Thread by @Historian_Steve

1. THREAD. Sharon Ann Murphy is out with a new article in Enterprise and Society. Here are my impressions.

cambridge.org/core/journals/…

2. The topic of Murphy’s article is the Nesbitt Manufacturing Company, an iron factory near Spartanburg, South Carolina. She uses the business correspondence of Alabama investor, enslaver, and industrialist, Franklin Elmore, located in the Library of Congress.

3. This company used slaves as assets in sophisticated ways, mainly by:

a) hiring slaves as workers in the factory
b) using these same slaves to purchase company stock
c) pledging the slaves as collateral for loans

4. Historians have focused much more on studying slaves as workers in southern factories, but much less on how slaves functioned as assets to enable investing, which Murphy believes is central to understanding the larger system of slavery.

5. For Murphy it’s not a question of *whether* slavery was compatible with capitalism, but *how* specifically it was. I’m comfortable with this framing as it seems to accept (finally?) that Genovese was wrong and the South was capitalist indeed.

6. While Murphy contends that using slave assets in these ways enabled the factory to stay afloat during tough times, she also notes that such sophisticated financial tools revealed the limits of enslaved financing.

7. Getting into some of the details of the article, Murphy notes how the value of the slaves had to be appraised. Because the slaves were submitted as stock to buy shares, even a small change in the value of a slave could have a major effect on a stockholder’s gains or losses.

8. Like Caitlin Rosenthal, Murphy finds that enslavers standardized the value of slaves in the same way one might standardize the value of wheat, cotton, sugar, etc. Appraisers used categories remarkably similar to those employed by the USDA, as Daina Ramey Berry points out.

9. By standardizing the value of slaves based on gender and skill, the company could turn slaves into commodities that could be traded more efficiently. The willingness to leverage assets like slaves was one of the most noteworthy characteristics of a modern financial system.

10. You borrow against the market value of the asset in hopes that your investment profits or that the value of the underlying asset goes up. Think of someone today who might pledge their house as collateral in hopes that the value of the house goes up over time.

11. Reading this article it struck me how frequently slave mortgages were changing hands through several, multilayered transactions. It’s an obvious but understated phenomenon that slaves were dehumanized and commodified.

12. Elmore’s company was constantly in trouble. To obtain a loan from northern and European investors, Elmore created a prospectus, underscoring his slave assets that could be seized in the event the company failed.

13. It is here that Nicholas Biddle makes a brief appearance. In December 1838 Elmore applied to the Philadelphian for a loan. Biddle did not extend the loan but praised Elmore’s loan application, recommending it to prominent NY bankers.

14. I would personally add to this that Biddle had a lot on his plate at this time. He was trying to get southern state banks to resume specie payments, speculating in cotton, investing in internal improvement companies, and marketing the Mississippi 5’s in Europe.

15. While briefly acting as fiscal agent of the Van Buren administration, Biddle was also tragically working with the War Department to conclude one of the treaties of Indian Removal, paying off the Cherokees with the Bank’s notes.

16. Some of this information on Biddle is contained in this encyclopedia entry.
economic-historian.com/2021/02/nichol…

For more details you’ll have to wait for my forthcoming article in Pennsylvania Magazine of History and Biography.

17. Murphy’s article is detailed. It presents an abundance of textual evidence from the Elmore Papers. She adds to our understanding of southern finance and demonstrates knowledge of the accounting and financial techniques of this time.

18. While reading I jotted down several questions. Murphy argues that the sophisticated use of slave asserts enabled the Nesbitt Co. to stay afloat. I’m not sure I found this wholly convincing but might if more data or evidence was presented.

19. She does note that other firms in South Carolina prospered while Nesbitt floundered. And to what degree was the use of slaves responsible versus the fact that Elmore had developed multiple relationships and connections through business and politics?

20. I want to know more about what was especially modern in collateralizing slaves? Bonnie Martin said this dates back to the colonial period. How are we defining modern, a term so often used in nineteenth century history?

21. When I argued about Biddle engaging in modern political campaigning for ANCH, I had to think a lot about what was especially modern about it and how it differed, say, from a turnpike lobbying campaign or the campaign to pass the Baldwin Tariff.

tandfonline.com/doi/full/10.10…

22. How specifically was what Elmore engaged in different from business practices in 1820? In the Gilded Age? Murphy surveyed a long period of financial history in Other People’s Money so I’m convinced she could answer this.

23. I’m not super familiar with the readership of Enterprise and Society but as Murphy admits, there’s a lot of complex transactions going on. I personally felt a bit lost between pp. 14-16. Will E&S readers have the knowledge to follow along? Maybe some will.

24. On this point I wonder if it would have been better to slow down, explain the basics of the transactions, tell us who was giving money to who, etc, and if not, to trim or eliminate? There’s a lot of evidence already, much of it textual.

25. I would have liked to know more about how Murphy translated 1840 dollars to today in parentheses. Only briefly does she note the use of the measuringworth site on footnote 16. But even the creators of this website show this is not an easy question to answer.

26. This reminds me of a book by a political scientist covering the antebellum period. He kept putting the party affiliation in parentheses like Calhoun (Whig-SC), and I’m like, dude, why are you calling him a Whig?

26. A very general rule of thumb I’ve remembered is take a dollar in 1830, multiply it by about 50 to get to today, or multiply by 30 from the year 1860, but these are *very* imprecise. It’s never a simple calculation.

27. Murphy seems to be talking mostly about the value of capital stock, but in footnote 69 she’s talking about wages. The Measuringworth site has different calculations for different categories (commodities, income, wages, capital, etc).

28. It’s not apples-to-apples b/c the currency today is a Fed Res Note worth the same amount in every part of USA. Back then the currency was a complete mess complicated by discounting, 100s of state banks, foreign coins, and Josh Greenberg’s favorite, the municipal shinplaster.

29. Finally, a point about originality. I’ve had articles rejected for lack of originality so it is only fair to ask if we have it here? It seems that the example of the Nesbitt Manufacturing Company is new and perhaps a few of the transactions are.

30. I’m less convinced that the grouping of slave mortgages into complex securities to enable further borrowing is all that new. I’ve noticed that in Baptist, Beckert, Schermerhorn, Bonnie Martin, Joshua Rothman, and Bodenhorn (not cited here).

31. This collateralizing of slaves can be found in previous authors who discuss plantation banks. Is it safe to call Murphy’s article a new example that helps to prove a trend we already knew from some of the history of capitalism literature?

32. As an aside, the continued citation of Rich Kilbourne has become problematic and irresponsible. My sense is that some top scholars have either missed or ignored the issues with Kilbourne’s work and statements, which I outline here.

https://twitter.com/Historian_Steve/status/1359453663568175105

THE END. Thanks.