Dealing With Sovereign Default

Perhaps invasion is avoided because they're still acting civilized and can deal with it within an International court.

Are you proposing they use military action to settle a debt?

That is one damned complicated question. I have to think about it a bit first.

Oh dear dear dear and gollum.

Didn't you read my answer to your previous question on credit default swaps, grease my palm.

Well when we was busy during the civil war in 1860s both England and France invaded Mexico over their debts or at least that was the excuse.

I am not sure and do not feel like googling it but I remember hearing something of us doing the same to poor Haiti for a decade or more in the 1920s.

Now with the international banking system up and running I assume there are other means of forcing the collections of funds beside putting boots on the ground.

http://history.state.gov/milestones/1914-1920/Haiti

Increased instability in Haiti in the years before 1915 led to heightened action by the United States to deter foreign influence. Between 1911 and 1915, seven presidents were assassinated or overthrown in Haiti, increasing U.S. policymakers’ fear of foreign intervention. In 1914, the Wilson Administration sent marines into Haiti who removed $500,000 from the Haitian National Bank in December of 1914 for safe-keeping in New York, thus giving the U.S. control of the bank. In 1915, Haitian president Jean Vilbrun Guillaume Sam was assassinated and the situation in Haiti quickly became unstable. In response, President Wilson sent the U.S. Marines to Haiti, claiming the invasion was an attempt to prevent anarchy. In reality the Wilson administration was protecting U.S. assets in the area and preventing a possible German invasion.

The invasion ended with the Haitian-American Treaty of 1915. The articles of this agreement created a Haitian gendarmerie, essentially a military force made up of Americans and Haitians and controlled by the U.S. marines. The United States gained complete control over Haitian finances, and the right to intervene in Haiti whenever the U.S. Government deemed necessary. The U.S. Government also forced the election of a new pro-American President, Philippe Sudré Dartiguenave, by the Haitian legislature in August of 1915. The selection of a President that did not represent the choice of the Haitian populace increased unrest in Haiti.


Philippe Sudré Dartiguenave

Following the successful manipulation of the 1915 elections, the Wilson Administration attempted to strong-arm the Haitian legislature into adopting a new constitution in 1917. This constitution allowed foreign land ownership, which had been outlawed since the Haitian Revolution as a way to prevent foreign control of the country. The legislature was extremely reluctant to change the long-standing law and rejected the new constitution. Law-makers began drafting a new anti-American constitution, but the United States forced President Dartiguenave dissolve the legislature, which did not meet again until 1929.

Some of the Gendarmerie’s more unpopular policies—including racial segregation, press censorship and forced labor—led to a peasant rebellion from 1919 to 1920. The U.S. Senate sent an investigative committee into Haiti in 1921 to examine claims of abuse, and subsequently the U.S. Senate reorganized and centralized power in Haiti. After the reorganization, Haiti remained fairly stable and a select group achieved economic prosperity, though most Haitians remained in poverty.

In 1929, a series of strikes and uprisings led the United States to begin withdrawal from Haiti. In 1930, U.S. officials began training Haitian officials to take control of the government. In 1934, the United States, in concert with President Franklin D. Roosevelt’s Good Neighbor Policy, officially withdrew from Haiti while retaining economic connections.

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Thank you.

I wonder what other means exist to force the collections of funds. I believe Argentina and others have reneged on their foreign debts while continuing to borrow new funds from other foreign parties.

It's not complicated at all. Do some research on the history of Mexico, for example. England and France seized the customs house in Veracruz in 1862 for non-payment of government and private debts (the Liberals were refusing to honors debts of the Conservatives contracted during the War of the Reform)--and as a preface to the Franco-Belgian invasion of 1863. The English dropped out of the game when they saw that it had all been a pretext for the invasion. (Napoleon III was attempting to set up an "empire" in Mexico with an Austrian Archduke as the Emperor.) The United States sezied the customs house in Veracruz in 1913 on the same basis--debts unpaid in consequence of a civil war.

After the civil war in Venezuela at the beginning of the 20th century, naval forces of Britain, Germany and Italy blockaded the country because President Castro refused to honor pre-war debts and pay damages to foreign nationals for what they suffered in the civil war. These sorts of actions have been very common in history. Henry Temple, Viscount Palmerston, was Secretary at War from 1809 to 1828, and Foreign Secretary from 1830 to 1841. He frequently threatened other, smaller nations with the Royal Navy over allegations of debts to Britsh subjects.

Thank you, Setanta.

Come to think of it, we are still refusing to trade with Cuba and severely restricting our citizens from traveling there. Perhaps that is connected to nationalization of property formerly owned by Americans.

I don't think so. I think in the case of Cuba it's just ideological pouting strongly allied to the electoral politics of south Florida.

Hundred percent correct it the large right wing Cuban Community that drive everything in south Florida and Florida had been a swing state for a long long time.

We are the only county in the US that keep trying to have it own foreign policy such as passing a law not allowing airliners to land at the Miami airport if it had pay the Cuban government for the right of overflight on the way to Miami.

The FAA needed to tell them that they could not do any such thing.