Sharon Murphy's distinguished career investigating the history of US financial instruments and their entangled relationship with the institution of slavery first appeared in her prize-winning dissertation's research into life insurance and now reaches a peak in this study of antebellum banking. She decisively links the astonishing economic growth of the nineteenth-century United States to the geographic expansion of slavery and the credit structures built on the backs of enslaved people. Enslavers invested capital in human beings. It would be hard to imagine, in the American system of frontier capitalism, that such lump sums could resist financialization. Indeed, enslavers leveraged humans as collateral, though the contracts and institutions that extended loans on the value of enslaved people changed dramatically over time and in different places as the frontier moved. Murphy's multitude of specific practices and cases explain transformations in the banking sector that facilitated the expansion of the slave system and relied on its victims for the credit arrangements that built economic growth.Banks in the Young Republic generally supplied their own banknotes as short-term loans for business purposes, and they also offered discounted payments for promissory notes from third-party credit transactions. When extending loans beyond standard thirty- or sixty-day terms, commercial banks would seek collateral—and thus sometimes found humans as assets on their balance sheets. Bankruptcy and business failure meant that foreclosing banks owned people and aimed to sell them to settle debts. This collateral ended up in the federal financial system, too: after the War of 1812, the Second Bank of the United States established branches nationwide—and their lax southern and borderlands practices tied the national bank to the accounts that enslavers and their creditors based on their investments in human property. After the Panic of 1819, frontier banks found ways to finance the booming 1820s and ’30s, including direct loans collateralized only by the land and lives they purchased. These “plantation banks” of the southwestern borderlands (including Georgia, Alabama, Mississippi, and Louisiana) mirrored state “improvement banks,” which financed public infrastructure improvements and depended on the enslaved as workers, and often explicitly as collateral for credit too. While this taxonomy of bank types perhaps seems too tidy, and also faded over time, Murphy's interpretation lends fresh insight into the Jacksonian Bank Wars. She explains how the Bank of the United States kept operating nationally after failing its recharter: by partnering or purchasing state banks, again linking the national bank to enslaved investments.As the nation grew, various legal precedents meant that people were sometimes personal property (chattel) but sometimes real estate, which mattered tremendously to the contracts that financialized them. English common law merged women's personal property with their husbands’ but maintained women's actual ownership of real property. Widows’ dower rights to their husbands’ estates—also differentiated as real estate versus personal property—further complicated the claims of her heirs and his. Southern courts adjudicated competing claims on the people owned, inherited, and mortgaged (sometimes, fraudulently, more than once) as property in this complicated legal framework.These court cases and Murphy's other evidence always breathes life into real people and their historical circumstances, the enslavers and the enslaved, framed in familial and financial networks. An earlier generation of social and cultural historians might have mined the descriptions of enslaved collateral that accompanied many of the mortgages on their lives for personalizing details. In contrast, Murphy absorbs and synthesizes the lessons of African American history and evokes the heart-sickening vulnerability of the people described. Enslavers, too, whether leveraging property and connections, expanding their businesses, or overextending themselves and going bankrupt, are vividly conveyed in a multitude of stories—and their debts reveal the connected webs of relationships and holdings within which they operated.While scholars in the “New History of Capitalism,” from Walter Johnson to Caitlin Rosenthal, often explicitly link antebellum American economic and geographic growth to slavery, Murphy's citations could remind readers that earlier studies understated that relationship. Banking on Slavery joins recent economic history volumes by Joseph E. Inikori, Maxine Berg, and Pat Hudson, among others, that identify slavery as the root of Euro-American economic and geographic expansion in the long nineteenth century. Yet Murphy refrains from joining these other works in confronting a long-established consensus among economic historians that denied that causal relationship. Economic historians once argued that American westward expansion into new fertile lands, and the economic growth they provided, “drew resources, particularly slaves” into the southwestern territories (see Jeremy Atack and Peter Passell's New Economic View of American History, 2nd ed. New York: W. W. Norton, 1994, 302, summarizing literature from the 1970s). This older scholarship viewed land and capital as the factors that drove growth, with the enslaved as “the most mobile factors” of production, driven by their enslavers to new conditions by economic boom. Murphy demonstrates that the enslaved were the capital investments leveraged to create that boom. The leverage—the credit arrangements, promises to pay profits, and conflicts over inheritances recorded in the courts and bank records of the South—clearly illustrates the profit-maximizing intentions and strategies of the planters, as well as the bankers and merchants who served their purposes.Because the current consensus takes the capitalist nature of the American slave plantation for granted, Murphy never really has to grapple with the interior lives of enslavers (one-third of her actants, along with banks and enslaved people). Given their lively voices in her pages, however, one wonders how they squared their paternalistic fantasies about their homes and operations with their endless capitalist schemes and calculations. The depths of their debts may have felt gentlemanly, even while the mechanisms and arrangements that repaid their investments in land and bodies evolved to meet the financial needs of economic growth.This evolution—of financial instruments, of the institutions that enforced property laws, of the national economy across a half century of extraordinary growth and terrifying busts—is the story. The system adapted to make use of enslaved people not only as laborers who built America but also as capital investments that banks and property owners leveraged into growth.
Barbara Hahn (Sun,) studied this question.