Page 43 - 1619 Project Curriculum

August 18, 2019

enslavers did make use of securi-

ties to such an enormous degree
for their time, exposing stakehold-

ers throughout the Western world
to enough risk to compromise the

world economy, that the historian
Edward Baptist told me that this

can be viewed as ‘‘a new moment

in international capitalism, where

you are seeing the development of
a globalized financial market.’’ The

novel thing about the 2008 foreclo-
sure crisis was not the concept of

foreclosing on a homeowner but

foreclosing on millions of them.

Similarly, what was new about
securitizing enslaved people in the

first half of the 19th century was not
the concept of securitization itself

but the crazed level of rash specu-
lation on cotton that selling slave
debt promoted.
As America’s cotton sector

expanded, the value of enslaved
workers soared. Between 1804 and

1860, the average price of men ages

21 to 38 sold in New Orleans grew to
$1,200 from roughly $450. Because
they couldn’t expand their cotton
empires without more enslaved
workers, ambitious planters needed
to find a way to raise enough capi-

tal to purchase more hands. Enter
the banks. The Second Bank of the
United States, chartered in 1816,

began investing heavily in cotton.

In the early 1830s, the slaveholding
Southwestern states took almost
half the bank’s business. Around the

African-Americans preparing cotton for the gin at a plantation on Port Royal Island, S.C., in the 1860s.

same time, state-chartered banks

began multiplying to such a degree
than $6.6 trillion was transferred 1944 with Bretton Woods, or per- slave property helped fuel the devel- that one historian called it an ‘‘orgy

to fi nancial fi rms. After witnessing haps in the reckless speculation of opment of American (and global) of bank-creation.’’
the successes and excesses of Wall the 1920s. But in reality, the story capitalism,’’ the historian Joshua When seeking loans, planters
Street, even nonfinancial companies begins during slavery. Rothman told me. used enslaved people as collateral.

Consider, for
example, one

Or consider a Wall Street finan-
began finding ways to make money of the most popular mainstream cial instrument as modern-sounding Thomas Jefferson mortgaged 150
Timothy H. O’Sullivan, via the Library of Congress wants to sell you a credit card? This collateral for mortgages centuries backed by inflated home prices in in multiple Southern states, more

of his enslaved
workers to build

from financial products and activi-
ties. Ever wonder why

as collateralized debt obligations

instruments: the mort-

every major
fi nancial
Monticello. People could be sold
retail store, hotel chain and airline

gage. Enslaved people

much more easily than land, and

were used as
(C.D.O.s), those ticking time bombs

than eight in 10 mortgage-secured
the 2000s. C.D.O.s
before the home mortgage became
were the grand-
financial turn has trickled down into
loans used enslaved people as full

children of mortgage-backed secu-

everyday lives: It’s there in our
our

the defining characteristic of middle

As the historian

America. In colonial times, when

or partial collateral.
pensions, home mortgages, lines of
of
rities based on the inflated value

enslaved people sold in the 1820s
Bonnie Martin has
land
was not worth much and banks

written, ‘‘slave
credit and college-savings portfo-

was based
lios.
owners
Americans with some means

worked their slaves finan-
didn’t exist, most lending
and 1830s. Each product created

on human property. In the early
act like ‘‘enterprising subjects,’’
now

massive fortunes for
cially, as well as physically from
the few before

Robert Aitken.
by mortgaging people to buy more
Enslavers were not the first ones

collateral in South Carolina. Many
Photograph by in the words of the political scientist 1700s, slaves were the dominant blowing up the economy. colonial days until emancipation’’

As it’s usually narrated, the story
were first exposed to the

Americans

people.
Access to credit grew fast-

to securitize assets and debts in
America.

The land companies that

er than Mississippi kudzu, leading

concept of a mortgage by trafficking

of the ascendancy of American
finance tends to begin in 1980, with

one 1836 observer to remark that

thrived during the late 1700s relied

in enslaved people, not real estate,
on this technique, for instance. But

in cotton country

and ‘‘the extension of mortgages to
the gutting of Glass-Steagall, or in
‘‘money, or what

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