The Half Has Never Been Told: Slavery and the Making of American Capitalism (60 page)

No one knows what happened to the specific individuals whom Slaughter had sold to Groves. The scholarly attention focused on the case has
been more concerned with the personalities who argued
Groves v. Slaughter
in front of the Supreme Court. Henry Clay and Daniel Webster represented the slave trader,
while Groves’s defenders—who were really arguing that
all
white Mississippians could G.T.T. their debts without having to leave the state—included Mississippi Senator Robert Walker. After taking George Poindexter’s Senate seat from
him in 1836, Walker had parlayed political power into privileged access to credit, which now meant that he owed thousands of dollars for his own purchases of slaves. His plea for Groves was for the right of individual debt repudiation. On the other hand, Rice Ballard paid Henry Clay’s bill. For the great slave trader, this class-action case would determine whether he could collect on debts still
owed him by Mississippi slave buyers. (Several similar cases made it to the Mississippi and Louisiana state supreme courts during the first half of the 1840s.) And the US Supreme Court delivered for Webster, Clay, and Ballard, rejecting slave-buyers’ claims that failure to enforce the state constitution gave them the right to cancel their debts by unilateral action.
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Image 8.3. The actual experience of the early 1840s on the cotton frontier was that of living through the clearing-out of the “debt overhang” built up during the boom years of the 1830s. Unceasing slave sales and forced movements were typical, like those depicted in this “Sale of Estates, Pictures and Slaves in the Rotunda, New Orleans,” in James Buckingham,
The Slave States of America
(London, 1842), vol. 1, facing title page.

In the environment of intense popular democracy that had emerged during Jackson’s presidency, the next step may have been inevitable. By
1840, streams of slave-produced income had dried up, borrowers could not pay the banks, and sale of their mortgaged property—when it wasn’t run off to Texas—brought little cash. The bondholders had fronted the banks millions, and the banks were not making their
interest payments. In flusher times, state legislatures had pledged their states’ “faith and credit” to redeem the bonds. Bondholders and bank insiders began to demand that the states extract the money from the people via taxes. Contracts had been made, just like the one between Slaughter and Groves. If the states went along, as pro-bank politicians often believed they should in order to maintain
the ability to borrow in the future, they would have to commit to taxing their citizens at a very high rate. In Florida, for example, the amount owed to the holders of the state-issued “faith bonds” worked out to approximately $120 per man, woman, and child in the territory, white or black. This meant that the average slaveless farmer would have to pay more in taxes than his farm was worth. In Mississippi,
wrote the
Columbus Democrat
, “the beds on which your wives and children sleep, the tables on which you eat your daily bread will be taken by the excise men for the benefit of those who sleep in splendid brick palaces, who sleep in mahogany bedsteads, eat with gold knives and forks, and drink champagne as the ordinary beverage of the day.”
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Privatizing the gains of investment, socializing the
risk. This is a classic strategy for politically powerful entrepreneurs. After generations of struggle to force politicians to respond to them, southwestern yeomen already suffering from the bad economic times that the entrepreneurial class had created were not about to hand over what remained of their livelihoods in order to bail out rich men. Increasingly they and their most radical politicians
agitated for states and territories to refuse to pay the bonds. Anti-bank anger also split the northern wing of the Democratic Party. Opponents described the reaction as backward-looking. But many voters saw it as a matter of white equality. They wanted to tell “cormorants and sharks,” as a Mississippi newspaper called “bonders,” that rich men couldn’t force the public to pay their debts. Wherever
the anti-bank Democrats got the upper hand, they launched financial investigations that documented the banks’ rampant insider lending and completely irresponsible behavior. It emerged, for instance, that the directors of Mississippi’s Union Bank had lent themselves $1 million of the first $5 million generated by the sale of the state bonds.
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So southwestern anti-bank politicians now launched
a crusade for G.T.T. by entire states. Mississippi governor Alexander McNutt, the same governor who in 1838 had supported the Union Bank, by 1841 advocated for repudiating the $5 million in state bonds he had helped to sell in the great 1838–1839
cotton speculation. In that fall’s elections, Mississippi elected a repudiationist majority to the state legislature, which immediately decided that
it would not pay the bonds. The Mississippi legislators who voted against paying the bondholders collectively owed between $500,000 and $1 million to the Union Bank. Those who voted against repudiation owed about half that amount. Both Florida and Arkansas also repudiated their bonds. Louisiana technically did not repudiate its bonds, but Democratic legislatures refused for years to make interest
payments on C.A.P.L., Union, and Citizens’ Bank bonds. The state had committed to back $21 million in bonds. Banks sold the securities and lent out the proceeds to their friends, yet as of the Civil War, $6 million remained unredeemed, the interest still unpaid.
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Bond repudiation outraged investors. Outrage fermented quickly to contempt. When he traveled to New York in 1839, John Knight discovered
that “Mississippi and Mississippi men, bank, &c” already stood “in horrible odour.” Wall Street’s banks had survived the Panic of 1839, effectively winning the battle with Nicholas Biddle and the southern entrepreneurs for control of America’s financial future. But Wall Street men and City of London types alike were shocked that the southwestern frontier, in which they had invested so much
money, would so shamelessly steal. European bondholders fired off endless pamphlets criticizing the repudiating governments. The
London Standard
called Mississippi citizens “a set of atrocious scoundrels.” The
London Times
claimed in 1847 that it would be fifty years until another European would be fool enough to lend money to the United States.
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The bondholders launched endless lawsuits. Despite
a withering storm of criticism and lawsuits, however, the bankrupt states continued to refuse to pay. The US Supreme Court dodged involvement. As late as the 1930s, the Principality of Monaco, which had inherited some Mississippi Union Bank bonds, was still trying to sue Mississippi in the Supreme Court. And Congress also declined to act. Neither party wanted to demolish its own electoral chances
in the half dozen repudiating states. The states’ citizens, meanwhile, solaced themselves against the slings and arrows of an angry financial world in a number of ways. Less wealthy whites took satisfaction in the discomfort of bank cliques. The governor of Mississippi and some of its leading newspapers turned to an ancient Western excuse. A Mississippi newspaper dismissed the
London Times
as
“the organ of Jew brokers,” while Alexander McNutt sneered that the Rothschilds, who held both Alabama and Mississippi bonds, should be denied payment because they were of “the blood of Shylock and Judas.”
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So southern popular culture, once as open to Jewish participation as anyplace in Christendom, had now been cynically injected with an anti-Semitic
virus that would last for many decades.
But that was only the start of repudiation’s poisoned gift-giving. True, reaction to the bank bonds had produced the most significant political uprising of class-based resentment to elite domination that would ever emerge from the poor and small-farming white men of the plantation frontier. No politician associated with the property banks had a viable political future. Yet G.T.T. on the grand scale
was a self-inflicted choking-off of ties to worldwide credit markets. After this, southwestern entrepreneurs would never again participate as equal partners in the worldwide expansion of capitalism. These elites had used popular anger to turn the power of the state into a shield against foreclosures—but at the cost of losing future control over their own credit. Common white southerners, who had
not experienced the boom of the 1830s in the same way as their self-appointed “betters,” cared little about all that, but credit would shape their futures, too.

REPUDIATION OF ONE FORM
or another had called a white man named Paskall to a slave labor camp on the far side of the Brazos. The camp’s owner, Richard Blunt, lived twenty miles away in the coastal town of Matagorda. Blunt, in debt in
Mississippi, had run his slaves west across the line into Texas, where his creditors’ arms were too short to reach. Paskall had come west to find a job. Overseeing paid cash. Now he had to control the people whom Blunt’s decisions had separated from anything they’d built, and everyone they’d built it with, back in Mississippi.

Paskall complained to the other white men in the neighborhood that
“the Negroes were very unruly.” Perhaps the disruption of their lives had shifted the terms of the daily calculus of obeying or fighting back. Go along to get along, get yanked out of one’s cabin in the middle of the night, and be herded west all over again. One’s husband was back on the next plantation along the Yazoo; or one’s wife and child; so were the Bible and the bag of hoarded coins, both
hidden under the roots of that old cottonwood.

Or maybe this: there had been that day in Mississippi when Blunt called everyone in from the field and lined them up for the man from the bank, who counted them off and wrote down dollar values and fake ages for his mortgage ledger. A mortgage is technically a sale, so by running to Texas Blunt had stolen each mortgaged slave from his or her legal
owner. One day Blunt was the representative of the Law, the hard edge of a giant monolith bearing down. Then, that night, he was slipping away with stolen property. He and his agents now seemed less imposing and united.

So there was Paskall, pushing a man to keep up with the cotton-chopping line. And this spring day, that man had enough. He “knocked [Paskall] in
the head with a grubbing hoe and
buried him in the field, and ploughed over him.” The man took Paskall’s gun, and, gritting his teeth, shot himself in the hand. He staggered from the field and walked twenty miles to Matagorda, where he gave Blunt his story. Paskall had shot him in a rage, “thought he killed [the slave], and [Paskall] rode one of his horses off.”

Blunt was too busy with drinking and cards to worry about the details.
But the story sounded fishy to his neighbor James Hawkins. A few days later the horse came wandering back, saddle still on. Hawkins convinced other local whites to have the slaves interrogated. “It was some time,” he reported, “before we could make the Negroes tell anything about [Paskall].” But they did. Hawkins took the men out to the field and made them dig Paskall’s body out from under
the cotton furrows. “The negroe” with the hand wound, Hawkins reported, “was in jail” and “will surely be hung.” Hawkins’s overseer, terrified by the neighborhood murder, was barricading himself in his cabin every night.
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Perhaps the terrified man couldn’t erase the image: blood pooling in dirt; Paskall’s shattered head half-covered by the plow’s first run; black man frantically whipping balking
mule around for one more pass, scanning the horizon. Borrowing and slave purchases in Mississippi, a son leaving Paskall’s father’s home back East: these ordinary decisions had led to the death of two men on the next and maybe last frontier for cotton slavery. Murder wasn’t what these men had imagined as the outcome of their long ride and march west. On slavery’s bleeding edge, overly ambitious
plans made years earlier led to blowback. But no one bled as much as enslaved people. And no one’s life was as disrupted by the principles of G.T.T.