Decolonization Models for America’s Last Colony: Puerto Rico

The Bankers Club and Puerto Rico

210 The Bankers Club and Puerto Rico January 27, 2010 The closing of the Bankers Club, the legendary icon of Puerto Rico’s financial world, founded in 1939, illustrates the changes that Puerto Rico is undergoing. It was a death foretold from the moment that the club failed to continue to run its historic venue in Old San Juan on top of the first Puerto Rican “skyscraper,” facing majestic San Juan Bay. Important business negotiations were closed and historic meetings and social events held in that exclusive private club. But the Bankers Club could not survive the changes of the twenty-first century. Its situation was similar to what Puerto Rico’s political, economic, and social model is currently facing. Half a century ago the main corporations in Puerto Rico were headed by American executives whose social venues were the Swiss Chalet, La Rotisserie, Dorado Beach, and the Bankers Club. With the closure of the Bankers Club, an era has come to an end. In the 1950s and 1960s, Chase Manhattan Bank and the First National City Bank of New York participated in the principal transactions in Puerto Rico, and they were represented by prominent American lawyers such as McConnell, Kelly, Griggs, Fiddler, Brown, Newson, and Goldman. That was a Puerto Rico dominated by the presence of Americans on the island, a presence dramatized on Sundays by hundreds of uniformed US Navy personnel walking the streets of the city and swarming into Tony Tursy’s night spots along the wharves in the evenings. There were army, naval, and air force bases scattered all over Puerto Rico, Culebra, and Vieques. The Bankers Club and Puerto Rico  211 The military importance of the island evaporated formally with the end of the Cold War, the development of weapons technology, and the shift of the geopolitical center of the world to the Middle East and Asia. Puerto Rico’s banking sector is currently dominated by local, Spanish (Santander, BBVA), and Canadian (Scotiabank) banks. The main brokerage firms are Swiss (UBS), Spanish (Santander Securities), and local firms. Mexicans dominate the communications sector (PRTC, Claro) and the cement industry (Cemex). The French and the British dominate the advertising industry (Y&R, JWT, Grey, Euro RSCG, Saatchi & Saatchi, Leo Burnett) and have a strong presence in the cement (San Juan Cement) and polling (Hispania) industries. Europeans also have a local presence in the pharmaceutical industry (Glaxo, Astra Zeneca, Roche, Sanofi-Aventis). Japanese cars replaced American cars in Puerto Rico long before they managed to do so in the United States. The Spanish have a strong presence in the telecommunications (TLD) and insurance (MAPFRE) sectors. As European and Latin American corporations have replaced American companies in the manufacturing and service industries, American investors have been replacing local firms in the retail market. This move capitalizes on the change from a productive economy to a consumer economy. Megastores such as Wal-Mart, Sam’s, Costco, Walgreen’s, Marshall’s, and Borders have replaced González Padín, Farmacias Moscoso, Amigo, Velasco, and García Comercial, among others. These megastores provide excellent products, manufactured mostly in China, at affordable prices for the Puerto Rican consumer. Puerto Rico’s economic model froze in the 1950s. Corporations operating under Section 936 [of the US Internal Revenue Code] gave it some oxygen and managed to carry it through to the 1990s. Today, Puerto Rico— with an unemployment rate at 16 percent and rising and with more than 50 percent of its people outside the job market—depends on public debt and federal transfers, which produce an economy based on consumption rather than production. That is why our professionals, who have graduated from our excellent centers of higher education, now find that they have to leave Puerto Rico. 212  Newspaper Columns The closing of the Bankers Club, founded in 1939, should serve as a warning to the oldest political organization in Puerto Rico, the Popular Democratic Party, founded in 1938, which refuses to accept that we are in the twenty-first century and that the world has changed. ...