The panic of 1857 is a good example of the devastating impact that economic downturns had on city businesses. During that crisis nearly all tobacco manufactories closed down, and more than 2,000 hired slave hands were released, thereby jeopardizing the futures and fortunes of the businessmen involved, including tobacconists, local shippers, box and hogshead makers, local tobacco growers, and slave owners. 23
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Because the market was in constant peril of saturation, particularly in the tobacco industry, industrialists had to be extremely vigilant to hold down production and labor costs or make a wide margin of profit. The fact that hundreds of businesses (roughly 800 businesses and individuals in the three wards in 1860) continued to hire slave workers rather than employ free wage laborers clearly demonstrates not only their reliance on slaves but their satisfaction with urban slavery as a labor system. 24 This satisfaction is the result of at least five factors, including the possibility that slave labor may have been cheaper than free wage labor. In terms of yearly wages, this appears to be true; one study indicates the annual cost of hiring a free skilled artisan was $197 in 1840 and $179 in 1860 much higher than the amount for skilled slave workers ($120-$150) during the same time. 25 These figures, however, are somewhat deceptive because they do not take into account the additional costs of policing, feeding, clothing, boarding, and providing medical care that employers often paid out for slave workers. As a result, these maintenance costs could have easily raised the total costs for hiring a slave to match, if not excel, the wages of a free laborer. 26 Furthermore, the proportion of white adult workingmen increased during the 1850s, which depressed free wage levels, driving them downward near slave employment costs. Accordingly, a few employers did replace some of their slave workers with free wage laborers.
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Before exploring that change, however, it is important to understand why so many employers continued to hire slaves rather than free workers. Public debates aired in the pages of DeBow's Review reveal that some employers were not convinced that bond labor was more expensive than free wage labor. One proponent trying to persuade the James River and Kanawha Company and the Virginia and Tennessee Railroad Company of the economic advantages of maintaining slave workers offered detailed estimates of the differences between slave and free labor costs:
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| | The cost to a company owning slaves who are masons, and to contractors who hire them, will approximate to the following calculation:
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| Interest on $600 [estimated cost of purchasing a slave mason]
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