Bankers and Empire by Peter James Hudson

Author:Peter James Hudson [Hudson, Peter James]
Language: eng
Format: epub
ISBN: 9780226598116
Publisher: University of Chicago Press
Published: 2017-04-26T18:30:00+00:00

Although Durrell was in Mexico for less than six months, the Cuba he returned to—at the peak of the dance of millions—was scarcely recognizable. “Everyone was a millionaire, real or fancied,” Durrell recalled, “and wild-cat speculation was the order of the day. The merchants were ordering four times as many goods as they could possibly dispose of. Real estate was booming. The banks were extending credit recklessly and I learned that our Bank had joined the mad scramble.”44 During Durrell’s absence, the City Bank had abandoned its measured policy of branch expansion and dispensed with its conservative policy of issuing credits. From his conversations with Juan F. Rivera, a Puerto Rican with whom he had worked at both the City Bank and the BNC (where he had served as the secretary to Edmund G. Vaughan), Durrell learned that Porfirio Franca and Juan B. Roqué were caught up in the speculative madness and had participated in what he later described as a “wild orgy of loaning.”45 “To me, who had been living out of that atmosphere,” wrote Durrell, “and in a country where there was no such thing as credit and with fifteen years of Cuban banking behind me, it was clear that the bubble must burst soon.”

Recognizing the economy was unsustainable, Durrell settled his business in Cuba, selling a farm near Pinar del Río, disposing of a number of lots he held in Havana, and shipping his furniture to New York.46 Durrell wrote to John H. Allen, warning him of the potential dangers inherent in the City Bank’s overexposure to sugar.47 Allen did not acknowledge his letter. When they encountered each other that summer in New York, Allen dismissed Durrell’s warning, telling him “that times had changed and world conditions with them,” and making it clear that Durrell’s advice on Cuba was unwanted.48 Although his previous complaints had led to his temporary exile in Mexico, Durrell again decided to break with the City Bank’s chain of command. He went over Allen’s head and outlined his views of the Cuban situation to bank officers John H. Fulton and Charles V. Rich. After listening to his warnings, they placed him on a committee responsible for supervision of the bank’s loans by the Foreign Division. Durrell was assigned the South American loans, of which he knew little, but against Allen’s wishes, Durrell took over the Cuban loans from a young assistant cashier who admitted he had no knowledge of Cuban conditions. Reviewing the Cuban accounts, Durrell “discovered they were even more of a mess than I had anticipated, and well knew that once the crash came, which I was certain was near, we would be faced in Cuba with a dangerous situation.” He urged the loan committee to restrain from making more advances to Cuba while trying to settle what was outstanding. Porfirio Franca, meanwhile, had been promoted by Allen from Havana branch manager to the City Bank’s general manager of Cuba branches, taking over the portfolio once held by Durrell.49 Soon after

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