Following the Money
by wjw on December 22, 2015
My friend Constance, who I’ve known since our college days, has written fantasy as 
“Constance Ash,” and now something very different in a collaboration with her husband, the musicologist and historian Ned Sublette. This is The American Slave Coast: A History of the Slave-Breeding Industry. Which is about the single most informative book on American history you will ever read.
Despite the rather sensational subtitle, The American Slave Coast is a very serious work, buttressed with over 100 pages of notes, and (I can’t emphasize this enough) written in readable English, not stilted Academese.
And about that sensational subtitle? No, there weren’t slave-breeding factories a la Mandingo. There were, however, a lot of masters who realized that if they kept their female slaves pregnant, they could sell the resulting surplus for a profit, albeit after twelve or fourteen years. The result was the “capitalized womb,” kept full, year after year, of little dividends for the master.
And were the women given much of a choice in who was to father their children? Not a lot, no. From “fancy girls” to “fine breeding women” to field hands, a slave woman exercised very little choice, and rape was not only permissible, but profitable.
The book follows the money— or at any rate the promise of money, since the United States at the time had very little specie and a lot of complex financial instruments to fill the gap. Southern banks invented what would now be called “collateralized debt obligation bonds”— which I thought got invented in the 1980s at Salomon Brothers— and which, like mortgage bonds in the early 21st century, sold little bits of slaves packaged for investors, and which sold to state governments and (for real silver) to English banks. And like the 21st Century version of these bonds, they were worth a lot, until very suddenly they were worth nothing at all. (Mississippi defaulted, leaving British banks holding a lot of worthless paper, and a lot of resentful bankers who subsequently took their ire out on the Confederacy. The Mississippi constitution actually forbids repayment of the debt.
(A number of Northern states defaulted as well, resulting in a lot of ire from Charles Dickens, who had invested. The Northern states however eventually reorganized and cleared their debts.)
The American Slave Coast details as well the regional differences between Southern states, from South Carolina, which profited on importing slaves from Africa, to Virginia, which exported its own slaves and didn’t appreciate competition from the African trade. Thomas Jefferson, as president, rushed through a law forbidding the international trade on the earliest possible date (January 1, 1808), he essentially doubled the value of his own slaves.
And on and on. Grim though the subject is, the detail is fascinating, and the authors’ achievement considerable.
This is the sort of book that is sold by hand and through word of mouth, and that’s what I’m doing here. It has my personal recommendation, for all that it’s worth.
And hey! The book is even on sale, at least if you buy from the publisher! Click here for 50% off from now through December 31, and I believe the discount applies to other books as well.
It’s also available to all the usual places, but at the regular price.
Southern banks invented what would now be called “collateralized debt obligation bonds” …
There are more and earlier examples of CDOs than you imagine. One of the most famous (and my personal favourite) was the “Thirty Maidens of Geneva.” The root of this was the long European practice of supporting public finance with annuities – streams of payments contingent on the life of an individual designated by the purchaser, which dates to the middle ages. One variant of this is the “tontine”, in which instead of a single individual, depends on a pool of people, usually 30 or 50. A tontine need not be constructed by the original issuer.
It is natural to sell an annuity at a rate that depends on the age of the nominee, and this was in fact normal practice. John Law issued some flat-rate annuities, but after the collapse of his system in 1720, issuers returned to the sensible practice of age-dependent rates. However, in 1761, the French found it very difficult to issue new loans (they had suspended payments in 1759), and were obliged to again issue flat-rate annuities. Some enterprising Swiss bankers seized this opportunity by purchasing annuities on healthy girls aged 4-7 (old enough to have survived early childhood diseases, young enough to have good prospects) from families with good health histories. They then sold shares in pools of 30 or 50 nominees. This successfully expanded the market for French debt, but at the cost of a high implicit interest rate.
The link indicates the sale is for the 2014 Holiday Season. I am definitely going to look for it either at the library or the usual places regardless.
I think the link will probably work anyway.
Phil, the story of the Maids of Geneva is pretty amazing! Wasn’t it fairly common in this period for governments to default, however? What happened to the maidens then?
The holiday sale is for this year indeed, and for all the books in the CRP catalog of fine and interesting titles.
Thank you, Walter! What a beautiful Christmas gift you have given us.
Love, C.
Just as today, historical nations differed in their propensity to default. France defaulted pretty often – one could argue that the high rate required to float their bonds was perfectly rational. Britain, by contrast, occasionally went to absurdly heroic lengths to avoid default, as when they restored gold parity after the Napoleonic wars. To a large extent this reflected the differing interests of the political classes governing the countries concerned. There is a fine book on this subject by James Macdonald called “A Free Nation Deep in Debt.” His book is too subtle to summarize properly here, but the capsule version of his thesis is that there was a deep historical link between debt and democracy. (The Thirty Maidens is among the anecdotes Macdonald relates, by the way.)
France was unhappy with the Thirty Maidens situation, but never repudiated these obligations. As for the Thirty Maidens themselves, as they were not actually beneficiaries of the annuities in their names, they would have been unaffected by default. One could imagine desperate governments dispatching assassins against them, but so far as I know this never actually happened.
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