Economic Condition of South Carolina in 1860

WJC

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#41
Most of my references on the economics of slavery suggest a return on RR investments of about 5%
Thanks for your response.
Grater the risk, the greater the reward.
It would be interesting to know whether that figure includes railroad ventures that went out of business, something that was not uncommon in the antebellum.
 

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jgoodguy

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#42
Thanks for your response.
Grater the risk, the greater the reward.
It would be interesting to know whether that figure includes railroad ventures that went out of business, something that was not uncommon in the antebellum.
One other thing to consider is that slaves were an increasing asset, the value of slaves from the market increase and reproduction does not show up in income reports.
 

James Lutzweiler

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#44
It would be interesting to know more about Governor Pinckney's financial situation, particularly the timing of both the purchases and sales of his investments.
As to the 4% return, one has to consider the relatively low risk in buying/selling slaves in the antebellum versus the high risk in railroad investments during the same period.
I would like to know more about how Pinckney lost his shirt (presumably cotton), too, but Hayne's biographer does not go there. Maybe some bio of Pinckney does. Yet there is no implication his slavery was not profitable, as he simply might have made some bad investments having nothing whatsoever to do with slavery.

I agree with your high risk comment.
 

James Lutzweiler

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#46
Competing estimates.

Link

Robert Fogel and Stanley Engerman made the most famous contribution to the debate. Their book, Time on the Cross, suggested that slavery in the American South was a lucrative enterprise for plantation owners. The authors reckoned that slaves were treated pretty well. And this meant that they were productive. So for the owners, slavery was:​
generally a highly profitable investment which yielded rates of return that compared favourably with the most outstanding investment opportunities in manufacturing​

Another study, by Alfred Conrad and John Meyer, calculated the rate of return on investing in slaves. They reckoned that “slave capital” earned at least equal returns to those from other forms of capital investment—such as railroad bonds. The rate of return on slaves could be as high as 13%—compared to a yield of 6-8% on the railroads.​
I don't disagree, though I don't know of anyone who owned slaves doubling, tripling, or quadrupling their money by flipping one of them. There very well might be, I just don't know of one. All I know from what I have read is that if I had $1,000 to invest in SC in 1860, I would have bought stock in the Memphis and Charleston Railroad instead of another slave. Even if I lived in hated New York City, I would have invested in that railroad --or maybe split the $1,000 into some for the New York Central, the Michigan Central, the Rock Island Road, or many others.
 

jgoodguy

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#48
I don't disagree, though I don't know of anyone who owned slaves doubling, tripling, or quadrupling their money by flipping one of them. There very well might be, I just don't know of one. All I know from what I have read is that if I had $1,000 to invest in SC in 1860, I would have bought stock in the Memphis and Charleston Railroad instead of another slave. Even if I lived in hated New York City, I would have invested in that railroad --or maybe split the $1,000 into some for the New York Central, the Michigan Central, the Rock Island Road, or many others.
Price of slaves nearly doubled between 1850 and 1860. A ready market for slaves down South. Let the Yankees take risks on RR, slavery is a sure thing. Slaves were used a benefit to widows and children, endowments to churches and colleges, payment of debt and a considerable asset to be divided in an Estate. Slaves were a sign of social success and not RR bonds.

Wrapping one's mind around the slave labor ethos of the Slave South sometimes warps it.
 

James Lutzweiler

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#50
Price of slaves nearly doubled between 1850 and 1860. A ready market for slaves down South. Let the Yankees take risks on RR, slavery is a sure thing. Slaves were used a benefit to widows and children, endowments to churches and colleges, payment of debt and a considerable asset to be divided in an Estate. Slaves were a sign of social success and not RR bonds.

Wrapping one's mind around the slave labor ethos of the Slave South sometimes warps it.
Thank you.

When comparing the risks of investments like stocks in railroads versus slavery, I am sure you would agree with me that slavery had its risks as well. In fact, by 1865 every last investor in slavery lost his shirt, whereas that is not true of every last railroad investor. And, actually, I never cease to be amazed at the amount of loss in the slavery business. If in 1860 the entire south had sold every last slave in aggregate for $.25 and then lost the quarter, it would have been further ahead in 1865 then it actually was. And this does not take into account the loss of land value in the south because it was slavery that made most of its land of whatever value it had. Any planter in 1860 anywhere in the south had to know he was in a risky business, too, eh?

I find it useful to contemplate this imaginary but very practical exercise. Picture two planters, one in 1850 and one in 1860. They both have $1000 to invest. Would they both invest in another slave, or might that 1860 planter roll the dice on a piece of railroad stock that he did not have to feed and clothe and medicate --and fear on top of all that? I am pointedly not suggesting to you that I have an answer to that question. But it is something I think about in order to get a better handle on the future from a strictly ante-bellum viewpoint. I would enjoy reading any meditations from others on this comparison. In short, steam stocks or slave stocks? That is the question in re: what was to be or what was not to be.
 
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O' Be Joyful

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#51
I find it useful to contemplate this imaginary but very practical exercise. Picture two planters, one in 1850 and one in 1860. They both have $1000 to invest. Would they both invest in another slave, or might that 1860 planter roll the dice on a piece of railroad stock that he did not have to feed and clothe and medicate --and fear on top of all that? I am pointedly not suggesting to you that I have an answer to that question. But it is something I think about in order to get a better handle on the future from a strictly ante-bellum viewpoint. I would enjoy reading any meditations from others on this comparison. In short, steam stocks or slave stocks? That is the question in re: what was to be or what was not to be.
If...I had invested $1000 in, say Facebook or Apple close to the time of their first public offering, rather than something considered more safe and conventional (GM?)...:dance: We have the benefit of looking back.
 

WJC

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#52
if I had $1,000 to invest in SC in 1860, I would have bought stock in the Memphis and Charleston Railroad instead of another slave. Even if I lived in hated New York City, I would have invested in that railroad --or maybe split the $1,000 into some for the New York Central, the Michigan Central, the Rock Island Road, or many others.
That decision is an excellent example of presentism. We know that 1860 was the 'high water mark' for slavery in the United States, that events over the next few years would culminate in the demise of the institution in 1865.
Similarly, we know which railroad projects succeeded while so many others failed.
But to an investor in, say January 1860, the choice was not so simple and the risks were totally unknown. The only insight was the landscape of failed railroad ventures and the record run-up in the price of slaves.
To a young man wanting to make his fortune in 1860, his first step and wisest investment choice was to acquire some land and a slave then grow cotton.
 

James Lutzweiler

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#53
Thanks for your response.
Grater the risk, the greater the reward.
It would be interesting to know whether that figure includes railroad ventures that went out of business, something that was not uncommon in the antebellum.
In this connection, am I the only one who finds it significant that the planters chose for the presidency of the Confederacy not just another planter like themselves but a railroad planter --and one who knew the West and Southwest (read: "western territories") as well as, if not better than, Fremont, The Pathfinder, hisself (I used to say "himself," when I lived in Illinois and "Missesota," as one of my dear young Southern friends called the Land of 10,000 lakes)? Isn't it interesting that the presidential heads of the North and the South were both major transcontinental railroad devotees? Was that by accident? Why didn't Montgomery pick a planter to save slavery, if slavery was the primary core of the whole shooting match? Was there a planter in all of the South who knew the West and Southwest better than Jefferson Davis? If so, who? And while JD's memory is routinely cursed, especially in these statue-busting days, is it not true that this Mississippian, named after the bankrupt gentleman farmer, Thomas Jefferson, created a document (the Pacific Railroad Surveys) that dwarfed in content and significance the Lewis and Clark Reports authorized by his namesake? And is it not also true that one historian has found Thomas Jefferson's own Declaration of Independence rooted in his own exercise in personal debt repudiation to the British?

Would anyone join me in calling the Civil War not just a War of Southern Aggression --or any of all the other valid characterizations seen on this thread-- but also a Railroad War? Mind you, NOT exclusively a Railroad War, but a Railroad War nevertheless? Doesn't a War for Western Territories" also fit? Was it really what James McPherson called it, "A Battle Cry for Freedom," when Lincoln called it a war for real estate, when young men were conscripted against their will to engage in battles in which they took no interest, when only slaves in some states were declared free and not others? I also like "A Battle for San Francisco" and "A Battle for San Diego" and "A Spat for Sand" (the Gadsden Purchase). Do these fit, too?
 

WJC

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#54
Would they both invest in another slave, or might that 1860 planter roll the dice on a piece of railroad stock that he did not have to feed and clothe and medicate --and fear on top of all that?
As @O' Be Joyful has pointed out, that decision is no different than the ones investors make every day today. Risk hard earned cash in high-risk, high-reward speculation ("roll the dice") or buy a CD.
 

James Lutzweiler

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#55
That decision is an excellent example of presentism. We know that 1860 was the 'high water mark' for slavery in the United States, that events over the next few years would culminate in the demise of the institution in 1865.
Similarly, we know which railroad projects succeeded while so many others failed.
But to an investor in, say January 1860, the choice was not so simple and the risks were totally unknown. The only insight was the landscape of failed railroad ventures and the record run-up in the price of slaves.
To a young man wanting to make his fortune in 1860, his first step and wisest investment choice was to acquire some land and a slave then grow cotton.
I must take exception to your invocation of "presentism," perhaps because I did not emphasize a very important factor in my question. In short, one must erase everything one knows about the present and the past all the way back to December 20, 1860. You cannot know anything past that date. Then you must begin by saying, "Based on what I can glean only from antebellum literature, letters, speeches, up until that date, what would I do with my money?" My question presumes the total and absolute absence of presentism. My question and my research is based insofar as is possible totally on available antebellum documents. I thought that was a given but apparently from your otherwise correct observation it was not. So, I repeat, for emphasis, "Based on what you could only know with antebellum documents --and especially without the aid of 20th century authors to assist your thinking-- what would you do with $1,000 in 1860?
 

WJC

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#56
In this connection, am I the only one who finds it significant that the planters chose for the presidency of the Confederacy not just another planter like themselves but a railroad planter --and one who knew the West and Southwest (read: "western territories") as well as, if not better than, Fremont, The Pathfinder, hisself (I used to say "himself," when I lived in Illinois and "Missesota," as one of my dear young Southern friends called the Land of 10,000 lakes)? Isn't it interesting that the presidential heads of the North and the South were both major transcontinental railroad devotees? Was that by accident? Why didn't Montgomery pick a planter to save slavery, if slavery was the primary core of the whole shooting match? Was there a planter in all of the South who knew the West and Southwest better than Jefferson Davis? If so, who? And while JD's memory is routinely cursed, especially in these statue-busting days, is it not true that this Mississippian, named after the bankrupt gentleman farmer, Thomas Jefferson, created a document (the Pacific Railroad Surveys) that dwarfed in content and significance the Lewis and Clark Reports authorized by his namesake? And is it not also true that one historian has found Thomas Jefferson's own Declaration of Independence rooted in his own exercise in personal debt repudiation to the British?

Would anyone join me in calling the Civil War not just a War of Southern Aggression --or any of all the other valid characterizations seen on this thread-- but also a Railroad War? Mind you, NOT exclusively a Railroad War, but a Railroad War nevertheless? Doesn't a War for Western Territories" also fit? Was it really what James McPherson called it, "A Battle Cry for Freedom," when Lincoln called it a war for real estate, when young men were conscripted against their will to engage in battles in which they took no interest, when only slaves in some states were declared free and not others? I also like "A Battle for San Francisco" and "A Battle for San Diego" and "A Spat for Sand" (the Gadsden Purchase). Do these fit, too?
Thanks for your response.
You seem to be falling back on your well-worn arguments, presenting the same opinions without convincing evidence of their validity.
Assuming for the moment that you are correct, how does these regurgitated claims add to the discussion of the "economic condition of South Carolina in 1860"?
 
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#58
The data do not show an economic problem in South Carolina that would motivate secession. Pieces of data from the 1860 census show that disease conditions in Louisiana, Mississippi and Arkansas were not good, particularly in New Orleans with respect to cholera.
The fact that slave prices in New Orleans remained high is an indication that there was a continuing labor shortage due to high death rates and the expansion of slavery in Texas, with the illegal smuggling of enslaved people rapidly diminishing.
This is a technical paper: http://www.dartmouth.edu/~jshambau/Papers/AntebellumExchRtsJCS-5-2005.pdf
But the Table 3 and p. 32 shows that Louisiana was flush with cash, and local currency system was relatively strong.
The behavior of South Carolina in the summer and fall of 1860 is evidence that they were making money on the internal slave trade. There is some evidence that they were making so much money on trading in involuntary labor that they were advocating reopening the slave trade.
If Abraham Lincoln were to be elected President of the United States, with Salmon Chase as an important cabinet official, attacks on the slave trade were sure to come. Whether they would be constitutional is beside the point. Any nervousness about the future of slavery would cause a gradual or rapid decline in the price of slaves.
 
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#59
With respect to railroads, the effect is not necessarily the investment opportunity. Railroads and telegraph communications work together. By 1860 the railroads were moving from a primitive technology, to a proven technology. Particularly in the north, they were faster, mostly immune from whether, and very capable of delivering farm produce to the cities and ports.
Time had arrived when interstate travel was rapid and efficient. The separate financial systems of the 33 states did not make sense. The banks were to poorly regulated. The 1838-1860 state banking era had to end, and the audit standards of New England and Philadelphia were going to take over.
 
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#60
See page 120. https://www2.census.gov/library/publications/decennial/1860/preliminary-report/1860e-06.pdf?#
Virginia, North Carolina and South Carolina had the same problem. The slave population grew very slowly, and it was difficult to get non-slave owning white people to stay. The people who stayed were the successful and wealthy land owners.
The ranking of the three states in the nation as a whole was rapidly declining and the number of states was rapidly increasing. The railroads and the telegraph created the rapid growth of 1850-60, and the means existed to create a continental empire. Whatever the founders had intended was physically irrelevant. A new situation existed by 1860.
 



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