Contrary to the dominant narrative, the 19^th century Latin American debt crises did not cause the difficulties experienced by the Northern banks and other creditors. The truth is that, from the beginning the debt crises were caused by the policies of the European bankers and the crisis that struck in London. On top of that, the combined effects of external borrowing and Free Trade policies constituted fundamental instruments of a new way of subordinating Latin American countries that developed in the 19^th century. This study, the second of six, covering the 1820-1850 period and entitled “Debt: the subordination of Latin America”, follows up the series of five recently published articles: “Newly Independent Greece had an Odious Debt round her Neck”, “Greece: continued debt slavery from the late 19^th century to the Second World War”, “Debt as an instrument of the colonial conquest of Egypt”, “Debt: how France appropriated Tunisia” and the first of the series on Latin America “How the South paid for the Northern crises and for its own subjugation.”

Between 1820 and 1825, Britain, especially the financial sector in London was agitated by an investment mania seeking high profits. Speculation reached its apogee in 1824-1825. The new States that came into existence in South America, following the military victories of the liberation movements against the Spanish crown, became a favourite destination for the London Stock Exchange’s surplus liquidities. The loans granted to the Principality of Poyais are the best illustration. In 1822, a Scottish adventurer, Gregor McGregor |1| successfully launched the bonds of a non-existent country that he called Poyais and of which he was the self-proclaimed monarch (Cacique). He managed to cream off 200,000 pounds sterling on the London Stock Exchange. He enticed British colonists to sail to the fabulous country. By the time it became known that the country was fictitious McGregor had hopped it. Nevertheless, five years later another London banker tried to issue bonds in the name of the same fictitious country.

In 1824-1825 alone, in the thick of economic euphoria, 624 new limited liability companies were created in London, of which 46 were specialised in commercial transactions, credit and investments in South American mines. The part of the foreign investment boom that was directed to Latin America was by far the largest; the capital of the 46 companies was the equivalent of half the total capital of all the 624 new companies. Another sign of the attraction of Latin America: of the £24 million worth of bonds sold on the London market in 1824-1825, a little more than two-thirds, £17 million, were issued in the names of new Latin American States. |2|

At Ayucacho, Peru, in December 1824 the Latin American independence army won the final victory of their fifteen years’ war against Spanish domination. |3| From Mexico to Argentina new republics were born. The British, who, since the end of the Napoleonic wars, had joined the Holy alliance along with the monarchies of the Austro-Hungarian Empire, France, Russia, Prussia and Spain, were supposed to defend their allies from threats. |4| However, the British government gave more and more discreet support to independence movements, hoping to spread its influence in this vast region rich in mineral, industrial, agricultural and commercial resources. The fact that the United States, Britain’s main competitor for influence in the region, recognised independent Colombia in 1822 accelerated London’s change of priorities. |5|

Simon Bolivar, one of the principal Latin American leaders, was well aware of the situation. Whilst negotiating, with London, a loan for the purchase of arms he wrote to Antonio Sucre, another Latin American leader, in May 1823: England is the first to be interested in this transaction (a loan for Peru) because she desires to form a league with all the free nations of America and Europe against the Holy Alliance, in order to put herself at the head of all these peoples and rule the world…It is not in England’s interest that ….Spain maintain a possession like Peru in America, and therefore prefers that she (Peru) be independent, albeit weak and with a fragile government. |6|

The British bankers were quite prepared to take risks organising loans for the new States, especially as they only acted as intermediaries. They issued the bonds on the London Stock Exchange in exchange for juicy commissions. While interest rates at the time were around 3% the Latin American countries had to promise 6% (real yield was higher still) and the commissions charged by the bankers were around 8-10% of the amounts effectively realised.

A critical analysis of the conditions imposed by the bankers on the bond-issuing country clearly shows the conditions to be unfair: excessive interest rates; multiple and abusive commissions; low remittances to the borrowing States in comparison to the debt incurred. |7| Five London banks controlled the Latin American debt market: Barclays; B.A. Goldsmith & Co (see below their behaviour concerning the first Mexican loan); Herring, Powles and Graham; Baring Bros. and Rothschild. Some of these banks were also involved in Latin American mining.

The first great crisis of World capitalism began on the London Stock Exchange in December 1825 in the wake of the speculative bubble created over the previous years. This crisis caused the failure of hundreds of banks, closure of hundreds of businesses and factories, a sharp drop in economic activity and international trade, an aversion against risk among the bankers and an economic depression. British bankers, quickly followed by European bankers, cut off foreign as well as domestic lending. The new states that counted on borrowing to repay their existing debts were unable to find bankers, in London or Paris, to grant them loans. The crisis affected all the European financial markets. After London and Paris the effects spread to Frankfurt, Berlin, Vienna, Brussels, Amsterdam, Milan, Bologna, Rome, Dublin and St. Petersburg.

It is important to note that at the moment when the crisis exploded the newly formed Latin American countries were still making their debt repayments. It was over the following year that several countries (Peru and Gran Colombia that included Colombia, Venezuela and Ecuador) had no other option than to suspend payments |8| once their sources of funding had dried up and the drop in international trade had reduced demand for their produce and it so followed, their revenues. The Latin American States did not cause the crisis, but on the other hand they did suffer from it.

By 1828 all the Latin American countries, from Mexico to Argentina had suspended payments. For some countries the suspension lasted for fifteen to thirty years. This does not mean that no payments at all were made during that period. The Latin American governments made partial payments when their treasury situation permitted them to do so. However, the drop in international trade (with slow growth in Europe in particular and the World in general between 1826 and 1847) did not permit them to collect the foreign currency to repay consistently, even if negotiations took place from time to time.

Latin American rulers were an exception to the above rules. Paraguay’s was such a case during the reign of Francia and his successors between 1810 and 1865. Francia successfully implemented a self-sufficient development project without recourse to external debt. This is reminiscent of Muhammad Ali in Egypt at the same time, |16| although Francia and his successors never tried to expand Paraguay through other conquests. Great Britain successfully forged a Triple Alliance among Argentina, Uruguay and Brazil to stop this dangerous experiment. Paraguay refused to grant free access to the exports of Great Britain and its allies. This was used as a pretext (the same pretext to wage the Opium Wars against China in the years 1839-1842 and 1860 |17| by the Triple Alliance to launch, in 1865, a five year long war that included the genocide of the Paraguayan people. The population declined by 80%. Argentina and Brazil heavily borrowed from the British bankers during this abominable war of total destruction. Paraguay’s momentous development remains unmatched into the 21^st century.

Regarding debt payment in the 19^th century, the government of Benito Juarez in 1860s’ Mexico was also a noteworthy Latin American exception to the rule.

External debt and free trade

During the first half of the 19^th century, All Latin American governments except that of Francia’s Paraguay adopted free trade policies under pressure from Britain.

Since the local ruling classes did not invest in processing or manufacturing activities for the domestic market, the implementation of free trade did not threaten their interests. Consequently, free import of mainly British manufactured goods hindered the development of these countries’ industrial fabric. The abandonment of protectionism destroyed a large part of the local factories and workshops, particularly in the textile sector.

In a way, we can say that the combined use of external debt and free trade was the driving force behind the development of underdevelopment in Latin America. This is of course related to the social structure of Latin American countries. The local ruling classes, including the comprador bourgeoisie, made these choices in their own interest.

At the end of the 18^th century, several Latin American regions, although still under colonial rule, accomplished a real artisanal and manufacturing development, mainly supplying to the local market. Aspiring for an economic domination over the region, Great Britain supported the Latin American people’s desire for independence. From the beginning Great Britain’s conditions for recognising the Independent States were clear: they had to allow free entry of English goods into their territory (the aim was to limit the import duties at about 5 %). Most new states agreed and the local producers, particularly artisans and small entrepreneurs, were put into great difficulty. British goods invaded the local markets. Eduardo Galeano has provided outstanding examples in his book The Open Veins of Latin America. |18|

The British authorities practised highly protectionist policies until 1846. This propelled the rise of Britain as the foremost industrial, financial, commercial and military power during the 19^th century. |19| Since 1810-20 they had obtained agreements from the independentist Latin American leaders for opening the economy of the still developing new States to British goods and investments. |20| Yet, the British authorities were protective about their own industries and trade. Britain remained at the forefront by strongly protecting its market and its booming industries, while destroying the factories of its competitors (e.g. India’s textile industry). Once British industry had achieved a prominent technological lead, Britain embraced free trade as it did not need to worry about any serious competition. Paul Bairoch wrote that starting from the late 1840s “the most highly developed country had become the most liberal, which made it easy to equate economic success with a free trade system, whereas in fact this causal link had been just the opposite.” |21| Bairoch added that “before 1860 only a few small Continental countries, representing only 4% of Europe’s population, had adopted a truly liberal trade policy”. |22| These were the Netherlands, Denmark, Portugal, Switzerland, Sweden and Belgium. Let us not forget that the United States remained protectionist throughout the 19^th century (and during most of the 20^th century).

George Canning, a prominent British politician, |23| wrote in 1824: “The deed is done, the nail is driven, Spanish America is free; and if we do not mismanage our affairs sadly, she is English.” Thirteen years later, Woodbine Parish, the British consul in La Plata, described a gaucho from the Argentine pampas in the following way: “Take his whole equipment— examine everything about him— and what is there not of raw hide that is not British? If his wife has a gown, ten to one it is made in Manchester." |24|

Great Britain did not need to depend on military conquests to achieve this (although it did not hesitate to use force whenever it felt so inclined). It used two very effective economic weapons: granting international credits and imposing the abandonment of protectionism.

In 1827, the prominent Swiss economist Jean Sismondi |25| clearly explained that Britain was interested in lending to the newly independent States because the latter would buy English goods with the loans. “The opening up of the immense market afforded by Spanish America to industrial producers seemed to offer a good opportunity to relieve British manufacture. The British government were of that opinion, and in the seven years following the crisis of 1818, displayed unheard-of activity to carry English commerce to penetrate the remotest districts of Mexico, Columbia, Brazil, Rio de la Plata, Chile and Peru. Before the government decided to recognise these new states, it had to protect English commerce by frequent calls of battleships whose captains had a diplomatic rather than a military mission. In consequence, it had defied the clamours of the Holy Alliance |26| and recognised the new republics at a moment when the whole of Europe, on the contrary, was plotting their ruin. But however big the demand afforded by free America, yet it would not have been enough to absorb all the goods England had produced over and above the needs of consumption, had not their means for buying English merchandise been suddenly increased beyond all bounds by the loans to the new republics. Every American state borrowed from England an amount sufficient to consolidate its government. Although they were capital loans, they were immediately spent in the course of the year like income, that is to say they were used up entirely to buy English goods on behalf of the treasury, or to pay for those which had been dispatched on private orders. At the same time, numerous companies with immense capitals were formed to exploit all the American mines, but all the money they spent found its way back to England, either to pay for the machinery which they immediately used, or else for the goods sent to the localities where they were to work." |27| Sismondi further added that this policy went against British interests because the new over-indebted States squandered money (as the above citation shows) and suspended debt payment. Now, adopting Carlos Marichal’s view we have mentioned before that payment suspensions did not cause the crisis in London. It was the other way round: the crisis in London caused a shutdown of financial flows in the form of credits to Latin America. Consequently, the indebted States could not borrow and repay. Remember that the Latin American States serviced their debts normally when the crisis broke out in December 1825. It was over the next two years that they partially suspended payments. That said, Sismondi’s analysis is very interesting because he points out Great Britain’s enormous interest in lending to the new independent States. Britain stood to gain on many levels, as Sismondi said. The new States could now afford to buy goods (weapons, uniforms for the troops, etc.) from England with the loans they procured at high rates of interest. The circle was completed as the money lent by England returned to England.

Sismondi could not have known in 1827 what the eventual outcome would be: England and other European powers would take advantage of the suspension of payments to impose a series of conditionalities on the indebted countries.

Epilogue and conclusion

The first great Latin American debt crisis was born in London. Great Britain, followed by other powers such as France, used it to impose on Latin America a capitulation to the bankers’ conditions and the Old Continent’s interests in trade and industry. The Latin American countries which had gained liberty from direct Spanish and Portuguese colonial rule |28| returned to a cycle of dependence, subordination and destruction, masterminded by British capital and its French counterparts in collusion with their respective authorities. The USA’s big capital, supported by its government, intervened later, except in the case of Mexico, where it intervened constantly. Paraguay’s initiative for a self-sufficient development was crushed between 1865 and 1870. In the 1860s, Mexico rebuffed a major offensive from the creditors but agreed to free trade. That thwarted its development. In the 1880s, the Mexican government again yielded to the creditors (see next article).

The weapon of debt and the withdrawal of protectionism was a crucial factor behind the submission of States and the transfer of wealth from the peoples of the periphery to the capitalist classes of the centre. The local ruling classes pocketed their commission in the process.

28 June 2016

- Eric Toussaint is a historian and political scientist who completed his Ph.D. at the universities of Paris VIII and Liège, is the spokesperson of the CADTM International, and sits on the Scientific Council of ATTAC France. He is the author of Bankocracy (2015); The Life and Crimes of an Exemplary Man (2014); Glance in the Rear View Mirror. Neoliberal Ideology From its Origins to the Present, Haymarket books, Chicago, 2012 (see here), etc. See his bibliography: https://en.wikipedia.org/wiki/%C3%89ric_Toussaint He co-authored World debt figures 2015 with Pierre Gottiniaux, Daniel Munevar and Antonio Sanabria (2015); and with Damien Millet Debt, the IMF, and the World Bank: Sixty Questions, Sixty Answers, Monthly Review Books, New York, 2010. Since the 4^th April 2015 he is the scientific coordinator of the Greek Truth Commission on Public Debt.

Bibliography:

 Bazant, Jan. 1995. Historia de la deuda exterior de Mexico, 1823-1946, El Colegio de México, Centro de Estudios Históricos, Mexico, 1995, 282 p. (in Spanish) https://www.google.com.mx/#q=histor...

 Bairoch, Paul. 1993. Mythes et paradoxes de l’histoire économique, La découverte, Paris, 1999, 288 p.(in French). Economics and World History: Myths and Paradoxes. University of Chicago Press, Chicago, 1993 (in English)

 Batou, Jean. 1990. Cent ans de résistance au sous-développement. L’industrialisation de l’Amérique latine et du Moyen-Orient face au défi européen. 1770-1870. Université de Genève-Droz, 1990, 575 pages (One Hundred Years Of Resistance To Underdevelopment: Latin American And Middle Eastern Industrialization And The European Challenge 1770-1870)

 Bayly, Christopher Alan. The Birth of the modern world, 1780-1914. Wiley-Blackwell, 2003 (in English). La naissance du monde moderne (1780-1914), Les Editions de l’Atelier/Editions Ouvrières, Paris, 2007, 862 pages (Translation in French)

 Britto, Luis, El pensamiento del Libertador - Economía y Sociedad, BCV, Caracas, 2010 (in Spanish)

 Calcagno, Alfredo and Eric. 1999. La Deuda Externa explicada a todos, Catálogos, Buenos Aires, 126 p (in Spanish)

 Galeano, Eduardo. 1970. Las venas abiertas de América latina, Siglo XXI, Mexico, 1993, 486 p. (Original Spanish edition) Les veines ouvertes de l’Amérique latine, Plon, coll. Terre humaine, ‎ Paris, 1981, 435 p. (French translation). Open Veins of Latin America. Monthly Review. (English translation. Available on the internet here : https://archive.org/stream/fp_Open_...).

 Gilbart, James William, The History and Principles of Banking, London, 1834, 220 p.

 Gunder Frank, André. 1967. Capitalisme et sous-développement en Amérique latine, Maspero, Paris, 1968, 299 p. (in French) Capitalism and Underdevelopment in Latin America: Historical Studies of Chile and Brazil, Monthly Review Press, 1967, 224 pages (in English)

 Gunder Frank, André. 1972. Le développement du sous-développement : l’Amérique latine, Maspero, Paris, 399 p. (in French). The development of underdevelopment, Monthly Review Press (in English)

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 Luxemburg, Rosa. 1913. The Accumulation of Capital. English edition first published in 1951 by Routledge and Kegan Paul. Available on the internet here: https://www.marxists.org/archive/lu...

 Mandel, Ernest. 1972. Le troisième âge du capitalisme, La Passion, Paris, 1997, 500 p. (in French). (In English: Late Capitalism. London, NLB, 1976)

 Mandel, Ernest. 1978. Long Waves of Capitalist Development, The Marxist Interpretation, Based on the Marshall Lectures given at the University of Cambridge, Cambridge University Press and Editions de la Maison des Sciences de l’Homme, Paris, 141 p.

 Marichal, Carlos. 1989. A Century of Debt crises in Latin America: from Independence to the Great Depression, 1820-1930, Prince¬ton University Press, Princeton, 283p.

 Marx-Engels, La crise, col. 10/18, Union générale d’éditions, 1978, 444 p

 Reinhardt Carmen and Rogoff Kenneth, Cette fois, c’est différent. Huit siècles de folie financière, Paris, Pearson, 2010, 469 p. (in French). (In English: This Time is Different: A Panoramic View of Eight Centuries of Financial Crises, NBER Working Paper No. 13882 issued in March 2008.http://www.nber.org/papers/w13882) and also This time it’s different : eight centuries of financial folly, Princeton University Press, 2010.

 Reinhardt Carmen M., and Sbrancia M. Belen. 2015 “The Liquidation of Government Debt.” Economic Policy 30, no. 82 : 291-333

 Reinhardt Carmen and Trebesch Christoph. 2015. The Pitfalls of External Dependence : Greece, 1829-2015

 Sack, Alexander Nahum. 1927. Les effets des transformations des États sur leurs dettes publiques et autres obligations financières, Recueil Sirey, Paris. (In French. The entire text can be freely downloaded from the CADTM website here: http://cadtm.org/IMG/pdf/Alexander_...) For examples of the application of the odious debt doctrine see : https://en.wikipedia.org/wiki/Odiou... and http://cadtm.org/Dette-odieuse?lang=fr (in French)

 Sismondi, Jean de. 1819. Nouveaux principes d’économie politique ou de la richesse dans ses rapports avec la population, Paris, 1827. Available in French here: https://play.google.com/store/books... The book has been translated in English by Richard Hyse as New Principles of Political Economy: Of Wealth in its Relation to Population and published by Transaction Publishers, New Brunswick (U.S.A) and London (U.K.) in 1991.

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 Toussaint, Éric. 2004. La finance contre les peuples. La bourse ou la vie, CADTM-Bruxelles/CETIM-Genève/Syllepse-Paris, 640 p. (in French). Your Money or Your Life, the Tyranny of Global Finance (in English). Haymarket, Chicago, 2005.

 Toussaint, Éric, 2016, “Newly Independent Greece had an Odious Debt round her Neck”. http://cadtm.org/Newly-Independent-Greece-had-an

 Toussaint, Éric. 2016, “Greece: Continued debt slavery from the late 19^th century to the Second World War” http://cadtm.org/Greece-Continued-debt-slavery-from

 Toussaint, Éric. 2016, “Debt as an instrument of the colonial conquest of Egypt” http://cadtm.org/Debt-as-an-instrument-of-the

 Toussaint, Éric. 2016, “Debt: how France appropriated Tunisia” http://cadtm.org/Debt-how-France-appropriated

Acknowledgements:

The author wishes to thank Claude Quémar and Patrick Saurin for their review and Pierre Gottiniaux for the illustrations.

The author accepts full responsibility for any errors that may occur in this work.

Translated by Mike Krolikowski and Suchandra de Sarkar

Footnotes

|1| See Carlos Marichal 1989. A Century of Debt crises in Latin America: from Independence to the Great Depression, 1820-1930, Princeton University Press, p. 50. See Carmen

Reinhardt and Kenneth Rogoff, This time it’s different: eight centuries of financial folly, Princeton University Press, 2010. Also see: https://en.wikipedia.org/wiki/Grego...

|2| Otherwise, the two Greek issues of in London in 1824-1825 realised £2.8 millions.

|3| Antonio Sucre, the Independentist friend of Simon Bolivar was at the helm of this battle.

|4| Great Britain did in fact withdraw its support for the independentists between 1815 and 1820, just after the constitution of the Holy Alliance.

|5| As from 1823, the Monroe Doctrine named after the US President of the same name who introduced it, was an important element in US foreign policy concerning the rest of the American continent. This Doctrine refused all European interference in ’American’ affairs and was used to justify the aggressive conquest of Latin America by the USA, starting by the annexation of a large part of the Mexican territory (Texas, New Mexico, Arizona and California) in the 1840s. US troops occupied the Mexican capital in September 1847.

|6| Letter from Simon Bolivar to Antonio Sucre, 26 May 1823, Quoted by Carlos Marichal in A Century of Debt crises in Latin America: from Independence to the Great Depression , 1820-1930, Prince¬ton University Press, Princeton, 1989, pg 14.

|7| See Carlos Marichal, p. 37 to 54.

|8| In 1826, Greece had to suspend payments for the same reasons.

|9| Face, or nominal, value is the value indicated on the ’face’ of the financial asset. For example: A Mexican bond of $100 has a face value of $100 even if it is acquired on the second market for $20. The value of a bond is the scriptural value on the bond when it is issued. It is this value which is the basis of the yield calculations.

|10| See https://en.wikipedia.org/wiki/Sir_J...

|11| See https://en.wikipedia.org/wiki/Grego...

|12| See the list of securities issued at London in 1824 here: https://books.google.es/books?id=Vj... Retrieved on May 29, 2016.

|13| Bazant, Jan. 1995. Historia de la deuda exterior de Mexico, 1823-1946, El Colegio de México, Centro de Estudios Históricos, Mexico, 1995, p. 38 (in Spanish)

|14| See Bazant, Jan. Op. citus. p. 96

|15| See http://www.wikirouge.net/Bourgeoisi... (in French) and https://en.wikipedia.org/wiki/Comprador

|16| http://cadtm.org/Debt-as-an-instrument-of-the

|17| Rosa Luxemburg, 1969. L’accumulation du capital, Maspero, Paris, Vol. II, p. 60 to 67 (in French). The Accumulation of Capital (in English) was first published in 1951 by Routledge and Kegan Paul. The relevant section is available here: Section three, Chapter 28 https://www.marxists.org/archive/lu.... Also see Joseph Stiglitz, La Grande désillusion, Fayard, Paris, 2002, p. 95 (in French). (Original English version: Globalization and its Discontents. W. W. Norton & Company, USA)

|18| In his valuable book The Open Veins of Latin America (1970), Eduardo Galeano has portrayed this destruction in a wholesome and picturesque way. Till date, this book remains the best and handiest presentation of the various forms of domination and dispossession suffered by the Latin American peoples. This work is well documented and points out the responsibility of the dominant classes, both from the Old Continent and the New World.

|19| See Paul Bairoch, 1993. Mythes et paradoxes de l’histoire économique, La Découverte, Paris, 1999, p. 37. Economics and World History: Myths and Paradoxes (In French). University of Chicago Press, Chicago, 1993 (in English)

|20| See Luis Britto, El pensamiento del Libertador - Economía y Sociedad, BCV, Caracas, 2010 (in Spanish)

|21| See Paul Bairoch, Economics and World History: Myths and Paradoxes, The University of Chicago Press, Chicago, 1993, pg 21

|22| Ibid, pg 22.

|23| George Canning, Under Secretary of State for Foreign Affairs, became Prime Minister in 1827. See https://en.wikipedia.org/wiki/Georg...

|24| Woodbine Parish, Buenos Ayres and the Provinces of the Rio de la Plata, London, John Murray, 1839, p. 338. Quoted by Eduardo Galeano in Open Veins of Latin America, p. 176. Available here : https://archive.org/stream/fp_Open_...

|25| Read Sismondi’s biography here: https://en.wikipedia.org/wiki/Jean_.... The original quotation in French is from the second and enlarged edition (1827) of Nouveaux principes d’économie politique ou de la richesse dans ses rapports avec la population (1819), page 368 and onward. The book is available here: https://play.google.com/store/books.... The book has been translated in English by Richard Hyse as New Principles of Political Economy: Of Wealth in its Relation to Population and published by Transaction Publishers, New Brunswick (U.S.A) and London (U.K.) in 1991.

|26| Remember that the monarchies of Russia, Austria, Hungary and Prussia created the Holy Alliance in 1815 following Napoleon’s defeat. Later Great Britain and post-Restoration France (from 1818) joined. From 1820, popular and military uprisings greatly destabilised the Spanish monarchy on its own territory. The revolt took off when the Spanish military refused to set sail from Cadiz to Latin America to fight the independentists (see: https://en.wikipedia.org/wiki/Revol..., https://fr.wikipedia.org/wiki/Mouve... (in French) and https://www.onwar.com/aced/chrono/c...). In 1823, a French intervention backed by the Holy Alliance (a French expeditionary force of 95,000 soldiers participated in this large-scale operation) came to the aid of the Spanish monarchy and crushed the liberal revolution. The restored Spanish monarchy refused to recognise the States which had just emerged from its empire in threadbare conditions. Great Britain should have shown solidarity and refused to recognise the new independent States, but it did not do so.

|27| Rosa Luxemburg, The Accumulation of Capital. https://www.marxists.org/archive/lu...

|28| Cuba and Puerto Rico were still Spanish colonies and this rule ended in 1898. Heroic struggles led to Haiti’s liberation from its French rulers in 1804, but the country again succumbed to French neo-colonial domination in 1825. Other than Britain, the Netherlands and France retained their colonies in the Caribbean and in the region between Brazil and Venezuela.