1812 - Banking on Slavery in the Antebellum South
Despite the rich literature on the history of slavery, the scholarship on bank financing of slavery is quite slim. My research demonstrates that commercial banks were willing to accept slaves as collateral for loans and as a part of loans assigned over to them from a third party.
Many helped underwrite the sale of slaves, using them as collateral. They were willing to sell slaves as part of foreclosure proceedings on anyone who failed to fulfill a debt contract.
Commercial bank involvement with slave property occurred throughout the antebellum period and across the South. Some of the most prominent southern banks as well as the Second Bank of the United States directly issued loans using slaves as collateral. This places southern banking institutions at the heart of the buying and selling of slave property, one of the most reviled aspects of the slave system. This project will result in the first major monograph on the relationship between banking and slavery in the antebellum South.
Chapter 1 will set the scene, describing southern banking, explaining how various mortgage and loan contracts worked, and examining the legal issues regarding contracting, foreclosure, and the breakup of slave families. Chapter 2 will examine slave mortgages by southern commercial banks through the 1830s, looking particularly at the role these mortgages played in the speculation leading up to the Panics of 1819 and 1837. Chapter 3 will focus on the involvement of the First and Second Banks of the United States in slave mortgaging, and the role these mortgages played in the failure of the Second Bank in the 1840s. Chapter 4 will examine the plantation banks, with a particular emphasis on the Citizens’ Bank of Louisiana. Although the Citizens’ Bank of Louisiana stopped payment on its bond obligations in 1842, it continued in operation until the early twentieth century. During the 1840s, it actively provided mortgages on plantations and slaves without the direct sanction of the state, and by 1852, the bank was able to convince the state to revive its charter. It actively underwrote slave mortgages through the Civil War. Chapter 5 will return to the experiences of commercial banks with slave mortgaging during the 1840s and 1850s. In particular, this chapter will examine the relationships of banks with slave traders, and the effects of sales on slave families. The final chapter will look at the legal and economic implications of emancipation for these mortgage contracts.
Full resource: https://economics.yale.edu/sites/default/files/banks_and_slavery_yale.pdf?fbclid=IwAR1tXxvKXK3LtlquGjpYTcvXYNBJVs78OwRDePkIgOE4W4C7Sno82fQx20g