At the end of the 19th century, Colombia faced an unexpected diplomatic crisis – the “Cerruti Case” – which nearly brought the nation to the brink of an Italian invasion.
Although less notable than other international disputes, for decades, it impacted diplomatic relations and history between the then-young countries.
At the time, Italy had only recently achieved its unification, and the Saboia monarchy was struggling with European nations to make a name for itself among the dominant world powers.
Colombia, in comparison, was subject to a federal regime that, since 1863, had given birth to the United States of Colombia – one of the country’s seemingly endless periods of instability – dominated by civil wars between liberals and conservatives that characterized the 19th century.
Ernesto Cerruti, Italy’s merchant in Colombia
Ernesto Cerruti was a prominent Italian merchant born in Genoa in 1844. Coming from a family of entrepreneurs dedicated to maritime trade, Cerruti followed in the footsteps of his ancestors and became a prominent figure in 19th century international commerce.
At an early age, Cerruti moved to Latin America, where he saw great potential for economic development. Settling first in Argentina and then Brazil, he established trade networks connecting Europe with South America, especially in the import and export of goods like textiles, coffee as well as raw materials.
Thanks to his business skills and strategic vision, Cerruti was able to establish a thriving trading company that quickly expanded throughout the South American region.
“Centu per centu, ganancia moderata”
Ernesto Cerruti’s economic success was largely due to his business expertise. In order to understate this keen commercial ability, it’s good to know a little Italian. Cerruti popularized a particular style of negotiation which he learned from his years as a Genovese merchant: “Centu per centu, ganata moderata” (hundred per cent, moderate profit).
This expression encapsulates a fundamental principle in commerce and finance: the importance of moderation in profit to ensure sustainability and mutual satisfaction between buyer and seller.
Cerruti used this phrase to refer to the practice of making fair profits, without falling into greed, which generated positive reputation and long-lasting business relationships. In the context of his time, where business practices were often ruthless, this business philosophy was innovative. Cerruti believed that excessive profit could be detrimental in the long run, both to the business relationship and to the stability of the market.
Today, “Centu per centu ganata moderata” resonates in public memory, and reminds people that financial success does not always lie in maximizing profits on every transaction. Instead, success means maintaining a balance between profitability and ethics, promoting sustainable growth over time.
The ‘Cerruti Case’
The case has roots in the complex relationship between late 19th century Colombia and European investors. During this period, Colombia, like many Latin American nations, was in the process of modernization and, in order to finance development, permitted and promoted foreign investment. One of these early investors was Ernesto Cerruti.
Cerruti had arrived in Colombia in the 1870s and established himself as a successful businessman and entrepreneur. He initiated various industries in the country, including the exploitation of natural resources – such as coal mining – as well as agriculture and cattle raising. Cerruti prospered and amassed a considerable fortune. However, he soon found himself in a serious conflict with the Colombian authorities.
In 1885, during the Civil War in Colombia, Cerruti’s assets in the country were confiscated by the government under the allegation of Cerruti supporting rebel forces. This seizure was, in Cerruti’s eyes, a violation of his rights. Cerruti demanded restitution, but his claim was ignored by the Colombian government.
Outraged, Cerruti decided to turn to Italy for support, arguing that his property had been illegally seized by the Colombian government: a claim centered on the idea that he had no direct connection to the insurgency. Thus, the matter took a diplomatic turn and became an international issue.
Colombia-Italy diplomatic crisis
The intervention of the Italian government transformed the conflict into a serious international dispute. Italy, which was in the throes of colonial expansion and wished to demonstrate its power on the world stage, took a very aggressive stance in defense of Cerruti’s interests. Under diplomatic pressure, the Colombian government was forced to enter talks, although Colombia resisted paying the compensation demanded at first.
The situation reached its peak in 1888, when Italy issued an ultimatum to Colombia, demanding an immediate compensation of 875,000 lire (equivalent to millions of today’s dollars) for Cerruti. The Colombian government, then led by the conservative Rafael Nuñez, was in a difficult position. On the one hand, it was reconciling internal pressure from extreme political and partisan division, and on the other, it was threatened by a European nation that was prepared to use military force to achieve its demands.
Italy threatens Colombia of naval invasion
Italy mobilized a small naval squadron, and in 1888 fears were rampant that an Italian armed intervention was imminent on Colombian coasts. The specter of a foreign invasion on Latin American soil caused alarm not only in Colombia, but throughout Latin America, which still remembered European colonial interventions.
Finally, faced with the threat of military intervention and international pressure, the Colombian government opted to submit to international arbitration. In 1891, Pope Leo XIII, who was respected in both countries due to widespread Catholicism, intervened as mediator in the conflict.
Under Papal arbitration, an agreement was reached in which Colombia was to pay compensation to Cerruti, although in an amount lower than that originally demanded by Italy.
Consequences of the ‘Cerruti Case’
The agreement reached through international arbitration circumvented military confrontation and put an end to the conflict, but it brought up problems in diplomatic relations between Colombia, Italy and other Latin American nations.
First, the Cerruti case highlighted the difficulties faced by Latin American countries in their relationship with European powers. The institutional weakness and internal political instability of nations like Colombia made them vulnerable to external pressures. This episode showed how a European nation, even if it was not one of the most powerful, such as Italy, could threaten the sovereignty of a Latin American country if its economic interests were compromised.
Second, the Cerruti case revealed the necessity to establish more effective international mechanisms for the resolution of commercial and diplomatic disputes. The intervention of the pope as arbitrator was seen as favorable at the time, but it was clear that there was little institutional security, and few avenues for peaceful resolution. This lacking served as an inspiration for future diplomatic efforts to create international bodies that could arbitrate in similar situations.
Finally, the case had an impact on Colombia’s domestic policy. The saga exposed weaknesses in its foreign policy and the need to strengthen its diplomacy and ability to defend national interests vis-à-vis foreign powers. This episode also reinforced the idea among Colombian elites that a more balanced and prudent relationship with foreign investors was crucial to avoid future crises.
For Latin America, it was a lesson in the importance of protecting sovereignty and policy-creation that balanced economic development with defense of national interest.
Related: The Day Colombia’s Boyaca Department Declared War on Belgium