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The Merchants’ Capital: New Orleans and the Political Economy of the Nineteenth-Century South

Author(s):Marler, Scott P.
Reviewer(s):Gudmestad, Robert

Published by EH.Net (December 2013)

Scott P. Marler, The Merchants’ Capital: New Orleans and the Political Economy of the Nineteenth-Century South. New York: Cambridge University Press, 2013. xv + 317 pp. $95 (cloth), ISBN: 978-0-521-89764-8.

Reviewed for EH.Net by Robert Gudmestad, Department of History, Colorado State University.

One of the guiding questions of Scott Marler’s new book is why did New Orleans decline so suddenly after the Civil War? As Marler examines the question, he examines the merchants of New Orleans who did so much to set the standard for the Crescent City. The result is a book that is thoroughly grounded in the available sources, strongly argued, and useful for understanding the vicissitudes of the nineteenth-century cotton trade.

Prior to the Civil War, the merchants of New Orleans squandered an opportunity to make their city into a first-rate urban center. These “complacent” businessmen bought into the illusion of a healthy and well-diversified economy that would automatically capture trade from upriver cities. As such, the merchants barely improved the levees, were sluggish in building railroads, and failed to fashion an effective sanitation system. Worse yet, they did not use their profits to build cotton mills or invest in other types of manufacturing. Marler rightly concludes that the merchants of New Orleans added practically nothing of value to goods moving through their city. The businessmen of New Orleans, in short, nurtured a culture that discouraged modernization and sought to keep their political economy closely tied to plantation slavery.

After the election of Abraham Lincoln, the merchants of New Orleans were hardly enthusiastic secessionists. Instead, they wanted stability. When secession happened, though, not only did they contract the money supply but they promoted a voluntary cotton embargo. Marler effectively argues that because the embargo went against Confederate policy, the fall of New Orleans relieved the Confederate States of America of a logistical headache. When the Union forces captured New Orleans in 1862, one of their first goals was to re-establish the cotton trade. The inept Benjamin Butler failed miserably and his successor, Nathaniel Banks had little more success. More importantly, the war destroyed the credibility of the New Orleans’s merchants, devastated the city’s banks, and generally sabotaged the region’s economy. New Orleans and Louisiana simply could not recover from the war’s dislocation. Changing trade patterns, under-production of cotton, racial strife, economic dislocation, and the growth of independent rural stores also contributed to the Crescent City’s downfall.

Besides chronicling the political economy of New Orleans and that city’s decline, Marler has several objectives in mind for this book. He returns to the old historiographical debate about the South’s economic nature and strongly believes that the region was, essentially, pre-capitalist. In his view, the economic gulf between North and South led to irreconcilable conflicts in the 1850s that produced the Civil War. Marler acknowledges that he is out of step with current trends but still believes that the South suffered from limited “class formation, urbanization, and fixed-capital investments that typified modernization elsewhere” (p. 10). In this regard, it is no wonder that he believes the New Orleans’s merchants were loath to invest in industry: a pre-capitalist outlook simply made such actions unthinkable. Marler also takes aim at historians like Jonathan Daniel Wells and Frank Towers who argue for the presence of a noticeable middle class in the South. According to Marler, southern industrialists were more talk than action and there was precious little economic diversification in the Old South and therefore no sizeable middle class. On both counts, Marler certainly has a point but fails to recount the ways in which the southern economy did diversify. Moreover, a focus on capitalists in New Orleans is a curious place to argue for southern economic stultification. It is likely that readers sympathetic to his argument will agree with him, while those who see the South as trending towards capitalism will not be convinced.

One of the book’s goals is to push Atlantic History into the nineteenth century (p. 11). While noble, this goal is not completely fulfilled. Marler acknowledges the international nature of the cotton trade, but the book’s focus is almost exclusively on the merchants of New Orleans or the rural country stores. While it is clear that cotton prices were dependent on Europe, Marler does not have an extended discussion of how the political economy of Louisiana interacted with the Caribbean, South America, or Africa. Put another way, the Atlantic World pops up in a few places (most of them in the book’s epilogue) but Marler does not flesh out how New Orleans interacted with other economies or peoples.

Marler also rebuts some of the arguments of Roger L. Ransom and Richard Sutch in One Kind of Freedom: The Economic Consequences of Emancipation (Cambridge, 1977). Instead of rural and small-town merchants having a near monopoly, Marler convincingly uses data from Ascension and West Feliciana Parishes to show that there was a surprising amount of economic competition for the rural dollar. The chapter on the country stores, while useful to correct Ransom and Sutch’s generalizations, feels disconnected from the rest of the narrative. Marler spends much time rebutting One Kind of Freedom and is less concerned with showing why the country stores of Reconstruction were important to understanding the New Orleans merchant community.

Indeed, The Merchants’ Capital will probably be most appealing to economic historians who miss the verbal jousting of graduate seminars. The work reads, at times, less like a book and more like a dissertation. When coupled with the hefty price tag, it’s unlikely that the book will appeal to a wide circle of readers. That’s a pity because Marler has interesting things to say about New Orleans, the cotton market, and the nature of the nineteenth-century South.

Robert Gudmestad is the author of A Troublesome Commerce: The Transformation of the Interstate Slave Trade (LSU Press, 2004) and Steamboats and the Rise of the Cotton Kingdom (LSU Press, 2011).

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Subject(s):Business History
Urban and Regional History
Geographic Area(s):North America
Time Period(s):19th Century