In this essay, I will be reviewing Juan Gonzalez’s “Banana Republics and Bonds” and specifically focusing on how the Dominican Republic was forced into a neocolonial relationship with the United States during the late 19th century and the start of the 20th. I will be going over the United States' exploitation of land exportation, bank loans, custom revenue, duty-free exports, tax laws, military intervention, dictators, and immigrant labor.
At the time (1892), the dictator Ulises Heureaux had acquired $34 million in debt from foreign creditors. To prevent bankruptcy, he bought into a refinancing plan with Dutch creditors and New York investors. The Santo Domingo Improvement Company bought off the Dutch's debt, paid off their bonds, and granted Heureaux millions of dollars’ worth of loans. The improvement company came up with this money by committing fraud against catholic farmers in Europe through marketing tactics. The farmers thought they were lending money to the Dominican religious order, not the Dominican Republic itself. The debt payment was suspended in 1905 when the republic experienced a financial crisis. Tensions were high with European powers since money was still owed to them. U.S. President Roosevelt was worried about European threats compromising the construction of the Panama Canal, so he made an offer. He promised to recover the republic’s debt with loans from a New York bank. According to Gonzales, the Dominican Republic had to agree that they would turn over all customs and revenues to U.S. appointed agents. Evidence of the neocolonial relationship between the U.S. and the D.R. is seen in their demand for consent for any increase in government spending or taxes to take place in the republic.
Land expropriation from the US was very prominent in the Dominican Republic, especially for the sugar growers. In the text, Gonzales describes how the US had convinced the local sugar growers to divide their communall...