms a Forfeit of national sovereignty and the other group who suffered from the deal was business owners like samsa Murray Sam's entire business model was dependent on the concessions and Deals he'd made with the Honduran government the only reason Sam could compete on price with the industry leader United Fruit was because his company was exempt from things like import duties which allowed him to keep costs low however JPMorgan made it very clear that those kind of deals would no longer be honored Sam would have to pay all these extra taxes which meant Sam's costs would increase significantly and he'd no longer be able to sell his bananas as cheaply as United fruits thus his entire business was at serious risk of collapsing something had to be done Sam immediately began trying to stop the plan to begin with he hired lobbyists to put pressure on the White House and managed to get an endless amount of newspaper articles published which said America needed to stop interfering in foreign affairs the US government was surprised that this was generating so much publicity and backlash and they soon found out that the man behind all of this media attention and lobbyist groups was Sansa Murray aka the banana man so in 1910 Sam was summoned to Washington to meet the Secretary of State in that meeting he was told very bluntly don't meddle in this this is much bigger than your banana business stay out of the way Sam nodded along as if he agreed but in reality he of course had no intention to let this plan go ahead the United States may have a deal in place with the president of Honduras but what if he wasn't the president anymore as crazy as this sounds Sam's plan was to overthrow the Honduran government and install a new president who would continue to honor his tax breaks and concessions of course by doing this Sam was defying JP Morgan and the United States government but this was his business at stake and so the first thing Sam did was to rile up the Honduran people by showing them how the Americans were going to take money on all their Imports and claim ownership of the Honduran railroad Sam hired newspaper writers to write endless stories to get Hunger and citizens scared of the deal and get them angry at the current hunger and Leadership for being incompetent and allowing this to happen the idea was to create so much outrage that people would be supportive of a change in leadership next Sam said about finding someone he could present as a better alternative to run the country and he found the answer in Manuel Bonilla who'd already been the president of Honduras once before unless already had a lot of support within the country Sam secretly met with Bonilla and said he'd help him get re-elected in exchange for honoring all the concessions and tax breaks Sam wanted the two men got on well and a deal was agreed next Sam began building a team of mercenaries which would be led by bonilla's right-hand man a guy called Lee Christmas Sam then invested heavily and all the resources they would need to overthrow the government including a 160-foot ex-navy warship and a vast quantity of explosives and weapons Lee Christmas also began recruiting more and more people for bonia's Army of Liberation and once they had enough men this mercenary Army arrived in Honduras in September 1910. they took city after City and recruited more revolutionaries along the way since Sam had done a great job of creating a lot of anger towards the current Honduran president their Rebel force was growing and they demanded that the current Honduran president stepped down and here was another stroke of Genius from Sam they told the president if he didn't step down they would send in reinforcements but in truth they didn't have reinforcements they were bluffing but the Honduran president thought he was outnumbered and he stepped down as leader shortly after Bonilla was inaugurated as the new president of Honduras pretty much his first major act as president was to give them all the concessions he wanted for the next 25 years this included permission to import any equipment he wanted duty-free along with permission to build all the railroads and infrastructure he could possibly need when he also gave Sam 25 000 acres of land in Honduras that he could claim later when he needed it and Bernier even gave Sam a 500 000 loan to repay all the expenses he'd incurred for funding this revolution in other words Sam had got everything he wanted no duties no taxes and even free land a repayment for the money he'd spent in funding this coup plus Sam now had the president of Honduras in his pockets it was later said that no American businessman ever held a foreign nation's Destiny so completely in his hands Sam had single-handedly funded and led a coup in Honduras and got a new president installed all to reduce the cost of his banana business and all of this meant that Sam now had everything he needed to take down United fruits thank you [Music] for many years United Fruit had dominated the banana business they had a huge Fleet of ships that transported bananas from Central America to countries all over the world and over time some of these Central American countries became dependent on United Fruit for other things like delivering their mail and cargo this gave United Fruit a vast amount of power for example if the countries did something United Fruit didn't like or workers tried to go on strike over the brutal working conditions United Fruit could stop deliveries and completely [ __ ] their economy plus as well as completely owning the supply chain for bananas United Fruit had total control over their workers they controlled their houses their shops their transportation in fact United fruits often didn't pay their workers in actual cash but instead in vouchers that could only be used in stores owned by United fruits I mean they paid extremely low amounts anyway but even the money they did give to workers could only be spent in stores united through owned so they got all the money back in places like Guatemala United Fruit became the largest company in the country and often felt more like a government than a business they owned the majority of the arable land politicians bowed down to them and they even had the nickname the octopus since their tentacles were wrapped around to everything in Central America from the people to the infrastructure nowadays the phrase Banana Republic usually describes an unstable country that's heavily dependent on a single export like bananas however the term Banana Republic was initially coined to describe countries who were under economic exploitation by U.S corporations such as the United Fruit Company what's interesting though is once United Fruit began controlling the supply of bananas in many of these countries they then needed to create more demand for bananas they had to get consumers in places like the United States and the United Kingdom to want to buy vast quantities of bananas because originally bananas were nowhere near as popular as they are today so United Fruit came up with several genius marketing strategies firstly United Fruit hired agents to stand at Ferry terminals in the US and hand a banana to everyone who arrived in the country and say welcome to America the whole idea was that people would associate the banana with the United States even though in reality No Bananas were even grown in the US secondly United Fruit began making as many banana themed products as they could there was banana flower and banana bread and even baby food made from bananas so they could hook consumers from a very early age United Fruit also paid doctors to write academic reports about how brilliant and nutritious bananas were and United Fruit also launched recipe books which all utilize the bananas to drum up more demand for them they even began a massive ad campaign encouraging people to add bananas to their cereal if you know someone who still does this today it likely all comes from United fruits Relentless marketing however one of their most successful marketing efforts was introducing the Miss Chiquita character who became the face of bananas people seem to love this and sure enough what had once been an exotic fruit started to become a staple of the western diodes United Fruit managed to create this wholesome happy image of bananas coming from a Tropical Paradise where the workers loved working people had no idea about the brutal conditions these bananas were actually grown in how the workers were treated and the dark past of the company they were buying from but still thanks to United fruits huge marketing efforts the banana business was thriving and for many years United Fruit dominated the industry and went pretty much unchallenged the only competitors they had were much smaller businesses which United Fruit often owned a percentage of anyway but by 1910 for the first time a real potential competitor was emerging chimel fruit the banana business run by Sam when Sam first started out selling ripe bananas nobody had taken him seriously but over the years Sam had grown his business more and more and was becoming increasingly successful plus he just overthrown a government in Honduras in order to get better tax breaks so clearly it was time for United Fruit to start taking Sam a little more seriously [Music] laughs now that Sam had got a new leader in place in Honduras he had all the tax breaks he needed to keep expanding his business kaim our fruit however United fruits still owned 10 of his company and Sam was Keen to change that and be fully independent Sam felt just his mere Association to United Fruit was bad for his Brand's reputation for example a few years earlier Nicaragua and banana Growers had boycotted united through and blocked its ships from sailing down its rivers but United Fruit simply broke the blockade with force it was brutal but since united through owned 10 of Sam's company his business suffered by association so Sam was Keen to part ways with them completely obviously United Fruit had no interest in selling their shares though they always liked to retain some control over their competitors but in 1913 they wouldn't have a choice it all began when Congress proposed a banana tax immediately United Fruit hired an endless amount of lobbyists to attack this plan but this backfired on United through the justice department then opened an investigation into their business and concluded that the way United Fruit colluded to fixed prices is and the way they repeatedly crushed or brought out competitors was proof they had a Stranglehold on the banana business and thus were violating the Sherman Antitrust Act whilst the investigation was ongoing United Fruit realized they had to try and prove that there was Fair competition in the banana industry or else United Fruit would get broken up and lose their dominance and that's one of the ways they could do this was selling their 10 stake in kiamal fruits back to Sam that way United Fruit could basically say to the US government look here's a genuine competitor to our business and we don't own any of his company so clearly we don't have a monopoly on the banana industry and this worked United fruits sold their 10 back to Sam and the justice department never filed any charges against them however in later years when Samba came more powerful analysts would look back at this moment as a huge mistake by United through letting Sam become totally independent of course for Sam this was amazing news he now had 100 control of his business kaimelfroods although this did mean him and United Fruit were now in very direct competition thus the stage was set for the banana War United Fruit versus chiamil fruits the octopus the Sam the banana man now it's important to stress at this point Sam was still very much the little guy sure he'd had a lot of success but his company was still much smaller United Fruit harvested 40 million bananas a year chiamel 8 million United Fruit had 150 000 workers kaimel had ten thousand United Fruit had working capital of 27 million kaimil had 3 million however in terms of profit margin and efficiency Sam's business was undeniably better his business was leaner more streamlined and thus he could move faster whereas United Fruit had become quite bloated bureaucratic and slow some was constantly innovating he found ways to improve drainage he implemented an overhead irrigation system using sprinklers he tied banana plants the bamboo to protect the stems and keep them straight he had his workers walk the fields and rip out the runts basically Sam was continuously running experiments and as a result he developed a huge amount of unique strategies that resulted in banana plants with more bunches he had greater output per acre and less spoilage he perfected the art of growing bananas it helped that Sam had worked in every position in the trade from growing and picking the bananas himself to managing the money negotiating with politicians for better deals shipping the bananas selling the bananas he understood every role fully and since he was often working in the jungle himself he knew his work as well most of them respected Sam unlike United fruits who were more of a faceless conglomerate run by the suits back in America Sam also reinvested heavily in his business in truth he was a bit of a gambler whereas many people would extract profits from the company he just wanted more and more growth after acquiring yet more land in Honduras he began expanding to other countries setting up banana plantations in Mexico Nicaragua for the first time United Fruit had a genuine competitor and something to enjoy the competition he actively began poaching some of United fruits employees and when an interviewer asked him about United Fruit he said he loved poking the monster in the knees however in 1915 things escalated further between these two companies the the utila river roughly follows the border between Honduras and Guatemala and the area had kind of acted as a buffer because United Fruit farmed the land north of the river and salmon kaimal fruit found the land south of the river it was a dividing line that kept the peace but remember when Sam led a coup to remove the president of Honduras and put in Manuel bonir instead as a thank you benir had promised Sam 24 700 acres of land at a future date and in 1915 Sam was ready to redeem man and he claimed some jungle land just north of the utila land that was meant to be the neutral zone that separated the two companies as soon as Sam declared he wanted to take that land United Fruit saw it as an act of War any kind of truce they'd had in place was now over and both companies began racing to acquire all the land they could in the area the two companies also began taunting each other for example United fruits and agents over the river one night to rip up kaiamel fruits railway tracks and cut their water lines some of course then responded by sending his own agents over the river to retaliate the tensions between the two banana companies also acted as a proxy between the two countries Honduras and Guatemala who were also in Conflict so basically political and business tensions were running very high by 1917 the banana war was centered on a 5 000 acre piece of land that boarded the river to the north both banana companies wanted this land but currently the territory seemed to have two separate legal owners so even though both companies wanted to buy it it was unclear who the real owner actually was United Fruit was a much bigger company with an army of lawyers so they set about trying to figure out who was the true owner of the land so United Fruit could buy it from them in the meantime some had a much simpler idea he simply bought the land from both the people who claimed to own it sure this meant paying twice but it meant whilst United Fruit was busy wasting time and money on lawyers Sam had got the land for himself it was a humiliation for United fruits and Sam now owned more land north of the river which was supposed to be United Fruit territory but now that kiaml was operating on both sides of the river Sam needed a bridge to transport his bananas however by this point the government had changed leaders again and United Fruit seemed to be bribing the government more than Sam so his request to build a bridge across the river got rejected so like Sam always did he simply found a way around this he built extra long docks on both the North and South Shores of the river and then had his engineers build a floating barge that could basically act as a bridge so he could transport his bananas it was a loophole it wasn't technically a bridge but it was basically a bridge once again United Fruit were Furious they retaliated by purging thousands of acres of land in the Honduran Highlands the land wasn't even suitable for growing bananas so at first this seemed strange but then Sam realized that the land contained the headwaters to the rivers that watered most of Sam's crops if United Fruit blocked or rerouted the rivers it could have devastating effects on all of Sam's banana plantations Downstream that relied on that water so as you can see tensions had been boiling between the two companies for years but it was getting to the point where the region seemed on the verge of literal War at one point Sam began loading his ships up with guns and bullets back in States the state department became very concerned by all this two U.S fruit companies won the verge of plunging the entire region into war the US was also concerned that this banana war was breeding hatred for the United States in Central America and this was threatening American interests U.S government diplomats decided to intervene and arranged what was essentially a peace conference between the leaders of these two fruit companies Once Again Sam was summoned to Washington after several meetings it was concluded that the only way to end this feud between United Fruit and chaumel fruit was some kind of merger or buyouts if they were on the same team rather than enemies peace would be restored and thus negotiations began there was of course a bizarre irony that the United States government was suggesting this the only reason United Fruit and chioma fruit had become enemies in the first place was because the U.S had been investigating United fruits over being a monopoly but now the United States government wanted United Fruit and claimal fruit to merge together in order to bring Peace by merging together they'd control 68 of the banana Market as at this point United Fruit had four percent share and chimel had 14 but the us obviously figured having one extremely dominant company was better than two companies at war with each other however even though the US government wanted them to merge and United Fruit probably wanted it too it's likely Sam would have had doubts chimel fruit was his baby but he'd spent years building and he defied the US government once before why not do it again but this time things felt different Sam was a lot older now and had a lot more to lose plus all of this coincided with an economic crash where many companies stock prices were plummeting so it seemed like a wise time to attach himself to an Unstoppable giant like United fruits and cash out whilst his business was still at its peak value and thus in 1929 the deal was agreed kaiamel fruit would merge with United Fruit creating one Ultra dominant force in the banana industry United Fruit would take possession of all kaiamel's land and absorb Sam's business into their empire the deal was structured as a stock swap in exchange for his chiamil mail shares Sam received 300 000 shares of United fruits which at the time was worth little over 30 million US Dollars over half a billion in today's money Sam had arrived in America with nothing and he was now one of the richest men in the country this deal also made Sam the largest shareholder of United fruits in return though Sam agreed to completely retire from the banana trade he signed a non-compete clause and United Fruit made it clear Sam would have no involvement in the company at all and to be honest Sam was probably very glad that he had no involvement in what happened next before we get to the next chapter I want to share with you my experience of ag1 who are today's awesome video sponsor now look making all these videos lately has required a lot of long days of work and for a while I was relying on a mix of energy drinks and coffee to help me put in the hours not exactly a healthy choice and also not a deal where my inevitable crash comes but for the past few weeks I've been drinking ag1 in the mornings a foundational nutrition supplement that supports whole body Health through a science driven formulation of micronutrients and vitamins ag1 supports the brain the gut and the immune system and since drinking it I've actually felt more energy in focus and I don't get that crash or headaches like I did with energy drinks plus I like that I feel healthier after drinking it now if you're watching this channel it's quite likely you've got big goals you're working on too and so if you're feeling drained or lacking Focus I think ag1 can help you and it gets even better when you go to drinkag1.com magnatemedia and make your first purchase you'll get a free one year supply of AG vitamin D3 and K2 plus 5 ag1 travel packs thrown in free as well it's a great deal so go to drinkag1.com magnets Media or click my link in the description below to get started today [Music] in 1928 United fruits workers in Colombia had finally had enough of the brutal conditions they were working in and went on strike thousands of workers took to the streets to protest their demand seemed pretty reasonable an improvement in working conditions a Six-Day work week instead of working seven days a week and they wanted to be paid in actual money instead of food coupons but unsurprisingly United Fruit did not like this and had no intention of giving in to the workers demands instead the company asked the US government for help saying the situation in Colombia is out of control and that this strike could be the start of a communist Uprising which it really wasn't it was literally just workers wanting fairer working conditions but the US government basically told the Colombian government you better get this under control or else we're going to intervene and the US put a lot of pressure on Colombia to fix this now Colombia certainly didn't want to get on the wrong side of the United States or risk the U.S sending troops over so so the Colombian government decided to take some very drastic action the workers striking in Colombia were called for a meeting and at this point the workers assumed their demands were finally going to be listened to but it was a trap when the workers showed up they soon found they were surrounded by Colombian soldiers who'd been ordered to make this problem go away their Specific Instructions said to spend no ammunition in putting down the strike and sure enough the Colombian Army opened fire on the Striking workers it was a bloodbath a Massacre where up to 2 000 people died we don't know the exact number as most of the bodies were carted off and buried by the morning all we do have is record of a dispatch from the U.S embassy in Colombia sent to the U.S Secretary of State on January 16 1929. it said I have the honor to report that the representative of the United Fruit Company told me yesterday that the total number of Strikers killed by the Colombian military exceeded 1 000. as you can see the massacre was reported as a success not a tragedy day as at the time it was justified as stopping communist revolutionaries it was only in later years the brutal truth would become much clearer the reality was men women and children had been mowed Down In Cold Blood by the Colombian military simply because an American banana company didn't want to improve the pay for their workers a congressman later admitted that the Army had acted under instructions from the United Fruit Company their power in the region was unimaginable and the banana Massacre would not be the first or last time that the company had blood on his hands [Music] foreign [Music] was trying to enjoy retirement which wasn't quite as easy as you may think after spending his life working endlessly suddenly having nothing to do was a real shock to the system however for a couple of years Sam really did stay out of a business world but he couldn't help but notice his dividend checked from United fruits were getting smaller and smaller in 1928 United Fruit had made 45 million dollars in profit by 1932 that had decreased 85 percent to just 6 million this was largely because of the economic depression that had followed the Wall Street crash of 1929 but also because of falling demand and growing labor unrest of course lower profits meant less money to invest in growing more bananas which in turn meant even lower profits and before long United Fruit was caught in a downward death spiral where every year their profits were falling this was disastrous news for Sam as his wealth was all tied up in United Fruit stock after he'd merged with United fruits their stock was worth over a hundred dollars a share there but now just a few years later it was down to about ten dollars per share in other words his 30 million dollar Fortune was now worth less than 3 million and it was hard to enjoy retirement watching his fortune fall so drastically so Sam did what he'd always done get to work he began meeting with people in the banana business from the ship captains to the fruit Peddlers he wanted to understand exactly what was going wrong and it quickly became clear there were countless mistakes United Fruit was making one of the most blatant examples was that the captains who sailed the ships from Central America to transport the bananas had been instructed to lay off the throttle and travel at a much slower speed to save money on fuel but Sam quickly realized that the money they were saving on fuel was lost by all the money they were losing from the ships taking several extra days to arrive as in that time more bananas went over ripe and this couldn't be sold they were literally losing more money than they were saving and slowing everything down for no reason Sam decided to write a letter to United fruits headquarters with all the problems he'd identified and a list of ideas and solutions however United never even responded to his letter as far as they were concerned they bought chymel fruit to get rid of Sam and he was no longer supposed to get involved but Sam wasn't going to let this drop in June 1932 he attended a meeting of the board of directors and explained his frustrations in person stressing he just wanted to help but again the management of United Fruit rejected Sam they'd always viewed him as a little crazy and they just wanted him to stay out of the way at this point Sam was mad he felt he'd been belittled in the meeting and wasn't being taken seriously so Sam decided to go and meet some of United fruits other larger shareholders to discuss the situation with them he showed them the data and explained everything he felt the current United Fruit management team was doing wrong he explained to these other shareholders that if the board didn't change things soon the company could literally go out of business understandably many shareholders agreed with Sam's concerns so Sam then arranged a direct meeting with the United fruits executive team in 1933. this time he came prepared with a presentation for the leaders of United Fruit explaining the changes he felt were needed to to save the company Sam still had his thick Russian accents and this kind of presentation was not something he was used to but he passionately explained his ideas when he finished one of the executives said unfortunately Mr zamari I can't understand a word of what you say the other Executives all started to laugh at him and thus Sam stormed out the room the board members must have thought Sam had given up and was leaving but instead Sam returned with a bag full of proxy votes from other shareholders Sam dumped the proxy votes on the meeting room table and said you're fired can you understand that Mr chairman you see when Sam had been meeting all of United Fruit shareholders he hadn't just been telling them his ideas he'd been getting their supports many of them had given some a proxy so he could vote on their behalf and it combined with his own shares Samuel had control of more than 50 percent of United fruits voting shares unless he had the power to literally fire the board and take control of the company himself Sam said you gentlemen have been [ __ ] up this business long enough I'm gonna straighten it out silence felt the room all the executives who'd moments ago been laughing at him and saying they couldn't understand him now began to realize the situation when United Fruit had brought out Sam they'd made him sign a non-compete Clause so that he couldn't start or work for a rival fruit company but they never imagined he might one day take over United Fruit itself that's what was happening Sam proceeded to fire most of the board and named himself as managing director of United fruits operations he later added president to his title as well it was kind of hilarious really Sam was supposed to be retired and relaxing instead he'd just become the leader of United fruits this gigantic Global organization that dominated the banana business Sam had risen from nothing starting out as a humble fruit Peddler selling ripe bananas to now becoming the big boss the Banana King as a result he also became one of the most powerful men in America with Sam now leading United fruits there was definitely more optimism about the company's prospects many people in the banana trade knew Sam from his time running kyamel fruit and thought he was the right man to lead them out of trouble but many feared it was already too late United Fruit had all kinds of problems from debts to low worker morale to inefficient processes and of course the falling stock price however when Sam showed up for the first meeting with the new board he hired he simply said I'm ready to go to work that was always his style just straight in let's do this now normally if someone takes over a company you might expect they'd spend most of their time at the company's headquarters but Sam immediately went on the road visiting every country where United Fruit had plantations and ports as he wanted to get close to the action to speak with the banana men working in the fields and his first big change was to give more power to the men working in these banana towns after all they understood the situation better than the corporate workers back in America Sam explained this decision by saying I realized that the greatest mistake the 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 the management had tried to tell every executive in every country exactly what he must do and how he must web Executives on the spot were treated like messenger boys I completely reversed that policy Sam also felt the company had become filled with Yes Men that's the way United Fruit had liked her but some replaced them all clearing out 25 of employees another problem was that United Fruit often had ships that were only half filled with Goods so Sam sold some of the ships and rented out space on the others that way every time a United Fruit ship set sail it was fully packed with no space wasted some also realized United Fruit was too heavily reliant on bananas and began diversifying into other products like sugarcane and pineapples some then saved Millions on taxes by having the value of United fruits land and machines reappraised and thus within just a few weeks of Sam taking charge of the company the stock price had already risen drastically from around 10 per share up to 26 dollars per share of course a lot of this was just down to the increased optimism and energies and broads he was making Fast decisions hiring and firing at rapid speeds and implementing new plans and policies he was basically applying the principles he used when running chiamil through and cutting out all the waste and bureaucracy and it seemed to be working say what you will of Sansa marry but the man knew how to run a banana business however while Sam was making great progress in turning the company around there were some serious problems Brewing that even Sam couldn't solve [Music] thank you okay time for a quick lesson in bananas technically speaking bananas don't grow on trees botanically speaking the banana plant is classified as a herb and a banana is classed as a berry just to make things even weirder strawberries and blackberries are not classed as berries I realize what I've just said sounds ridiculous but you'll just have to Google it now when most of us think of a banana we probably all picture something like this but actually there are over a thousand different types of bananas the one we all know today is called the Cavendish but there's also red bananas apple bananas and even the blue Java banana which supposedly tastes a bit like ice cream but here's the plot twists until the 1950s by far the most popular banana and the one that United Fruit and Sam sold was actually the grow Michelle variety which was otherwise known as The Big Mike it was fairly similar to the Cavendish type we all know today just a little sweeter and creamier and so a lot of people think it actually tastes nicer the Big Mike banana also had a thicker skin which made it less prone to bruising during shipping and so it was perfect for companies like united through as it was easier to transport so if everyone used to buy and sell the big mic why did we switch to the Cavendish variety of banana instead well we had no choice the way bananas grow means they're genetically identical so every banana is basically a clone this is great for quality control as it means every banana ends up being pretty much the same but the lack of genetic variation means that if a disease comes along it can sweep through an entire crop of bananas and kill them all easily and this is exactly what happened to the Big Mike variety now as far back as the 1900s banana companies had been dealing with disease on banana plantations for example there was something called sikatoka disease which spread rapidly as pathogens spread from workers shoes and got transported from one banana plantation to the next the disease was a fungus that essentially turned the entire crop black giving it an eerily haunted feel and making the entire Plantation unusable United Fruit used to find it easier to just abandon the entire Plantation when this happened which left the workers in those areas jobless United Fruit would then simply cut down more rainforests and make new plantations elsewhere but by the 1930s when Sam was in charge of United Fruit the disease had decimated huge amounts of their banana fields and some had tasked scientists with finding a solution within a few years they developed a poison which seemed to work against the disease but they had only been tested on a very small sample and the risks weren't really known Sam was always one to act fast though and he ordered that thousands of Acres be sprayed with this new poison to try and stop sikatoka disease from destroying all their bananas and indeed it seemed to work but there were unintended consequences when the wind blew the mixture carried into the local town where all the workers stayed some of these workers began to lose their sense of smell soon everything started to taste funny and they started to feel sick after a couple of months their skin began to develop a bluish tint some would never be able to enjoy food again and others died over time though a scientist developed the treatment further zigatoka was eventually curbed and safety precautions put in place but the ultimate problem still remained bananas were highly susceptible to disease and it was only a matter of time before a disease came along that they couldn't stop unlike zigatoka which destroyed plants Panama disease destroyed Earth it lives in the soil and can actually be asymptomatic for years but then just suddenly strike everywhere wiping out acres and Acres all at once when Sam realized the severity of Panama disease he began buying as much jungle land as possible literally hundreds of thousands of acres by 1940 the United Fruit Company owned over half of all the private land in Honduras but it cultivated less than 10 of that the idea was that once One Plantation got attacked by Panama disease they would just move on to the next bit of jungle land and start over there but that was clearly only a short-term plan with no known cure for Panama disease eventually the banana industry would have to accept the Big Mike banana was too vulnerable to Panama disease and they would have to find a new variety of banana to sell instead which is why they eventually switch to the Cavendish type which was initially resistant to Panama disease unfortunately in more recent years a new strain of Panama disease has developed which can wipe out Cavendish bananas too in fact Colombia actually declared a National Emergency in 2019 after confirming the presence of Panama disease so even to this day the banana industry is facing a very serious threat just like Sam was back in the 1930s it must have been so frustrating for him as he taken over united through managed to turn the business around and get profits back up only for this disease to then try and Destroy Everything But while Sam was busy worrying about Panama disease all of a sudden an even more urgent problem began to arise Adolf Hitler after the outbreak of World War II in 1939 the British government were looking to save money and resources and banned all shipments of bananas to Britain and its colonies deeming the item an unnecessary luxury the UK was 20 of United fruits market and overnight it was gone after the Japanese attacked Pearl Harbor the United States began limiting banana Imports as well and to make matters even worse for Sam both countries began seizing some of the ships United Fruit owned as part of their great white fleets and they instead turned them into warships and Troop carriers for their navies as for the ships that didn't get seized by governments for use in the war they came under attack anyway because they all look the same even if the ship was just carrying bananas enemy soldiers still attacked her so basically when United Fruit did try to transport bananas to countries that hadn't blocked their deliveries the ships would sometimes come under Fire putting all their workers and all their products at risk by the end of the war United Fruit would have lost 19 ships despite Sam's efforts in previous years to get United Fruit back on track there was nothing he could do about the brutal challenges the War caused gas prices and insurance prices continued to rise meanwhile demand and profits continued to fall United Fruit had loads of bananas growing in their fields in Central America some just couldn't ship them anywhere so they began to rot however to his credit some never seemed to complain instead he looked for a solution to keep the business afloat Sam figured since he wasn't able to sell as many bananas he would instead find something else to sell united through already had Acres of sugarcane but Sam decided to try and find more crops to grow on his plantations specifically crops that were deemed Necessities not luxuries as that way countries wouldn't have any limits on how many he could import Sam created a task force to go and search for trees and plants that grew elsewhere and figure out a list of other crops they could grow once his team returned Sam began growing all kinds of new things like hemp and palm oil Sam focused especially on anything that could be useful for the war effort for example the hemp could be used to make rope during the war Sam had many thousands of Acres growing a wide variety of different plants and fruits their banana sails may have dropped hugely because of all the restrictions but Sam's expansion into other crops saw them into whole new markets and this Innovation helped United Fruit survive the war unfortunately for Sam whilst his business had survived the war still brought him tragedy on January 7 1943 Samsung was killed during the war when his plane struck a mountain during a scouting expedition in Africa Samsung had been working on foreign Duty and was just 31 years old after the tragic loss of his son Sam did what he always did and threw himself into his work but those who knew him later commented that after the death of his son Sam the banana man was never the same [Music] thank you [Music] foreign [Music] Guatemala passed a new law that allowed banana workers to join trade unions up until this point United Fruit had used brutal force to break up any strikes but now the labor leaders were free to organize on United Fruit plantations United fruits immediately protested this new law and even threatened they'd completely pull their operations from Guatemala but in the end they didn't follow through on that threat and business continued as usual however it soon became clear that Guatemala wanted to push for even more labor reforms which would be a serious threat to United fruits business model that depended on cheap labor things looked even worse for United Fruit when a guy called our Benz got elected as Guatemalan president he was much more forceful than his predecessor and immediately called out United fruits one of the ministers in arbenza's government publicly said all the achievements of the United Fruit Company were made at the expense of the impoverishment of the country the United Fruit Company is the principal enemy of progress of Guatemala the people of Guatemala were pretty happy that their government was finally going to stand up to United through as increasingly anger had been growing that United Fruit had so much power land and tax breaks all our citizens struggled on low wages in brutal conditions and sure enough more policies were soon introduced in June 1952 Arben signed decree 900 which gave the Guatemalan government the right to reclaim private land that was uncultivated the decree only applied to Farms that were more than 670 acres and there was really only one landowner who held such vast amounts of uncultivated land United fruits the policy was clearly aimed at them our Benz wanted to take some of the land united through owned that they weren't using and redistribute it to the people put it back in the hands of poor Guatemalan citizens who were struggling our Ben said they would pay United Fruit 627 572 for the land as that was the value United Fruit had listed it was worth on their tax returns so our Benz was saying we'll pay you what you've told us this land is worth however United Fruit were not at all happy about this as really they felt the land was worth far more tens of millions of dollars but United Fruit had under-reported the value of the land to save on taxes and now that was coming back to haunt them of course United Fruit weren't just going to stand back and let this new leader in Guatemala do whatever he wanted as we know by now when the banana companies don't like a country's leader they changed the leader but given that a lot of Guatemalan people supported our Benz United Fruit knew they were going to need some help so United Fruit complained to the US government but our Benz was a communist this was during the Cold War where even the mention of Communism was enough to whip up a lot of Hysteria in reality arbenz didn't claim any allegiance to the Communist party and most historians would certainly agree he was not a communist however United Fruit began a Relentless media campaign to convince everyone he was a communist and was a threat to America United Fruit financed the book called report on Guatemala which alleged that arbenz was under moscow's control United Fruit then had this book distributed to every member of the US Congress united through also hired a genius PR guy AI to help convince the American public that there was a serious communist threat in Guatemala this PR guy had a lot of connections in the media so could easily plant fake stories and reports in fact he later bragged about how easy people were to manipulate United Fruit then even made a movie called why the Kremlin hates bananas basically United fruits spent vast amounts of money to influence everyone that the Guatemalan government and our Benz needed to be overthrown and before long the CIA began a project called operation PB success with the intention of eliminating arbenz and his governments and installing a new leader in Guatemala to be honest it didn't take much convincing for the US to get involved as United Fruit had a lot of deep Connections in the US government in fact a lot of government decision makers literally owned United Fruit stock Sam had always known that if he could align the interest of his company with the interests of top officials in the United States government that the U.S would back him and that's why the whole issue wasn't presented as arbenza's hurting United fruits profits it was turned into this narrative that our Benz was a threat to America and so soon the line between United Fruit and the CIA got pretty blurry they shed a lot of personnel and United fruits applied the CIA with men Guns and Money the CIA then ramped up the rhetoric that arbenz was the leader of a radical Communist Regime there was a serious danger to Guatemalan citizens and thus tried to create a climate of fear in Guatemala and undermine avenza's presidency fabricated news stories were spread to encourage opposition to the president the CIA then recruited a rebel force made up of Guatemala and Exiles and dissidents and provided them with cash weapons training and strategic guidance on how they could launch a military campaign to overthrow our bends in 1954 this Liberation Army backed by the CIA launched an attack on arbenza's governments as well as providing fighter pilots guns and bombs the U.S also used psychological warfare to terrify our Benz and his supporters for example hidden speakers boomed out the sound of guns and shells and they had fake news reports talking about how the Guatemalan people wanted our bands to resign they also got exile Guatemala newspaper men to write fake stories about how large the rebel Army really was with the attack underway arbenz went on the radio to ask in whose name have They carried out these barbaric acts they have used the pretext of anti-communism the truth is very different the truth is to be found in the financial interests of the fruit company our Benz later added our only crime is having enacted an agrarian reform which affected the interests of the United Fruit Company clearly Urban's new United Fruit was behind all this but there was nothing he could do the rebel Army arrived in Guatemala on United Fruit boats and trains and attacked the rebel Army did not meet much resistance the citizens of Guatemala didn't want war and the psychological warfare from the US had convinced arbenz he didn't have the resources to win and thus abenz ultimately resigned and fled the country he was later found drowned in a bathtub a new leader was then put in place who was much more friendly to American interests and the United Fruit Company many of those who had closely supported our Benz were arrested or killed several labor organizers who attempted to unionize on United Fruit plantations were also found dead a brutal police state was essentially enforced where political parties and trade unions were abolished books were banned that were considered dangerous and United Fruit workers were stripped of their right to bargain collectively and this whole incident led to Decades of civil unrest in Guatemala with a succession of dictators taking charge and all kinds of inequality and human rights abuses by 1955 all the land which had been seized from United Fruit had been returned to them technically it was an absolutely huge victory for United fruits they had completely got rid of the Guatemala leader who'd been causing the problems and replaced him with someone who did exactly what they wanted however United Fruit quickly began to realize this whole incident had drawn far too much attention to them people began asking was our Benz really that much of a threat was there any proof the Soviet Union was actually involved although arbenz was even a communist or what this whole thing really more about the financial interests of the United fruit company it soon became clear to United fruit that the whole incident had actually backfired firstly there was a whole new level of hostility towards the company from the people in Guatemala but secondly as the details of what had happened became public in the U.S Eisenhower's Administration got a lot of criticism it was exposed that many of the government officials involved had once worked for United fruit or had close connections to the company so the US government needed a way to distance themselves from United fruits and just a few days later the U.S justice department filed a lawsuit against United Fruit for violating antitrust laws the government said the timing was just a coincidence but to most people it seemed pretty obvious the US government was publicly attacking United Fruit in order to distance themselves from the company so whereas initially people thought United Fruit had been using the CIA now it was starting to look like the CIA had used United fruits they'd used its money and ships to fight this Cold War battle but then once they'd faced some backlash over this the government had immediately thrown united through under the bus with this anti-dress lawsuits in 1958 the suit was settled and United Fruit had to sell 33 of its fields to an independent fruit company so that it would have a genuine competitor and that marked the beginning of the end of the United fruits foreign [Music] fruit in 1951 and this time when Sam retired he sold all his stocking United fruits partially because he wanted a clean break but also because he didn't feel his money was in good hands and he was right when Sam left for good the company struggled more than ever and would remain in Perpetual decline in his final years Sam gave away a lot of his wealth he built hospitals and Roads and tried to leave behind a more positive Legacy but Sam was well aware a lot of damage was already done he once admitted I feel guilty about some of the things we did all we cared about was dividends samsamari died of Parkinson's disease at the age of 84 and after sun was gone United fruits decline accelerated in 1959 Fidel Castro nationalized every United Fruit Plantation and building in Cuba which resulted in losses of around 60 million dollars for the company United Fruit followed their usual Playbook of when they didn't like what a foreign government was doing they teamed up with the CIA gave them ships and tried to spark an uprising to hopefully overthrow Castro it was called the Bay of Pigs Vision but it was very poorly planned and it failed horribly 114 men died 1200 were taken prisoner United Fruit lost its ships and within a few years United Fruit would be driven out of the region completely United Fruit had once been this Unstoppable force a puppet master controlling entire countries the octopus with their tentacles wrapped around everyone and everything but now the company had become weak inefficient their profits had been falling drastically their powerful leaders were gone and their brand and public perception was in a terrible State United Fruit also had huge issues with Panama disease affecting their bananas as the disease continued to spread rapidly by the 1960s the Big Mike banana their main product was almost extinct meanwhile a different company called standard through ended up overtaking united through as the market leader as they began selling the Cavendish banana instead which wasn't affected by Panama disease for the first time United Fruit had lost its dominance in the banana market and didn't seem to have any real Direction in later year is United Fruit got sold multiple times to different owners who tried to save the business but were mostly unsuccessful to try and get away from their history and have a fresh start one of the new owners changed the company name to Chiquita instead and I mean if your brand has been linked with massacres and Wars having a Rebrand probably does make sense but more scandals would still follow like in the 70s the company's new chairman Eli black threw himself up the window of a New York skyscraper after his company's corruption got exposed and it was found he'd authorized bribes to get united through lower taxes and even in more recent times the company has faced controversy like in 2007 the business got fined 25 million dollars by the US Department of Justice for payments made to a terrorist organization in Colombia this is a company that has been involved in controversy all throughout its history but once the business still exists today it's days of dominance are long gone [Music] thank you [Music] with these business videos I make I really try to present them as kind of this impartial narrator I'm just trying to tell interesting stories based on the facts I find and not add my own biases and opinions but at the end here I just wanted to add a couple of thoughts firstly if you've watched both part 1 and part two I hope you've found the story of Sam the banana man as interesting as I did it's not very well known but to me there's just something incredible about the idea so Much Madness happened all because of bananas I mean literally these fruit companies were shaping geopolitics and I love the idea of this guy starting from nothing but just this simple idea of selling bananas nothing fancy just one product and then through taking risks and innovating it just escalates more and more but I also like this story as it represents both the best and worst of business capitalism and human nature there's obviously plenty of lessons here like how Sam initially takes something that everyone else considered trash and found a way to turn it into a thriving business but there's also clearly terrifying realizations here too about how powerful businesses can become and the Shady deals that go one behind the scenes and one thing I want to stress is that I think it's tempting to separate Sam from some of the actions of United fruits because we know he starts from such humble beginnings I don't know about you but I mostly found myself rooting for him most of the story as he was the underdog going against United fruits but of course the actual reality is a lot darker because in his later life Sam ran United Fruit for many years and plenty of terrible things happened on his watch plus even before Santa cove United through his company kaiamel fruit did plenty of horrific things too I guess in a way this story to me almost has a parallel with Breaking Bad to begin with Sam is this kind of reserved guy just trying to make the money he needs but over time he grows to like the power and he ends up wanting more and more and doing whatever it takes to win no matter who gets hurt this is ultimately the story of how Sam The Humble fruit seller becomes the Banana King how he transforms into this ruthless businessman who caused all kinds of damage in his quest for more money and power I mean we hear about people going to extreme lengths for their business but how many people literally overthrow a government so they can put in a new president who will let them pay no tax but anyway my goal with this channel has always been to show that business is fascinating I think there can sometimes be a stigma that business and finance can be a little boring but honestly the way these Empires are built and destroyed the way companies tried to outwit each other or take each other down I think it's really interesting and so my intention with magnates media is just to present these stories in a way that's hopefully quite enjoyable so if you want more mini business movies like this please consider subscribing and turning on the notification Bell finally I want to say a huge thanks to the book the fish that ate the whale which was the main inspiration for this video normally I use hundreds of different sources when writing these videos but with this one this particular book heavily inspired the video and so I encourage you to check it out if you want to know more the books bananas how the United Fruit Company shaped the world and banana the fate of the fruit that changed the world are also great further reading about the banana industry or if you want another rags to riches story with a very dark twist go check out the incredible story three of Andrew Carnegie by clicking the thumbnail on screen all that's left for me to say now is thank you for watching you are a legend and I'll see you in the next video in just a second [Music]

Channel: MagnatesMedia

Views: 671,773

Keywords: Banana king part 2, Banana business, banana industry, dark side of banana industry, banana industry documentary, banana business documentary, united fruit, united fruit evil, story of united fruit, dark business stories, disturbing business stories, dark business documentary, controversial business, controversial businesses, controversial business stories, controversial documentary, business documentary, the banana massacre

Id: hJlqwOIiN4g

Length: 54min 7sec (3247 seconds)

Published: Sat Jul 29 2023