Transcripts For CSPAN2 Bankers And Empire 20170905

Origins of wall street, to excavate the International Origins of wall street and to locate those origins in the caribbean, and the west indies which i think was a kind of critical and fertile testing ground for wall streetson. Internationalization. At the same time i was interested in trying to understand to some degree is there a relationship between wall streets history in the International Field and some of its contemporary practices . Is there a way one can trace something of a genealogy through the 20th century from the time i look at which is 18731973 up until the present and what with the terms of that genealogy andd of that International Expansion . And in that i think a couple of things emerged for me. One is the critical relationship that institutions, wall street institutions, including whats i now citigroup, jpmorgan chase,. Had to u. S. Imperialism in the 20th century, how the institu institutions really grappled with the question of International Expansion through legal practices, to their attempts to sometimes trample tl regulations, sometimes extend regulations to support International Capital accumulation. Finally, to also understand what his relationship between theee history of capitalism through wall street, through Banking Institutions and its relationships to its the development, expansion, generation of ideas of race andr racism, especially as they impinge on and affect the sovereignty of caribbean peoples, of peoples and haiti, Dominican Republic, to the, et cetera. When did wall street become wall street . Guest i think wall street, i would argue wall street really became wall street in the early 19th century. You know, early u. S. History so wall street as, new york city, as one of a number of capitals of capitals in the United States, as commercial. Baltimore was a significant presence for a good time. Boston, new orleans. But by the end of the 19th century, increasingly capital becomes concentrated in wall street, the number of financial and Insurance Firms are concentrated in wall street, and to become truly the kind of entrepreneurial floor of the commercial development of the u. S. West. T. And then when we Start Talking about the kind of expansion of american commerce overseas, much of it is really going through wall street. Different historians might locate the genealogy of wall street nudges as a place but as a kind of idea, a kind of signifier of american capitalism might trace it to different moments but for me it really begins towards the end of the 19th century at a moment when wall street is turning overseas, turning to look at overseas markets, turning to look at as i said the caribbean but also latin america. Host what was interest in the caribbean . Guest multiple interest in the caribbean. In there was a sense of needing to use financial means towards political ends on the part ofds the state department. There was the sense of the kind of early history of dollar diplomacy, which as your viewers well know, the idea of substituting bullets for dollars in terms of foreign relations, that became important to the kind of work of roosevelt andtat taft. Cell Banking Institutions were very important in terms of the organization of Central Banks ie the caribbean, very important terms of the organization of currency system integrated caribbean. This was critical to the state departments goal of political stability in the caribbeanical s region, which was increasinglyri important in the context of both, in the context of world war i as well as in the openingr of the panama canal and the need to protect the naval alliancepr and the passages, the commercial passages between the atlantic and the pacific. Beyond that there are, of course that. Financial and commercialco interests that the u. S. Banks, wall street had in the caribbean region. These differ island to island colony to calling but, of, course, sugar was one of the most important ones with the institutions like the citibank and maybe the chase, involved in the financing of sugar plantations throughout thehout t region. There was an interest in the financing of caribbean sovereign debt which is really in the first part of the 20 century was, the debt was held byby jpmorgan as well as fire and company, but later became very, very important to institutions like the citibank and like the chase. Chase became the largest lender to cuba by the end of the 1920s. Beyond those questions of sovereign debt, there was also simply the question on one level commercial banking, the financing of trade but also what we might call personal banking. There was a movement in the 20s, especially by citibank to set up branch banks in thench ba caribbean which would serve as middleclass customers. Suggest the opening of compoundd interest deposits was a new and revolutionary thing in the caribbean, and something that the bankers were quite surprised to find was very profitable for them, that caribbean people wanted to save, put the money io bank someone to get the small amount of interest on that money and that became a very, very important kind of marketing practice on the part of wall street. Its a monopoly of interest on the part of wall street. Host what was the impact generally on some of these nations, haiti, nicaragua, cuba . Guest again, it really differs from country to country. If you look at haiti and nicaragua for instance, these are two countries that are seen as in the worst possible sense exemplars of the failures of dollar diplomacy. The kind of role of u. S. Bankers in haiti led to the landing of u. S. Marines and the development of a 19 year military occupation that lasted from 19501934. It led to a thing something that in some ways intangible to manyy u. S. Audiences but it led to the extinguishment of haitian sovereignty, the transfer of their kind of financial and economic control to wall street. And it also led to thousands of deaths of haitian citizens by u. S. Marines. B its not necessarily that one sees bankers going into withth r guns, but they were the ones that were advising the state department on u. S. Policy. They were the ones that were creating the Financial System that created some of the chaos in haiti that led to military occupation. Similar things could be saidsaid about nicaragua. The consequences for cuba were the development or the support of first of all the dictatorship by the end of the 1920s. He was democratically elected im 1925 on a platform of progressgr and reform. He was kind of a populist leader. He had vowed he wouldnt take anymore, that cuba wouldnt contract any further debt. But he also said that he will protect the interests of wallhe street once elected, and he did more to protect the interest of wall street and give the cuban people. He immediately began to figurege out how the cuban government could avoid the plat and which restricted to the building of the cuban government to take on more debt. Cted he went against that platt amendment. , he contracted with the Chase Manhattan Bank for millions and millions of dollars of sovereign debt that crippled the cuban economy, especially during an era where sugar prices had remained depressed. As cuba took on more debt, as he brought more from the chase, the repression of cuban people became worse and it eventually led to a real conflict in cuba in which we saw machado depose,a subsequent cuban governmentsan r suggesting that the debt itself was odious, that it was contracted by an illegal regime, and that led to a real sense of animosity towards wall street, that i think lasted for many years, perhaps up to the cuban revolution in 1959. So in terms of the actual consequences across the region, i think in the first instance we can say that the consequences are the complete erosion of caribbean sovereignty. These are sovereign nations the suddenly didnt have control over their own destinies. In different ways we see that, the consequences for the violence of use military occupations, the military violence of u. S. Marines in these countries as we saw to quoteunquote pacify caribbean populations. With that violence came forms of u. S. Racism, jim crow that were exported into the caribbean region. Then at the end of the day, while many of the bankers were involved in forms of financial reform, many professed to want to expand agriculture, to help develop the School Systems and things like this. Th none of these really a matter too much and most of the investments into the caribbean were seen as profits repatriated back to wall street. Host so in your view, is exploitation at their word to use . Guest i think its a very fair word to use, yet. I think it is at a think what im trying to argue in the book is that exploitation ensues. The modes of that exploitation were very complex, but that is also not necessarily always the kind of top town vision of what happened. Its not necessarily allknowing bankers going into cuba or haiti or nicaragua, the Dominican Republic and acting as public masters over caribbean people. On one level theres always push back from the caribbean people. On another level theres modes of negotiation where caribbean elite are trying to getra something from wall street. Theres also a sense that as much as many bankers were delivered in the activities in the caribbean, they also didntt know what youre doing. They were using new Financial Instruments. They were trying to develop, they were trying to reformgislat legislative practices that governed relations between states and Government Relations between banks and states. And its a history those also marked by failure, when there was a sugar crisis in cuba in the early 1920s, the citibank had invested so much money in cuban sugar, that when the prices bottomed out almost destroyed the bank. And so it led to the resignation of firings of many citibank executives. In the case of haiti, while the citibank had a huge presence there, the kind of negativee publicity around the u. S. Occupation of 80 in the 1930s, that was kind of brought to thet American Public, not to the of attention of the American Public by organizations like the National Association of colored people and the new republic. Theres a kind of backlash against bankers, a development of what the historian refers to as antibanking discourses. Exploitation of something i think is the word to use but we cant use any kind of clean and easy since. Host peter hudson comey also write about an entityyo called the matc, which was what . Guest the matc is a north American Trust company. It was founded and i think 1898 by a number of midwestern bankers. The principal banker here was a figure by the name of Samuel Miller jarvis who had made tremendous amounts of money working as a banker involved inn western mortgages he was basically taking capital from england and set up a mortgage brokerage that was filtering capital from england in the northeast into the west. By the end of the 19th century, and a very suspicious circumstances, he had collapsed the naacp. It filed for bankruptcy. He left the west and ended up in new york city, and then suddenly in july 1898 finds himself on a boat heading to Santiago De Cuba evening for the United States has declared sovereignty over the republic and before the u. S. Occupation of cuba has officially begun. He arrives in santiago and opens up the First North American Banking Institution in cuba, which is the north American Trust company. The activities of the north American Trust Company Start and a very slow. The other kind of involved in remitting money back from american soldier back to the fence at home, trying to introduce currencies to u. S. , u. S. Currency to the other. Trying to build a system of telegraphic transfers of money can be moved about the island. But they are also trying to become the kind of primary player in cuban government finances. They want to control the taking of customs revenues, the money generated by the poorest, and they are also looking to displace the old Spanish Banks to become cubas central bank. Theres a lot of controversy around them. Many observers at the time see them as a kind of corrupting influence whose activities are really based on patronage. But the actually soon collapse. They dont collapse but they dissolve and reformed and become an institution which is the bank of cuba which becomes the de facto cuban government bank. So the north American Trust company is one of these institutions that many historians, especially many cuban historians, have talked about in the cuban context, but they havent necessarily, i mean, i think before my bookpeople havent traced their history back to the u. S. West from the west to the west indies. And also extended the work of Samuel Miller jarvis, the principal of the north American Trust company through the bank of cuba and into the Dominican Republic where he then sets up another bank which also has, is attached with a lot of controversy, attached to it. One of the main things i found with the north American Trust company and the history of Samuel Miller jarvis is that hes an individual, kind of a quite brilliant entrepreneur whos able to really see placese where capital will soon move to. So we understand, he sees the west before becomes west is able to profit from that. He sees cuba before becomes the haven of american businesses and is able to profit from that. And hes able to skillfully worked between the legal regimes governing these places. So he gets to cuba before the legal system is set up, before the terms of order through which the state has developed and is able to manipulate these kinds of spaces. And i think work there although bit of corruption in his business. Host a businessman or a flimflam man . Guest a bit of both. Its a great question, and i think what we see in his early history of use banking and the craving, this early history of wall street in the caribbean is theres always both. There are always hustlers alongside being legitimate business. Theres a fine line between the two, and given the fact sometimes a questions of sovereignty, sovereignty is weak. Legal regimes are weak, that its very difficult to say whether they are a flimflam man or a business legitimate man. Host you said about his bankers were advising the federal government oneral g foreignpolicy. Did wall street in this move into the caribbean, didnt have the full faith and credit and support of the federal government traffic absolutely. Not. Theres times when the federal government wanted to restrain them, and theres times when, theres times of absolute collusion. One of the antidotes i tell in the book concerns an individual named roger leslie farnum who was instrumental to the u. S. Occupation of haiti. Farnum has a whole history going back to the end of 19 century and working in panama with law firm sullivan cromwell, but he becomes a de facto advisor to the u. S. State department. And memos are going back and forth between the citibank and the state department, and farnum is telling the state department whats happening in haiti. But you also see by the 1930s, especially with the coming to power of roosevelt, this is in the context of the depression and the context of the banking crisis and in the context of great animosity amongst the u. S. Public towards wall street at this time or hes like okay, this needs to stop. Hes trying through new deal legislation, hes trying to restrain the bankers and their activities in the caribbean. At a think the kind of congressional hearings on banking and currency under the guise of the lawyer fernando is the site of this. So he had access to the first time to the city banks records and into the records of other banks in the League Office of sherman in sterling, and is able to really for the first time somebody is able to go in and get an inner history or archaeology of all the different exploitative banking practices in the caribbean. And through him the federal Government Works to try to restrain the activities on wall street. Host basically were talking about the early 20th century right now. Are these banks still prevalent and influential in the caribbean, and whats the legacy of all of this . Guest its interesting. Theres a number of legacies. First, i would say that in terms of the current influence in the caribbean, the legacy is less what of u. S. Banks than it is of Canadian Banks. And one of the things i found in my face search was the Canadian Banks, especially the one bank of candidate but also the banknk of nova scotia, to some degree the bank of montreal, the Canadian Bank of commerce, with the biggest competitors to use institutions in the early 20th century. In cuba, throughout the region,u the royal bank of canada had more branches than the citibank. I was competed with for deposits in cuba. And as an example when the cuban revolution occurred in 1959 there was a moral kind of aas negotiated settlement with the castro government on behalf of the Canadian Banks and with u. S. Banks. The u. S. Banks had to get out. The Canadian Banks could work something out. And we see now in the caribbean that these banks, the Canadian Banks are still prevailing, especially in the former british br colonies of jamaica, trinidad, et cetera, et cetera. Jam the u. S. Banks to some degree on a retreat from the caribbean, the udc citibank is recently returned to haiti after many years. But i think the larger legacy was less about the actual presence of wall street and u. S. Bankers in the caribbean then it was of their understandings of what this history meant to them, for the present. If you look at the kind of corporate biographies of citibank, you understand that they looked at the 1920s, or the 1910s, nike \20{l1}s{l0}\20{l1}s{l0} 20s, early 1930s as a glorious time of International Expansion when theyre able to kind of create new Financial Institutions and Financial Instruments that were largely unregulated by the government, that they can go up into the world do what they want, make money as he wanted to to. And after the 1930s with the new deal banking legislation they were restrained. So what you see in these histories of citibank is a sense that we need to get back to this era of unregulated expansion where we can collapse commercial investment functions, where we can move across National Boundaries without restraint and we can basically do what we want with it either pesky sovereign caribbean nations or the united States Government breathing down our necks. I think through that theres an attempt now, theres a sense of wanting to move back into those markets but theres also a bit of shift in terms of how they look at those markets. Though its less about Branch Expansion into the caribbean than it is about the developmenf of offshore investment vehicles in places like the Cayman Islands in panama and these are the kinds of things. Host this is an aside and i dont believe you know this but whenever i have traveled in that region i always see the bank of nova scotia because flexing the bank of wyoming. Tranter its not a side note there its absolutely relevant to the book. Two things. One is the presence of Canadian Banks in the caribbean was so strong at the beginning of the 20 century that when u. S. Bankers were trying to figure out how they could move into the region, how they could can control caribbean markets, at one point the staff of citibank said why dont we simply purchase the bank of nova scotia and take over all of its branches . Will close its canadian branches and in making all the branches they have been jamaica, in haiti and in cuba. That when we dont have to go in and start a branch network. It wasnt a plan they came tot fruition but he gives you a sense of how powerful, important the Canadian Banks were at the time. What happened with the Canadian Banks is, theres a fairly stable and regulated Canadian Banking industry. Banks were charted by the dominion government. There was only three of our banks as opposed to the kind of radical expansion of state banking and National Banking inn the United States. And the Canadian Bankers, first of all, had experience internat International Expansion withinin candidate itself, woul when youk about the movement of institutions like the bank of nova scotia from halifax to montreal to toronto and then to the west. Following the movement of the Canadian Pacific railroad. They had already developed a sense of how do you conquer space basically. So it was easy then for them to move into the caribbean because they had this experience overseas, if you think of western canada as being some ways overseas to the maritime provinces. Furthermore, the Canadian Bankers were working and what we might call intra colonial mode, which is a sense that theyre going to do the work in the british colonies that england itself wasnt going to do. So the kind of caribbean territories to some degree were seated to Canadian Banks and that there was a way ofwe strengthening the dominion by establishing Canadian Capital in the region. At the same time the Canadian Banks recognizing that the National Banking legislation in the United States inhibited the overseas expansion of u. S. Branch banking. They said this is an advantage for us, so well go into cuba, jamaica, the other places and serve as but one historian has called surrogates of the u. S. Capital. So they will go in and to all the banking functions that wall street interests get to. In cases like the of canada then set up an office on wall street so they could be in that mix but then actually serve wall street interest to some degree in the region. At one point i can remember the exact date but at one point i Chicago Business interest in capital purchased a huge chunk of the royal bank of canada to use them. It was a mutual use but use them for the own capital expansion. This is why even now youll seeh the presence of these banks, this long historical legacy of Canadian Banks in the region. Host peter hudson is a professor at ucla and is the author of this book bankers and empire how wall street colonized the caribbean. This is booktv on cspan2. Booktv visited capitol hill to ask members of congress what they are reading this summer. I just finished the nix. Excellent novel especially for a first novel. Really talented writer and it takes place in many different worlds. I thoroughly enjoyed it. I really like reading novels on my list now is some that are not novels. I have somebody with a little hammer which is a compilation of essays. I enjoyed the mayor that she will. I read that last year so the completion of essays im looking forward to my beloved world, Sonya Sotomayor book that are ready to read that because i care a lot about the supreme court. And also i just picked up hunger, roxanne gates new book. Thats my short list for summer reading. Its a real mix of things but im looking forward to devouring those in maybe going back and reading part of the nix again. Booktv wants to know what you are reading. Booktv on cspan2, television for serious readers. You are watching booktv on cspan2 with top nonfiction books and authors and you weekend. Booktv, television for serious readers. Cspan, where history unfold the daily. In 1979, cspan was created as a Public Service by americas cabletelevision companies and is brought to you today by your cable or satellite provider. George freeman, former assistant general counsel for the New York Times moderated a Panel Discussion of the Trump Administration and its relationship with the press at the american bar Associations Annual meeting. He talked about the differences between the 45th president and his predecessors in dealing with