Citigroup’s online timeline commemorating its 200th anniversary presents a story of achievement, progress and world-uniting vision, but it says little about the Republic of Haiti — and no wonder.
Citigroup’s history in Haiti is remembered as both among the most spectacular episodes of U.S. dollar diplomacy in the Caribbean and as an egregious example of officials in Washington working at the behest of Wall Street. It’s also a story marked by military intervention, violations of national sovereignty and the deaths of thousands.
In the early 20th century, the National City Bank of New York, as Citigroup was then called, embarked on an ambitious and pioneering era of overseas expansion. Haiti emerged as one of National City’s first international projects. In 1909, Speyer & Co. invited National City President Frank A. Vanderlip to join in the purchase of a moribund American-controlled railway concession in Haiti.
Vanderlip agreed and the purchase turned out to be a “small but profitable piece of business” for the bank. But Vanderlip wasn’t interested in the acquisition for its short-term returns. He thought the stock would give National City a “foothold” in the country that could lead to a risk-free and profitable reorganization of the Haitian government’s finances.
The next year, the government canceled the contract of the Banque Nationale d’Haiti — giving Vanderlip the opportunity he sought. Chartered in 1880, the bank was owned by France’s Banque de l’Union Parisienne and was contracted by the Haitian government to finance the national debt and handle the fiscal operations of the state. It was continually dogged by scandal. Haitian politicians accused its directors of graft and fiscal malfeasance (at one point its foreign managers were jailed) and local political aspirants saw the bank’s currency reserves as a bounty for winning political office.
When a new contract was drawn up, the U.S. State Department intervened, claiming it placed an unfair burden on the Haitian people while giving too much leeway to the French to intervene in Haiti’s internal affairs. They also argued that the new contract didn’t represent the American interests that were then gunning for a share of Haiti.
As a result of State Department pressure, a new institution, the Banque Nationale de la Republique d’Haiti, was chartered. The Banque de l’Union remained the majority shareholder, but National City — alongside a number of other U.S. banks and a German one — was offered a minority interest.
Executive decisions at the Banque Nationale were made by a committee split between the Banque de l’Union in Paris and National City in New York. Chairman of the New York committee was Roger Leslie Farnham. He had spent a decade working as a lobbyist for the corporate-law firm Sullivan & Cromwell LLP before Vanderlip recruited him to National City in 1911. Farnham lobbied officials in Washington on behalf of the bank, and eventually took charge of all its Caribbean operations, including in Haiti.
With the onset of World War I, French interests in Banque Nationale receded. Farnham assumed a large role in its direction while National City slowly began buying out its stock. At the same time, Farnham was becoming a major influence on State Department policy in Haiti.