Emancipation, violence and economic retribution

BVIlander heritage depicted

Emancipation celebrations usually come with a sense of reflection and jubilation. This does not come without a literal price tag. Today, the Gross Domestic Product (GDP per capita income of the British Virgin Islands seem pretty well off but this is a far cry from the immediate post-slavery era.

One of the main pillars of the Territory’s economy comes in the form of financial services, such as offshore banking.  Following the abolition of slavery in 1834, the BVI was in a financial tumult. The immediate abolition of slavery did not quickly manifest the prosperity that the slaves had expected.   

Economic decline had led to increased tax burdens which became a source of general discontent for former slaves and other residents of the Territory alike.

This was the case in most Caribbean countries where there was the abolition of slavery, which in some cases was immediately substituted with indentured labourship and which did not completely erase a level of decline in economic performance.

In 1848 one of the first major disturbances for the Territory occurred, and while the specific cause of this ruckus is debatable, what is not, is the fact that it was finance related.

At the time there was a slave upheaval occurring in St. Croix, which only served to fuel the general fervour in the islands, but the free population of Tortola were much more concerned with two other grievances: the appointment of public officials, and the crackdown on smuggling.

Although Tortola had sixteen coloured public officials, all except one were "foreigners."

During the period of economic decline, smuggling had been one of the few lucrative sources of employment, and recent laws which imposed stringent financial penalties (with hard labour for non-payment) were unpopular.

The anger was directed against the Magistrates by the small shop keepers, and they concentrated their attack on the stipendiary Magistrate, Isidore Dyett.

However, Dyett was popular with the rural population who respected him for protecting them from unscrupulous planters.

The ringleaders of the insurrection thought that their attack would lead to a general revolt, but their choice of Dyett as a target robbed them of popular support, and the disturbance eventually fizzled.

This did not remain the order of the day as in 1853 there was a far more serious affair, and would have much graver and more lasting consequences. Arguably, it was the single most defining event in the islands' history. Taxation and economics were also at the root of that disturbance.

In March 1853, Robert Hawkins and Joshua Jordan, both Methodist missionaries, petitioned the Assembly to be relieved on taxes.

The Assembly rejected the request, and Jordan is said to have replied, "We will raise the people against you."

Subsequent meetings fostered the general discontent. Then in June 1853, the legislature enacted a head tax on cattle in the Territory.

Injudiciously, the tax was to come into effect on August 1, the anniversary of emancipation. The burden of the tax would fall most heavily on the rural coloured community.

There was no violent protest when the Act was passed, and it was suggested that rioting could have been avoided if the legislature had been more circumspect in enforcing it, although the historical background suggests that insurrection was never far away, and only needed a reason to spark into life.

On August 1, 1853, a large body of rural labourers came to Road Town to protest the tax. However, instead of showing a conciliatory approach, the authorities immediately read the Riot Act, and made two arrests.

Violence then erupted almost immediately. Several constables and Magistrates were badly beaten, the greater part of Road Town itself was burned down, and a large number of the plantation houses were destroyed, cane fields were burned and sugar mills destroyed.

Almost all of the white population fled to St. Thomas.

President John Chads is said to have showed considerable personal courage, but little judgement or tact.

The following day he met a gathering of 1,500 to 2,000 protesters, but all he would promise to do was relay their grievances before the legislature (which could not meet, as all the other members had fled).

One protester was shot (the only recorded death during the disturbances themselves) which led to the continuation of the rampage.

By the next day, the only white people remaining in the Territory were John Chads himself, the Collector of Customs, a Methodist missionary and the island's doctor.

The riots were eventually suppressed with military assistance from St. Thomas, and reinforcements of British troops dispatched by the Governor of the Leeward Islands from Antigua.

Twenty of the ringleaders of the riots were sentenced to lengthy terms of imprisonment; three were executed. The period which followed the riots of 1853 has been referred to by one historian as the period of "decline and disorder."

Some commentators have suggested that the white population essentially refused to return and the islands "went to de bush." But this has been found to be an exaggeration.

While many whites did not return to their heavily mortgaged and now ruined estates, some did, and rebuilt. However, the insurrection created a climate of uncertainty, alongside the existing poor economic conditions and caused an economic depression which would take nearly a century to lift.

It would in fact take a full two years before even the schools in the Territory would be able to open again.

While tensions in the Territory continued to simmer, and local unrest ran high and exports continued to decline, large numbers of people travelled abroad to seek work. In 1887, a plot for an armed rebellion was uncovered.

In 1890, a dispute over smuggling led to further violence, and a Long Look resident, Christopher Flemming, emerged as a local hero simply for standing up to authority. In each case, widespread damage was averted by bringing in reinforcements for the local authorities from Antigua and, in 1890, from St. Thomas.

While the violence undoubtedly reflected disenchantment with the economic decline and lack of social services, it is said to be wrong to construe that period as a form of "Dark Ages" for the Territory.

During that period there was, for the first time, a significant expansion in the islands' schools. By 1875, the Territory had 10 schools; a remarkable development in light of the complete absence of functional schools after the insurrection of 1853.

This period also saw the first coloured British Virgin Islander, Fredrick Augustus Pickering, appointed as President in 1884.

Pickering stepped down in 1887, and in 1889 the title of the office was changed to Commissioner, marking a clear decrease in administrative responsibilities.

By the early 1900’s the Territory was not remotely economically prosperous as yet, and social services had deteriorated to vanishing point.

Emigration was extremely high, particularly to St. Thomas and to the Dominican Republic. Both concern and assistance from Britain was in very short supply, not least because of the two World Wars which were fought during this period.

In 1947, another unlikely hero emerged. Theodolph H. Faulkner was a fisherman from Anegada, who came to Tortola with his pregnant wife. He had a disagreement with the medical officer, and he went straight to the marketplace and for several nights criticised the government with mounting passion.

His oratory struck a chord, and a movement started. Led by community leaders such as Isaac Fonseca and Carlton de Castro, a throng of over 1,500 British Virgin Islanders marched to the Commissioner's office and presented their grievances. The voices of the people were heard.

As a result of the demonstrations the previous year, the Legislative Council was reinstituted in 1950 under a new constitution.

Having been denied any form of democratic control for nearly 50 years, the new Council did not sit idly by. In 1951, external capital was brought in to assist farmers from the Colonial Welfare and Development office. In 1953, the Hotel Aid Act was enacted to boost the nascent tourism industry.

Up until 1958, the Territory had only 12 miles of motorable roads; over the next 12 years the road system was vastly improved, linking West End to the East End of Tortola, and joining Tortola to Beef Island by a new bridge.

The Beef Island airport (now renamed after Terrance B. Lettsome) was built shortly thereafter. In 1956, the Leeward Islands Federation was abolished and defederation enhanced the political status of the British Virgin Islands.

Jealous of its newly acquired powers, the Council declined to join the new Federation of the West Indies in 1958, a move that would later be crucial in the development of the offshore finance industry.

In 1966, the new constitution with a much greater transfer of powers was brought into effect by order in council.

Elections followed in 1967, and a comparatively young Lavity Stoutt was elected as the first Chief Minister of the Territory.

With the creation of the financial services industry, it led to a surge in growth in the Territory. The fortunes of the Territory dramatically improved in the late twentieth century with the advent of the offshore financial services industry.

Former president of the BVI's Financial Services Commission, Michael Riegels, recites the anecdote that the industry commenced on an unknown date in the 1970s when a lawyer from a firm in New York telephoned him with a proposal to incorporate a company in the British Virgin Islands to take advantage of a double taxation relief treaty with the United States.

Within the space of a few years, hundreds of such companies had been incorporated.

This eventually came to the attention of the United States government, who unilaterally revoked the Treaty in 1981.

In 1984 the British Virgin Islands, trying to recapture some of the lost offshore business, enacted a new form of companies’ legislation, the International Business Companies Act, under which an offshore company which was exempt from local taxes could be formed.

The development was only a limited success until 1991, when the United States invaded Panama to oust General Manuel Noriega.

At the time, Panama was one of the largest providers of offshore financial services in the world, but the business fled subsequent the invasion, and the British Virgin Islands was one of the main beneficiaries.

In 2000, KPMG was commissioned by the British Government to produce a report on the offshore financial industry generally, and the report indicated that nearly 41 per cent of the offshore companies in the world were formed in the British Virgin Islands.

The British Virgin Islands is now one of the world's leading offshore financial centres, and boasts one of the highest incomes per capita in the Caribbean.