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Bankers and EmpireHow Wall Street Colonized the Caribbean$
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Peter James Hudson

Print publication date: 2017

Print ISBN-13: 9780226459110

Published to Chicago Scholarship Online: September 2017

DOI: 10.7208/chicago/9780226459257.001.0001

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American Expansion

American Expansion

(p.150) Five American Expansion
Bankers and Empire

Peter James Hudson

University of Chicago Press

Focusing on the Cuban banking crisis of 1920–21, this chapter examines the expansion of US imperial banking and finance into the Caribbean and Latin America in the years immediately following World War I through the history of the Mercantile Bank of the Americas. Backed by a consortium of powerful Wall Street interests including J. & W. Seligman and Co., Brown Brothers and Co., and J. P. Morgan and Co., the Mercantile Bank of the Americas was organized to both take advantage of the unsettled financial conditions of the post-war years and the new permissive federal legislation for international banking put in place by the Federal Reserve system. The chapter shows how the new legal order permitted forms of concentration, cartelization, and collusion in foreign banking, allowing the Mercantile Bank of the Americas to quickly create a expansive network of dependent branch banks and semi-autonomous local banks throughout the American hemisphere. Yet the new legal regimes also encouraged over-expansion and, combined with managerial incompetence, personal corruption, and market instability, the bank's network proved precarious and frail. Its collapse occurred almost as quickly as its emergence; its failure offered lessons on the problems of imperial banking and the limits of US empire.

Keywords:   concentration, foreign banking, branch banking, banking regulation, imperialism, cartelization, corruption, crisis, finance capitalism

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