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abolishing the African slave trade in game that everyone seemed to be

1807, Britain, and much of Europe playing. If planters thought them-

along with it, was bankrolling slavery selves invincible, able to bend the

in the United States. o raise capital, laws of finance to their will, it was
T

state-chartered banks pooled debt most likely because they had been

generated by slave mortgages and granted authority to bend the laws

repackaged it as bonds promising of nature to their will, to do with the

investors annual interest. During land and the people who worked it

slavery’s boom time, banks did swift as they pleased. Du Bois wrote: ‘‘The

business in bonds, finding buyers in mere fact that a man could be, under

Hamburg and Amsterdam, in Bos- the law, the actual master of the

ton and Philadelphia. mind and body of human beings had

Some historians have claimed to have disastrous eff ects. It tended

that the British abolition of the slave to inflate the ego of most planters
trade was a turning point in moder- beyond all reason; they became

nity, marked by the development of arrogant, strutting, quarrelsome

a new kind of moral consciousness kinglets.’’ What are the laws of eco-

when people began considering nomics to those exercising godlike
the suff ering of others thousands power over an entire people?

of miles away. But perhaps all that
changed was a growing need to We know how these stories end.

scrub the blood of enslaved work- The American South rashly over-

ers off American dollars, British produced cotton thanks to an

pounds and French francs, a need abundance of cheap land, labor and

that Western financial markets fast credit, consumer demand couldn’t
found a way to satisfy through the keep up with supply, and prices fell.

global trade in bank bonds. Here The value of cotton started to drop

was a means to profit from slavery as early as 1834 before plunging like
without getting your hands dirty. In a bird winged in midflight, setting

fact, many investors may not have off the Panic of 1837. Investors and

realized that their money was being creditors called in their debts, but

used to buy and exploit people, just plantation owners were underwa-
as many of us who are vested in mul- ter. Mississippi planters owed the

tinational textile companies today are banks in New Orleans $33 million
year their crops yielded only $10
unaware that our money subsidizes in a
a business that continues to rely on million in revenue. They couldn’t

forced labor in countries like Uzbeki- simply liquidate their assets to

stan and China and child workers in raise the money. When the price

countries like India and Brazil. Call of cotton tumbled, it pulled down

it irony, coincidence or maybe cause the value of enslaved workers and

— historians haven’t settled the mat- land along with it. People bought

ter — but avenues to profit indirectly for $2,000 were now selling for $60.

An 1850 inventory of enslaved people from the Pleasant Hill from slavery grew in popularity as the Today, we would say the planters’

Plantation in Mississippi.
institution of slavery itself grew more debt was ‘‘toxic.’’

unpopular. ‘‘I think they go togeth- Because enslavers couldn’t repay

passed for money, was the only their coff ers. In several Southern er,’’ the historian Calvin Schermer- their loans, the banks couldn’t make And Lower Mississippi Valley Collections, Louisiana State University Libraries, Baton Rouge, Louisiana.

cheap thing to be had.’’ counties, slave mortgages injected horn told me. ‘‘We care about fellow interest payments on their bonds.

Planters took on immense more capital into the economy than members of humanity, but what do Shouts went up around the Western

amounts of debt to finance their sales from the crops harvested by we do when we want returns on an world, as investors began demanding

operations. Why wouldn’t they? enslaved workers. investment that depends on their that states raise taxes to keep their

The math worked out. A cotton Global financial markets got in on bound labor?’’ he said. ‘‘Yes, there is promises. After all, the bonds were

plantation in the first decade of the action. When Thomas Jefferson a higher consciousness. But then it backed by taxpayers. But after a swell
the 19th century could leverage mortgaged his enslaved workers, comes down to: Where do you get of populist outrage, states decided

their enslaved workers at 8 per- it was a Dutch firm that put up the your cotton from?’’ not to squeeze the money out of
cent interest and record a return money. The Louisiana Purchase, Banks issued tens of millions of every Southern family, coin by coin.

three times that. So leverage they which opened millions of acres to dollars in loans on the assumption But neither did they foreclose on

did, sometimes volunteering the cotton production, was fi nanced that rising cotton prices would go on defaulting plantation owners. If they

same enslaved workers for mul- by Baring Brothers, the well-heeled forever. Speculation reached a fever tried, planters absconded to Texas
tiple mortgages. Banks lent with British commercial bank. A major- pitch in the 1830s, as businessmen, (an independent republic at the time)

little restraint. By 1833, Mississippi ity of credit powering the Ameri- planters and lawyers convinced with their treasure and enslaved work From Louisiana

banks had issued 20 times as much can slave economy came from the themselves that they could amass force. Furious bondholders mount-

paper money as they had gold in London money market. Years after real treasure by joining in a risky ed lawsuits and cashiers committed

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