Capital in the Nineteenth Century

Endorsed by the Business History Conference

Friday, April 3, 2020, 8:00 AM - 9:30 AM

Type: Paper Session

Tags: Business and Economy; Legal and Constitutional


“The idea of capital,” remarked Henry George, was something “beset” with “ambiguities.” In his bestselling Progress and Poverty, George noted that although “all sorts of things that have a value” were “vaguely spoken of as capital,” the use of the term among “economic writers vary so widely that the term can hardly be said to have a fixed meaning.” Throughout the nineteenth-century United States, capital was everywhere: it had built up the cotton mills of the northeast, constructed the turnpikes, canals, telegraph and railroads that formed the sinews of an industrializing economy, and upended centuries-old rhythms of social, religious and economic life. But as George observed, while the power of capital was undeniable, its meaning was labile and unfixed, its definition in textbooks unmoored from its manifestation in plantations, cargo holds, courtrooms, and shop floors. This panel argues that capital’s ambiguity was no accident of semantics, but a function of power. Taking up historian Jonathan Levy’s charge to reconsider capital as “a matter of power and politics, of determining which assets get capitalized, under what terms, and for the benefit of whom,” this paper panel denaturalizes capital by presenting it in three different contexts in nineteenth-century America. In her paper on slavery and foreclosures, Sharon Ann Murphy revisits the legal contests over banks’ attempts to seize married women’s financial assets—including the slaves they owned. These debates, as her paper shows, pitted the gendered norms of widow protection against the logic of racial capitalism as courts determined the extent to which slaves’ bodies could be capitalized into financial assets. In a different but striking case, Alastair Su’s paper captures the process through which millions of dollars’ worth of Indian opium were converted into international capital through Anglo-American financial institutions during the Jacksonian period. Piecing together the records of the Bank of the United States, Barings and various American and British opium firms, he demonstrates how anxieties over drug prohibition in China spread into global money markets, stoking the Panic of 1839. Finally, Daniel Platt interrogates the relationship between nineteenth-century debt instruments and the construction of financial time. Time in the Gilded Age, he argues, was neither experienced in a simple nor homogenous fashion, but was shaped and distorted by the logic of financial capital. By shedding light on the contested nature of capital in the nineteenth century, this panel will provide new ways to understand one of the fundamental, yet dimly understood, aspects of capitalism.

Papers Presented

“A Marvellous Affair”: The Opium War and the Panic of 1839

This paper examines the extraordinary claim that the attempted prohibition of the Chinese opium trade in the spring of 1839 inadvertently triggered a financial panic in the United States—what one befuddled observer at the time called “a marvellous affair.” Using archival records from the Barings, Bank of England, Bank of the United States (BUS) Jardine Matheson, and Russell and Company archives, it argues that the large-scale capitalization of opium contracts into bills of exchange did, indeed, expose the transatlantic financial system to the vagaries of the Asian opium economy, turning China’s drug crisis into a financial contagion. Starting in 1828, the BUS began to sell bills on London as a convenient means for East Indian opium traders to remit their profits back to London, and for American merchants to pay for Chinese wares. These bills, however, soon proved to be a liability for their holders, especially when the existential status of the trade’s principal product—opium—threatened to vanish with prohibition. By investigating the linkages between the Opium War and the 1839 Panic, this paper offers two historiographical contributions. First, it recasts the relationship between drugs and the history of capitalism by highlighting the significance of the opium trade in the development of modern financial markets. Second, by analyzing the connections between Massachusetts, Philadelphia, Canton, London and Calcutta merchants, it reconfigures the geographies of financial dependency in the Jacksonian era in a groundbreaking fashion.

Presented By
Alastair Yuanhao Su, Stanford University

Debt and the Politics of Time

In 1883, Uriah W. Oblinger, an over-mortgaged homesteader in northern Nebraska, lamented the unfreedom of indebtedness in a letter to a relative in Ohio. “While my accounts remain unsettled,” he wrote in explanation of his inability to travel east for a visit, “my time is not my own.” Fifty years later, in Bankruptcy in United States History (1935), the legal historian Charles Warren noted the “striking fact” that “whenever there has been any serious economic or financial upheaval in this country, the States have enacted stay-laws prolonging the period when a debtor’s property should be exempt from execution.” Between these two observations—Oblinger’s expressive narration and Warren’s scholarly assessment—lies a neglected political history of financial time in nineteenth-century America. This paper surveys the many ways that Americans experienced financial time in this era and used the law to force the credit economy to follow the steady beat of moral expectations, in stay measures as well as redemption, appraisal, and scaling laws. It argues that these devices regarded time as a legal construct that could be manipulated to limit the logic of commodity formation- and capital formation. Further, it recovers the political struggles these measures aroused, in arcane battles over procedural reform and more visible disputes before the Supreme Court. The paper suggests that the emergence of predictive economics in the early twentieth century represented more than a cultural accommodation to financial modernity. It also satisfied a set of moral needs and wants, in contradictory ways, that had once been the preserve of popular politics and the law.

Presented By
Daniel Platt, University at Buffalo, State University of New York

Slaves, Banks, and Married Women’s Property Rights

During the antebellum period, commercial banks were deeply involved with the slave system. Many helped underwrite the sale of bondspeople, using them as a kind of capital. They accepted enslaved people as collateral for loans and as a part of loans assigned over to them from third parties. And they were willing to sell the enslaved as part of foreclosure proceedings on anyone who failed to fulfill a debt contract. Yet bondspeople who had been part of the property brought into a marriage, or who had been placed in trust for a wife, proved to be particularly problematic for creditors such as banks. During foreclosure proceedings, wives (especially widows) often claimed ignorance of their husband’s financial dealings with banks, and sought to prevent the seizure of enslaved people. While courts almost always viewed this as a clear case of fraud against the bank (putting slave property up as collateral upon whom the debtor did not have full legal title), they often also viewed the wife as an unwilling victim of the husband’s misdeeds. Banks thus needed to prove not only that the husband had acted fraudulently, but also that the wife had knowingly participated in the fraud. Or, they had to prove that the (usually now-deceased) husband had not acted in bad faith, but that rather the wife’s assertion of a prior claim on the bondspeople was fraudulent. The courts’ moral concern for the impact of these loan contracts on financial dependents ignored altogether the fate of those for whom these decisions mattered most—the slaves themselves.

Presented By
Sharon Ann Murphy, Providence College

Session Participants

Chair and Commentator: Jonathan Levy, University of Chicago
Jonathan Levy is a professor of history at the University of Chicago. He specializes in the history of economic life in the United States, with interests in the relationships between business and economic history, political economy, legal history, and the history of ideas. His research and teaching span the 19th and 20th centuries and are concerned with global and comparative questions. His first book, Freaks of Fortune: The Emerging World of Capitalism and Risk in America (Harvard University Press, 2012), is a history of risk in the United States. The book has a dual focus, tracing the simultaneous rise, in the context of slave emancipation, of a new individualist creed that equated freedom with risk-taking and a new corporate financial system of risk management. Freaks of Fortune won the Organization of American Historians’ Frederick Jackson Turner Award, Ellis W. Hawley Prize, and Avery O. Craven Award, and the American Society for Legal History’s William Nelson Cromwell Book Prize. Levy is currently working on an interpretive history of capitalism in the United States, “Ages of American Capitalism,” which will be published by Random House. He is also researching the historical relationship between for-profit and nonprofit corporations in the United States.

Presenter: Sharon Ann Murphy, Providence College
Sharon Ann Murphy is a professor of history at Providence College, where she teaches classes on the Early American Republic and Antebellum America, Corporations and Entrepreneurs in US History, and Panics and Depressions in US History. Her research examines the complex interactions between financial institutions and their clientele in the nineteenth century. She is the author of Investing in Life: Insurance in Antebellum America (2010, The Johns Hopkins University Press), winner of the 2012 Hagley Prize for the best book in business history, and Other People’s Money: How Banking Worked in the Early American Republic (2017, The Johns Hopkins University Press). Among her latest projects is an investigation of the public perception of banks around the Panic of 1819, and an examination of the relationship between southern commercial banks and slavery during the antebellum period. She has presented her work at numerous conferences including OAH, AHA, Society for Historians of the Early American Republic, Business History Conference, Southern Historical Association, and Policy History Conference. She is also an associate editor of Enterprise and Society: The International Journal of Business History and a 2018 fellow of the American Council of Learned Societies.

Presenter: Daniel Platt, University at Buffalo, State University of New York
Daniel Platt is a Postdoctoral Fellow in Interdisciplinary Legal Studies at the Baldy Center for Law and Social Policy, State University of New York at Buffalo. He earned his PhD in American Studies at Brown University in 2018. His current manuscript, The Debt Question in Modern America, considers the legal and cultural history of personal indebtedness from the Civil War to the New Deal. An article drawn from this research, on usury reform in the 1920s, received the OAH’s Louis Pelzer Memorial Award and was published in the Journal of American History. Two review essays, on the histories of finance and economic thought, have appeared in the Journal of Cultural Economy and the Journal of the Gilded Age and Progressive Era.

Presenter: Alastair Yuanhao Su, Stanford University
Alastair Su is a PhD candidate at Stanford’s Department of History. He specializes in the history of U.S. empire and global capitalism in the nineteenth century. His dissertation, “Age of Opium: American Capital and the Making of the Modern Pacific, 1815-1882,” offers a major revision of the American opium trade in the nineteenth century. Combining the methods of business, social, economic and immigration history, his dissertation traces the historical process through which Americans first sold opium in China, to when the Chinese sold opium in America. His teaching and research has been supported by the Gilder Lehrman Institute of American History, Cambridge University Press, the McCoy Family Center for Ethics in Society, the Mercatus Center at George Mason University, the Business History Conference, and the Organization of American Historians.