I am interested in Citigroup and its history because of my own research on New York City’s relationship with slavery, the slave trade, and the sale of slave produced commodities (New York And Slavery: Time To Teach The Truth, SUNY Press 2008 and New York’s Grand Emancipation Jubilee, SUNY Press 2018) and because of the role international banking played in the 2008 financial crisis.The federal government rescued Citigroup from potential collapse by covering over $300 billion in risky assets and transferring $20 billion to the bank.
According to CEO Vikram Pandit in the book’s foreword, “In the summer of 1812, a dozen New York merchants came together to form the bank that would be known as Citi. They pooled their capital, shared ideas, and financed new ventures. Their principles guided the bank’s principles; their success fueled the bank’s success. From the beginning, they backed bold projects that improved and connected the world” (9). The book’s introduction elaborates on this theme claiming that throughout its history, Citibank was motivated by concern for innovation, people, values, and clients (13). Pandit was definitely half right. The principles of the founders definitely directed the bank’s actions, but despite the books heft, glossy photographs, and celebratory tone, Citibank and its forbearers definitely did not strive to make the world a better place.
Chapter 1 describes “a local bank with national ambitions” between 1812 and 1890. The City Bank of New York was chartered by the State Assembly in 1812 and was made a federal depository in 1814. The chapter explains that in its early years the bank “mainly served the commercial interests of the merchants who owned it.” In 1837 it nearly collapsed along with the national economic system in a financial panic precipitated after President Jackson and the Democratic Party refused to recharter the national Bank of the United States. The City Bank of New York survived the panic because John Jacob Astor, the wealthiest man in the country at the time, deposited substantial funds in the bank and installed Moses Taylor, “an importer of Cuban sugar,” on the bank’s Board of Directors.
Extended sections describe Taylor’s role in transforming the bank into a national financial institutions with international connections. Taylor is lauded as a “commodity specialist” who focused on Latin America and was able to “broaden City Bank’s client base” (36-47). The “commodity” that Taylor specialized in was sugar produced in Cuba by enslaved Africans smuggled into the Spanish colony in violation of international bans on the trans-Atlantic slave trade. Not only did Taylor broker Cuba’s sugar exports but he and the bank served as an “investment advisor for Cubans and sent samples of bylaws, reports, rules, and regulations to help them set up companies or commercial associations” (37). Taylor and City Bank became the “middleman” for plantation owners arranging for them to purchase equipment for “railroads, ferries, lighthouses, steam engines and machinery for sugar mills” (37). As full service banker, Taylor arranged for the education of the children of the Cuban planters and slaveholders when they were in the United States and shopping trips for their wives. In response and gratitude, the Cuban planters laundered profits from slave produced commodities by investing approximately $3 million in the United States, worth almost $300 million today, employing Taylor as an agent.