Book Review: Banking on Slavery: Financing Southern Expansion in the Antebellum United States

Banking on Slavery: Financing Southern Expansion in the Antebellum United States. By Sharon Ann Murphy. Chicago: University of Chicago Press, 2023. Softcover, 419 pp. $35.00.

Reviewed by Al Mackey

The prevailing view among Civil War enthusiasts is that planters in the South were land and enslaved persons rich and cash poor, with their mortgages held by banks in the North. However, in Banking on Slavery: Financing Southern Expansion in the Antebellum United States, we find that it was primarily banks in the South that financed the expansion of slavery into the Old Southwest “Cotton Kingdom” during the antebellum years. In this detailed book by Professor Sharon Ann Murphy of Providence College, readers follow the financialization of slavery from the end of the War of 1812 to the end of the 1830s and into the 1840s. She notes, for example, the surprising fact that there were more banks in New Orleans in the 1830s than in any other place except for New York City.

Antebellum southern banks pioneered a number of financial institutions, such as farmers’ banks and plantation banks, each designed to meet the financial needs of their specialized clientele as seen in their names. Expanding into new lands was an expensive proposition. It required purchasing new equipment, new building materials, and in many cases additional enslaved people to perform the extra labor, in addition to purchasing whatever new land that had to be bought.

Few individuals had that amount of cash initially on hand, thus the expansion had to be financed through loans. Southern banks met this need for capital. The collateral for these essential loans included the enslaved people who were laboring on these new plantations and farms. Because bonds people were considered property, the banks accepted them as a guarantee. When a planter failed and thus defaulted on a loan, the bank seized the enslaved people and auctioned them off, breaking apart families and entire communities to repay as much of the loan as possible. In some cases, market prices were too low, and the bank had to hire an agent to manage the enslaved people and keep them laboring on the plantation the bank now owned until the prices for land and people rose enough for an auction to yield enough to repay the loan.

Professor Murphy divides her book into three parts. The first part looks at the rise of southern commercial banks and the early days of using enslaved people as collateral for loans. In Part II, she discusses the boom in southern banking in the 1820s and 1830s, along with the expansion of using enslaved people as loan security as the cotton and sugar plantations grew with boundless energy. Part III examines the effects of the Panics of 1837 and 1839 and the recession that followed, revealing the problems with having so many enslaved lives as collateral for risky loans.

Banking on Slavery fills an important need in our historical understanding. Most histories of slavery barely mention how its expansion received the financing it required, and most histories of southern banking barely mention slavery and the use of enslaved people in loans and mortgages. The financialization of slavery is an understudied topic, with only a few historians, such as Edward Baptist in The Half Has Never Been Told (2014), Joshua D. Rothman in The Ledger and the Chain (2021), and Stephanie E. Jones-Rogers in They Were Her Property (2019), venturing to even broach the subject. This is one of the very few book-length studies of how banks in the South financed the expansion of slavery into the Old Southwest. Deeply researched and well-grounded in both primary sources and sound secondary scholarship, this excellent book is most welcome and should be read by anyone interested in the history of American slavery.


Al Mackey is a retired US Air Force colonel currently contributing to his community by serving as a substitute teacher in Pennsylvania. A lifelong student of the American Civil War since taking an undergraduate course with Professor James I. “Bud” Robertson at Virginia Tech, Al blogs at Student of the American Civil War, where he posts reviews, videos, interviews, interesting articles he finds, and research results.

6 Responses to Book Review: Banking on Slavery: Financing Southern Expansion in the Antebellum United States

  1. Sophomoric. No one has ever said there were no Southern banks and they financed no plantations. It is a fact, however, that Northern banks participated as well, some receiving plantations out of bankruptcy and continuing to own them. On a related note, in some instances, particularly in Natchez, plantations were owned and run by Northern financiers intent on cutting out the middleman and growing cotton for themselves. Hence, most of the historic houses there weren’t burned by Union troops.
    On a much larger note, most of the trading/shipping/handling of export cotton and cotton products was done by Northern factors/financiers. It’s good that this financial information has been documented, but its presentation in the review as yet another attempt to shift blame onto the South, away from the innocent North, is sad. It’s always good to remember that cotton was the country’s largest export, by far, and the US Treasury rode on its back.

    1. We are all very fortunate that you provided each reader with a warning prior to reading your erudite response. Dr. Murphy informed the reader early, as the reviewer notes, “the surprising fact that there were more banks in New Orleans in the 1830s than in any other place except for New York City.” Dr. Murphy’s 19 years of collegiate professorial experience coupled with her PhD. from the highly regarded University of Virginia not to mention her four books on Early American Economic History I am sure made her more than aware that the banking industry of the fledgling United States invested nationwide, not just regionally. Her point in writing this was to dispel our ideas that New York was the economic engine of our young economy. New Orleans as well as, I’m sure, other southern and northern cities provided an early economic boost to the development of agricultural development. Again, I fully appreciate the warning you provide about your response.

  2. Thank you for this review! I hadn’t come across this book yet, but I’m excited to read it now, especially coming off of Colby’s “An Unholy Traffic” earlier this summer.

  3. Thank you for bringing this worthy book to our attention. Too often the economic aspects of the slavery system in the antebellum United States have not received the attention they deserves I was happy to read Jonathan David Wells 2020 book, The Kidnapping Club: Wall Street, Slavery and Resistance on the Eve of the Civil War. I am delighted to know there is a serious further study of how slavery expansion was supported by Southern banking institutions. I remember being advised by a senior campaigner in the environmental law trenches when I was a very young lawyer, ‘if you want to know how a system works, follow the money’. Now armchair students of slavery can do just that.

  4. Thanks Al, great review … although economic and financial historians would not be surprised that southern banks financed the expansion of southern agriculture … antebellum banking was almost exclusively a regional activity dominated by state-chartered or state-regulated institutions which made loans and issued their own currency … so, one would expect, for example, that the Bank of Louisiana or the New Orleans Canal and Banking Company’s primary financial interests were in plantation real estate and enslaved men and women … and there were a lot of these state sanctioned banks – almost 600 in 1840 and over 1,400 by 1860.

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