How Wall Street Colonized the Caribbean

National_Bank_of_Haiti,_Port-au-Prince

[Many thanks to Peter Jordens for bringing this information to our attention.] I “How Wall Street Colonized the Caribbean,” Peter James Hudson (Boston Review) writes, “The expansion of banks such as Citigroup into Cuba, Haiti, and beyond reveal a story of capitalism built on blood, labor, and racial lines.” Read the full article at the Boston Review:

Scrubbed from the pages of glossy coffeetable books, the history of U.S. imperialism can be found in the archives of Wall Street’s oldest, largest, and most powerful institutions. A deep dive into the vaults and ledgers of banking houses such as Citigroup, Inc., and J. P. Morgan Chase and Co. reveals a story of capitalism and empire whose narrative is not of morally pure and inspiring economic growth, technological innovation, market expansion, and shareholder accumulation, but rather of blood and labor, stolen sovereignty and pilfered resources, military occupation and monetary control. Sugar comingles with blood, chain gangs cross spur lines, and the magical abstractions of finance are found vulgarized in the base manifestations of racial capitalism.

This history of bankers and empire is also a Caribbean history. The Caribbean archipelago was ground zero for U.S. imperial banking. Wall Street’s first experiments in internationalism occurred in Cuba, Haiti, Panama, Puerto Rico, the Dominican Republic, and Nicaragua, often with disastrous results—for those countries and colonies, and often for the imperial banks themselves. Yet where there was expansion, there was also pushback. The internationalization of Wall Street was met with local resistance, refusal and revolt. And just as the history of imperialism has been excised from popular narratives, so too has this history of Caribbean anti-imperialism and autonomy.

The history of imperial banking and racial capitalism begins at the end of the nineteenth century, at the historical horizon where the project of U.S. settler colonialism that spurred the financing of the West became the enterprise of U.S. territorial colonialism in the Caribbean and Asia.

Buoyed by unprecedented wealth and boosted by the expansionist jingoism following the victory over Spain in the Caribbean and the Pacific, New York City’s bankers and merchants believed that the organization of an imperial banking system—one that could compete with Europe’s long-established institutions—was critical to the global rise of the city and to the consolidation of Wall Street’s position in international finance, trade, and commerce. With these ambitions, bankers and business-people set their sights on asserting control over the trade and finance of the Americas. They sought to control local central banks, establish U.S. branch banks, take over commodity financing, reorganize monetary systems on a dollar basis, and refinance European-funded sovereign debt.

This project of internationalization was explicitly encouraged and supported by the U.S. government. The war and state departments required fiscal agencies to support the infrastructure of U.S. colonialism, and financial institutions were an important conduit of colonial policy and financial and commercial diplomacy. Bankers, however, needed little prodding to move overseas, extending their influence into the sugar plantations, railroads, and financial systems of Haiti, Cuba, Santo Domingo, and Nicaragua. The U.S. state made both implicit and explicit assurances that it would intervene should local conditions turn against U.S. business interests or disrupt the payments of interest or customs revenue.

At the center of this story was the National City Bank of New York, the precursor to today’s Citigroup, Inc. Founded in 1812, it emerged as the largest and most important imperial financier in the United States. Through most of the nineteenth century, it was a powerful but staid merchant bank whose cautious lending and massive cash reserves helped it ride the nation’s economic roils. It took on a more aggressive, entrepreneurial, and activist strategy for expansion and growth under James Stillman and Frank A. Vanderlip, who carried it into the twentieth century.

Stillman and Vanderlip transformed City Bank from a merchant bank into a modern financial department store—creating a new managerial structure, expanding into new financial markets, and exploring the possibilities of foreign expansion and international banking. The most important theater of internationalization was the “American Mediterranean,” as one City Banker described the countries and colonies ringing the Caribbean Sea and the Gulf of Mexico. There, the bank experimented with the issuance of sovereign debt, the financing of international trade, the funding of industrial infrastructure, and the organization of regional state banks and currency systems. Beginning in 1914, it also made the Caribbean the centerpiece of the largest foreign branch bank system of any U.S. banking house, with Cuba the jewel in its crown.

Law was critical to City Bank’s internationalization and expansion. As part of its efforts, City Bank hammered away at the banking regulations shackling its activities and pushed for regulatory reform while creating new subsidiary organizations that could navigate the complex regulatory geographies of international finance or simply evade existing legal constraint. Wall Street lawyer John Sterling, of Shearman and Sterling, worked closely with Stillman and Vanderlip, while other firms worked to devise the colonial methods by which the imperial banks operated.

Race was central to City Bank’s work, too. In its encounters with the nations and colonies of the Caribbean and Latin America, Wall Street helped reorder those economies along racial lines, exporting the U.S. racist imaginaries in which Wall Street was embedded and through which it functioned. When conducting business in the Caribbean, U.S. bankers understood people of color—whether Africans or indigenous peoples—through the same racist lenses they viewed them through at home. White representations of African Americans, in particular, were exported to the West Indies and inscribed in a vast and diffuse archive of pamphlets, reports, circulars, press releases, prospectuses, and journal articles produced by Wall Street about the Caribbean and Latin America. At the same time, in their dispatches back to the United States, bankers translated the Caribbean to U.S. businesspeople, investors, and the general public. In some cases they debunked stereotypes as a means to encourage investment. In others they replicated and reconstituted racial stereotypes in order to further the expansion of white supremacist control of the region—with returns to investment found not in the extraction of capital values, but in the ledger of white racial dominance.

One example of this practice can be found in City Bank vice president John H. Allen, one of the new slate of managers and vice presidents appointed by Vanderlip as part of the bank’s modernization of its bureaucracy. Allen aided the bank’s expansion into Cuba and Argentina and was the manager of the City Bank–controlled Banque Nationale de la République d’Haiti in the 1910s. In the City Bank’s foreign trade journal The Americas, Allen evoked a picture of Haiti that would have been recognizable to white U.S. audiences but for its tropical setting. “Cock-fighting and card playing,” Allen asserted, “are the national pastimes, and these, together with a supply of Haitian rum, are all that is necessary for a Haitian citizen’s perfect day.” He claimed that during his visits to Haiti, he found that “humorous incidents were of almost daily occurrences.” For Allen, such incidents “showed the naivete and also the restricted mentality of the people, which latter was plainly noticeable even among the more highly educated.” [. . .]

For full article, see http://bostonreview.net/race/peter-james-hudson-how-wall-street-colonized-caribbean

[Photo above: National Bank of Haiti, Port-au-Prince.]

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