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.