From Pearls to Methanol: Economies in Trinidad and Tobago

 Outside of the trade or barter that may have existed during Amerindian times, one may say that our first economy was created by the Europeans' contact with the natives of these islands. The first "industry" to have been developed was pearl diving, so much so that the Gulf of Paria became the Gulf of Tears, so named for those who died there diving for pearls.

This industry, together with the capture of tribal people and their sale into slavery to the larger islands to the north, drove both the pearl-bearing in the Gulf and the Amerindians to virtual extinction by the end of the 16th century. The economy to follow was largely one of imaginary nature: the quest for El Dorado. It lead to the burning of the port settlement of Puerto d'España and the sack of the island's capital, San José de Oruna, by Sir Walter Raleigh. During this period, the most widely used commercial coin changed hands in these waters.

Ferdinand and Isabella of Spain introduced a new monetary system in 1497. The system included the eight "reales" piece, which was to become famous as the romantic "piece of eight". The coin provided an almost universal currency at the time, and it is from this "piece of eight" that the Latin American "peso" derives, which was also in use in Spanish Trinidad.

These coins were struck with the "Pillars of Hercules", i.e. the Straits of Gibraltar, and the legend "More Beyond". It was from this mark that the "$", the dollar sign, derived: the figure 8 between two pillars. In quill-written form, this sign took the form of an S with two lines. The pillar dollar was originally minted in Mexico and was also in use in Trinidad. It is, in fact, the origin of our Trinidad and Tobago dollar. The word "dollar" is derived from the word "Taler" or "Thaler", which was the currency used in German-speaking Europe throughout the Middle Ages.

The Cedula of Population of 1783 introduced French colonists, Free Black people and African slaves to Trinidad in quantity and inaugurated the plantation economy. In this system, there was little need for money since food, shelter and clothing were provided by the plantation. There was little development for the development of a retail sector. Since there was no paid labour force, nobody had money to spend, and transactions were mostly in kind. Transactions between planters and Europe were handled in the main by bills of exchange and book entries. Services necessary to provide for the shipping and sale of goods and for management of income were provided by the merchant banker who operated at the metropolitan centre. He provided ships to move the produce. The proceeds were used to settle the planters' financial commitments, such as pensions and mortgages, and to procure supplies to be shipped to the plantation. The residual was placed in a bank.

With this pattern of trade, money was needed for transactions only at the metropolitan end. Transactions at the colonial end required no cash, and were in fact no more than book entries. The produce served as the unit of account and the medium of exchange, and could therefore be regarded as a form of money. Goods which were available in Europe, such as lumber, grain, livestock, were also in the main bought bills of exchange.

For the most part, money was used as a measure of value for the payment of outstanding balances only as necessity arose. The volume of currency was small and consisted of a wide variety of coins of fluctuating value. As such, one may say that the slave population was outside of the economy and, being "owned" by the plantation, they themselves were a unit of account and a medium of exchange.

During this period, local currency in Trinidad operated under very complicated circumstances, such as the transition of the government from Spanish to English and the influence of the French on the composition of the population. It was brought about as a direct result of those circumstances: several types of coins were brought to Trinidad and Tobago by the West Indian immigrants, ranging from Spanish, American, French, on to Mexican and Dutch currency.

By 1803, there was an attempt to regularise the value of all the various coins in Trinidad, as well as to consider the problems arising from the necessity of readily available change. In 1804, the "Coinage Proclamation" made a cut silver half-bit valued at 6 d. currency, and a cut silver quarter of a bit at 3 d. currency legal tender.

During  1811, silver coins became a rarity, as England drained Trinidad and Tobago of its silver species. Because of this,  a hole was pierced in the middle of the coin. This "plug", as it was sometimes called, was stamped with the letter "T" and was worth 1 bitt. The dollar ring was valued at 9 s. or 9 bitts.

In 1816, the T bitt were ordered by government to pass by weight only, and by 1823 T bitts were decried. The dollar ring survived up to the 1860s, valued at 3 s. 9 d. sterling, or 90 cents. Out of this confusion of currencies the dollar emerged, valued at 4 s. and 2 pence, and may well be the last remnant of our Spanish past.

The need for the creation of some type of banking system in Trinidad and Tobago became evident following the emancipation of the slaves, which had the effect of requiring the planter to pay for many of the services which were formally rendered by the slaves. The full economic impact of emancipation was, however, cushioned by the fact that it was accompanied by a six-year apprenticeship scheme, which provided that the ex-slaves were only paid wages for work done in excess of 40 hours a week.

In 1838, when the islands' some 20,656 former slaves were fully free, the planters lost control of the labour force. They as well as their merchant bankers in London were fully aware that full emancipation, when it came, would increase the number of transactions in cash. An acute need for working capital arose, and it was felt that it would be best met by the establishment of a bank.

The abolition of slavery also meant that the state would grow at the expense of the plantation. Bureaucracy expanded and a consistent need to pay the civil servants as well as public sector projects arose. Taxes had to be levied in cash, and the economy had to monetised. Throughout the British Caribbean, planters had been compensated for the freeing of their slaves by receipt of £ 20,000. There was money making the rounds. This lead entrepreneurs to believe that it was a good idea to establish a bank so as to absorb this excessive liquidity.

The practice of money-lending at exorbitant interest rates was a vital necessity. Money loaned and mortgages of the estates made many rich. In May of 1837, however, the Colonial Bank, owned and operated by a "Court" comprising the commercial interest of the City of London, shipped seventy boxes of dollars on board the "Harriet" to Port of Spain. Each box contained between 3,000 and 5,000 coins; the total being $ 250,738.50.

The secretary of the bank noted:

"Those contained in boxes no. 60 to 62 are Spanish pillar dollars. These dollars stand in on board about 50.5 pence per dollar, exclusive of interest and charges that may be incurred on arrival."

Banknotes ordered from Perkins, Bacon & Co. Ltd. of London came in the denominations of $ 5, $15 and $ 20. 1,025,000 notes in all, they had, when signed, counter-signed and issued, a redeemable value of no less than $13,125.00.  

Thus was the origin of currency in Trinidad, and by extension in the British Caribbean. With it, the period of plantation economy was over, and the epoch of commerce began. There was, however, no guarantee for the survival of the island's economy, which had all but collapsed after the abolition of slavery. Various experiments were attempted with labour: Chinese, then Portuguese immigrants were brought, without much success. Only with the advent of labour from the Indian sub-continent was the situation saved.

Despite the ups and downs of the sugar market, Trinidad and Tobago's sugar economy was to save the day between the 1840s and the 1880s. It was worked by indentured Indian labourers, who received a pittance.

By the 1870s, another economy began to emerge, which was to have a broad and deep effect on society. This was cocoa. As the result of the industrial revolution, Europe had produced a quickly growing middle class. One of the things that this class enjoyed was chocolate. These islands became the main suppliers. If the cane economy was the property of the wealthy British firms, cocoa was every mean's mean of gaining wealth. From 2 to 5 acre holdings to 1,000 acre under cocoa: the cocoa economy had a tremendous effect on the prosperity of these islands. Minority groups, such as the French Creoles, became commission agents. Others, such as the Chinese and Portuguese, became shopkeepers on the estates. The trickle-down effect of the cocoa economy meant the emergence of an educated middle class society, which in turn produced a generation of the islands' first crop of professionals, mainly in the fields of law and medicine, but also teachers, chemists, civil engineers, and surveyors.

Within a generation, another economy was to make and impact on the lives of Trinidadians and Tobagonians. It was oil. By the 1930s, despite the terrible world recession, Trinidad's economy was underpinned by a very strong foundation. The petroleum economy impacted on the island's infrastructure in terms of roads, water, electricity, which had to be geared to an industrial-based economy. In every island in the Caribbean, including Tobago, all the roads lead to the beaches. Their economies became dedicated to the visitor. In Trinidad, the roads lead into the interior, where the oilfields and the plantations are.

The industrial-based economy impacted on the nature of education, producing engineers and scientists to operated the petrochemical sector. From this economy, institutions such as the trade union movement was born. This, in turn, gave rise to the type of political movements that took the country into independence.

Trinidad and the Empire

The Seas around us hold our destiny

From climatic conditions over naval decisions to the petrochemical industry: our fate was always intertwined with the oceans around us.

Who controlled the high seas during the colonial era was always of great significance to us in these islands. When Sir Winston Churchill in 1913 as First Lord of the Admiralty altered the British ocean-going fleet from coal furnaces to oil burners, the economic future of Trinidad was forever altered.

If Admiral Lord Nelson's flotilla had encountered the French battlefleet in an unfortunate manner in the Gulf of Paria in 1805, we may all be French-speaking today. Or, for that matter, had Admiral Apodaca attacked Admiral Sir Henry Harvy's squadron as they sailed through the Dragon's Mouth instead of burning his fleet in Chaguaramas Bay in 1797, Spanish might be spoken here.

The seas around us hold our destiny. A significant period in the history of Trinidad and Tobago occurred at a time when we were hardly mentioned on the maps and charts of the world. Spain and Portugal had been given the New World, the entire western hemisphere, by the pope of the day, oblivious to the fact that it was not his to give away in the first place. This was challenged by the non-Catholic princes of Europe, particularly England. At the source of the circumstances lay the proverbial root of it all: money.

Had circumstances gone in favour of Spain, the direction of history would have changed. In the wake of the discoverers Columbus, Vespucci and others, came the adventurers Cortes, Pizzaro and de Berrio, to name but a few. These were followed by the privateers, bandits and buccaneers, many of whom were English seamen like Morgan, Drake, Hawkins and Raleigh.

Spain was then an underpopulated, comparatively backward European country which had recently driven out its intelligentsia, that is, the Jews and the Arabs. She had become enormously wealthy by her new colonies in the New World. Out of the mines of Peru and Mexico came gold and silver. From the Gulf of Paria came pearls of great worth. Vast areas of the southern continent, as yet without names, yielded emeralds and rubies. The power of the Spanish empire was so fortified by these riches, that King Philip could equip his armies and his navy as no other power had done before.

This was well appreciated in the ruling circles of England. Recently Protestant under Henry VIII, Spain, a powerful Catholic neighbour, posed a threat to the island nation. So long as Spain controlled the wealth of the New World, she could launch and equip battlefleets against England.

To get a piece of the treasure from Americas, England therefore had to arrest it at its source or capture it from the Spanish ships on the high seas. England's economy in those years, the 1580s, was agricultural. She had to strengthen her finances. The virgin Queen Elizabeth I accordingly sanctioned a quantity of unofficial expeditions against Spanish interest in the west. This brought Sir Francis Drake and Sir Walter Raleigh into the Gulf of Paria. Raleigh burnt down Port of Spain, captured Trinidad's capital, St. Joseph, kidnapped the Spanish governor and took him up the Orinoco river in search of El Dorado and the City of Gold.

Sir Henry Morgan raided out of Jamaica the Spanish-held coastlines of Mexico. British privateers would lie in hiding in Tobago's Pirates Bay, so as to spot Spanish treasure fleets making for the Galleons Passage, the narrows between Trinidad and Tobago in order to capture treasure beyond their wildest fantasies.

Avoiding open war, these raids continued. However, they made no lasting impact on Spain. It was only John Hawkins who rebuilt the British navy and put into place the sound foundation that would make it master of the open sea in the coming 17th century.

Sir Winston Churchill, writing in his "History of the English-Speaking Peoples", remarks:

"The Spaniards had long contemplated an enterprise against England."

They knew that England stood in the way of their reconquest of the Netherlands. Spain commenced the building and the assembling of a fleet. These preparations were delayed for a year by Drake's famous raid on Cadiz in 1587. He wrote that he had "singed the King of Spain's beard". In May of the following year, the armada was ready. 136 ships were assembled, carrying 2,500 guns and more than 30,000 men; 20,000 of them soldiers. There were 20 galleons, 44 were merchantmen and 8 were Neapolitan galleys. These were the main ships.

The Spanish armada set out to sail up the channel with a view to land on the south coast of England. They were under the command of the Duke of Medina-Sidonia. Hawkins' redesign of Britain's fighting ships was about to be tested. In fact, the best that they could put against the Spaniards was a fleet of 34 ships of the line plus another 150 privately owned vessels.

The British stationed small squadrons all along the southern coast. In the meantime, an Atlantic storm that had been broiling for several days swept the Spanish fleet, dismantling two 1,000 ton ships.  The storm in passing through the channel, forced the British to put out to sea.

If the Spanish Duke had attacked the English vessels to leeward of his ships as they struggled to clear the land, he would have caught them at a disadvantage, but instead, he followed his orders and sailed up the channel. The English, however, just managed to get their fleet to the windward of the Spaniards and for nine days hung on to the Armada as it ran before a gusty westerly while pounding away with their long-range guns at the lumbering galleons.

On July 23, the wind dropped and both fleets lay drifting off Portland Bill. The Spaniards attempted a counter-attack with the Neapolitan galleys rowed by hundreds of slaves. Sir Francis Drake took advantage of light wind and swept in upon the main body, forcing them to give way "until they flocked together like sheep".

During the following night, the English launched ships full of dynamite to drift in the direction of the enemy, then set them alight, abandoning them as quickly as possible. Massive explosions shook the very air. The Spanish captains cut the cables that held their ships at anchor and made for the open sea. There were many collisions in the dark.

Over the following several hours, both winds and tide worked against them. Finally, the Spanish turned to face their pursuers. A long and desperate fight raged for eight hours. Ships lashed together as men fought it out hand to hand, sword to sword, musket to musket. Breaking free, their main van sailed northward with one thought in mind: home. This time, the westerly winds helped although they were wrecks. Then a shift came. They were forced to make for Ireland for fresh water - they had already cast their horses and mules overboard.

The English had not lost a single ship. A handful of men had given their lives. The Spaniards had lost half their fleet. The British struck a gold medal upon which was inscribed: "God blew and they were scattered". This victory over Spain was the shining achievement of the Elizabethan age. England had emerged as a first class sea power. She had resisted the might of the greatest empire since Roman times.

This, in fact, was a turning point in the history of the world. There were still many battles to fight against Spain, France and later against Germany, and many tribes and nations to conquer and overthrow to make the British Empire. But in the final analysis, it was England that won the wars. 

The British pick a quarrel

From its discovery in the 15th century, the Caribbean has always been a region where the European powers struggled with each other. Decisive battles have been fought in our blue waters, battles whose outcome tipped the scales in the Old World.

One such incident took place in Trinidad in the 18th century. It started with a violation of the neutrality of Spanish territory - and ended with England declaring war on Spain and eventually capturing Trinidad from the Spanish Crown.

Trinidadian historian P.G.L. Borde described the events in 1883:

“The formidable armament which England had prepared in 1795 for the appeasement of the French islands, the conquest of the Dutch settlement of Guiana, and the Spanish islands of Trinidad and Puerto Rico, was prevented by bad weather from reaching Barbados until April of the following year. The intrepid defenders of their nationality succumbed beneath the great number of their enemies in the long run, and when they had lost all their defended positions, they carried on a guerilla warfare (corsairs) for several months.

In order to overcome this trouble, it was necessary for the English to destroy these corsairs. This task was confided to Captain Vaughan of the thirty-two cannon frigate ‘Alarm’, which was accompanied by the twenty-cannon corvette ‘Zebra’ under the command of Captain Skinner. These two ships chased the corsairs from the creeks where they sheltered, and also out of the labyrinth of small islands of the Grenadines where they went into hiding.

The corsairs were forced to seek refuge in the neutral waters of the Gulf of Paria, where they were pursued by the enemy. This refuge which was excellent if the neutrality of the island had been respected, became merely a mouse trap, since the English forces did not take any account of neutrality.”

Captain Skinner was sent on a mission to demand the authorisation from Trinidad’s Governor Chacon to destroy the corsairs in the Gulf. Chacon, however, did not wish to take responsibility of such a violation of neutrality.

“In the morning at daybreak, he (Captain Skinner) opened fire on the corsairs at random. They were all destroyed except those who were able to reach Port-of-Spain.

When he heard of the destruction of the French corsairs, Captain Vaughan considered it his duty to pay a visit to Governor Chacon in order to justify the conduct of Captain Skinner, and probably also to make a reconnaissance of the country which undoubtedly would soon be attacked by the English forces.

As soon as he arrived, he obtained an audience with the Governor. Then he went about visiting some Spanish and Irish people in the town. His officers also came ashore, and following his example, they visited their compatriots.

On the evening of the 8th May, the officers of the ‘Alarm’ were at the house of a lady named Griffith. There the French and English sailors picked a quarrel. Insults were followed by blows, and a general riot took place.”

The English sailors, supported by their officers, were soon outnumbered by the French citizens of Trinidad, supported by the corsairs. Spanish troops who had arrived on the scene had to isolate the English, who had sought refuge in a house, from the enraged French. The commander of the troops, Don Juan Jurado de Lainés, managed to distract the people in the street, while the English climbed over the walls at the back of the house and managed to get to their boats unseen. Only the ship’s surgeon was injured and had to remain in the house, where the corsairs left him unharmed.

“On hearing the news of these events, Captain Vaughan was infuriated, although what had happened was only the result of his own imprudence., but he considered it an outrage and an insult to his flag. That same night he ordered the call to arms to be sounded, and he made the necessary preparations for landing at day break. All the (490) men from the frigate landed, armed to the teeth. The English started on the march, headed by the bank and with flags flying. The French sailors, accompanied by their friends and compatriots, had had time to put themselves in battle order outside the town on the right bank of the old course of the St. Anns river. This party consisted of three or four hundred men, who were resolved to await the enemy, and they were flying the French flag and had decorated themselves with the tricolor cockade. On his side, the Governor had also had time to collect a company of soldiers, and he put himself at their head with the object of stopping what looked like an inevitable battle. By a clever maneuver, and passing through a cross road, he arrived in time to put himself between the two enemy bands just at the moment when they were about to come to blows. He finished up by saying: ‘I will not suffer a province of my King which is confided to my care to become the field of battle of two nations who are at war with each other.’”

Captain Vaughan decided to return to his ship without a further word. Covered with confusion, he immediately set sail and abandoned the field of his sad exploit. A short time later, he committed suicide.

On the 5th October 1796, the English declared war on Spain. Shortly afterwards, on the 17th October, the Cabildo in Trinidad received a dispatch from the British Secretary of State, relative to the Vaughan affair. Three months later, on the 16th February 1797, the British invaded Trinidad and the island became a British colony.