The Half Has Never Been Told: Slavery and the Making of American Capitalism (66 page)

At every stage of the march from seed to mill to consumer, entrepreneurs of one kind or another sliced into tranches the margin of profit generated on the backs of enslaved African Americans, plated each slice, and distributed it to an actor in the world economy. Measuring all the elements of this dynamic process, which combined ever-cheaper access to the world’s most essential commodity with
increasingly efficient manufacturing processes to drive the northern economy in new directions, might be impossible. But here’s a back-of-the-envelope accounting of cotton’s role in the US economy in the era of slavery expansion. In 1836, the total amount of economic activity—the value of all the goods and services produced—in the United States was about $1.5 billion. Of this, the value of the cotton
crop itself, total pounds multiplied by average price per pound—$77 million—was about 5 percent of that entire gross domestic product. This percentage might seem small, but after subsistence agriculture, cotton sales were the single largest source of value in the American economy. Even this number, however, barely begins to measure the goods and services directly generated by cotton production.
The freight of cotton to Liverpool by sea, insurance, and interest paid on commercial credit—all would bring the total to more than $100 million (see
Table 4.1
).

Next come the second-order effects that comprised the goods and services necessary to produce the cotton. There was the purchase of slaves—perhaps $40 million in 1836 alone, a year that made many memories of long marches forced on stolen
people. Then there was the purchase of land, the cost of credit for such purchases, the pork and corn bought at the river landings, the axes that slaves used to clear land and the cloth they wore, even the luxury goods and other spending by slaveholding families. All of that probably added up to about $100 million more.

Third-order effects, the hardest to calculate, included the money spent by
millworkers and Illinois hog farmers, the wages paid to steamboat workers, and the revenues yielded by investments made with the profits of merchants, manufacturers, and slave traders who derived some or all of their income either directly or indirectly from the southwestern fields. These third-order effects would also include the dollars spent and spent again in communities where cotton and cotton-related
trades made a significant impact. Another category of these effects is the value of foreign goods imported on credit
sustained by the opposite flow of cotton. All these goods and services might have added up to $200 million. Given the short terms of most commercial credit in 1836, each credit dollar “imported” for cotton would be turned over about twice a year: $400 million. All told, more than
$600 million, or almost half of the economic activity in the United States in 1836, derived directly or indirectly from cotton produced by the million-odd slaves—6 percent of the total US population—who in that year toiled in labor camps on slavery’s frontier.

THE NORTHERN ECONOMY
‘
S INDUSTRIAL
sector was built on the backs of enslaved people. And yet by the 1840s, northerners like John G. Palfrey
were increasingly likely to think—from their new vantage point where they stood on those people’s backs—that their business endeavors did not need slavery. As early as the 1830s, Americans in the non-slave states were using cotton-generated wealth to develop a more diversified industrial sector that owed less to trade with the South. For instance, in 1832, the Collins Axe Works, one of the first
large-scale manufacturing employers in Connecticut, accounted for almost a quarter of all non-textile manufacturing investment and employment in the state. But by 1845, when Robert Walker, Polk’s secretary of the treasury, commissioned another survey of manufacturing, Connecticut contained about twenty-five different axe manufacturers. Axes themselves were now only a fraction of the state’s industrial
production. New brass foundries, firearms manufacturers, and factories for hardware, clocks, hats, and carpet now employed thousands of Connecticut residents. And the vast majority of the brassware, machine tools, and consumer goods that came out of Connecticut foundries and shops were being sold to urban centers, factory cores, and commercial farming zones across the North.
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Although Connecticut
had become the most densely industrialized state in the United States, it was not alone in shifting toward an industrial economy. By 1840, 500,000 Americans toiled in the manufacturing sector, almost all in the North. By 1850, their total number was 1.2 million, and manufacturing’s share of all workers had risen from 9 percent to 15 percent. A significant number of these workers were women,
especially in the textile mills. The share that manufacturing contributed directly to value added in the national economy increased from 17 percent in 1839 to 29 percent a decade later, while the corresponding percentage for agriculture fell from 72 percent to 60 percent. Many economic sectors—some of which were completely new, such as railroad construction—depended heavily on the northern consumer
markets that manufacturing labor forces were creating with their new cash wages.
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True, in the 1840s, cotton was still powerful. No one source of northern revenue was as massive as the rush of British paper that returned west each year in exchange for the cotton bales that had sailed east. No kind of manufacturing was as purely profitable as the hand picking a cotton boll, if prices exceeded
about 10 cents per pound: not the segment of northern commercial agriculture that fed the free states’ rapidly growing cities, not the mills, not even the shops where mechanics built the latest version of the steam locomotive. Yet the increasing diversification of the northern economy enabled it to grow more consistently and resiliently than its southern counterpart. Even if the annexation of Texas
reignited the expansion of slavery, southern economic health depended on the price of cotton.

And northerners depended less on the cotton margin than they had before the late 1830s. Instead, they were creating an industrial margin. The textile industry, for instance, was shifting production into larger, more capital-intensive operations that could turn major investment into rapid revenues at
high or low raw material costs. Between 1820 and 1860, New England textile mills increased their average capital investment by 600 percent. This is what historical economists call “capital deepening.” The average number of spindles per mill grew from 780 to 6,770, and the number of power looms from 5 to 164—and in both cases, the machinery grew more efficient at processing fiber into thread and cloth.
Just like the increasing sleight of left hands in the cotton fields, the accumulation of machinery increased the productivity of millworkers, enabling the typical textile worker of 1860 to make cloth five or six times more quickly than his or her counterpart of 1820.

By the late 1830s, northern textile manufacturing was creating new spinoff industries as well. The machinists who built and repaired
textile machinery not only improved power looms and spindles, but also invented and then produced stationary steam engines that could be harnessed to factory machinery. Before the 1830s, steam engines were almost exclusively used to power river craft. By 1845, steam-powered factories were becoming the rule. Increasingly, they burned coal. In 1820, Pennsylvania had sent 365 tons of anthracite
coal to market; by 1844 that number had climbed to more than 1.6 million tons. (Eventually, fossil fuels would enable windfall profits parallel to those stolen from enslaved labor.) Meanwhile, machine shops kept nurturing new skills and ideas: improved steam-powered sugar mills that completed the revolution in sugarcane processing and sucrose extraction that had begun twenty years before with the
vacuum pan, for instance. By the early 1850s, over half of the 1,500 sugar mills in Louisiana were driven by steam power. The same networks of machinists created increasingly more sophisticated
locomotives, and by the early 1840s they were building a coherent railroad industry. This created new efficiencies through a rapid transportation network as well as a demand for steel rails, fuel, and credit.
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As northern factories grew, employers could not hire enough workers. In response, European immigration to the North soared. One and a half million came to the United States in the 1840s alone. The Irish were the paradigm. By 1845, 220,000 had already come in a decade not half over, and the second half saw 550,000 Irish refugees arrive in the United States, fleeing British oppression and a famine
that killed millions. A few of the Irish went to New Orleans, whose levees and cotton presses offered plenty of opportunity for laborers. But although many came west in American ships that had been loaded with cotton bales on the way east, this was not an unfree migration. Now that Manhattan had achieved financial hegemony over the cotton trade, ships passing between Liverpool and New Orleans usually
turned off their old direct course to stop in New York Harbor, and there the immigrants disembarked. Outside of the cotton ports, jobs were scarce for immigrants in the slave states during the 1840s, and they had no desire to compete with workers driven by the whipping-machine. The immigrants’ choice to move to the North had a significant demographic impact, raising the northern population
from 7.1 million in 1830 to 10 million in 1840, and then to over 14 million by 1850. In the same period, the South grew much more slowly, from 5.7 million in 1830 to almost 9 million.

Immigration, the main source of the free states’ population growth, held down labor costs and created massive markets for consumer goods. Most immigrants began at the bottom rungs of northern society and economy,
where they were canal-diggers, housemaids, or coal miners. But in the distribution of political representation, they each counted as 5/5 of a person, which meant increased northern power in the House of Representatives. The number of congressional representatives determined the number of electoral votes a state could cast in the presidential election, so reapportionment shaped the influence of states—and
regions—in the executive branch as well. In 1820, 42 percent of the House members came from slave states. Along with southern equality in the Senate, enslavers had thus needed only a handful of free-state allies to block any proposal they did not like. But after the 1840 US Census, the number of slave-state representatives dropped below 40 percent. After 1850, free-state representatives
would make up two-thirds of the House.

The accelerating growth of the North’s economy made northerners less likely to act like southerners’ dependents in politics. In the two years after John G. Palfrey’s seventeen slaves made their migration to freedom and
Boston, his increasing frustration with Massachusetts Cotton Whigs, and their willingness to compromise with their southern allies (who were
backing Polk’s policy of slavery expansion), drew him into the political arena on the side of the Conscience Whigs. He wrote and published
Papers on the Slave Power
, an indignant pamphlet with chapter titles such as, “The North Defrauded and Brow-beaten.” It described the South as a unitary political bloc that was “enslaving” northern whites’ political selves. With both Justice Story’s ruling
in
Prigg v. Pennsylvania
and the memory of the attempted kidnapping of the Latimers still fresh in his mind, Palfrey claimed that southerners could travel to Boston and alleged that even a white Massachusetts citizen was merely a light-skinned runaway slave. “
There is the law;
it says nothing of color; and by it the Governor of Massachusetts is just as liable to be carried away and sold in the
Southern shambles, as the blackest or least considerable citizen in the Commonwealth . . . Harrison Gray Otis [the richest lawyer in Boston] as much as his boot-black.” Palfrey singled out Nathan Appleton and Abbot Lawrence, Massachusetts textile magnates and Cotton Whigs, blaming them for persuading northerners to let Texas into the Union.
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Palfrey’s
Papers
offended proper Bostonians who had
once supported him as clergyman, professor, and editor. Some ignored his greetings in the street or barred him from their homes. But Palfrey was not the only one accusing New England cotton lords of collusion with their suppliers in the Mississippi Valley. The newly emerging northern critique of enslavers and their allies was different from that of immediatists, such as William Lloyd Garrison, who
demanded that America purge itself of sins. Instead, the new critics argued that southern slavery damaged the national economy. Two decades earlier, in the midst of the Missouri crisis, some expansion opponents had made similar claims, but over the intervening years, the rapidly increasing wealth in every sector touched by cotton rendered the claims that slavery undermined economic progress unpersuasive.
Certainly New England’s lords of the loom had used slave-made cotton and slavery’s market to become the wealthiest people in the free states.

Yet in the early 1840s the increasing sense of northern economic dynamism and southern doldrums emboldened many northerners to assert that they owed slavery nothing—certainly not fealty to the political sway of what Palfrey was calling “The Slave Power,”
a term he probably learned from clergyman, newspaper editor, and Liberty Party activist Joshua Leavitt. Leavitt’s journal,
The Emancipator
, argued that “slavery reigns by fomenting the strife of party at the North.” The new alignment of interregional coalitions shaped by Van Buren, Jackson, and their opponents meant that if
Democrats in Vermont, for instance, wanted to win national elections,
they had to avoid antagonizing their party brethren from Alabama. The latter made it clear that support for slavery was the price of party alliance. So the Vermont Democrats motivated voters by emphasizing their differences from Whig neighbors at home, rather than from enslavers in the South.

Here, however, was the most distinctive piece of Leavitt’s attack: “[I] consider slavery,” Leavitt told
an Ohio audience in 1840, to be “the chief source of the commercial and financial evils under which the country is groaning.” At the time he made the speech, the US economy had not yet recovered from the Panics of 1837 and 1839, and Leavitt insisted that the Slave Power’s distortion of public policy was a major cause of the depression. “We find ourselves,” Leavitt announced, “subject to the exhausting
operations of slavery,” a series of policies and patterns that drew the wealth of the free states into the slave ones. Sure, the southwestern slave frontier had
appeared
profitable in the 1830s, as investment and forced migrants flowed into the Mississippi Valley at an unprecedented velocity: “Everyone wanted stock in the Vicksburgh, Grand Gulf, Brandon, and other South-west banks,” Leavitt recalled.
But “the great drain of northern capital to the South” to meet the “demands of the Domestic Slave Trade”—$100 million to Mississippi alone, Leavitt calculated—was just another one of the “ordinary defalcations of slavery”—layers of theft and fraud, from the theft of labor to the rampant dishonesty of enslavers toward their northern creditors. Although never had trade throughout the national
economy appeared “so vast and profitable” as it had in 1836, “the bubble burst, and all that capital is gone, sunk, irrecoverable.” Enslavers owed uncountable millions to northern merchants, bondholders, factory owners, and banks, and had no plans to pay much of it, and yet even “the South has nothing to show for it.” The South’s problem was slavery, Leavitt insisted, for it was in essence opposed
to saving, productive investment, and the kinds of technological improvements (specifically, the introduction of labor-saving machinery) that were transforming the North.
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