06 Aug The French and British struggle for global power impacted the social and cultural dynamics of the region we now know as Canada. Please highlight examples of this impact and how it is manifested in the present time

The French and British struggle for global power impacted the social and cultural dynamics of the region we now know as Canada. Please highlight examples of this impact and how it is manifested in the present time. 2-3 paragraphs

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“AGreat and Noble Scheme”:Thoughts on the Expulsion of the AcadiansIN THE AUTUMN OF 1755 OFFICERS AND TROOPSfrom New England, actingunder the authority of the colonial governors of Nova Scotia and Massachusetts,systematically rounded up more than 7,000 Acadians who lived in communities alongthe shores of the Bay of Fundy. Men, women, and children alike were crowded intotransport vessels and deported in small groups to the other British colonies. Manyfamilies were separated, some never to meet again. The remaining 10,000 to 12,000Acadians managed to escape and spent years as refugees. Many took up arms inresistance. The campaign of removal continued for eight years, by which time a totalof more than 10,000 Acadians had been forced from their homes and dispersed widelyacross the Atlantic world. Meanwhile, their property was plundered, theircommunities were torched and their lands were seized.Some of the most appalling violence occurred at the site of present-dayFredericton, New Brunswick, in a village called Sainte-Anne along both sides of theSt. John River, which was home to approximately 1,000 Acadians. In November1758, Colonel Robert Monckton, in command of 2,000 troops, ascended the river asfar as present-day Gagetown, leaving a swath of destruction on both banks; hesucceeded in capturing few of the Acadians living there, though, as most of them hadfled upriver to Sainte-Anne. To remedy this, two months later in February 1759Monckton sent a company of 15 New England rangers, under the command ofLieutenant Moses Hazen of Massachusetts, to strike that community. Hazen wasordered to “kill them all and give no quarter”.1He succeeded in bringing back 23prisoners and 6 scalps. Joseph Godin-Bellefontaine, several years a resident of Sainte-Anne at the time, provided a rare first-hand Acadian account of the attack. The rangerscaptured his entire family, Godin-Bellefontaine declared in a deposition taken byFrench authorities. He and his grown son Michel were bound hand and foot andforced to watch as the Yankees abused their wives and daughters. “They took theirrage to the point of massacring his daughter Nastazie, wife of Eustache Paré”, readsthe deposition, “crushing her head with a blow of the butt of a gun, his two childrenand a son of Michel, and splitting the head of the wife of the latter with a blow of ahatchet”.2The surviving members of the Godin-Bellefontaine family were sent toHalifax and eventually transported to France.The Acadians had a term for this violent turn in their history: le grand dérangementorthe great upheaval. It continued from 1755 until the end of the Seven Years Warbetween Great Britain and France in 1763. It claimed thousands of lives and laidwaste one of the oldest colonial homelands in North America. After the war hundreds1John Mack Faragher, A Great and Noble Scheme: The Tragic Story of the Expulsion of the FrenchAcadians from their American Homeland(New York, 2005), p. 405. Aside from material from othersources (noted in footnotes), the information cited in Faragher’s talk was taken from this book and arereferenced in the text by the page numbers within brackets.2Quoted in Richard J. Bergeron, “Three Acadian Generations: The First Bergeron d’Amboises in TheAmericas”, http://www.acadian.org/bergeron.html (accessed 4 December 2005).John Mack Faragher, “‘A Great and Noble Scheme’: Thoughts on the Expulsion of theAcadians”, Acadiensis,XXXVI, 1 (Autumn 2006), pp. 82-92.18024-05 Faragher Forum 3/2/07 8:53 AM Page 82

of surviving Acadians settled again in the region, but not on their former farms forthose had been turned over to Yankee settlers from New England. Other Acadianssought refuge in the French colony of Louisiana, where they became the ancestors oftoday’s Cajuns.My idea for a book focusing on this horrible episode began to take shape during avisit my wife and I paid to our daughter, who was attending graduate school at theUniversity of Louisiana in the city of Lafayette, which is sometimes referred to as thecapital of Cajun Country. On a memorable Sunday afternoon in November 1995 thethree of us drove down Bayou Teche to Longfellow-Evangeline State Historic Siteand there, in the reconstructed cabin of an Acadian exile, I first saw the poster“Acadian Odyssey”, produced by Parks Canada, which maps the Expulsion of theAcadians.Aside from short discussions in histories of the French and Indian War, boyhoodmemories of Henry Wadsworth Longfellow’s “Evangeline”, and the plaintive chorusof The Band’s “Acadian Driftwood”, it was something I knew very little about. But itwas something that seemed familiar. At that time the world was just learning of thefearful episodes of ethnic cleansing taking place in the former Yugoslavia and thecentral African state of Rwanda. In the gift shop at the site I bought Carl Brasseaux’slittle book on the Deportation, Scattered to the Wind,and before bed that night I hadlearned enough to know that the Expulsion of the Acadians, so strikingly similar tocontemporary events of ethnic cleansing, was something about which I needed toknow much more.Quite early in my research I discovered a startling piece of evidence from which Idrew the title of my book: a dispatch written by an anonymous correspondent,datelined Halifax, 9 August 1755, and published several weeks later in the colonialpress of New York, Pennsylvania and Maryland: “We are now upon a great and nobleScheme of sending the neutral French out of this Province, who have always beensecret Enemies, and have encouraged our Savages to cut our Throats. If we effect theirExpulsion, it will be one of the greatest Things that ever the English did in America;for by all the Accounts, that Part of the Country they possess, is as good Land as anyin the World: In case therefore we could get some good English Farmers in theirRoom, this Province would abound with all Kinds of Provisions” (p. 333). Thisstatement amounts to as frank an acknowledgement as one might fear to find that legrand dérangement was a classic episode of ethnic cleansing.Compare it with the statement issued by the United Nations Commission ofExperts, convened by the Secretary General in 1992 to investigate the violent conflictin the Balkans. “Ethnic cleansing”, the commissioners concluded, “is a purposefulpolicy designed by one ethnic or religious group to remove by violent and terror-inspiring means the civilian population of another ethnic or religious group fromcertain geographic areas. To a large extent, it is carried out in the name of misguidednationalism, historic grievances, and a powerful driving sense of revenge. Thispurpose appears to be the occupation of territory to the exclusion of the purged groupor groups” (p. 469). Note how this definition amplifies the meaning of the August1755 dispatch: the ethnic contrast drawn between “the neutral French” and “goodEnglish farmers”. There is also an appeal to historic grievances and the desire forrevenge: “the neutral French, who have always been secret Enemies, and haveencouraged our Savages to cut our Throats”. And there is a connection made betweenAGreat and Noble Scheme8318024-05 Faragher Forum 2/23/07 5:32 PM Page 83

dispossession and repossession: “If we effect their Expulsion, it will be one of thegreatest Things that ever the English did in America; for by all the Accounts, that Partof the Country they possess, is as good Land as any in the World: In case thereforewe could get some good English Farmers in their Room, this Province would aboundwith all Kinds of Provisions”. Ethnic cleansing always has this dimension – one ethnicor religious group clearing away another by violent and terror-inspiring means and aneagerness to seize their lands and possessions. Ethnic cleansing is nearly always aprocess of dispossession followed by repossession.Most Americans in the United States are unfamiliar with the story of le granddérangement, just as they are unacquainted with the Acadians. If Acadians are knownto us at all, it is as the unfortunate people of Longfellow’s epic poem. For Americansof a certain age, myself included, “Evangeline” was required reading in public school.Yet Longfellow’s Acadians were a literary creation, little more than victims whoendured other men’s prejudice, hatred and greed. For me, one of the most valuablelessons of this project was discovering the Acadians of history rather than legend.Although they were largely illiterate, their voices may be excavated from the colonialrecords of France and Great Britain. The Acadians turn out to be fascinating andimportant subjects in their own right.Today Acadian descendants number several hundred thousand persons in easternCanada and southwestern Louisiana in addition to tens of thousands more spreadacross the map of North America. 2005 marked the 250th anniversary of le granddérangement and, over the course of those centuries, Acadian and Cajun societysurvived and more recently has thrived. That it has done so is, in important ways, theresult of the strong sense of identity Acadians had developed before 1755.Acadian history begins with the French colonists of the early-17th century whosettled on the shores of Baie Française (known today as the Bay of Fundy) at roughlythe same time English colonists were settling the colonies of Plymouth andMassachusetts Bay. French authorities hoped to transplant to the New World ahierarchical society of lords and peasants. But the Old World was a long way off, thesocial and religious institutions of the ancien regimewere stunted in transplantation,and what developed instead was a clannish frontier society of farmers and fishermenwho enjoyed rough equality and suffered few distinctions of rank.The French may have been unsuccessful in transplanting feudal institutions, butthey were quite successful in their missionary efforts among the Mi’kmaq, the mostnumerous of the Native peoples of the region, as Catholicism proved a powerful bondbetween colonist and Native. One missionary provided a description that is suggestiveof the way a common faith encouraged cultural mixing. A contingent of colonists ona trading mission along the Fundy coast was invited to attend a Native celebration.“All night”, the missionary wrote, “there was continual haranging, singing, anddancing”. Horrified at the thought that “probably their songs and dances wereinvocations to the devil”, he asked the colonists to perform some of their sacred songs– to purify the air, so to speak. The men offered up hymns to the blessed virgin. Soonthe Natives joined in with chants of their own, and before long both colonists andNatives were dancing and singing together. Even this relatively humorless missionarywas delighted. “It was really very comical”, he wrote, “for you would have said thatthey were two choirs which had a thorough understanding of each other” (p. 27). TheCatholic missionary effort created a bond of sympathy between Natives and colonistsAcadiensis8418024-05 Faragher Forum 2/23/07 5:32 PM Page 84

in l’Acadie that made possible genuinely intimate personal relations.Because many colonists of the first generation came to l’Acadie as single men,there was also a considerable amount of intermarriage with Mi’kmaq women.Eventually the two peoples came to think of themselves as kindred. Living inethnically mixed communities, colonists readily adopted indigenous ways. From theMi’kmaq they learned the arts of fishing and hunting, methods of making clothing andmoccasins from skins, furs and animal sinew, and the many uses of birch bark. Ajargon composed of French and Mi’kmawi’simk (the native language of theMi’kmaq)became the lingua franca of the countryside, and many colonists learned tocommunicate (at least a little) with their Native cousins. All this made Acadian cultureunique among the settler traditions that developed on the Atlantic coast of NorthAmerica.There was a material side to this as well. Ceding the wooded uplands to theMi’kmaq for their migratory hunting, fishing and gathering, the colonists confinedtheir settlements to the coastal lowlands where the tidal variation is one of the greatestin the world (as much as 50 feet at the site of the village of Grand Pré on Minas Basinat the head of the Bay of Fundy). In one of the most remarkable developments in thehistory of the colonization of North America, French colonists in l’Acadie developedthe distinctive practice of dyking the tidal marshlands to create pastures and fields.This was no small task and required the energies of the entire community workingtogether. It sealed a pattern of good relations with the Mi’kmaq, for instead of movingonto Native lands – as, for example, the settlers in New England did – the Acadianscreated land of their own without infringing on the estate of the Mi’kmaq.The communal work on the dykes was perhaps the most important factor in thedevelopment of a common sense of Acadian identity. The first test of that identitycame when Port Royal, the chief settlement in l’Acadie, was captured in 1654 by aheavily armed Puritan fleet out of Boston. The English claim to the province datedfrom the early-17th century when the English Crown asserted its right to the region,which it called “Nova Scotia” (or New Scotland). As French officials and soldiersprepared for repatriation to France, the Yankee conquerors offered the colonists achoice of either returning to their mother country or remaining “unmolested” on theirmarshland farms, with “liberty of conscience allowed to [their] religion”. We do notknow precisely what the colonists thought about the Yankee conquest or their offer,but we do know what they did – they chose to stay, taking an oath “that they wouldno longer bear arms against the English nation” (p. 59). It marked a critical turningpoint, strongly suggesting that the colonists’ attachment to their new home was morepowerful than their identification with the mother country. It is at this point, I think,it is fair to begin thinking of the people as the Acadians.During the next 16 years “l’Acadie or Nova Scotia” (as it was called in the officialdocuments) remained under the nominal control of New England and, after taking anoath of loyalty to the English king, the Acadians were allowed to govern themselves.When France regained possession of the colony – in exchange for territorialconcessions in the West Indies – French colonial officials found that the Acadians hadgrown accustomed to living without supervision. They exhibited “a certain Englishand Parliamentary inclination”, reported one French governor (p. 68). Anothercomplained that the Acadians were “so little accustomed to subjection it seems to methey live as true republicans” (p. 107).AGreat and Noble Scheme8518024-05 Faragher Forum 2/23/07 5:32 PM Page 85

Acadiensis86In 1690, during a conflict known in the colonies as King William’s War, l’Acadiepassed to New England’s control once again when another Boston armada forced thesurrender of Port Royal. The Acadians agreed to take another English oath of loyalty,but insisted on a condition: that in the struggle between the English and the Frenchempires “they themselves would remain neutral” (p. 96).This is the first evidence that I can find in the historical record of the Acadianinsistence on their status as neutrals. The claim of neutrality was rare but notunprecedented. The pope granted the residents of the Channel Islands the “privilegeof neutrality”, allowing them protection in time of war between England and France,a privilege that Elizabeth I renewed in 1561 and which continued until the late-17thcentury. There are also North American examples. After the conquest of New Swedenby New Netherland in the 1650s, the Finnish, Swedish and Dutch settlers askedGovernor Peter Stuyvesant that they “not . . . be obliged to take sides if any troublesshould arise between the Crown of Sweden and [the United Provinces] at home”, arequest Styuvesant granted.3When his superiors objected, he argued that only withsuch a tolerant policy would officials win the hearts of the residents. In the case ofl’Acadie the idea of neutrality became part of the Acadian conception of themselvesas a people. It was a response to the facts of life on the margins of empire, to theuncertain ricochet of their homeland back and forth between empires and sovereigns.Learning to be a people “in between”, they developed a willingness to do businesswith anyone, French, English or otherwise. Their marshland farms produced amplesurpluses of fruit, grain and livestock, and the Acadians established a particularlylucrative commerce with Yankee traders, whom they jokingly referred to as nos amisles ennemis – “our friends the enemy”.The phrase captured something essential aboutthe Acadian situation. They lived in a world on the margins, a world of ambiguities,a world where by necessity people had to learn to play both sides, a world where, asthe Acadians put it, “cunning was better than strength” (p. 79).Many would be thetimes the Acadians would successfully employ cunning to combat the strength ofimperialists.France regained control of “l’Acadie or Nova Scotia” in 1697, then lost it again in1710, during Queen Anne’s War (the War of the Spanish Succession) when yetanother armed Yankee fleet conquered Port Royal and took possession in the name ofthe British Crown. The 1713 treaty ending the war formalized British control. TheAcadians were once more given the choice of leaving or remaining in the province,with guarantees of the free exercise of religion and the security of their property aslong as they agreed to become subjects of the British Crown. This required swearingan oath of loyalty.Oaths of allegiance on the transfer of a colony from one empire to another were anaccepted practice. Such a transfer took place numerous times in the 17th-centuryDelaware Valley, where the European settlers were required to swear allegiance asmany as six times. As I have said, the Acadians themselves had taken such oaths tothe English Crown before – in both 1654 and 1690. What was different this time was3Mark L. Thompson, “National Subjects in a Contested Colonial Space: Allegiance, Ethnicity, andAuthority in the Seventeenth-Century Delaware Valley”, PhD diss., John Hopkins University, 2004,p. 269.18024-05 Faragher Forum 2/23/07 5:32 PM Page 86

the insistence that the oath be unconditional. The Acadians declared themselveswilling to take an oath, but only with the inclusion of a condition: “That we will takeup arms neither against his Britannic Majesty, nor against France, nor against any oftheir subjects or allies, by which they meant their cousins, the Míkmaq, allies of theFrench” (p. 147).The British found themselves in a difficult position. The colony ranked low in theircolonial priorities. They wished to maintain a garrison and small colonialestablishment at Annapolis Royal (the new name for Port Royal) to check Frenchambitions in the region, but doing so required the material support of the Acadians,who supplied essential food, fuel and manpower for the operation. The Britishdebated the idea of undertaking the removal of the Acadians and the resettlement ofthe province with British settlers, but in the end they rejected the scheme as tooexpensive. The British were stuck and the Acadians knew it.The controversy over an unconditional oath continued for more than 15 years,ending only when the British colonial governor finally agreed to the Acadian terms.In 1730 Acadian leaders agreed to sign an oath of allegiance and in return thegovernor made an oral concession (which the Acadians recorded and had notarized)declaring “that he exempts them from bearing arms and fighting in war against theFrench and the Indians, and that the said inhabitants have only accepted allegiance onthe promise never to take up arms”. The British later denied having made theconcession, but we have good reason to doubt their veracity. One British officialpresent at the negotiations later testified that when the governor demanded theAcadians swear an unconditional oath “they at first absolutely refused”. The officerthen noted that, following earnest discussion, “they at last swore allegiance, afterhaving extorted the same assurance . . . , that they should not be obliged to bear arms”(p. 177-8).In the years following this agreement the Acadians became widely known as “theneutral French”. Neutrality was shorthand for their complex relationship to thecolonial world. It stood for their intimate and cooperative connection to the Mi’kmaq,with whom they shared the land. It stood for their cultural identity, one that retainedits French origins in custom, language and religion, yet was at the same timesomething new, something Americanin its attachment to place, local practice andnewly developed traditions. It stood for their problematic relationship to empire, theirdesire to participate wholeheartedly in the opportunities for wider commercialconnections, but also for their insistence on an exemption from the violent anddestructive inter-colonial struggle for conquest and hegemony. It also stood for theirvariety of “republicanism”, for the idea that they had rights as a people as well as theright to argue for themselves and their interests in the court of kings.If we date the origins of Acadian neutrality to the first period of English controlbeginning in 1654, we can say that this policy of neutrality served the inhabitants verywell for nearly a century. But the situation began to change for the worse in 1744when, after 30 years of peace, the British and French went to war once again in aconflict known in the colonies as King George’s War (the War of the AustrianSuccession). French forces invaded l’Acadie and besieged the British garrison atAnnapolis Royal. Although a number of Acadians fought alongside the Frenchinvaders, others provided critical intelligence to the British and the great majority didtheir best to remain neutral.AGreat and Noble Scheme8718024-05 Faragher Forum 2/23/07 5:32 PM Page 87

The wartime climate of anti-French and anti-Catholic sentiment in New England,however, put the Acadians at great risk. Governor William Shirley of Massachusettswas convinced that Acadian neutrality was nothing but a sham and that the Acadianswere treasonous supporters of the French. Shirley would become one of the primaryarchitects of “the great and noble scheme”. In 1745 he urged “the immediate removalof some at least of the French inhabitants of Nova Scotia” and the settlement of NewEngland families “in their room” (p. 231). The Governor’s Council of Nova Scotia,composed principally of Yankee emigrés, took Shirley’s recommendation a stepfurther. “Upon the whole”, they wrote to British officials in London, “it is mosthumbly submitted whether the said FrenchInhabitants may not be transported out ofthe Province of Nova Scotia and be replac’d by good Protestant Subjects” (p. 229).When the news leaked out, there was panic in the Acadian community and to preventthem from going over the French en mass, Governor Shirley was forced to issue apublic proclamation denying that any such deportation was being contemplated. Inprivate letters to imperial officials, however, Shirley continued to argue for theremoval of at least some of the Acadians and their replacement by Yankee farmers.The war ended by treaty in 1748 and British officials decided not to pursueShirley’s plan of removal. They had decided to “postpone anything of this kind for thepresent”, the colonial minister wrote to Shirley, but he added a significant postscript– “tho’ His Majesty would have you consider, in what manner such a Scheme may beexecuted, at a proper Time, and What Precautions may be necessary to be taken, toobviate the Inconveniences that are apprehended from it” (p. 241). Thisquintessentially bureaucratic language had chilling implications.In the mid-18th century the colonial world of North America was on the verge ofan enormous transformation. Before 1748 the pretext for hostilities between GreatBritain and France was centered in Europe while afterwards the violent conflictbetween the two empires fixed on control of the seas, on the struggle for colonialpossessions and on the privilege of unimpeded expansion in North America. Both theFrench and the British believed that l’Acadie or Nova Scotia, at the raw northeasternedge of their respective empires, would be one of the flashpoints of the comingconflict. To counter the great French fortress of Louisbourg, north of Nova Scotia onCape Breton Island, the British committed themselves to establishing a fortress andnaval base of their own in Nova Scotia.In 1749 several thousand Protestant colonists from the British Isles and thecontinent arrived on the Atlantic coast of the province and began the construction ofthe fortified port town of Halifax. A new military government was installed under theleadership of Governor Edward Cornwallis, uncle of Charles Cornwallis, famous inAmerican history as the general who surrendered the British army to Washington atYorktown in 1781. One of Governor Cornwallis’s primary instructions was to finallyresolve the Acadian problem.Cornwallis, a member of the English aristocracy, was a career military officer whohad served on the personal staff of the Duke of Cumberland, second-born son of KingGeorge II. He had been at Cumberland’s side in 1745 when the duke turned back theFrench-backed invasion of Charles Stuart, Catholic pretender to the British throne.Cornwallis led his regiment at the Battle of Culloden, brutally crushing Stuart’sScottish supporters. In the aftermath of the battle he commanded raiding parties sentinto the remotest parts of the Scottish Highlands to “pacify” the population, raidsAcadiensis8818024-05 Faragher Forum 2/23/07 5:32 PM Page 88

legendary for their brutality and bloodlust. He supervised the burning of Catholicchapels and the torture of Catholic priests. He was instrumental in the “Scottishclearances”, executing orders to expel the most troublesome of the Highland Scotsfrom their homeland. This was the man the British selected to handle the Acadianproblem. His staff was composed largely of others who shared his experience,including the man that became Cornwallis’s protégé, Lieutenant-Colonel CharlesLawrence, who soon was appointed lieutenant-governor.Cornwallis had no specific instructions to expel the Acadians. Rather, he wasexpected to intimidate them into submission. A new civil government would beestablished to rule the province, but the Acadians, as Catholics, would be permittedneither to vote nor to hold office. They would be required, however, to swear anunconditional oath of allegiance. Those who did so would be allowed to “continue inthe free exercise of their Religion . . . [and] the Peaceable Possession of such Landsas are under their cultivation” (p. 250). Those who refused would be forced to vacatethe province, forfeiting all their property. Cornwallis had no actual plan to effect theremoval of the Acadians, since he fully expected that they would bend to his pressure.They did not. Governor Cornwallis anticipated humble and cloying peasants,tugging at their caps. He was surprised to find subtle and assertive republicans. To hisdemand that the Acadians swear an unconditional oath, the inhabitants reiterated theirlong-held position. While they were willing to take another oath, they insisted on anexplicit exemption from bearing arms. They argued that since this exemption hadbeen endorsed by the king’s representative in 1730, and it had been accepted as theruling assumption of their civil life for nearly 20 years, the exemption had the forceof law. “Acts proposed by the people”, they asserted, “when they are approved byRoyal authority, acquire a force which the king himself cannot take away from them”.Consider the meaning of this remarkable statement; their neutrality was part of thecustomary law of l’Acadie or Nova Scotia and thus their identity was protected by thecommon law of Englishmen. It was a brilliant and original formulation. “It appears tome that you think yourselves independent”, Cornwallis responded, “and you wish totreat with the King as if you were so” (pp. 253-5).This is a “tragic” story not simply because it is sad but because, as in classicaltragedy, the Acadians helped to shape their own fate. They stood up for principles.Residents of the British colonies of North America were years away from declaringtheir rights as republicans yet here were the Acadians standing before Britishgovernors and making the case for similar rights. I think of them as prematurerepublicans – a little too early for their own good. The Acadian story is a remarkableone, because the rights for which they were arguing were not that different from therights ordinary British colonists would assert in the 1760s and 1770s.Many Acadians responded to the new British threats by abandoning their homesand farms and decamping for French-controlled territory. The new militarygovernment was “reducing us to the condition of the Irish”, one group declared. “Thuswe see ourselves on the brink of destruction, liable to be captured and transported . . .and to lose our religion” (p. 264). The Mi’kmaq responded to the new British militaryassertiveness by declaring war and launching a series of destructive attacks againstProtestant settlers in the Halifax area. Over the next four years the province wasovertaken by spasmodic violence. Cornwallis eventually resigned in failure andreturned to England and, by late 1753, the military government was in the hands ofAGreat and Noble Scheme8918024-05 Faragher Forum 3/2/07 8:53 AM Page 89

Lieutenant-Governor Charles Lawrence. “I cannot help being of the opinion”, hewrote to London in one of his first official dispatches, “that it would be much better,if [the Acadians] refuse the oaths, that they were away” (p. 282). He asked for officialapproval.Much attention has been focused on the responsibility of the authorities in Londonfor le grand dérangement. Lawrence did not receive a reply to his request forauthorization for the expulsion until January 1755. The colonial office refused toeither approve or disapprove, but instructed him to act on his own. I think theconclusion is obvious: by shifting responsibility to local authorities, officials inLondon were distancing themselves from what was about to take place, providingthemselves with “plausible deniability”. Better to let Lawrence take the risk –something it turned out he was more than willing to do. Only after the dirty job hadbeen done – after thousands of Acadians had been removed from their communitiesand shipped off in transport vessels, after thousands more had fled into the woodswhere they suffered from exposure, starvation, and disease, and after Acadianproperty had been looted and Acadian communities torched – only then did Britishofficials offer an endorsement. The operation, the colonial minister wrote to the kingin the aftermath, had been “crowned with a success greatly beyond our expectationsand almost equal to our wishes”. The expulsion of the Acadians had made available,he wrote, “vast quantities of the most fertile land in an actual state of cultivation, andin those parts of the Province the most advantageously situated for commerce” (p.410). His comments make it clear that ultimate responsibility lay with the Britishstate.But I would extend that responsibility. Longfellow’s Evangelineimpressed readerswith its tale of Acadian sufferings and exile. But perhaps because Longfellow was aNew Englander himself, the poem offered no hint of the important role that Yankeesplayed in the removal. Yet the fact is that New Englanders were the most prominentplayers in the planning of the “great and noble scheme” of Acadian removal.Even as Lawrence sought the sanction of London authorities, he already had inhand a comprehensive plan for the removal of the Acadians. It had been prepared byprovincial surveyor Charles Morris, a Massachusetts native and a protégé of GovernorWilliam Shirley. Morris’s thinking echoed that of his mentor. The Acadianscontrolled all of the best land in the province, he argued, and a program of Protestantcolonization would require the confiscation of their farms and the expulsion of theAcadians themselves. “Without their removal”, he wrote in one of the several officialreports he authored on the Acadian problem, “I am sure it would be impossible anylarge number of Protestants can ever be settled in the Country”. Morris urged amilitary campaign to eliminate once and for all the Acadian presence: “They are at alladventures to be rooted out, and the most effectual way is to destroy all thesesettlements by burning down all their houses, cutting the dikes, and destroying all thegrain now growing” (pp. 288-9).In mid-1754 Morris delivered his most comprehensive report to date. The longtitle told the tale: “Some Reflections on the Situation of the Inhabitants, commonlycalled Neutrals, and some methods proposed to prevent their escapeout of the Colony,in case upon being acquainted with the design of removing them, they should attemptto desert over to the French neighboring settlements . . .” (p. 289).Morris made noattempt to argue the case for removal in this report – he had done that many timesAcadiensis9018024-05 Faragher Forum 2/23/07 5:32 PM Page 90

previously – but focused instead on detailing the operations necessary to put it intoeffect. These plans had to be kept secret, he wrote, for once the Acadians knew aboutthem it would be impossible to prevent them from fleeing the province andcontributing their capacious skills as sailors and rangers to the French enemy. TheBritish must strike them by stealth. Morris considered a variety of stratagems bywhich this might be accomplished. Perhaps the inhabitants could be captured whilethey were at mass on Sunday or surprised in the dead of night while they were in theirbeds. But their scattered hamlets would make these difficult operations to man andcoordinate.The best alternative, he concluded, was to set a trap the Acadians would fall intovoluntarily and on their own accord. The men could be summoned to attend ameeting, then seized and held hostage against the surrender of their families. It wouldbe critical, he suggested, to encourage them to think they were being sent to join theirFrench brethren: “It will much facilitate their readiness to go if a persuasion couldobtain among them that they are to be removed to Canada”. In that case, others wouldcome in voluntarily to join their captive kindred. Nonetheless, some inhabitantscertainly would make an attempt to escape, so Morris drew up detailed plans forblocking “the passages by which they may desert the Colony” (p. 290). In its coldcalculation, its weighing of various stratagems and its invention of tricks and lies,Morris’s logic was diabolical. Once they were in British hands, he argued, it would benecessary to disperse the Acadians in small groups throughout the empire, as far fromtheir homeland as possible. Morris aimed at nothing less than the complete destructionof the Acadian community.It is worth repeating that this plan was written considerably more than a year beforeLawrence set it into operation in the autumn of 1755. The operational plan of removalwas the logical culmination of political assumptions and implications that had beendeveloping since the mid-1740s. Let me be explicit about why I think this is soimportant. The comparative history of ethnic cleansing – a field that has developed inthe last ten years or so – makes it perfectly clear that most such operations are notcarried out spontaneously by enraged and inflamed populations. They are typically theresult of carefully conceived plans, often years in the making. They are conceived andmethodically executed by states. And that was precisely the case with Morris’soperational plan, which Charles Lawrence put into effect point by point.Moreover, the operation was carefully planned in conjunction with GovernorWilliam Shirley of Massachusetts. It was authorized by the Nova Scotia Governor’sCouncil, largely made up of Yankees. It was then executed by Yankee troops led (forthe most part) by Yankee officers and provisioned by Yankee merchants. TheAcadians were transported in Yankee vessels, with Yankee crews and Yankeecaptains. And the country once possessed by Acadian farmers was eventually resettledby Yankee families from Connecticut, Rhode Island, Massachusetts and NewHampshire. New Englanders were thus the principal schemers and beneficiaries ofAcadian removal, making this as much an American as a Canadian story.I’ll close by returning to the Acadians of Sainte-Anne (which eventually becameFredericton, the capital of New Brunswick). After the fall of Quebec, the refugeesfrom Sainte-Anne, who had fled there, returned to Rivière Saint-Jean with officialpermission to resettle their lands. An outraged Governor Lawrence deported many ofthem, but a small number avoided his roundup, rebuilt their homes at Sainte-Anne (byAGreat and Noble Scheme9118024-05 Faragher Forum 2/23/07 5:32 PM Page 91

then renamed “Sainte-Anne’s Point” by Planter settlers) and, in 1767, after taking anunconditional oath of allegiance to the British Crown, had their presence formallyauthorized. But their upheaval was not yet over. After the American Revolution, theywere forced to yield their cultivated lands to Loyalist refugees from New England,including many of the officers and troops who had carried out le grande dérangement.The Acadians of Sainte-Anne eventually found homes in the Madawaska Valley.Lieutenant Moses Hazen, the Yankee who led the ranger raid on Ste. Anne, waspromoted to the rank of captain by General Jeffery Amherst.Some time later,however, when Amherst learned that the rangers had killed and scalped Acadianwomen and children, he privately condemned Hazen yet failed to bring charges andallowed Hazen to keep his new rank.Hazen subsequently settled in Quebec after theConquest and then joined American patriots during the Revolution, eventually risingto the rank of brigadier general and, after the war, retired in upstate New York.All of this may further remind us of the interconnectedness of American history.Le grand dérangement is an Acadian, French, British, Canadian and American story.As Acadian historian Édouard Richard put it more than a century ago, in order to re-imagine that story “one must become, so to speak, by turns, a missionary, an Acadianpeasant, an Englishman and a Frenchman, a Catholic and a Protestant. One mustdivest oneself of preconceived notions, narrow or broaden one’s views, penetrate intothe prejudices of all. This is not always easy, nor equally easy for every one” (p. 479).Remembering this story requires that we recognize the wider realms of our history andacknowledge the darker side of our past: the evil means men used to pursue the endof continental expansion. The Acadian story indeed tells a story of North America –a story of frontiers and borderlands at the founding moment of American history, ofa people born on the margins of empire who sought a peaceful way to live with twomasters, of those who attempted to foster peace, and of those who, out of hatred andfear, jealousy and greed, pursued the ways of war.JOHN MACK FARAGHER92Acadiensis18024-05 Faragher Forum 3/2/07 8:53 AM Page 92

O papel das entidades financeiras canadenses nO desenvOlvimentO dOs mercadOs financeirOs na cOlômbia, 1896-1939*stefanO tijerinaEntidades financeiras canadenses desempenharam um papel importante no desenvolvimento dos mer-cados financeiros das principais cidades Colombia-nas. Asseguradoras tais como Manufacturers Life Insurance Company e Life Assurance Company of Canada tiveram um grande impacto no desenvolvi-mento do negócio de seguros no litoral Atlântico, enquanto que Royal Bank of Canada contribuiu ao desenvolvimento da banca pessoal. Este artigo se centraliza nas experiências de entidades financeiras canadenses a Colômbia desde o final do século XIX até o começo da Segunda Guerra Mundial. Des-taca a competitividade entre entidades financeiras internacionais; e o papel que cumprido pelos líderes financeiros, as políticas públicas e os governos em sua luta pelo posicionamento nos mercados emer-gentes de países como a Colômbia. Esta pesquisa histórica também contribui para um melhor enten-dimento das relações bilaterais entre a Colômbia e o Canadá e a forma como o capitalismo se espalhou no hemisfério ocidental.Classificação JEL: E44, F59, F23, G21, G22, L25, N21, N22, N26, N41, N42, N46, O16.Palavras-chave: relações entre a Colômbia e o Canadá, investimento estrangeiro, desenvolvimento econômico, mercados financeiros internacionais, capitalismo, hemisfério ocidental.*O autor é da University of Maine, History Department and School of Economics.Eu gostaria de agradecer a mi amigo e colega John Greenman por suas sugestões e de retroalimentação.Endereço eletrônico:[email protected] recebido no dia 27 de outubro de 2011; versão final aceita no dia 19 de janeiro de 2012.

el papel de las entidades financieras canadienses en el desarrOllO de lOs mercadOs financierOs en cOlOmbia, 1896-1939*stefanO tijerina*El autor es de la University of Maine, History Department and School of Economics.Me gustaría agradecer a mi amigo y colega John Greenman por sus sugerencias editoriales y su retroalimentación.Correo electrónico:[email protected] recibido:27 de octubre de 2011; versión final aceptada19 de enero de 2012.Entidades financieras canadienses desempeña-ron un papel importante en el desarrollo de los mercados financieros de las principales ciudades colombianas. Aseguradoras tales como Manufac-turers Life Insurance Company y Life Assurance Company of Canada tuvieron un gran impacto en el desarrollo del negocio de seguros en la costa Atlántica, mientras que Royal Bank of Canada contribuyó al desarrollo de la banca personal. Este artículo se centra en las experiencias de entidades financieras canadienses en Colombia desde fina-les del siglo XIX hasta el comienzo de la Segunda Guerra Mundial. Resalta la naturaleza competitiva del negocio financiero internacional y el papel que cumplieron los líderes empresariales, las políticas públicas y los gobiernos en su lucha por el posi-cionamiento en los mercados emergentes de países como Colombia. Esta investigación histórica tam-bién contribuye a un mejor entendimiento de las relaciones bilaterales entre Colombia y Canadá y la forma como el capitalismo se extendió en el hemisferio occidental.Clasificación JEL: E44, F59, F23, G21, G22, L25, N21, N22, N26, N41, N42, N46, O16.Palabras clave: relaciones entre Colombia y Canadá, inversión extranjera, desarrollo económico, merca-dos financieros internacionales, capitalismo, hemis-ferio occidental.

the rOle Of canadian financial institutiOns in the develOpment Of cOlOmbia’s financial markets, 1896-1939*stefanO tijerina*The author is at the University of Maine, History Department and School of Economics.I would like to thank my friend and colleague John Greenman for his editorial suggestions and feedback.E-mail:[email protected] received: 27 October 2011;final version accepted:19 January 2012.Canadian financial institutions played an important role in the development of financial markets within Colombia’s urban centers. Specifically, insurance companies such as Manufacturers Life Insur-ance Company and Life Assurance Company of Canada were crucial in the expansion of the insur-ance business across the Caribbean coast, while Royal Bank of Canada contributed to the develop-ment of personal banking operations throughout the nation. This paper looks at the experience of Canadian financial companies in Colombia from the late 1800s to the beginning of World War II. It highlights the competitive nature of international financial business and the role of business leaders, policy, and governments in efforts to secure mar-ket shares in emerging nations such as Colombia. This historical research also contributes to a bet-ter understanding of the bilateral relations between Colombia and Canada, and the ways in which capi-talism expanded across the western hemisphere. JEL classification: E44, F59, F23, G21, G22, L25, N21, N22, N26, N41, N42, N46, O16. Keywords: Canadian-Colombian Relations, for-eign investment, economic development, inter-national financial markets, capitalism, western hemisphere.

255ensayOs sObre pOlÍtica ecOnÓmica, vOl. 30, núm. 67, ediciÓn especial histOria de la banca centralI. InTrODUCTIOnCanadian financial institutions such as Life Assurance Company of Canada, Manu-facturers Life Insurance Company, and Royal Bank of Canada began to offer their services in Colombia between the late 1890s and the early 1900s.1 Canadian multi-nationals were also interested in the Colombian market because it remained, for the most part, untapped. They initially chose Panama City, Cartagena, and Barranquilla as potential markets because these cities were Colombia’s international trading cen-ters at the time. Some British and American financial firms had established operations during the second half of the 1800s, but these operations did not compare to their presence in other Latin American nations such as Mexico, Brazil, Argentina, or even Cuba. The Caribbean and Latin American markets represented a solution to Cana-dian financial institution’s limited domestic market, which did not allow their busi-nesses to grow at the pace of American or European markets. Insurance companies were attracted by the potential of the Caribbean, and included Colombia’s Caribbean urban centers as part of their target market. Upon their arrival in Colombia in the late 1890s, Manufacturers Life Insurance Company and Life Assurance Company found a commencing market controlled by locally-owned businesses such as the Compañía Colombiana de Seguros.2 The Royal Bank of Canada found stronger competition on their arrival in 1920, but were able to make their presence felt due to their close relationship with Canadian subsidiary Imperial Oil, which by that time carried out operations in Barrancabermeja on behalf of Standard Oil Company of New Jer-sey. Henceforth, Royal Bank was forced to compete against other financial entities, 1 Graeme Mount, “Canadian Investment in Colombia: Some Examples, 1919-1939,” North/South: The Canadian Journal of Latin American Studies, 1, no. 1 and 2 (1976): 46.2 Frank Safford, “Foreign and national Enterprise in nineteenth-Century Colombia,” The Business History Review 39, no. 4 (Special Latin American Issue) (Winter 1965): 521.

the rOle Of canadian financial institutiOns in the develOpment Of cOlOmbia’s financial marketspp. 252-279256including the Bank of London, Banco de Bogotá, Banco Alemán Antioqueño, Anglo South American Bank Limited of London, and the French and Italian Bank.3 In both cases, the Colombian market represented a solution to the domestic demographic constraints and limited investment capital of Canadian financial institutions.4 Contrary to the experience of Canadian subsidiaries operating in Colombia dur-ing the early 1900s (e.g. Pato Gold Dredging and Imperial Oil), Canadian financial entities were independent and experienced greater decision-making flexibility than their foreign-owned counterparts. The Canadian financial institutions that arrived in Colombia were fully-owned by Canadian capital, and enjoyed the benefits of Canadian policies and government support. This allowed Canadian banking and insurance initiatives in Colombia to be independent from the burdens of British or American control, but did not mean that these institutions were immune to interna-tional dependency on larger industrial markets. The Canadian Bank was dependent on the New York Stock Exchange while insurance companies were dependent on the London Stock Exchange. The experiences of both banking and insurance in Colom-bia revealed the limitations of Canadian multinationals and their dependency on leading international trading institutions.5Canadian financial entities responded to the international market’s demand for financial services in the early twentieth century by branching out into emerging markets across the Caribbean and Latin America. One of these markets was Colom-bia’s Caribbean coast, which by the late 1800s had moved away from the conserva-tive isolationist ideology and the anti-liberal views that characterized Colombia’s Andean elites. Coastal urban centers such as Panama, Cartagena, and Barranquilla had moved toward more progressive economic development policies and had imple-mented liberal policies introduced by foreigners and local merchants that had estab-lished contacts with the outside world. Local policy makers and business leaders were instrumental in setting up chambers of commerce, banks, and insurance companies, 3 For more on Bank of London and Banco de Bogotá see Safford, “Foreign and national Enterprises in nineteenth-Century Colombia,” 521. For information on Banco Alemán Antioqueño, Anglo South American Bank, and French and Italian Bank, see Adolfo Barajas, roberto Steiner, and natalia Salazar, “Foreign Investment in Colombia’s Financial Sector,” (Bogota: International Monetary Fund, november 1999), 5.4 Gregory P. Marchildon, “Canadian Multinationals and International Finance: Past and Present,” Business History 34, no. 3 (July 1992): 3.5 Ibid., 2.

257ensayOs sObre pOlÍtica ecOnÓmica, vOl. 30, núm. 67, ediciÓn especial histOria de la banca centralas well as in establishing favorable business conditions tailored to attract foreign investment and capital. Port city elites who relied on foreign capital for the sustain-ability of local and regional economies increasingly demanded the implementation of laissez-faire policies that would benefit business and improve the export-driven infrastructure.6 It was under this climate of free-market thinking that Manufactur-ers Life Insurance Company first arrived in 1896, followed by Sun Life Assurance Company a few years later. The financial institutions that ventured overseas profited from Canada’s deregulated financial system. Lax fiscal and investment policies not only turned Canada into a hub for foreign-owned subsidiaries, but it allowed Canadian financial investors to operate in the international market under more favorable conditions. The federal government willingly supported Canadian financial investors abroad by providing them the flexibility to develop and implement new and sophisticated financial prod-ucts that allowed them to effectively compete in the international market. While British and American banks were restrained from expanding overseas by their own legislation, the Canadian government was “instrumental in creating a protected mar-ket, in which banks could develop competitive strengths,” providing a “cornerstone for international growth strategies.”7 It was under these favorable conditions that Canadian financial institutions ventured into the Colombian market.II. InSUrAnCEToronto-based Manufacturers Life Insurance began to sell policies in Colombia in the late 1890s, followed by the Montreal-based Sun Life Assurance in 1905.8 Both insurance companies centered their business in Cartagena and Barranquilla, 6 By the early 1900s, elites from Barranquilla and Cartagena had established strong relations with foreign businesses and investors. Their economic development had become more dependent on foreign markets than on the domestic market, as companies such as United Fruit and the Andian national Corporation invested in infrastructure proyects geared towards the region’s export economy. For more on the region’s economic development during the early 1900s, see Adolfo Meisel roca, ¿Por Qué Perdió la Costa Caribe el Siglo XX? Y Otros Ensayos (Bogotá: Banco de la república, 2011), 133-68. 7 James L. Darroch, “Global Competitiveness and Public Policy: The Case of Canadian Multinational Banks,” Business History 34, no. 3 (July 1992): 153.8 Graeme Mount, “Canadian Investment in Colombia: Some Examples, 1919-1939,” North/South: The Canadian Journal of Latin American Studies 1, no. 1 and 2 (1976): 46.

the rOle Of canadian financial institutiOns in the develOpment Of cOlOmbia’s financial marketspp. 252-279258taking advantage of the dynamic economy of these two port cities.9 Elites from this region had a more outward view and a “marked readiness to accept new ideas.” This included political opposition to policy makers from the interior and their uneasiness toward trade and commerce.10 The United Fruit Company had established operations in Ciénaga in 1899 and used Cartagena’s shipping and Barranquilla’s business facili-ties, while British and American mining companies used the main coastal ports for the shipment of gold. Foreign merchants managed their import businesses from cities such as Barranquilla, thereby making it a potential center for life insurance business.In 1901 the head office of Manufacturers Life Insurance Company issued a press release stating the company was in the process of absorbing the Canadian insur-ance companies Temperance and General Life Insurance. This was done in order to become a stronger competitor in the international market, demonstrating its inten-tions to aggressively tap international markets.11 Although it was not openly stated, Manufacturers was branching out to foreign markets in order to bring the company up to par with other Canadian and foreign competitors. The Canadian domestic market was limited, and in order to grow Manufacturers had to underwrite poli-cies outside the country. The company explained that Canadian insurance laws were an advantage, enabling “the Company to get foreign business at less cost than its competitors.”12 Buyouts, or what the company called “concentration and amalgama-tion of financial and other interests,” were their objective overseas; the company explained that this was the way in which financial entities competed in the global market.13 Canadian insurance companies willing to expand overseas benefited from pro-business government policies. For instance, a policy allowed the government to set aside a reserve to ensure that policyholders were paid. In essence, the federal gov-ernment issued a three million dollar reserve “for the protection of policyholders.”14 9 Sun Life established business in Panamá in 1904 and Manufacturers followed in 1909. By that point Panama had gained independence from Colombia. Graeme Mount, “Isthmian Approaches: The Trajectory of Canadian-Panamanian relations,” Caribbean Studies 20, no. 2 (1980): 51-52. 10 Vernon Lee Fluharty, Dance of the Millions: Military Rule and the Social Revolution in Colombia (Pittsburgh: University of Pittsburgh Press, 1957), 23.11 Toronto Head Office, Canada, “Manufacturers Life Insurance Company,” The Daily Gleaner, March 20, 1901, 7. 12 Ibid.13 Ibid.14 Ibid.

259ensayOs sObre pOlÍtica ecOnÓmica, vOl. 30, núm. 67, ediciÓn especial histOria de la banca centralThanks to policy and potential buyout opportunities, the company was ready to “make a special push for business in the West Indies and Spanish America.”15Commonwealth Caribbean markets were the first ones to be targeted by Manufactur-ers Life Insurance Company. By 1896, the company had established a branch office in Kingston, Jamaica under the management of Ivanhoe Gadpaille, while South American operations were assigned to William E. Young.16 The Colombian market was initially tapped by Young, who tailored its business to the needs of educated elites that understood the benefits of the financial product. He also sought high-level executives from Canada, Europe, and the United States who resided in Colombia and were interested in protecting their family assets from the dangers of the rugged, wild, and untamed tropical region. Manufacturers, like all other foreign financial institu-tions operating throughout the Americas, understood that business success in places like Colombia could only be achieved if regional elites were targeted. The masses (the popular class) did not represent a profitable market as they did back home.Upon its arrival, the Canadian company found it challenging to compete against several local and foreign-owned insurance companies, particularly because these companies had physical offices in Colombia and did not rely on the regional repre-sentative model for business expansion. The competitors’ long-standing acquain-tance with coastal elites also gave them an edge over Manufacturers. Nevertheless, the government-backed product gave them an advantage over their competitors. Canadian insurance companies also benefited from anti-American sentiment that spread across Colombia after the 1903 incidents that led to Panama’s independence, as well as the declining influence of Britain within the region.Manufacturers’ operations in Colombia were overshadowed by the more aggres-sive presence of Sun Life Assurance Company. The beginning of operations in the Colombian Caribbean in 1905 were established through the company’s Western Department, which included eleven other Latin American nations and a regional office that tailored to the needs of the Northern and Central British West Indies.17 15 Ibid.16 Manufacturers’ operations in other parts of the Caribbean and South America were initially based in Jamaica. Ivanhoe Gadpaille, “Manufacturers Life Insurance Company of Canada,” The Gleaner, April 29, 1902, 6. 17 This includes Latin American and Caribbean nations such as Cuba, Haiti, Jamaica, Mexico, nicaragua, Peru, Puerto rico, Santo Domingo, Chile, and Argentina. See George H. Harris, The

the rOle Of canadian financial institutiOns in the develOpment Of cOlOmbia’s financial marketspp. 252-279260Sun Life capitalized on the anti-American sentiment and the lack of American pres-ence in the Colombian insurance market.18 The British had a stronger presence at the time, but financial regulations in the United Kingdom made them less competitive in the area of life insurance. Sun Life also benefited from 1906 state legislation in the United States that limited the amount of new business “which New York-based life insurance companies could write,” forcing American companies such as Equitable Life Assurance Society and New York Life Insurance Company to abandon their Caribbean and South American operations.19Sun Life entered the Colombian Caribbean market offering an “unconditional pol-icy,” a product that trumped the efforts of any other competitor in the market.20 In essence, the product made life insurance products accessible to any individual with-out restrictions of any kind, including the selectivity of risk.21 By the time it entered the Latin American market, Sun Life “had an individuality and a character which distinguished it from all rivals; in respect to the terms of the contracts it offered it was indeed in a class of itself.”22 Cartagena and Barranquilla were, for the most part, untapped markets; they rep-resented “a virgin field for life insurance.”23 Nevertheless, these were unfamiliar territories for Canadian businessmen. The mystery and dangers that stereotypi-cally characterized the tropics at the time forced Sun Life executives to tweak insurance policies to fit the demographics and mortality rates of the particular regions. Although preserving the “unconditional policy,” the company established premium tables for the tropical region based on available mortality statistics and President’s Book: The Story of the Sun Life Assurance Company of Canada (Montreal: Sun Life Assurance Company, 1928), viii-ix.18 Total trade between Colombia and the United States was insignificant, it “amounted to a little more than a million dollars in 1830, reached two million in 1855 and fourteen million in 1880, but declined to seven million in 1900.” This tendency would begin to change after the First World War. J. Fred rippy, The Capitalists and Colombia (new York: The Vanguard Press, 1931), 10.19 Mount, “Canadian Investment in Colombia: Some Examples, 1919-1939,” 46.20 Harris, The President’s Book: The Story of the Sun Life Assurance Company of Canada, 83.21 Ibid.22 Ibid., 84.23 Ibid., 87.

261ensayOs sObre pOlÍtica ecOnÓmica, vOl. 30, núm. 67, ediciÓn especial histOria de la banca centralother contingencies.24 All tropical business, including Colombia’s, was considered a special class in and of itself.25 The company viewed Colombia as a Caribbean nation, and identified Barranquilla’s “cosmopolitan bourgeoisie” as an ideal Caribbean market.26 As indicated by the com-pany, Colombia’s Atlantic Coast represented a region of prospective high-volume, low-cost business in a “new and almost non-competitive field.”27The Caribbean was a more accessible market than the Canadian market. The Domin-ion’s vast territory was difficult to cover, the population was small, individual wealth was limited, and competition from foreign and Canadian companies made the mar-ket a much more challenging environment.28 Meanwhile, the Caribbean market was easily accessible; there was much less competition and business was unregulated. The unregulated market allowed Sun Life to protect its foreign operations from the high risks of international investment. The Canadian company mandated that foreign business be self-supporting and not financed or supported by domestic premiums; therefore, business risks were assumed by each Latin American office and policies were tailored to the particular needs and perils of each case.29 Sun Life also benefited from the failed attempts of several American insurance companies. In 1922, American-owned Equitable Life Insurance Company rein-sured their existing Colombian policies with Sun Life, and in 1923 New York Life Insurance Company followed suit.30 By 1927 Sun Life Assurance had successfully 24 Ibid.25 Ibid.26 regional historian Eduardo Posada-Carbó made reference to what C.A. Jones called Barranquilla’s “cosmopolitan bourgeoisie”, a merchant class of mixed nationalities. For more on Barranquilla’s elites, see Posada-Carbo, The Colombian Caribbean: A Regional History, 1870-1950, 208. For more on Barranquilla’s contribution to Colombia’s national economy during the early 1900s, see Adolfo Meisel roca, ¿Por Qué Perdió la Costa Caribe el Siglo XX? Y Otros Ensayos, 134-44.27 According to company records, Colombia was seen as an untapped market; for more information see Harris, The President’s Book, 87.28 Harris, The President’s Book: The Story of the Sun Life Assurance Company of Canada, 88.29 Ibid., 126.30 Mount, “Canadian Investment in Colombia: Some Examples, 1919-1939,” 47.

the rOle Of canadian financial institutiOns in the develOpment Of cOlOmbia’s financial marketspp. 252-279262expanded its operations to include a broad share of the international market.31 For-eign markets such as Colombia were so important that the president at the time said, “Canadian business, large though it is, will soon be less than ten per cent of the total…profits are being earned by Canadian brains and Canadian enterprise, but not from Canadian premiums.”32 Sun Life took advantage of Colombia’s 1920s “dance of the millions.”33 It generated business from the inflow of capital that stemmed from Washington’s 1921 reparation payment for the loss of Panama and the increase of American foreign investment, as seen in the case of the United Fruit Company.34 The presence of American companies and Canadian subsidiaries such as Tropical Oil and Andian National Corporation turned Barranquilla into a promising insurance market.35 Cartagena was also an important business hub for Sun Life Assurance. The historic port city was a desired destination for Canadian winter cruises that sailed the Caribbean. Cartagena’s tourist industry represented an important market for for-eign companies such as Sun Life; the city offered a concentrated core of traditional wealth, an emerging merchant class, and a strong presence of foreigners that tailored to the needs of a growing tourist industry.3631 By 1927 Sun Life Assurance was present in the United States, Great Britain, Mexico, Chile, Colombia, Cuba, Argentina, Peru, nicaragua, Guatemala, Puerto rico, Santo Domingo, Haiti, British West Indies, Japan, India, China, Egypt, Philippines and South Africa. “Sun Life Assurance Company of Canada: A great international institution,” The Gleaner, March 3, 1928, 17. 32 Mira Wilkins, “Multinational enterprise in insurance: An historical overview,” Business History, 51, no. 3 (May 2009): 343. 33 For more information on the “dance of the millions”, see Vernon Lee Fluharty. Dance of the Millions: Military Rule and the Social Revolution in Colombia (Pittsburgh: University of Pittsburgh Press, 1957).34 J. Fred rippy indicated that U.S. direct investment in Colombia experienced a rapid expansion, going from “11 million dollars in 1910 to 23 million in 1913, more than 112 million in 1920, and over 153 million in 1929”; for more detail see rippy, The Capitalists and Colombia, 14. In the case of United Fruit, investments in Colombia had escalated from an initial $2 million to $125 million by 1928; see “Progress made by United Fruit Company in the Caribbean,” The Gleaner, March 27, 1928, 6.35 For more on the Andian national Corporation and its presence in Colombia see Adolfo Meisel roca, ¿Por Qué Perdió la Costa Caribe el Siglo XX? Y Otros Ensayos, 151-54; see also Stefano Tijerina, “A ‘Clearcut Line’: Canada and Colombia, 1892-1979” (Ph.D. Dissertation, University of Maine, 2010), 49-67.36 numerous American and Canadian cruise lines used newspaper advertisements as a means to market their product. A 1924 ad in the Manitoba Free Press showed the key destinations of

263ensayOs sObre pOlÍtica ecOnÓmica, vOl. 30, núm. 67, ediciÓn especial histOria de la banca centralBy 1930 three foreign-owned companies controlled close to fifty-four percent of Colombia’s insurance market; Sun Life’s policies represented half of this share and the rest was split between Manufacturers Life and New Orleans-based Pan Ameri-can Life Insurance Company.37 By that time, the Colombian life insurance market was, for the most part, underwritten by Canadians.However, the Great Depression forced President Enrique Olaya Herrera to implement a series of nationalist policies that conflicted with the interests of foreign companies operating in Colombia. Protectionist policies such “as placing the oil industry under government regulation” sent a negative message to Canadian insurance companies.38 Additionally, the fine-tuning of risk evaluation that resulted from the outcomes of the First World War lead Sun Life and Manufacturers to reevaluate their position in Colombia and other parts of the hemisphere. In the 1930s, for example, “Sun Life Assurance of Canada opened no new offices in the United States and closed thirteen. It withdrew from underwriting insurance in Chile, Colombia, El Salvador, Dutch Guiana (Surinam), French Guiana, Honduras, Mexico, Nicaragua, and Peru.”39 How-ever, this did not impede the company from growing its insurance business else-where. T.B. Macaulay, president of the company at the time, reported shareholder gains “of more than $36,000,000 in assets” for 1931, and highlighted the possibility of expanding business to the recovering North American market.40 Canadian insur-ance companies had changed their strategy, moving away from Latin America and concentrating on Canadian and American markets.Latin America was no longer an attractive market due to nationalist policies. In Colombia, protective policies threatened foreign business interests, and the possi-bility of social unrest and political instability created a less than favorable environ-ment for insurance companies. After the 1930s Colombia had become an unstable place, and the debate over sovereignty and oil policy reduced the interest of foreign the Canadian red Star Line, the White Star, and the Dominion Line. In this case, as in many others, Cartagena was included as a key destination in the Caribbean. See “Winter Cruises,” Manitoba Free Press December 2, 1924, 16.37 Mount, “Canadian investment in Colombia,” 47. 38 Fluharty, Dance of the Millions, 43. 39 Wilkins, “Multinational enterprise in insurance,” 344. 40 “Assets of Sun Life rise $36,000,000,” New York Times February 10, 1932, 35.

the rOle Of canadian financial institutiOns in the develOpment Of cOlOmbia’s financial marketspp. 252-279264investors. Sun Life and other foreign corporations only considered returning to Colombia after the Frente Nacional policies of 1958 that favored open market and business-friendly initiatives.III. BAnkInGCanadian banks were able to successfully penetrate the Latin American and Carib-bean markets for two main reasons: the support they received from their federal government, and the knowledge of their leaders concerning the changing dynam-ics of geopolitical power in the region. Specifically, former Royal Bank president Sir Herbert Holt was instrumental in helping the bank navigate the murky waters of the struggle for imperial power in the Western Hemisphere. The bank aggres-sively entered the market in 1920 with the objective of carrying out branch banking operations across the country, and was able to remain a personal banking operation for the next forty years. In the 1960s, Royal Bank would begin to experiment with investment banking through consortium banking, following the footsteps of Bank of London and Montreal, which entered the Colombian market with mixed banking products in the late 1950s.41In the early twentieth century, institutions such as Royal Bank received Ottawa’s approval to expand beyond national borders, unleashing international banking opera-tions that “boomed in the 1920s, assisted directly and indirectly by provincial and fed-eral governments that were eager to facilitate the country’s expansion.”42 The efforts of Royal Bank of Canada, Bank of Nova Scotia, and Bank of Montreal contributed to Canada’s rapid economic development of the 1920s, aided by increased federal powers that orchestrated economic production and centralized banking policy in Ottawa.43Ottawa used flexible and more progressive banking legislation to ensure that bank-ing contributed not only to national economic development but also to the consolida-tion of the nation state as well. Policy makers established a stable industry that would 41 The Bank of London and Montreal was jointly formed by the Bank of Montreal and the Bank of London and South America; for more detail see Duncan McDowall, Quick to the Frontier: Canada’s Royal Bank (Toronto: McClelland & Stewart, 1993), 409.42 Scott W. See, The History of Canada (Westport: Greenwood Press, 2001), 116.43 Ibid., 108.

265ensayOs sObre pOlÍtica ecOnÓmica, vOl. 30, núm. 67, ediciÓn especial histOria de la banca centralencourage the inward flow of capital, therefore choosing “chartered banks as the dominant financial institution in Canada.”44 Contrary to other industries, banking became a Canadian-controlled industry designed to facilitate provincial and interna-tional trade; its infrastructure was intended to assist government financing.45 Meanwhile, banks in Britain and the United States were restrained from expanding operations abroad. Prior to the First World War “there was no American bank in Latin America, the law forbidding Federal banks to establish branches abroad.”46 However, as the war progressed and the British Empire’s influence in the region decreased, Washington quietly stepped up to fill the gap being left by Britain. British and Canadian bankers and policy makers were well aware of these changes. The initial developments of the Pan American Union led British officers to believe that Americans were forming an American League of Nations to displace them from the region. In the case of banking, they pointed out that during the war restrictive laws were “quietly changed” by the American government “to permit the finan-ciers of Wall Street to invade South American markets and dominate them.”47 They accused the Americans of intervening in the private and government affairs of Argentina, Chile, Brazil, Peru, Bolivia, and Colombia.48 Taking advantage of the declining influence of British banks, Canadian institutions aggressively increased their activity across the region in order to compete against American banks.During the 1915 Pan American Financial Conference held in Washington, del-egates from Latin America indicated “they needed many commodities which they formerly bought from Europe.”49 However, they doubted that the American system could take “the position in South American finance held for so long by European 44 Ibid., 154. 45 James L. Darroch, “Global Competitiveness and Public Policy: The Case of Canadian Multinational Banking,” Business History 34, no. 3 (July 1992).46 Edwin L. James, “Europe Watching Pan-America Plans,” New York Times March 27, 1923, 19.47 Ibid.48 Ibid.49 “South America needs the U.S.,” New York Times, May 23, 1915, SM 12.

the rOle Of canadian financial institutiOns in the develOpment Of cOlOmbia’s financial marketspp. 252-279266countries, particularly England.”50 Unable to distinguish between the Canadian Dominion and the British Empire, lobbyists from the region’s financial sector had no other option but to take their agenda to the United States. Prominent bankers, national bank directors, and Treasurers took advantage of the opportunity to lobby for the “establishment of banks, arrangement of credits, and…temporary invest-ment… in such directions as the supplying of money for the working of mines and rubber plantations, and extending to South American traders those credit facilities” that had been closed as a result of the war.51In the case of Colombia, delegate Santiago Pérez Triana arrived with a proposal that stipulated, in great detail, the type of foreign banking that would benefit the region.52 He explained:Autonomous banks, in my view, should be established in each South and Central American country under the guarantee of the respective countries. These should be individual banks, having no connection with one another. All the banks should be under the auspices of a general United States banking association, composed of banks and bankers of the various parts of your country, or else each individual new bank should be under the auspices of an individual bank or group of bankers of the United States.53Royal Bank and all other Canadian banks that entered Latin American and Carib-bean markets in response to the demand of banking and financial services fulfilled the requirements set forth by Triana. Institutions such as Royal Bank were eager to tackle the challenge set forth by the members of the Pan American Union.By 1916, just one year after the Pan American Financial Conference, the Royal Bank of Canada had opened branch operations in Cuba, Costa Rica, the Dominican Republic, 50 Ibid.51 Ibid.52 Triana was a prominent Colombian banker, former Minister to Great Britain, and son of a former Colombian President. 53 “South America needs the U.S.,” SM 12.

267ensayOs sObre pOlÍtica ecOnÓmica, vOl. 30, núm. 67, ediciÓn especial histOria de la banca centraland Venezuela.54 That year Holt visited Cuba, Puerto Rico, Santo Domingo, Costa Rica, and the British West Indies with the intention of familiarizing himself “with local conditions and to meet…leading customers.”55 He also visited Venezuela, where the bank had just opened its first branch, and stopped in Colombia to discuss with local authorities and the British government the possibilities of opening branch offices there as well. 56 Later, at the bank’s annual meeting, he reported to shareholders that “he was gratified to receive from Viscount Grey, the late (British) Foreign Secretary, his approval of the establishment of branches” in Colombia.57By the war’s end, Royal Bank of Canada was well positioned across the hemisphere. The bank profited from Holt’s understanding of the region; he not only was familiar with the geopolitical realities and the business culture, he also understood the impor-tance of taking advantage of the window of opportunity that Canadian banks had to compete shoulder to shoulder with American counterparts. The war benefited Latin American and Caribbean economies by allowing them to diversify their pool of foreign investors. It provided an opportunity for Americans to displace European banks from the region and, according to Holt, it had revealed to Canadians their “economic power” and provided a “great opportunity in the field of foreign trade.”58 By 1920, when the bank first began operations in Colombia, it provided personal banking services, including intermediary banking between Colombia and Europe.59 This was crucial because most European-owned banks operating in Colombia had closed, leaving behind a demand from commodity consumers, foreign and local mer-chants, and exporters that still relied heavily on the European market. Royal Bank was able to maintain this relationship and serve as a bridge between Colombia and 54 Herbert Holt, “Forty-Eighth Annual Meeting of the royal Bank of Canada,” Manitoba Free Press January 19, 1917, 12.55 Ibid.56 Ibid.57 Ibid.58 Ibid.59 “The royal Bank of Canada has formed a close working association with the London County Westminster and Parr’s Bank, Limited,” The Gleaner, July 11, 1919, 7.

the rOle Of canadian financial institutiOns in the develOpment Of cOlOmbia’s financial marketspp. 252-279268Europe. This was a great advantage because American banks at the time could not provide intermediary services with Europe. Royal Bank capitalized on this opportu-nity to expand its branch services across Colombia. The bank’s efforts in the region motivated others in the Canadian private sector to reevaluate business opportunities in the region. In 1921, the Canadian Manufactur-ers Association embarked on a fact-finding mission throughout the West Indies and South America. Upon their return, Canadian exporters, importers, and representa-tives from the manufacturing sector met in Montreal to debrief on the recent visit. In regards to banking, they noticed that Canadian banks were well positioned, par-ticularly the Royal Bank.60 C.E. Austin, a Canadian business representative living in Barranquilla, referred specifically to business in South America. He noted that Colombia and Venezuela “were now at the commencement of what promises to be a remarkable period of expansion,” thanks in part to the development of the Panama Canal.61 Once again, representatives from the Canadian business and manufacturing sector concluded that Ottawa needed to increase its efforts, and suggested the gov-ernment send men to the region “to keep in touch with conditions in that part of the world and establish business connections.”62 If there was more government presence in the region, the delegation concluded, trade relations would be greatly benefited.63Herbert Holt was also interested in receiving direct support from the Canadian gov-ernment, particularly after 1922 when the American-owned Bank of Central and South America took over all branch operations of Mercantile Bank of the Americas for Central and South America.64 This meant that National Bank of Nicaragua, Banco Mercantil de Costa Rica, Banco Mercantil Americano del Perú, Banco Mercantil Americano de Caracas, and Banco Mercantil Americano de Colombia were now 60 Canadian Gazette, “Trade between Dominion and West Indies,” The Gleaner, December 29, 1922, 6. 61 Ibid.62 Canadian Gazette, “Trade between Dominion and West Indies,” The Gleaner December 29, 1922.63 Ibid.64 “Bank to specialize in Latin America,” New York Times, September 15, 1922, 31.

269ensayOs sObre pOlÍtica ecOnÓmica, vOl. 30, núm. 67, ediciÓn especial histOria de la banca centralcontrolled by American interests.65 With British banks out of the picture, American and Canadian banks were left on their own to compete against local banks.Herbert Holt, who had a particular affinity for Venezuela and Colombia, never gave up the fight for the control of these newly-developed markets.66 In an effort to con-vince the bank’s board members, Canada’s private sector, and Ottawa of the benefits of defending their position in Colombia, Holt emphasized the potential of Colombia’s untapped wealth. Royal Bank issued a national report published in 1925 that indicated there were “few storehouses of untouched and unmeasured wealth to compare with the resources that remain to be developed in the Republic of Colombia.”67 Regarding the nation’s financial situation, the report concluded that Colombia’s international debt of close to twenty-two million dollars for 1924 was not a significant figure and that the banking industry was sound, thanks to the establishment “of the central reserve bank modeled after the Federal Reserve system.”68 Rapid economic develop-ment, said the report, had not been achieved because of the limited development of land transportation and other transportation facilities.69 The report concluded that the development of the commercial hydroplane industry had represented a step for-ward, but in order to unify the country’s economy, a railroad system needed to be developed and the Bank could facilitate this venture.70 Since the Germans had beaten them to the development of an air travel industry, pitching the idea of a national railroad system was the next best economic development business option. The Royal Bank had experience with the development of national railway networks in Canada and therefore saw this as a possible investment option.In an effort to win the race for Colombia’s untapped markets, foreign companies, including the Royal Bank, began to look closer at the Colombian Andean mar-kets after the development of an air travel industry by German ex-Luftwaffe pilots 65 Ibid.66 See Appendix 1.67 “Colombia’s riches reviewed by Bank,” New York Times, July 3, 1925, 24. 68 Ibid.69 Ibid.70 Ibid.

the rOle Of canadian financial institutiOns in the develOpment Of cOlOmbia’s financial marketspp. 252-279270significantly reduced travel time from the Colombian coast to the interior.71 This facilitated the business of Royal Bank of Canada, Sun Life Assurance and all other foreign financial and domestic entities operating in Colombia at the time. Air travel expanded market opportunities and accelerated financial sales operations and trans-actions in the Colombian market. For Colombia, the establishment of air travel rep-resented an advantage over other Latin American and Caribbean countries that were interested in attracting foreign capital. This represented a tremendous achievement for the German business sector considering their weaker position in the hemispheric market, particularly in Colombia where Americans were beginning to dominate. German ingenuity and the ability to identify and fill the gaps left by British and American investors served as an example for Canadian businesses interested in tap-ping what Holt referred to as “the vast stretches about which little is known and the possibilities of which have been only vaguely suggested.”72Herbert Holt insisted on defending the company’s interests in Colombia. In February of 1925 Royal Bank “purchased all of the shares of the Bank of Central and South America,” thereby expanding its outreach in the region.73 The Bank of Central and South America, which had been in the market for just three years, found itself in financial trouble and unable to successfully carry out business in Latin America. Holt relished the opportunity to establish greater distance between the Americans and the Royal Bank in the region. He incorporated the branches of the Bank of Central and South America into the branch network of the Royal Bank.74 The Cana-dian entity had, by that point, been singled out as “one of the largest competitors of American banks doing business in Latin America.”75 This was more evident after his decision to absorb seventeen more branches in the region.7671 German investors were instrumental in the development of the first commercial airline industry to operate in Colombia. SCADTA (Colombo-German Society of Air Transportation) was also the first commercial airline to be established in Latin America. See Fluharty, Dance of the Millions, 35. 72 “Colombia’s riches reviewed by Bank,” 24. 73 “Bank of Canada is spreading out,” The Gleaner, March 30, 1925, 19. 74 Ibid.75 Ibid.76 “Bank of Canada adds to holdings,” New York Times, February 4, 1925, 33.

271ensayOs sObre pOlÍtica ecOnÓmica, vOl. 30, núm. 67, ediciÓn especial histOria de la banca centralIn order to carry out the bank’s objectives in Colombia, Holt requested greater sup-port from Ottawa. He needed the Canadian government to increase its efforts in the region. After Holt’s Latin American tour in 1925, bank officials who accompanied Holt reported that Canadian trade commissioners in South America were “hampered and handicapped” by the limited resources available for public relations.77 The bank demanded greater government involvement as public relations and diplomacy began to play a bigger role in the region. However, the Mackenzie King administration remained committed to its East-West relations and was “apprehensive about external commitments,” particularly in Latin America.78In 1927 the bank once again registered record growth.79 Holt’s report to the board of directors indicated that it represented “the most successful year in the history of the bank.”80 He credited part of the growth to its operations in Latin America and the Caribbean.81Colombia was among those markets highly regarded by Royal Bank, not only for their contribution to business expansion, but because of their potential for further growth. Ottawa recognized this as well and in 1927 included Colombia as part of the official itinerary of the trade mission headed by Deputy Minister of Trade and Commerce F.C.T. O’Hara.The official mission was a sign that Ottawa had responded to Holt’s and the Manu-facturers Association’s demand for increased official support in the region.82 O’Hara, who possessed “sufficient working knowledge of the Spanish language,” left in the 77 Hill, Canada’s Salesman to the World: The Development of Trade and Commerce, 1892-1939, 411.78 Paul Painchaud, ed. From Mackenzie King to Pierre Trudeau (Québec: Les Presses de L’université Laval, 1989), 15.79 See Appendix 2.80 Herbert Holt, “Fifty-ninth annual meeting of the royal Bank of Canada,” New York Times, January 17, 1928, 47. 81 Ibid. 82 “Trade mission from Canada is planned,” The Daily Gleaner, May 19, 1927, 1.

the rOle Of canadian financial institutiOns in the develOpment Of cOlOmbia’s financial marketspp. 252-279272fall on a four-month tour that stopped in Mexico, Brazil, Argentina, Chile, Bolivia, Peru, Ecuador, Venezuela, and Colombia.83 Holt’s lobbying efforts for their operation in Colombia coupled with the increas-ing presence of Imperial Oil and Andian National Corporation resulted in a small but determinant role of Colombia within Canada’s trade and foreign policy agen-das. By the early 1930s bilateral trade with Colombia and other Latin American and Caribbean nations began to have a positive impact on Canada’s economic growth. Canada’s exports reached unprecedented levels of growth; they increased from US$3,312,000 in 1933 to US$13,803,000 in 1934, culminating in a total of US$16,936,000 by 1935.84 Canada also became a major destination for Colombian exports, in particular coffee and oil.85Royal’s experience in Colombia showed that the nation’s decision makers were eager to accelerate Canada’s participation in the international market system. Colombia’s growth had caught the attention of global investors, and its business culture was being recognized by the international business sector as one of “forward-looking spirit…imbued with an admiration of North American enterprise and methods.”86Although the Royal Bank was able to overcome the obstacles imposed by the nation-alist agenda of the Liberal administrations that followed the Great Depression, it did not fare as well with the impacts that the Second World War had on Colombia. The presence of German U-Boats in the Caribbean forced the Canadian subsidiary Imperial Oil to shift its oil imports from Barrancabermeja to their operations in Venezuela. The reduced presence of Royal Bank’s biggest ally in Colombia impeded the advancement of their aggressive business campaign. Although it did not close its branch operation, it did retract from further expansion. This allowed Americans to fill the market gap left by Holt. 83 Ibid.84 Dispatch Canadian Press, “rise in Canadian exports,” New York Times, June 5, 1935, 28. 85 By 1938 Canada was ranked fourth among Colombia’s export destinations with 8.7 percent of total exports. In 1941 Canada was second to the United States with an export market share of 13.2 percent, but in 1942 exports to Canada dropped to 1.5 percent as a “result of shipping restrictions and wartime trade regulations.” See “Postwar Trade reviews: Colombia and Venezuela,” (Ottawa: Department of Trade and Commerce, 1946), 6.86 “Colombia imbued with enterprise of north,” The Lethbridge Herald, December 24, 1930, 3.

273ensayOs sObre pOlÍtica ecOnÓmica, vOl. 30, núm. 67, ediciÓn especial histOria de la banca centralAfter the war, Royal Bank began to reclaim its position in the Latin American and Caribbean markets. An ad in the Winnipeg Free Press summarized its intention:Before the war at least 25c out of every dollar of Canadian income was derived from exports. How much income, and how many jobs for Canadian workers, will exports provide after the war? That will depend partly on how much we buy abroad. It will depend, too, on how effectively we develop present markets and search out new ones. The Royal Bank of Canada can assist both buyers and sellers. In Cara-cas, Buenos Aires, Rio de Janeiro and 16 other important Central and South American cities, our branches provide on-the-ground informa-tion about export markets and sources of supply.87Royal Bank’s return to the Latin American market encountered the fierce competi-tion of American banks that were also interested in expanding business throughout their sphere of influence. IV. BAnkInG UnDEr U.S. HEGEMOnYThe Cold War that unfolded after the Second World War, coupled with the expan-sion of open market capitalism across the region, led the United States to reevaluate its hemispheric foreign policy. Canada, as a middle power, had to accommodate to the conditions set by Americans and accept its junior partnership role.88 From then on, Canada lost maneuverability and had to leave the Royal Bank’s fortune in the hands of the free market. Nevertheless, the bank’s predominant presence in places like Colombia during the first half of the twentieth century and its collaboration with Imperial Oil and the Andian National Corporation left an enduring mark on the bilateral relationship. Canadian financial institutions played a key role in the development, expansion, and structure of the Colombian financial system. Together with British and Ameri-can institutions, they cemented the pillars for the “long-term trend towards larger 87 “Foreign trade means work for Canadians,” Winnipeg Free Press, April 4, 1945, 7. 88 For more on Canada’s middle power role, see John W. Holmes, ed. Canada: A Middle-Aged Power (Toronto: McClelland and Stewart Limited, 1976).

the rOle Of canadian financial institutiOns in the develOpment Of cOlOmbia’s financial marketspp. 252-279274markets that transcend political boundaries.”89 Colombia, as part of the transnational business of Canadian financial institutions, provided the capital for the development and growth of the Canadian economy. Institutions such as Sun Life Assurance and Royal Bank expanded their business abroad in order to keep profits inside Canada and avoid capital flight that resulted from their subsidiary role.90 Emerging consumer markets like Colombia’s served as launching grounds for the nationalist efforts car-ried out by Canadian financial institutions abroad. Financial institutions created the need for an increased presence of the Canadian government within the region. They forged a national image abroad that Ottawa had not been able or even intended to promote in the region. Under the guidance of individuals such as Herbert Holt, Canadians were able to realize that the best way to distinguish themselves from the competition was by branding the “Canadian” name abroad. Together with Canadian oil and gold mining subsidiaries, commercial institutions came to the conclusion that Colombia was a relatively untapped market where Canada could establish a clear-cut line of action.Washington and American private interests were also well aware of the vast invest-ment opportunities that lay idle across the Colombian territory. The 1950 World Bank mission to Colombia headed by Lauchlin Currie confirmed the nation’s poten-tial for growth and development. American influence on the economic development and institutional modernization of Colombia made it more difficult for Canadian financial entities to capitalize on the nation’s accelerated growth of the 1950s, 1960s, and 1970s. The adoption and implementation of free market policies under the Frente Nacional administrations, the expansion of a domestic financial market, and the recovery of the European market also made it more difficult for Canadian financial entities to compete effectively. Canadian financial companies remained active in Colombia, but their share of the market never reached the record levels of the early 1900s. In 1958 the Bank of London and Montreal established a banking operation 89 Marchildon, “Canadian multinationals and international finance,” 1. 90 George H. Harris indicated that during the first board of directors meeting of Sun Life, one of the Directors, Mr. Workman, said that “he hoped that the desire to build up Home Institutions by prudent management would be speedily realized, so that the confidence of our people in the stability of our own institutions might be secured, and the million and a half dollars that now go out of the country to build up foreign cities may be kept at home to build up the resources of the Dominion.” Harris, The President’s Book, 57.

275ensayOs sObre pOlÍtica ecOnÓmica, vOl. 30, núm. 67, ediciÓn especial histOria de la banca centralin Colombia.91 By 1963 their operation had expanded across Latin America, and Colombia had become their biggest South American operation with a total of six branch offices.92 However, their share of Colombia’s domestic banking was minimal and their participation in the nation’s economic development and modernization of the second half of the twentieth century was even less. The inflow of American capital after the Second World War, Washington’s vigilance over their sphere of influence, a nationally-controlled domestic financial market, and a lack of interest from Canadian financial powerhouses negated any possibilities of a strong Canadian comeback during the rest of the twentieth century.9391 Daniel Jay Baum. The Banks of Canada in the Commonwealth Caribbean: Economic nationalism and Multinational Enterprises of a Medium Power (new York: Praeger, 1974), 23.92 Ibid.93 In the 1960s, Quebec and British interests came together to form the Bank of London and Montreal. The partnership absorbed the branch offices of Bank of London and South America in Colombia, and operated in that market until 1970. It would take another forty-two years before another Canadian bank would penetrate the Colombian consumer market. In January 2012, Scotiabank purchased 51 percent of Banco Colpatria de Colombia, adding to its Latin American operations which also included Chile, Peru, and Mexico.

276the rOle Of canadian financial institutiOns in the develOpment Of cOlOmbia’s financial marketspp. 252-279rEFErEnCES“Assets of Sun Life Rise $36,000,000”, 1. New York Times, February 10, 1932.“Bank of Canada Adds to Holdings”, 2. New York Times, February 4, 1925.“Bank of Canada Is Spreading Out”, 3. The Glean-er, March 30, 1925.“Bank to Specialize in Latin America”, 4. New York Times, September 15, 1922.Barajas, A.; Steiner, R.; Salazar, N. 5. Foreign Investment in Colombia’s Financial Sector, Bo-gotá, International Monetary Fund, 1999.Baum, D. J. 6. The Banks of Canada in the Com-monwealth Caribbean: Economic Nationalism and Multinational Enterprises of a Medium Power, New York, Praeger, 1974.Braun, H. 7. Mataron a Gaitan, Bogotá, Editora Aguilar, 2008.Canadian Press, Dispatch. “Rise in Canadian 8. Exports”, New York Times, June 5, 1935.“Colombia Imbued with Enterprise of North”, 9. The Lethbridge Herald, December 24, 1930.“Colombia’s Riches Reviewed by Bank”, 10. New York Times, July 3, 1925.Darroch, J. L. “Global Competitiveness and 11. Public Policy: The Case of Canadian Multina-tional Banking”, Business History, vol. 34, num. 3, pp. 153-175, 1992.Fluharty, V. L. 12. Dance of the Millions: Military Rule and the Social Revolution in Colombia, Pittsburgh, University of Pittsburgh Press, 1957.“Foreign Trade Means Work for Canadians”, 13. Winnipeg Free Press, April 4, 1945.Gadpaille, I. “Manufacturers Life Insurance 14. Company of Canada”, The Gleaner, May 24, 1913.Gazette, C. “Trade between Dominion and West 15. Indies”, The Gleaner, December 29, 1922.Gootemberg, P. 16. Between Silver and Guano: Commercial Policy and the State in Postinde-pendence Peru, New Jersey, Princeton Univer-sity Press, 1989.Harris, G. H. 17. The President’s Book: The Story of the Sun Life Assurance Company of Canada, Montreal, Sun Life Assurance Company, 1928.Head Office, Toronto, Canada. “Manufacturers 18. Life Insurance Company”, The Daily Gleaner, March 20, 1901.Henderson, J. D. 19. Modernization in Colombia: The Laureano Gomez Years, 1889-1965, Gaines-ville, University Press of Florida, 2001.Hill, M. O. 20. Canada’s Salesman to the World: The Development of Trade and Commerce, 1892-1939, Montreal, McGill-Queens Univer-sity Press, 1977.Holmes, J. W. 21. Canada: A Middle-Aged Power, Toronto, McClelland and Stewart Limited, 1976.Holt, H. “Forty-Eighth Annual Meeting of the 22. Royal Bank of Canada”, Manitoba Free Press, January 19, 1917.James, E. L. “Europe Watching Pan-America 23. Plans”, New York Times, March 27, 1923.Marchildon, G. P. “Canadian Multinationals and 24. International Finance: Past and Present”, Busi-ness History, vol. 34, num. 3, pp. 1-15, 1992.Marichal, C. 25. A Century of Debt Crises in Latin America: From Independence to the Great De-pression, 1820-1930, New Jersey, Princeton University Press, 1989.McDowall, D. 26. Quick to the Frontier: Canada’s Royal Bank, Toronto, McClelland & Stewart, 1993.

ensayOs sObre pOlÍtica ecOnÓmica, vOl. 30, núm. 67, ediciÓn especial histOria de la banca central277Mount, G. “Canadian Investment in Colombia: 27. Some Examples, 1919-1939”, North/South: The Canadian Journal of Latin American Studies, vol. 1, num. 1 and 2, pp. 46-61, 1976.Mount, G. “Isthmian Approaches: The Trajecto-28. ry of Canadian-Panamanian Relations”, Carib-bean Studies, vol. 20, num. 2, pp. 49-60, 1980.Painchaud, P. 29. From Mackenzie King to Pierre Trudeau: Forty Years of Canadian Diplomacy, 1945-1985, Quebec, University of Laval Press, 1989.Posada-Carbo, E. 30. The Colombian Caribbean: A Regional History, 1870-1950, Oxford, Claren-don Press, 1996.“Postwar Trade Reviews: Colombia and Vene-31. zuela”, Ottawa, Department of Trade and Com-merce, 1946.“Progress Made by United Fruit Company in the 32. Caribbean”, The Gleaner, March 27, 1928.Rippy, J. F. 33. The Capitalists and Colombia, New York, The Vanguard Press, 1931.Meisel, A. 34. ¿Por qué perdió la Costa Caribe el siglo XX? Y otros ensayos, Bogotá, Banco de la República, 2011.Safford, F. “Foreign and National Enterprise in 35. Nineteenth-Century Colombia”, The Business History Review, vol. 39, num. 4 (Special Latin American Issue), pp. 503-526, 1965.See, S. W. 36. The History of Canada, Westport, Greenwood Press, 2001.“South America Needs the U. S.”, 37. New York Times, May 23, 1915.“Sun Life Assurance Company of Canada: A 38. Great International Institution”, The Gleaner, March 3, 1928.“The Royal Bank of Canada Has Formed a 39. Close Working Association with the London County Westminster and Parr’s Bank, Limited”, The Gleaner, July 11, 1919.Tijerina, S. “A ‘Clearcut Line’: Canada and Co-40. lombia, 1892-1979”, Ph. D. Dissertation, Uni-versity of Maine, 2010.“Trade Mission from Canada Is Planned”, 41. The Daily Gleaner, May 19, 1927.Wilkins, M. “Multinational Enterprise in Insur-42. ance: An Historical Overview”, Business His-tory, vol. 51, num. 3, pp. 334-363, 2009.“Winter Cruises”, 43. Manitoba Free Press, De-cember 2, 1924.

the rOle Of canadian financial institutiOns in the develOpment Of cOlOmbia’s financial marketspp. 252-279278APPEnDIx 1sir herbert hOltSource: Duncan McDowall. Quick to the Frontier: Canada’s Royal Bank (Toronto: McClelland & Stewart, 1993), 199.

279ensayOs sObre pOlÍtica ecOnÓmica, vOl. 30, núm. 67, ediciÓn especial histOria de la banca centralAPPEnDIx 2expOrt banking: rOyal bank branches abrOad 1882-1930Vladivostok1919Republic, Washington1899Central AmericaBritish Honduras 1912Costa Rica 1915Panama 1929 South AmericaBritish Guiana 1914Venezuela 1916Brazil 1919Argentina 1919Uruguay 1919Colombia 1920Peru 1925CaribbeanPuerto Rico 1907Bahamas 1908Trinidad 1910Barbados 1011Jamaica 1911Dominican Rep. 1912Grenada 1913Antigua 1915Dominica 1915St. Kitts 1915Nevis 1917Tobago 1917Monserrat 1917Guadeloupe 1919Haiti 1919Martinique 1919St. Lucia 1920Montreal1907HalifaxSt. Pierre1884Bermuda1882Cuba1899New York1899Barcelona1918Newfoundland1895London1910Paris1919Source: Duncan McDowall. Quick to the Frontier: Canada’s royal Bank (Toronto: McClelland & Stewart, 1993), 196.

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