Published by EH.Net (September 2023).

Sharon Ann Murphy. Banking on Slavery: Financing Southern Expansion in the Antebellum United States. Chicago: University of Chicago Press, 2023. 419 pp. $105 (hardback), ISBN 978-0226824598.

Reviewed for EH.Net by Jenny Bourne, Carleton College.


In 2005, JP Morgan Chase made history by apologizing for its involvement in Southern slavery and setting up a scholarship program for African American students from Louisiana. Sharon Ann Murphy, among others, argues that the bank’s gesture was “incredibly small . . . [but] important” (p. 320) in recognizing the role Southern commercial banks played in promoting and preserving slavery. Her book offers substantial detail about individual banking transactions involving slaves and hypothesizes that the willingness of banks to adapt to the changing needs of slave society was key in developing the frontier South in the 1820s and 1830s. Murphy also suggests that the financial panics of 1837 and 1839 put the brakes on Southern commercial banks’ involvement in the peculiar institution.

Like Caesar’s Gaul, Murphy’s analysis is divided into three parts. Part I describes banking in the early Republic, which focused on small, unsecured, short-term loans that were often renewed. In response to the needs of slaveowners, some banks experimented with longer-term loans collateralized by slave property. Part II examines the growth of these arrangements as Southerners moved west and established large plantations on the frontier. Part III explores the conundrum faced by Southern banks in the wake of crippling financial panics: should they foreclose on debtors and face the risk of either owning slaves themselves or attempting to sell in a down market, or should they offer leniency and encounter possible solvency problems? Murphy argues that banks chose the latter, which resulted in widespread bank failure and a withdrawal of commercial banks from the financing of slavery.

The strengths of this book are its connections to the broader literature regarding institutions and its finely drawn descriptions of particular scenarios. For instance, chapter 1 looks at the emergence of commercial banking and its initial focus on short-term lending to facilitate trade. Chapters 1 and 2 explore the legal question of whether slaves constituted real estate or personal property, and chapter 3 refers to issues surrounding women’s rights to own and manage property. Descriptions of the disposal of large estates and the property of delinquent debtors, down to the names and ages of slaves as well as the number of times they were put up for sale, give an agonizingly human face to slave property (pp. 31-39). Tales of multiple families absconding to Texas to escape paying debt in the wake of financial panic makes clear how precarious the living situation was for slaves owned by these families (pp. 228-242). The case study of P.M. Lapice offers a fascinating look at the 60-year career of an entrepreneur and plantation owner who operated in Mississippi and Louisiana (pp. 296-304).

Yet what is strength is also sometimes weakness. At times, the level of detail causes the reader to lose the narrative thread. As just one example, Murphy describes various financial transactions of the Girault family but does not explain why these fit into her argument (pp. 58-61). And is this the same Girault family she cites later (pp. 121-123)? Better connections to hypotheses and across anecdotes might improve flow.

More critically, the author’s lack of a theoretical model, exclusion of other financial institutions from the analysis, failure to contextualize, and incomplete use of quantitative evidence call into question how robust her claims might be. Murphy explicitly focuses on Southern commercial banks and omits banks located elsewhere as well as other sorts of financial intermediaries (pp. 12-13). So how did long-term finance occur in the South before commercial banks got in the picture? Is it possible that Southern commercial banks simply saw an ex ante profit opportunity arise as the frontier opened up and decided to get into the long-term lending game? And then realized ex post that they did not have a comparative advantage in taking on risk in a down market? As another example, she claims that the capital intensity of the sugar industry “magnified the demand for long-term loans” (p. 110), but didn’t the North also have capital-intensive industries? How did Northern banks cope? (As a minor note, capital-intensive production is not equivalent to economies of scale (p. 142).) She makes an elliptical reference to antebellum language that “could have been made in 2008… with only the removal of the word ‘negroes’” (p. 162) – mightn’t this imply that banking with slavery isn’t so different from banking without? Table 9.3 and the surrounding text suggest that a particular commercial bank lent to medium and large slaveholders but not to small and very large ones. This is interesting, but I would have liked the author to speculate more as to why. Perhaps small slaveholders simply didn’t have sufficient collateral and very large ones had other borrowing options?

I understand wanting to keep the focus narrow, but a few umbrella statistics would have helped me understand if the author’s numbers are large or small and whether they are representative or not. New Orleans bank capital in 1838 was $55 million – how big is this relative to national bank capital (p. 5)? Murphy lists the number of Southern bank charters granted and banks closed at various points in time but not the size of bank assets (Tables 1.1, 3.1, 8.1, 9.1, and 9.4). Were large banks receiving charters and small banks exiting the industry, or did another pattern dominate? The author states that the number of banks for the five states of the lower frontier grew by more than 400 percent from 1820 to 1838 (p. 82). Table 3.1 suggests that this was large relative to other regions, but what are the related growth rates in bank assets overall and bank assets on a per capita basis? Table 8.2 offers an example of a property sale by the Bank of Orleans occurring in the early 1840s. Are the numbers typical for assessed values and sale prices for the reported assets at this time?

A couple of picky points: I think the author means well by the epilogue and her comments on how to remember the financialization of slavery, but this section seems tacked on. What is more, I found the constant use of the phrase “enslaved lives” instead of “slaves” a touch contrived. I admire the desire to remind the reader that we are talking about human beings. But perhaps her statement that “it is the voices and experiences of the enslaved themselves that are most absent from this study” (p. 14) is sufficient.

In short, this book is well worth reading for scholars of banking history, slavery, and antebellum institutions generally. The author has clearly done her homework in various archives, and the details associated with individual cases are often fascinating. I think her work would, however, benefit from greater attention to an underlying theoretical model of bank behavior, a more rigorous use of data and statistics, and stronger connection to context.


Jenny Bourne is Raymond Plank Professor of Economics at Carleton College. Jenny has authored books on the Grange movement and the economics of Southern slave law and numerous journal articles on American economic history, law and economics, and tax policy.

Copyright (c) 2023 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (September 2023). All EH.Net reviews are archived at