The economic boom brought by Shell transformed local banking and finance, spurring the creation of many new business (which needed bank loans for construction, inventory and expansion), and putting extra money into the pockets of thousands of lower class workers (who opened savings account for the first time). With banking needs increasing at every level of society, the informal financial system that had served the traditional merchant elite so well was no longer enough; several merchant houses remade their banking departments into entirely separate entities, creating the island's first private banks. Interestingly, at the time the first private local banks opened not a single Dutch bank had a branch on the island, although several US institutions were interested in opening on Curaçao.
By the early years of this century it was clear that the establishment of private banking on the island was imminent, although it was unclear what characteristics this new sector would have. There were clear-cut divisions and rivalries, with the interests of local capitalists - that omnipresent merchant elite - pitted against those of Dutch banks and other international financiers (with the latter two groups not always acting together). While each jockeyed for position to gain an upper hand in the new economic order, the locals' widespread international connections served them surprisingly well. For example, Royal Dutch Shell, which clearly favored international financial interests over local ones, approached the Royal Bank of Canada to open a branch on the island, clearly unaware that S.E.L. Maduro & Sons was already the bank's official representative on Curaçao!
The president of the Bank of the Netherlands, who had been consulted regarding possible reorganization of the Curaçao Bank, recommended that an agreement be reached with the Bank of Suriname, rather than bringing in non-Dutch foreign capital. The local merchant elite clearly preferred the establishment of an entirely local bank, and the 1901 petition by S.E.L. Maduro (see below) made it clear that there was both ability and interest on the island for such a move. The Board of Management of the Curaçao Bank, the Chamber of Commerce, and the Governor all favored either expanding the powers of the Curaçao Bank or granting Maduro's petition over bringing in the Bank of Suriname or another foreign bank. The management of the Bank of Suriname, in any case, was not interested, due to the colonies' widely divergent economies. For a few years a paradox reigned: the Bank of Suriname was legally authorized to open on the island but was uninterested in doing so, while Maduro & Sons was interested but lacked official permission, until Maduro's Bank was founded in late 1916.
In the immediate post Shell period the interests of Dutch industry and capital seemed to be at the forefront. Shell had a major role in the island's financial sector as well as the economy and sought to distribute its business somewhat equitably; in 1931 it divided its business among the island's three major private banks, guaranteeing 40% to Maduro's Bank, 40% to the Dutch Bank of the West Indies, and 20% to Curiel's Bank.
Curaçao's private banking sector saw its major growth and transformation in this century's two main periods of prosperity: the years surrounding the opening of the Shell refinery (from the late 1910s through the 1920s) and post World War Two. The years in between were not favorable to international trade or finance, and so neither to local banking. The world crisis brought on by the 1929 stock market crash was felt by Curaçao's banking sector in the early 1930s; faced with crisis and bankruptcy among many of their international trade partners and reduced purchasing power at home, many local commercial houses were unable to repay their loans. World War Two also brought complete disruption in international trade, import restrictions and reduced spending by the local population. The war, however, also brought the seeds of the island's most successful twentieth century financial sector, offshore (see below).
That the newly created local banks retained close ties to their merchant roots is clear from their response to these crises: in both cases, the banks refinanced and sometimes even forgave outstanding loans, so as not to further jeopardize the faltering local businesses, and so saved many from outright bankruptcy. Once the crisis was over and prosperity returned merchants again began to borrow heavily. The economic fortunes of Curaçao's private banks continued to closely parallel those of the commercial sector throughout the second half of the century. All periods of major growth in the commercial sector meant increased business for banks, while periods of economic uncertainty, such as the mid 1980s, showed a corresponding decline in local banking business.
Throughout the twentieth century, banks did a thriving business with the new groups of immigrant merchants as they ascended the economic ladder, granting loans for inventory and construction as they traded in their carts, first for modest storefronts and later for larger shops (see Chapter 5). But here, the banks' interests began to diverge from those of the traditional merchant class with whom they were so closely intertwined. The banks' very support of foreign peddlers put them in direct opposition to the economic interests of the established merchants, who were petitioning the government to restrict opportunities for these newcomers at the very same time that banks were helping them to prosper.
Administrators and board members of local banking institutions in the nineteenth and early twentieth centuries were often selected more on the basis of their important economic or family connections than for their financial expertise. Board members of the Curaçao Bank, for example, had usually included members of the influential Maduro, Curiel and Senior families, and others of the traditional merchant elite. In the post World War Two period a new group of well-educated managers and financial experts emerged who began to run the banks much more professionally.
Curaçao Chamber of Commerce & Industry,
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