This is a topic I’ve meant to research, but always have something else more pressing to look up and don’t currently have access to really good history databases.
Most planters were heavily in debt, and often to northern banks (plus a lot of southern banks were owned by northern or British banks). What happened to the mortgages on slaves at the end of the Civil War? Or on property that was destroyed in the war? Did the government do any sort of bail-out for the northern banks? Were the debts forgiven?
The passage of the XIII Amendment wiped out lots and lots of capital. But it happened at the same time as (even more?) capital was wiped out by shot and shell and blockade. The freeing of the slave impoverished the South, but was hardly noticed given the backdrop.
I don’t know that that’s true. The American banking system was pretty primitive before the Civil War. Banks were forbidden to open branches or operate across state lines, and served mostly a local market. A great deal of lending still took place on a personal level, without intermediation; a planter who needed more acreage or more slaves would borrow from kinfolk or from a wealthy local with whom he had a personal relationship. Merchants would sometimes grant short-term credit for seed or supplies, secured by the next year’s crop–but again, this was mostly local.
In any event, there was no bailout; on the contrary, the federal government created a new network of nationally chartered banks during the Civil War and deliberately marginalized state-chartered banks.
No, it was a big issue right from the beginning. People like Hamilton and Jefferson argued over the creation of national banks and it was one of the pillars of the founding of the Democratic Party in the 1820’s.
I actually have photocopies of such promissories from the estate inventory of an ancestor who died in 1861. He was a well to do and elderly planter in central Alabama and the documents are amazingly simple compared to today’s loans; on a form about the height of an index card and width of a piece of typing paper it would read
It was signed by both parties and witnessed by two or more witnesses and it’s clear that the borrower often had no intention of paying the loan back in cash but with a share of a crop (the payback amount being scratched through). These ranged from $13 to $680 and totalled about $1900 in all. I’ve wondered if these were more often favors or a secondary income. (I have a record where the same ancestor sold one of his farms for $6,000 in 1861 and put the money into Confederate bonds.)
Was it possible for, say, a bank in Boston (or anywhere in another state) to own a major share of the stock of a bank in Atlanta (or anywhere in another state)? I also wonder if there were some kind of holding companies that got around laws of Boston Bank owning Atlanta Bank.
I know from this time that extremely wealthy individuals loaned money to banks. Several robber barons did this. (Long before them and in the south John Calhoun, who earned a fortune in gold from his investments in the fields and supply lines of the Dahlonega gold rush, loaned money at a considerable interest to a troubled bank in Charleston and settled for some of their foreclosed-on properties.) I wonder if legislation prohibited this kind of private speculation across state lines.
The 13th Amendment and the 18th Amendment both ended extremely large industries and bankrupted many individuals. Did any others?
Assuming the former “owner” wasn’t bankrupt, did the obligation survive? Were loans secured back then? Pre-emancipation/war, if someone defaulted on a loan, would the repo men come calling? Ghastly.
Oh yeah. In genealogy research one of the best ways to learn about ancestors is by their debts. I had one ancestor who was jailed for burning his corn crop when it was seized by a creditor he disputed, and newspapers from the time have constant “default being made by Perfidious T. Wombat to Squire Albus Costive be it known his mares are now taken” etc. etc… Thomas Jefferson actually had furniture and even fixtures repossessed from Monticello due to non payment (and a year after his death his creditors took everything, from 120 slaves down to, literally, his shoes, clocks, candle sconces and walking sticks, and sold it in a series of auctions on the estate grounds).
I don’t like to say “never”, and I can’t prove that this didn’t happen anywhere before the Civil War, but in general, no. Holding companies and “trusts” as a means of evading single-state business requirements didn’t take off until much later in the Nineteenth Century.
Conversely, banks would lend money to wealthy individuals. It wasn’t unknown for individuals to found banks and solicit deposits for the purpose of lending money to themselves, or to their brother-in-law!
Pre-Civil-War banking didn’t have a good reputation, partly due to the vicious circle of regulation and malfeasance. Jacksonian Democrats hated banks in general, and so passed laws to keep them small and obscure and local–precisely the conditions that led to greater malfeasance and failure, which caused more mistrust, and even more restrictive laws, and so forth.
There were prototypes but the 2 minute esposure, kerosene lighting, and tin kept jamming the printer.
On long range investments I forgot to mention the most obvious example where I live: Daniel Pratt. He was a New Hampshire Yankee ([SIZE]that’s used here in the Connecticut Yankee in King Arthur’s Court sense and not as a pejorative, incidentally[/SIZE]) trained as an architect who settled outside of Montgomery where he founded the city of Prattville and became the largest manufacturer of cotton gins in the world and owned one of the south’s largest textile mills [later branching into gunpowder, glass, iron, and other items and militarizing into pistols and uniforms and other goods during the war). He was an extremely loyal Confederate, and after the war helped lead to the founding of Birmingham and its steel industry.
The Tallassee mills closer to where I grew up were English built, then sold to New Englanders who were pro Southern in the war, and were vital to the CSA war machine. It was militarized into the largest munitions factory [as well as churning out uniforms/tents/saddles/etc.] to remain uncaptured at the end of the war.
