How a French Bank Captured Haiti

The second half of the 19th century should have presented Haiti with a huge opportunity. The global demand for coffee is very high and Haiti’s economy has been built around it.

Across the Caribbean, Costa Ricans have channeled their coffee riches to build Latin America’s first electrified city schools, sewers and lighting systems. In contrast, Haiti forces most of its coffee tax to be paid to France – first to its former slave owners, then to the Crédit Industriel.

Despite all that, Haiti remains a middle-class Caribbean economy, thanks to high coffee prices. But during the bull market in the 1890s, Haiti’s coffee tax exceeded the price of coffee. The entire economic model is on the verge of collapse.

It was time for another loan: 50 million francs (about $310 million in today’s dollars) from the National Bank of Haiti in 1896. Again, it was secured by the coffee tax, the country’s most trusted source of funds. country.

Haitians have been poor for generations. But this moment – when the country is tied to coffee, the CIC and the national bank – is when Haiti begins to plummet compared to the rest of the region, according to data compiled by Victor Bulmer-Thomas, a British economist who studies the history of the Caribbean. .

“Haiti has made a lot of mistakes, such as taking on new debt and not being able to diversify its economy,” he said. “But there is no doubt that many of its problems from the late 19th century onwards can be attributed to these imperial powers.”

Durrieu died in 1890, before the national bank he founded.

Haitian authorities began accusing the bank in 1903 of fraud in short payments, charging double interest on loans, and operating against the best interests of the country. But the bank reminded them of one important detail: It is operated in France, and considers such disputes to be out of reach of the Haitian courts.

Undeterred, Marcelin persuaded Congress to regain control of the government treasury. Haiti will print its own money and pay its own bills.

But records in the French Diplomatic Archive show that the national bank still has one powerful ally: the French government.

In January 1908, the French envoy to Haiti, Pierre Carteron, met with Marcelin and urged him to restore normal relations with the bank. Marceline refused. The National Bank of Haiti, if it exists, will really need to work towards the economic development of Haiti, he said.

That could happen, Carteron replied. Of course, he added, Haiti would first have to return its coffers to French control. And besides: “You need money,” Carteron said, on his own note. “Where are you going to find it?”

As his handwritten message shows up, Carteron suspects Marcelin will never agree to it. So he encouraged his colleagues in Paris to come up with a new plan.

“Most importantly, we study how to establish a new French credit facility in Port-au-Prince,” Carteron wrote, adding: “Without any close links to the Haitian government. ”

That new institution opened in 1910 with a slight change of name: the National Bank of the Republic of Haiti. France still has a stake, but, after 30 year, Crédit Industriel et Commercial was born.

At the time, there was a new focus in the financial world: Wall Street, and an incredible group of bankers from the National City Bank of New York, eventually became Citigroup..

The American financiers continued to operate from Durrieu’s play and became the dominant force, with consequences lasting longer than the debt he took on.

After all, Wall Street wields a more powerful weapon than a French diplomat making oblique threats. American bankers called out to their friends in Washington, and 35 years after Durrieu’s bank was born, US Army Invades Haiti.

It was one of the longest-running military occupations in US history, allowing the US to take control of Haiti’s finances and shape its future for decades to come.

Once again, the country was undermined by the institution of which President Salomon was so proud that night at the palace: the national bank of Haiti.

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