At some point, in the late 1800s, the penny, the economic penny that is, dropped for the merchant class, and the government, in the Bahamas. When this happened, the country moved swiftly from an agricultural society, to a food import society. The question is why. For all of the years during slavery, agribusiness thrived. Despite all impressions given, agriculture did not die after emancipation due to the laziness of negroes to work the land. Other things were in play, as the colonial government of the early 1900s, sought to direct the accumulated petty wealth of thousands of Bahama peasants.
As the second era of industrialisation emerged, with the advent of the automobile, household products, textiles and widespread use of new electricity, product import dependency soon followed food import dependency for the Bahamas.
Agriculture was slowly discouraged among poor blacks and poor whites. These were the groups who were still generationally dependent on growing or rearing what they ate. If a nation cannot feed itself, this creates dependency, a captive audience and a lucrative revenue stream for shop owners, the merchant class.
When the economic realisation dawned on the Bay Street merchant class, it turned into a golden penny, which would change the economic and social landscape of the country to the present day.
(The Allentown Democrat, Saturday, 30 October 1915)
By 1915, the population balance, in the Bahamas, had already been tipped, quite heavily, for more than a century. Negroes, by and large, made up the vast majority of those living in poverty across the islands. Collectively though, their money, their copper shillings, kept in mason jars under floor boards, represented tremendous purchasing power. This purchasing power needed to be controlled, concentrated and directed.
Peasant purchasing power had to be controlled for three significant reasons.
First, by the early 20th century, protracted hostilities of World War I, exposed the unexpected fragility of small island economies, like the Bahamas, to global events.
Second, negro purchasing power in the Bahamas supported white merchant class wealth. White merchants, in the early 1900s, earned more money selling to 5,000 poor negroes than they did selling to 50 American winter tourists.
Third, negro purchasing power supported government revenue. Descendants of slaves, by virtue of their vast numbers, suddenly became the tax base which supported government revenue. Without tens of thousands of negroes buying imported merchandise at a 25% added import duty tax, colonial revenue, in the early 1900s would have been in serious jeopardy. Through an ironic twist to history, the income tax base for the Bahamas, in 1915, was being supported by the lower economic classes.
“For instance, women and children and some of the men grow sisal for fibre and clean it by hand, and spend the few cents they have earned in this labourious undertaking in the purchase of foreign foodstuffs that pay a duty of 25%. This tendency has been encouraged and made the most of by the merchants as it increased their trade, and also by the government as they gave so much more revenue.”
(The Allentown Democrat, Saturday, 30 October 1915)
1915 – WHEN HARD TIMES HIT, THE BAHAMAS WAS PRODUCING NOTHING SALEABLE. THE GOVERNMENT AND BANKS INCREASE TAX AND LENDING RATES
It was 1915, only one year into World War I, when the bite of a slowed global economy gnawed deep into the Bahamas. The stark realisation that sisal and sponges were about as useful as gout and bunions, in hard economic times, hit home. In response to a slowed global economy, local Nassau banks raised the lending interest rate by 2%, raised the rate of exchange by an additional 2% and the colonial government increased import tariffs by 2%.
Bahamians were buckling under the weight of taxes, upon taxes, upon taxes.
As the First World War showed no signs of being resolved as quickly as the British had hoped, and as increased tax rates began to push the peasant class into further depths of poverty, the Governor of the Bahamas, made a proclamation.
The Governor, Sir William Lamond Allardyce, (June 15 1914–1920), entreated Bahamians to go back to the soil to try and grow as much as possible. This would help alleviate the local food problem somewhat, but also help with another problem. The Bahamas needed to put in their fair share for the war effort. Monies had to be collected. Food supplies had to collected. Clothing had to be collected. All manner of things had to be accumulated to send to England to support the Mother Country in the war effort.
After the war, agriculture, for local consumption, fell into nothingness once again. Peasant Bahamians went back to working labour jobs for scant monies in order to purchase foreign imports.
It wasn’t until year round tourism took off, as the major economic industry for the Bahamas, that some of the overall tax burden was shifted from locals to tourists.
Foreign import dependency, and the dependency on import duties to support government revenue, increased exponentially, as the local population and foreign tourism trade grew, moving into the 21st century.