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A World Safe for Capitalism This page intentionally left blank A World Safe for Capitalism Dollar Diplomacy and America’s Rise to Global Power Cyrus Veeser columbia university press new york Columbia University Press Publishers Since 1893 New York, Chichester, West Sussex Copyright ᭧ 2002 Columbia University Press All rights Reserved Library of Congress Cataloging-in-Publication Data Veeser, Cyrus. A world safe for capitalism: Dollar diplomacy and America’s rise to global power / Cyrus Veeser. p. cm. Includes bibliographical references and index. ISBN 0-231-12586-0 (cl) — ISBN 0-231-12587-9 (pa) 1. United States—Foreign economic relations— Dominican Republic. 2. Dominican Republic— Foreign economic relations—United States. 3. San Domingo Improvement Company (New York, N.Y.) 4. Debts, Public—Dominican Republic—History. 5. Loans, American —Dominican Republic—History. 6. United States—Foreign relations—Dominican Republic. 7. Dominican Republic—Foreign relations—United States. I. Title. HF1502.Z4 U57 2002 337.7307292Ј09Ј034—dc21 2002019283 Columbia University Press books are printed on permanent and durable acid-free paper Printed in the United States of America c10987654321 p10987654321 Dedicated to the memory of my parents, Harry Veeser and Elise Karagozian Veeser and to my favorite Dominicanists, Lilian, Gaby and Minerva. This page intentionally left blank Contents List of Illustrations ix Acknowledgments xi List of Abbreviations xiii Introduction: Economic Interests and U.S. Expansion, 1892—1907 1 1. The Gilded Age Goes Abroad The San Domingo Improvement Company and the Political Economy of the 1890s 10 2. Remapping the Caribbean U.S. Caribbean Interests and the Mission of the SDIC 30 3. Peasants in the World Economy The Dominican Republic in the Late 1800s 43 4. Dictating Development Ulises Heureaux and the SDIC Remake the Dominican Republic 58 5. The Cash Nexus Economic Crisis and the Collapse of the Heureaux-SDIC Regime 76 viii Contents 6. Old Wine in New Skins The U.S. Government Champions the SDIC, 1899—1904 98 7. A Reign of Law Among Nations John Bassett Moore and the Vindication of the SDIC, 1904 110 8. A World Safe for Capitalism Stabilizing the Dominican Republic, 1901—1905 126 9. From The Gilded Age to Dollar Diplomacy The SDIC and the Roosevelt Corollary, 1904—1907 143 Conclusion 155 Notes 163 Bibliography 227 Index 239 List of Illustrations Map: The Dominican Republic, 1900 xv Following page 78 [1] Santo Domingo harbor in 1901, with colonial-era buildings used as residences in foreground. (Library of Congress, Prints & Pho- tographs Division, Detroit Publishing Company Collection, re- production no. LC-D4–10540R). [2] Smith M. Weed, president of the San Domingo Improvement Company (Courtesy Special Collections, Feinberg Library, Platts- burgh State University) [3] Dominican President Ulises Heureaux (Coleccio´n Garcı´a, Ar- chivo General de la Nacio´n, Santo Domingo) [4] Commercial street of a provincial Dominican city in the early 1900s. (Archivo General de la Nacio´n, Santo Domingo) [5] A Dominican peasant and his daughter, early 1900s. (American Museum of Natural History Library, image no. 247947) [6] Rural home or bohio near Puerto Plata, early 1900s. (American Museum of Natural History Library, image no. 229075, photo by C.R. Halter) [7.1 & 7.2 ] A two-peso note and a one-peso “silver” coin, both issued x List of Illustrations by the SDIC-owned Banco Nacional de Santo Domingo in the last years of the Heureaux regime. (author’s collection) [8] John Bassett Moore, advisor to the State Department and attorney to the SDIC, in a portrait by Edwin Burrage Child. (Permanent Collection of the university of Delaware.) [9] The U.S.S. Bancroft, a small, steel-hulled gunboat, often patrolled Dominican waters while assigned to the Caribbean squadron from 1902 to 1906. (Library of Congress, Prints & Photographs Divi- sion, Detroit Publishing Company Collection, reproduction no. LC-D4–20141) [10] From left, U.S. Minister Thomas C. Dawson, Dominican Presi- dent Carlos Morales Languasco, and Dominican Minister of For- eign Affairs Juan P. Sa´nchez, in Santo Domingo, 1904 (Library of ongress, Prints & Photographs Division, Hanna-McCormick Col- lection, reproduction no. LC-USZ62–107890) [11] Soldiers marching in Santo Domingo in 1904 or 1905. (Library of Congress, Prints & Photographs Division, Hanna-McCormick Collection, reproduction no. LC-USZ62–107892) [12] Jacob Hollander, architect of the refunding of the Dominican debt after 1905. (The Ferdinand Hamburger, Jr., Archives of The Johns Hopkins University) [13] President Theodore Roosevelt with U.S. naval officers and other officials during a naval review, 1906 (Theodore Roosevelt Collec- tion, Harvard College Library) Acknowledgments The personal debts I incurred in researching and writing this book spread across several continents, recapitulating the credit network that linked the United States, the Dominican Republic, and Europe at the end of the nineteenth century. The idea for this study came to me fully formed in an Irish bar on Eighth Avenue near 46th Street, where Emelio Betances and I had stopped to dis- cuss his dissertation on the formation of the Dominican state, since pub- lished as State and Society in the Dominican Republic. My adviser, Eric Foner, later looked over a list of possible dissertation topics and counseled, “Do the Dominican Republic.” In the early stages of the project, Emelio Betances, Herbert Klein, Frank Moya Pons, Lisa McGirr, Ariel Salzmann, Gerald Sider, and David Nasaw offered advice that guided my research. I also owe thanks to Elizabeth Blackmar, Robert McCaughey, Eric McKitrick and James Shenton of the Columbia history department for their support and intellectual guidance. In the Dominican Republic, three accomplished historians generously shared their knowledge, contacts, and resources— Roberto Cassa´, Jaime Domı´nguez, and Raymundo Gonza´lez. Jaime ar- ranged for me to read microfilm of French foreign ministry records at the Maison Francaise in Santo Domingo, going so far as to lend me his micro- film viewer. The staff at the Archivo General de la Nacio´n extended them- selves far beyond their official duty, often spending hours helping me de- cipher the cryptic longhand of Ulises Heureaux. I thank Eddy Jaquez, Rosmery Fanfa´n, and Adalgiza Cabrera especially. All three shifts of waiters xii Acknowledgments at El Dumbo adjusted to my puzzling presence in what for me was an air- conditioned, 24-hour research facility. In New York, participants in the Mellon working seminar at Columbia University read and commented on several chapters of this work. Sven Beckert, Emelio Betances, Alan Brinkley, Roberto Cassa´, Jaime Domı´nguez, Norman Finkelstein, Charles Tilly, Richard Turitz, and Hobart Spalding also commented on portions of the manuscript. Martha Biondi and Adele Oltman, in particular, took pains to work through early versions of several chapters. Betsy Blackmar found the time to both read and encourage. Anders Stephanson provided a regular antidote to my empirical tendencies, while Eric Foner made astute editorial suggestions about material far removed from his own areas of interest. Martin Sklar offered incisive objections to the representation of Gilded Age capitalism and corruption in chapter 1. Anonymous reviewers for Diplomatic History offered useful comments on an article version of chapter nine. Gaynor Ellis brought a merciless but salutary intolerance for academic jargon to her reading of these chapters. In England, Andrew and Ruth Seager made possible a stint of compressed research at the Public Record Office and the Guildhall Library. I benefited from the advice of librarians at those institutions as well as the U.S. National Archives, Library of Congress Manuscript Division, Columbia University Rare Book and Manuscript Library, Columbia University School of Law Special Collections, Moorland-Springarn Collection at Howard University, and Benjamin J. Feinberg Library at SUNY/Plattsburgh. A grant from Ful- bright/I.I.E. allowed me to spend over a year doing research in Santo Do- mingo, and I owe a special thanks to Mary Fedorko for her interest in this project. Barbara Burke provided food, lodging, and critical readings on my many trips to Washington, D.C. A summer research grant from Bentley College allowed me to revise the manuscript for publication. At Columbia University Press, Peter Dimock, Anne Routon, and Leslie Bialler provided level-headed encouragement and hard-nosed editorial advice. Harold Veeser managed to read the entire manuscript critically even as he urged me to carry the project to its always provisional conclusion. Elise Veeser provided material and emotional support all along the way, but sadly is not here to see the final product. Lilian Bobea offered her own vision of Dominican history and also proved that Dominican-American relations, if founded on equality and mutual respect, can be wonderful indeed. Abbreviations AF Area File of the Naval Records Collection, Area 8, United States National Archives AGN Archivo General de la Nacio´n, Santo Domingo CE Correspondencia Epistolar de Ulises Heureaux, Archivo General de la Nacio´n, Santo Domingo CFB Council of the Corporation of Foreign Bondholders, Guildhall Library, London CM Presidencia de la Repu´ blica, Copiadores de Carlos Morales Languasco, Archivo General de la Nacio´n, Santo Domingo DI Diplomatic Instructions of the Department of State, Haiti and Santo Domingo, United States National Archives DL Notes from the Dominican Legation to the State Department,