The slave economy of the southern states had ripple effects throughout the entire U.S. economy, with plenty of merchants in New York City, Boston, and elsewhere helping to organize the trade of slave-grown agricultural commodities—and enjoying plenty of riches as a result.
“In the decades between the American Revolution and the Civil War, slavery—as a source of the cotton that fed Rhode Island’s mills, as a source of the wealth that filled New York’s banks, as a source of the markets that inspired Massachusetts manufacturers—proved indispensable to national economic development,” Beckert and Rockman write in the introduction to the book. “… Cotton offered a reason for entrepreneurs and inventors to build manufactories in such places as Lowell, Pawtucket, and Paterson, thereby connecting New England’s Industrial Revolution to the advancing plantation frontier of the Deep South. And financing cotton growing, as well as marketing and transporting the crop, was a source of great wealth for the nation’s merchants and banks.”
The slave economy of the southern states had ripple effects throughout the entire US economy, with plenty of merchants in New York City, Boston, and elsewhere helping to organize the trade of slave-grown agricultural commodities—and enjoying plenty of riches as a result.
www.forbes.com
“By a conservative estimate, in 1860 the total value of American slaves was $4 billion, far more than the gold and silver then circulating nationally ($228.3 million, “most of it in the North,” the authors add), total currency ($435.4 million), and even the value of the South’s total farmland ($1.92 billion). Slaves were, to slavers, worth more than everything else they could imagine combined.”
Ned & Constance Sublette, The American Slave Coast: A History of the Slave-Breeding Industry
In today’s money slaves in 1860 were worth over 127 billion dollars. According to the Sublettes that is a conservative estimate, meaning the amount could be even more. In 1860 the total value of slaves was 17- and one-half times more than the money circulating in the United States economy. Slaves were worth more than the gold, silver, total U.S. currency, plus all the farmland in the South combined in 1860 yet did not receive a dime. Remember that slaves were considered property. Because they were, wealthy slaveowners looking for a way to get additional capital to buy more slaves came up with an idea: slave-backed securities. Your eyes are not playing tricks on you. Slaveowners securitized slavery. Cornell professors Edward E. Baptist and Louis Hyman detailed how it was done in an article published by the Chicago Sun-Times on its website dated March 7, 2014. This is from the article:
In the 1830s, powerful Southern slaveowners wanted to import capital into their states so they could buy more slaves. They came up with a new, two-part idea: mortgaging slaves;and then turning the mortgages into bonds that could be marketed all over the world.
First, American planters organized new banks, usually in new states like Mississippi and Louisiana. Drawing up lists of slaves for collateral, the planters then mortgaged them to the banks they had created, enabling themselves to buy additional slaves to expand cotton production. To provide capital for those loans, the banks sold bonds to investors from around the globe — London, New York, Amsterdam, Paris. The bond buyers, many of whom lived in countries where slavery was illegal, didn’t own individual slaves — just bonds backed by their value. Planters’ mortgage payments paid the interest and the principle on these bond payments. Enslaved human beings had been, in modern financial lingo, “securitized.”
As slave-backed mortgages became paper bonds, everybody profited — except, obviously, enslaved African Americans whose forced labor repaid owners’ mortgages. But investors owed a piece of slave-earned income. Older slave states such as Maryland and Virginia sold slaves to the new cotton states, at securitization-inflated prices, resulting in slave asset bubble. Cotton factor firms like the now-defunct Lehman Brothers — founded in Alabama — became wildly successful. Lehman moved to Wall Street, and for all these firms, every transaction in slave-earned money flowing in and out of the U.S. earned Wall Street firms a fee.
The infant American financial industry nourished itself on profits taken from financing slave traders, cotton brokers and underwriting slave-backed bonds. But though slavery ended in 1865, in the years after the Civil War, black entrepreneurs would find themselves excluded from a financial system originally built on their bodies.
Edward E. Baptist and Louis Hyman, American Finance Grew on the Back of Slaves
Edward E. Baptist and Louis Hyman,
American Finance Grew on the Back of Slaves, Chicago Sun-Times.com March 7, 2014, derived from:
American Finance Grew on the Back of Slaves