Unit V: Sovereign Debt Diplomacies: Rethinking sovereign debt from colonial empires to hegemony (Zendejas, Cole)

Question 1

What served as a mechanism for external control in 19th-century Latin America?

Answer 1

Public debt

Sovereign debt defaults frequently led to the erosion of Latin American sovereignty through foreign intervention.

Question 2

Which European powers frequently intervened in Latin America due to debt issues?

Answer 2

Britain and France

These powers sometimes established colonial regimes or systems of international foreign control.

Question 3

What were less extreme forms of intervention in Latin America related to debt?

Answer 3

Commissions with representatives of bondholders and governments

These commissions impacted public policies without direct military action.

Question 4

Name two examples of military coercion connected to debt disputes in Latin America.

Answer 4

• French invasion of Mexico in 1862
• Naval blockade of Venezuela in 1902

Question 5

How did foreign interventions affect political regimes in Latin America?

Answer 5

They sometimes led to the establishment of new political regimes and foreign control over fiscal policies.

Question 6

What was the impact of trade and credit on Latin American public policies?

Answer 6

They significantly influenced public policies, especially through sovereign debt.

Question 7

What legal strategies did Latin American lawyers attempt to use against military interventions for debt collection?

Answer 7

International law

Lawyers aimed to prevent the use of military force for debt repayment.

Question 8

During early independence, why did Latin American governments rely on external loans?

Answer 8

• Fiscal challenges
• Need for diplomatic recognition
• Recovery of trade and investment

Question 9

What role did bondholder associations like the British Corporation of Foreign Bondholders (CFB) play?

Answer 9

They gained political weight and sought government support for debt claims.

Question 10

What does the concept of informal empire refer to?

Answer 10

Significant control exerted by dominant powers through economic influence rather than direct rule.

Question 11

How did the US pursue imperialistic goals in Latin America?

Answer 11

By focusing on commercial expansion and asserting intervention rights under the Roosevelt Corollary.

Question 12

Sovereign debt could finance which type of public infrastructure?

Answer 12

Railroads

However, defaults could hinder such development.

Question 13

What role did merchant banks play in the fiscal management of Latin American countries?

Answer 13

They often led to a loss of sovereignty over revenues.

Question 14

What legal tools were used to resolve debt disputes in Latin America?

Answer 14

• Diplomatic conventions
• Direct contracting

Question 15

What was the significance of the Venezuela Crisis of 1902?

Answer 15

It highlighted the growing importance of international law in sovereign debt disputes.

Question 16

What did the Roosevelt Corollary assert regarding intervention in Latin America?

Answer 16

The right to intervene in countries failing to meet debt obligations, linking debt repayment to sovereignty.

Question 17

Who contested the use of force for debt collection in Latin America?

Answer 17

Latin American jurists like Luis Maria Drago

He advocated for absolute sovereignty through the Drago Doctrine.

Question 18

What was the outcome of the legal discourses surrounding sovereign debt disputes in Latin America?

Answer 18

They became central to the disputes despite differing interpretations.

Question 19

How did Latin American nations view international law in the context of foreign interventions?

Answer 19

As a potential means to protect themselves from foreign interventions.

Question 20

Fill in the blank: Sovereign debt defaults in 19th-century Latin America frequently resulted in the erosion of the indebted country’s _______.

Answer 20

sovereignty

Question 21

True or False: Military interventions were the only means of foreign control in Latin America during the 19th century.

Answer 21

False

Less extreme interventions also occurred, such as through commissions.

Question 22

What was the Drago Doctrine?

Answer 22

A proposal by Argentine jurist Luis Maria Drago arguing against the use of force for debt collection.

Question 23

How did the actions of Latin American jurists reflect agency in the context of foreign intervention?

Answer 23

They attempted to use international law to limit foreign intervention in sovereign debt collection.

Question 24

What impact did failure to repay debt have on the sovereignty of Latin American nations?

Answer 24

Erosion of sovereignty, possible military intervention by European powers, establishment of foreign control systems

Examples include the French invasion of Mexico in 1862 and customs receiverships by the US.

Question 25

What is the concept of informal empire in the context of Latin America?

Answer 25

Economic influence without direct political control, significant control through trade and investment ## Footnote The debate centers on the extent of British influence versus Latin American agency.

Question 26

What organizations did bondholders form to pursue claims against defaulting Latin American governments?

Answer 26

Associations like the Corporation of Foreign Bondholders (CFB) ## Footnote These organizations could lobby their home governments for intervention.

Question 27

What was the Grace Contract in Peru?

Answer 27

An agreement settling defaulted debt by granting bondholders control over national assets ## Footnote Included railways, land, and guano resources.

Question 28

What was the Drago Doctrine?

Answer 28

Argued that armed force to collect sovereign debt was unlawful and violated national sovereignty ## Footnote Proposed by Argentine Foreign Minister Luis María Drago in 1902.

Question 29

What did the Roosevelt Corollary assert regarding Latin American nations?

Answer 29

Right of the US to intervene in cases of 'chronic wrongdoing' or debt non-payment ## Footnote Positioned the US as a regional enforcer of stability.

Question 30

What were the implications of diplomatic convention debts in Mexico?

Answer 30

Transformed private financial obligations into matters of international diplomacy ## Footnote Increased likelihood of foreign intervention in case of default.

Question 31

How did external credit dependence act as a mechanism of control for Latin American governments?

Answer 31

Gave investors leverage to exclude governments from financial markets and coordinate boycotts ## Footnote Governments risked losing access to funds if they deviated from repayment norms.

Question 32

What role did international law play in sovereign debt disputes in Latin America?

Answer 32

Initially used to justify interventions, later sought by Latin American nations to protect sovereignty ## Footnote Examples include the Drago Doctrine and the response to the Venezuelan blockade.

Question 33

True or False: European powers frequently intervened militarily in Latin America due to debt defaults.

Answer 33

False ## Footnote Military intervention was less common compared to other regions despite frequent defaults.

Question 34

What is the definition of sovereignty?

Answer 34

The full right and power of a governing body over itself, without outside interference.

Question 35

Fill in the blank: The _______ refers to a policy of extending a country's power and influence through diplomacy or military force.

Answer 35

Imperialism

Question 36

What does the term 'dollar diplomacy' refer to?

Answer 36

American foreign policy using economic power to further aims in Latin America and East Asia.

Question 37

What was the function of customs receivership?

Answer 37

Foreign financial control over a country's customs revenue to ensure debt repayment.

Question 38

What were some alternative mechanisms of control employed by European powers in Latin America?

Answer 38

Economic influence, credit as a tool, bondholder associations, and dollar diplomacy ## Footnote Focused on securing cooperation of local governments.

Question 39

What is the purpose of direct contracting in sovereign debt resolution?

Answer 39

Negotiations between debtor governments and foreign bondholders to settle debts.

Question 40

What was the Monroe Doctrine?

Answer 40

A US policy opposing European colonialism in the Americas, established in 1823.