Ulises Heureaux - Political Demise

Political Demise

In order to enrich himself and his supporters, strengthen the bribe system, pay for the army, help set up sugar mills and finance infrastructural development, Lilís borrowed heavily from European and American banks, even as sugar prices underwent a steep decline. In 1888, he took out a loan of three-quarters of a million pounds sterling from the Amsterdam banking house Westendorp. The Westendorp Company went bankrupt in 1892, after its agent revealed fraud in the Customs Service, where Heureaux arranged preferential tariff treatment for some of his domestic creditors. A consortium of New York businessmen calling themselves the San Domingo Improvement Co. bought out Westendorp, taking over the claims of its European bondholders, in exchange for two loans, one of $1.2 million and the other of £2 million, to fund the countries external debt, to be secured with a lien over the nations customs fees. As the mounting public debt made it impossible to maintain his political machine, Heureaux increasingly relied on secret loans from the San Domingo Improvement Co., sugar planters and local merchants. In 1897, with the country on the brink of bankruptcy, Lilís was reduced to printing five million dollars worth of unsecured paper money, known as papaletas de Lilís, ruining many of the countries merchants. This helped trigger a new revolt among the Cibaeño tobacco planters and merchants, leading to his assassination in Moca in July 1899. By the time of his death, the national debt exceeded $35 million, fifteen times the annual budget.

During his time in office, the country's economy came largely under the control of the United States. Upon his death, it was revealed that he had taken many secret loans from foreign banks for personal enrichment. The government declared bankruptcy, the economy crumbled and the American military intervened.