Gotham_ A History of New York City to 1898 - Edwin G. Burrows [961]
New Yorkers were also exporting money. In the 1880s bankers and industries had begun to make loans to foreign governments, invest in overseas ventures, and set up branches abroad. The 1890s depression, in diminishing domestic opportunities, spurred calls to accelerate the process, and Americans increased their investments abroad by almost $250 million during hard times. In the course of expanding their export of capital and commodities, however, New Yorkers kept running up against entrenched Europeans. In the Far East, a conglomerate of American oil, rail, sugar, steel, and banking interests (with participation by Harriman, Schiff, Carnegie, and Rockefeller) put together a million-dollar American China Development Corporation in 1895, but it lagged far behind the British and was threatened by expanding German interests.
In Latin America, New Yorkers were in a stronger position. The city had long imported substantial quantities of Caribbean and Central and South American goods, carried northward by generations of shippers from the Griswolds to Grace. By the end of the century, metropolitan families were consuming one pound of coffee per week, bananas had become a customary delicacy, and the city’s parlors and Palm Rooms were festooned with tropical products.
Dictator Porfirio Diaz had thrown Mexico open to New York capital; his agents hosted a dinner at Delmonico’s and successfully enlisted railroad investments from the likes of Collis P. Huntington, Grenville M. Dodge, Russell Sage, and Jay Gould. J. P. Morgan’s firm made loans to Peru and participated in Argentine development; William R. Grace engaged in banking and shipping operations in South America; William Rockefeller of Standard Oil had interests in Brazil.
A New York syndicate had bought up the Dominican Republic’s debt in 1892, taken control of its finances, and launched the San Domingo Improvement Company. In Cuba the great Yankee metropolis, long intimately involved in the island’s commercial affairs, had increased its presence after the last great upheaval against Spanish rule. The Ten Years War of 1868-78 had bankrupted many Cuban planters and opened the way to substantial investment by wealthy New Yorkers, including Henry Havemeyer’s Sugar Trust. By the mid-1890s, American investment in Cuba alone surpassed 50 million dollars, ten million more than Carnegie’s annual profit from steel. And by 1898 U.S. capitalists had sunk $350 million into the Caribbean and Central America.
Nevertheless, Europeans still dominated the hemisphere’s markets and supplied the bulk of its credit requirements, and in the depression years some New Yorkers cast hungry eyes southward. If “we could wrest the South American markets from Germany and England and permanently hold them,” wrote the Bankers’ Magazine in 1894, “this would be indeed a conquest worth perhaps a heavy sacrifice.”
Increasingly, Roosevelt and others demanded that the U.S. government play rough on behalf of its entrepreneurs. Europe had inaugurated a new age of imperialism—the word itself first became current in the 1890s—and in the last quarter of the nineteenth century had swallowed up a fifth of the earth’s surface, including most of Africa and much of the Far East. The United States must get into the great game and compete vigorously or risk being cut off from markets and raw materials in a world increasingly carved up into colonies or protectionist blocs. The global economy was a dog-eat-dog world, and America should concentrate on biting.
Fortunately the country had developed some teeth since the 1880s, when an antiquated navy left the country at the mercy of foreign fleets, and a Spanish or Chilean armada, Leslie’s Weekly noted, could have anchored off Coney Island and bombed Madison Square. In the late 1880s and early 1890s, two New Yorkers had helped oversee creation of a powerful American fleet. The initiatives of financier William Whitney, secretary of the navy in Cleveland’s first administration, had been carried on by his successor in Harrison’s Republican administration, Benjamin