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The Economic Vestiges of Slavery in the United States

The first permanent group of English settlers in North America settled in

Jamestown, Virginia, in 1607. By 1609, those settlers found themselves in a very grave
situation, enduring the starving time. Historians describe the English settlers as being
unfamiliar with hard agricultural labor. In addition, they found it difficult to deal with the
seasonal changes in North America. That year, in the throes of desperation, English
settlers resorted to eating their horses, dogs, cats, and wild mice.1 Douglas Owsley, a
Smithsonian forensic anthropologist has even found proof that, in the effort to stave off
starvation, the settlers resorted to cannibalismeating other human beings.
Fast-forward a brief 166 years, on the eve of the American Revolutionary War,
and we find that the English settlers were enjoying one of the highest standards of living
in the world. What could have occasioned such an unprecedented rise from desperation
to real wealth in such a short time? To answer that question, we must realize that the
land the settlers arrived on had been kept in pristine condition for thousands of years by
nature and its indigenous inhabitants. This was a land of tremendous resources. The
settlers were for the most part unabashed in their aggression for land. In their quest to
have as much land as possible, they utilized negotiation, trickery, and, when all else
failed, unparalleled levels of violence. Thus, the European American rise in the new
land was in part born out of the decline of various indigenous, Native American nations.
In fact, Native Americans and indebted or criminal Europeans were the first
people whom the English settlers used as their servants (indentured servants). It was
not long, however, before the settlers took note of the tremendous financial success that
their mother country Britain was gaining from enslaving African people in the Caribbean.
There, the plantations were so profitable that an enslaved African paid for himself or
herself after only eighteen months. 2 Although Africans first came into the colonies as
indentured servants, for reasons of cost, lower death rates, their unfamiliarity with the
land and language of the Europeans, and their prized agricultural and vocational skills,
African people ended up making up the bulk of the permanently enslaved persons in
colonial America.

Stromberg, Joseph, Starving Settlers in Jamestown Colony Resorted to Cannibalism,

downloaded from
Wilder, Craig Steven, Ebony and Ivy: Race, Slavery, and the Troubled History of Americas
University (New York: Bloomsbury, 2013), 30.

It can be argued that it was a combination of Native American land and crop
knowledge and African agricultural science and back-breaking labor that first lifted the
English settlers from desperation to a financial plateau where they could produce a
commodity that could be sold for profit on the world market.
Making Cash from Cotton
While colonial America was under the British, the products they brought to
market were primarily tobacco, rice, and indigo. After independence, with the invention
of the cotton gin in 1793, cotton became king. Slavery quickly shifted its geographical
focus from the Northern states to the growing Southern states. By 1850, there were an
estimated 2.5 million people enslaved in the United States.3 On Southern farms and
plantations, enslaved Africans produced more than 60 percent of the cotton used in the

Of the 2.3 million pounds of cotton produced by captive Africans in the United
States, more than half went to Britains cotton factories, of which there were over
2,000. The desire for cotton also spurred the industrial revolution, specifically
textile factories in France, the Netherlands, Switzerland, Germany, Austria,
Russia, Italy, Spain, Belgium, and Boston.4

When a Southern plantation owner wanted to produce cotton, or expand his

operation (obtain more enslaved Africans) he had to obtain loans from the large
banks in New York or London.5 These loans were paid back with considerable
interest, making banking an extremely profitable business. Banks such as Bank
of America, Wachovia, Citibank, JP Morgan Chase, and Barclays Bank
(London) have all profited from human bondage in North America.

Enslaved African persons were legally considered property in the United States,
so an enslaved person could be used as collateral to obtain the loans necessary
for plantation life. When calculating the value of the estates (plantations), the
estimated value of each slave was included. This became a source of tax
revenue for local and state governments. Taxes were also levied on slave

Every portion of the slave economy was insured, making insurance an

enormously profitable business. The ships that left America and various
European ports to procure Africans were all insured. Individual enslaved persons
were insured, as were the crops being produced. The value of each enslaved
person was carefully calculated, in some cases even before they were born.
Furthermore, plantation owners meticulously depreciated the value of their
enslaved persons as they aged, and they readily sought insurance compensation

Dodson, Howard, How Slavery Helped Build a World Economy, downloaded from
Farrow, Anne, Joel Lang, and Jenifer Frank, Complicity: How the North Promoted, Prolonged,
and Profited from Slavery (New York: Ballantine Books, 2005).
Dodson, How Slavery Helped Build a World Economy, 3.

for any enslaved African who died unexpectedly. 7 Insurance companies such as
Lloyds of London, Aetna, and New York Life have firmly cemented
connections with slavery in the United States.

Cotton grown in the South was usually not directly exported. It was first shipped
to New York, making New York the financial and shipping hub of the nation.
Middlemen such as the Lehman Brothers cashed in by helping rural Southern
farmers get the best price for their cotton from the investment and shipping firms
in New York. It is estimated that forty cents of every dollar made by Southern
plantation owners was spent in the Northern states for goods. Northern firms
seeking to get a portion of the overwhelming profits being made in the South
manufactured hats and hoes for plantation owners. They also imported fine china
and cutlery and made fine furniture, candles, soaps, French plate glass, pumps,
fire hoses, pianos, pickles, liquors and account room weighing books specifically
for cotton, grain, sugar and molasses.8 Northern textile mills were even making
the clothes worn by enslaved African people!

New York soon became a shoppers paradise. It was advertised as the place for
Southerners to spend their summers away from the sweltering heat of the South.
Fancy hotels and retailers of fine linen, perfumes, and precious stones all vied for
their blood-soaked dollars made from human bondage.9

Historians from the Gilderman Institute firmly assert, It is inconceivable that

European colonists could have settled and developed North and South America without
slave labor. Other historians add that learning how to control the Atlantic world and its
slave economy gave Europe and America the template for later world dominance.
Referring to the ease of Americas entrance into the industrial age, historians
Beckert (of Harvard) and Rockman (of Brown University) state,
Those who would soon be called capitalist . . . rarely started from scratch
but instead drew on the wealth generated earlier in the robust economy of
slaves, sugar and tobacco. Fathers who made their fortunes outfitting
ships for distant voyages begat sons who built factories, chartered banks,
incorporated canal and railroad enterprises, invested in government
securities and speculated in new financial instruments.10

Johnson, Katie, The Messy Link between Slave Owners and Modern Management,
downloaded from
Farrow, Lang, and Frank, Complicity, 23.
Beckert, Sven, and Seth Rockman, How Slavery Led to Modern Capitalism: Echoes,
downloaded from

Activities for Economic Vestiges of Slavery

Activity One Historical Recall
Once students have completed the reading, they should be able to answer the following
1. What were social conditions like in Jamestown, Virginia, in 1607, where the first
English settlers created the first permanent English settlement?
2. What factors led to the swift change in the economic outlook for the English
3. Write a two- to three-paragraph reflection on what you may have found new or
shocking in the readings.

Activity Two Historical Research

1. Students should view the film Traces of the Trade: A Story from Deep North,
directed by Katrina Brown.
2. Immediately following the above film, students should choose one of the wealthy
families, corporations, or banks/financial institutions to research. The complete
list of these families and businesses is found in appendix. The focus of the
students research should be on tracing how money made during Americas
period of enslavement was invested over time. An example of this research on
the Lehman Brothers can be found in appendix B.
3. Students should present their findings to the class.

Activity Three Math and Statistics

1. Using the recent report issued on the Annie Casey Foundation, Race for
Results, students should be guided to examine how poverty, poor health care,
and inadequate education leads to measurable disparities between African
Americans and members of other racial groups. Although the report is quite
extensive, on page ten of the official report the researchers give an easy-tofollow chart of the twelve indicators of success that they measure. Students
should be led to create their own line graphs, bar graphs, or pie charts from the
statistics that are given in that article. The article can be found at
2. Allow students to offer their own speculations on how disparities in wealth that
were established at the beginning of American history are still relevant today.

Follow That Money!

How Money Made in the US Economy

of Enslavement Led to Intergenerational
The Lehman Brothers as a Case in Point

Mayer Lehman

Emanuel Lehman

In 1844 Henry Lehman emigrated from Germany to Montgomery, Alabama,

where slavery was well under way and cotton was king. There he started a small
shop that sold groceries, dry goods, and farm tools to plantation owners.

The shopkeeping efforts were so successful that in 1850 Lehmans two other
brothers, Emanuel and Mayer, joined the business. From this union came the
name Lehman Brothers.

Lehman Brothers quickly saw that real money was not in shopkeeping but in
buying captive-produced cotton from small rural farmers and selling that cotton at
a profit to larger shipping firms in Northern states such as New York. Thus,
Lehman Brothers evolved from retailers to a commodities broker (buying and
selling cotton).

Briefly combining their efforts with John Wesley Durr, Lehman Brothers was able
to build a cotton warehouse so that it had a place to store cotton while it
negotiated for the best price or waited for price of cotton to rise. By 1858, it was
able to open a New York office, which fully established it as a player in major US
financial circles.

Even after the Civil War, cotton was still king in the United States. In fact, well
into the 1900s cotton was the leading export from the United States. The growth
of the cotton business enabled = Lehman Brothers to be a leader in the creation
of the New York Cotton Exchange.

For, the next couple of decades, Lehman Brothers had extreme vertical financial
growth. It became the fiscal agents for the state of Alabama. It was able to tap
into the tremendous wealth being generated by the growth of the railroad industry
by giving financial advice and underwriting loans for railroad construction.
Lehman Brothers also branched into selling stocks, bonds and securities for up
and coming companies.

In 1906, Lehman Brothers began business with Henry Goldman (of Goldman and
Sachs). Together they provided funding and underwrote securities for the retail
giants of that era, including Sears, Roebuck & Co.; F. W. Woolworth Co.; and R.
H. Macy & Co.

During the 1920s Lehman Brothers entered the airline and motion picture
industries. Lehman Brothers would help fund Paramount Pictures, Twentieth
Century Fox, and Radio Corporation of America.

Lehman Brothers also funded the oil industry, backing giants such as Halliburton
and the construction of the Trans-Canada pipeline.

From the 1950s to the 1990s, Lehman Brothers invested in the digital markets
and developed a global market that helped large US companies negotiate crossborder transactions (Chrysler/American Motors, General Foods/Phillip Morris).

It was Lehman Brothers engagement with subprime mortgage lending that

caused the company to finally close down on September 15, 2008. At the point of
bankruptcy, Lehman Brothers listed $639 billion dollars in assets. A portion of its
assets were sold to Barclays Bank, a bank that also originated in the era when
Europeans freely and legally trafficked and forced African people into profitless

History of the Lehman Brothers downloaded from
Business consultation for the lesson provided by Bernard Afrifa (business analyst
consultant) Certified Competency in Business Analysis (International Institute of
Business Analysis), B.A. Economics, Illinois Wesleyan University
MBA, Lewis University

Additional Resources

For Teachers
Christopher Columbus and the Afrikan Holocaust: Slavery and the Rise of European Capitalism
by John Henrik Clarke
The Half Has Never Been Told: Slavery and the Making of American Capitalism by Edward E.
Racism: From Slavery to Advanced Capitalism by Carter A. Wilson
River of Dark Dreams: Slavery and Empire in the Cotton Kingdom by Walter Johnson
Slavery in New York edited by Ira Berlin and Leslie M. Harris

Wall Street Was a Slave Market Before It Was a Financial Center by Alan Singer. Download
9 White Celebs, World Leaders Whose Families Owned Black Slaves by Atlanta Black Star
staff. Download from

Slavery and the Making of America

The Economic Vestiges of Slavery in the United States of

Banks and Investment Firms
JP Morgan Chase (1799): Between 1831 and 1865, two of its predecessor banks
(Citizens Bank and Canal Bank in Louisiana) accepted approximately 13,000
slaves as loan collateral and seized approximately 1,250 slaves when plantation
owners defaulted on their loans.
Bank of America (founded in 1904 as Bank of Italy): Two of its predecessor
banks (Boatman Savings Institution and Southern Bank of St. Louis) had ties to
slavery, and another predecessor (Bank of Metropolis) accepted slaves as
collateral on loans.
Barclays Bank (1690; founders Thomas Gould and John Freame)
Wachovia Bank (1879; acquired by Wells Fargo in 2008): Two institutions that
became part of Wachovia (Georgia Railroad and Banking Company and the
Bank of Charleston) owned slaves or accepted them as collateral on
mortgaged property or loans.
Royal Bank of Scotland (1727 [first charter])
Lehman Brothers (1850)
Boston and Lowell (1835)
Union Pacific Corp (1862)
Norfolk Southern (Mobile & Girard and the Central of Georgia) became part of
Southern. Mobile & Girard paid slave owners $180 to
rent their slaves to the railroad for
a year. The Central of Georgia
owned several slaves.
Hartford Courant (1764)
USA Today: Its parent company, E.W. Scripps and Gannett, was linked to the
slave trade.
Virginia Gazette (1736 and 1780)
Georgia Gazette (est. by James Johnston, a Scot, in 1733)
Maryland Journal (1773)
Names of slave ships:
Creole, Jesus of Lubeck, La Amistad, Desire, Hope, Wanderer
Mary (James Brown), Sally (Nicholas Brown)

Insurance Companies
Aetna Insurance Co. (1850)
Manhattan Life Insurance (1850)
Lloyds of London (1688)
New York Life: A predecessor, Nautilus Insurance Company, sold slaveholder
policies during the mid-1800s.
AIG: purchased American General Financial, which owns US Life Insurance
Company. AIG
found documentation that US Life insured the lives of
United States Life Insurance Company of New York
Educational Institutions
Harvard University (1636)
Yale University (1701)
Founders: Timothy Woodbridge, Samuel Andrew, James Noyes, Joseph Webb, Israel
Chauncy, Abraham Pierson, Samuel Mather, James Pierpont, Thomas
Buckingham, Noadiah Russell

Princeton University (College of New Jersey, 1746)

Founders: John Witherspoon, Jonathan Dickinson, William Tennent, Aaron Burr, Sr.
Brown University (Rhode Island College, 1764)
Rutgers University (1766)
Dartmouth College (1769)
University of North Carolina (1789)
Williams College (1793)
Columbia (1754)
Tiffanys (1837): Charles Lewis Tiffany originally financed with profits from a
Connecticut cotton mill. The mill operated from cotton picked by slaves
DeBeers (initially financed by the Rothschilds in 1887)
Royal African Company (British, 1660)
Dutch West India Company (1621)
Brooks Brothers: The suit retailer started out in the 1800s selling clothes for
slaves to slave traders.
Leading Slave Merchants and Prominent Families
Cabots of Massachusetts
Browns of Rhode Island (Brown University)
Champlins of Rhode Island
Whipples of New Hampshire
Eastons of Connecticut
Willings of Philadelphia
Morrises of Philadelphia
Stantons of Narragansett, Rhode Island
Other families: Fanueils, Royalls, Wantons
Note: Ezra Stiles imported African captives while president of Yale University
Slave Ports in Northern States

Rhode Island New Port, Bristol, Providence

Ebony and Ivy: Race, Slavery, and the Troubled History of Americas University (2013)
by Craig Steven Wilder
Complicity: How the North Promoted, Prolonged, and Profited from Slavery (2005) by
Anne Farrow, Joel Lang, and Jenifer Frank
How Slavery Led to Modern Capitalism: Echoes by Sven Beckert and Seth Rockman,
downloaded from slavery-led-to-modern-captialism-echoes.html
The Messy Link between Slave Owners and Modern Management by Katie Johnson,
downloaded from

Lesson Plan
The Economic Vestiges of Enslavement
Grade Level(s)


Unit and Time

Common Core
State Standards

Three 60-minute periods

Lesson Goals


CCSS. ELA-Literacy. CCRA. R.1: Read closely to determine what the text
says explicitly and to make logical inferences from it; cite specific textual
evidence when writing or speaking to support conclusions drawn from the
CCSS. ELA-Literacy. CCRA. R.7: Integrate and evaluate content
presented in diverse media and formats, including visually and
quantitatively, as well as in words.
CCSS. ELA-Literacy. CCRA. W.1: Write arguments to support claims in an
analysis of substantive topics or texts using valid reasoning and relevant
and sufficient evidence.
CCSS. Math Practice. MP.1 Make sense of problems and persevere in
solving them.

After completing this lesson, students should be able to demonstrate

understanding of economic vestiges of slavery in the United States by doing the
Demonstrate knowledge of the complex social, economic, political, and
environmental factors that create and perpetuate precariousness.
Analyze the ways that processes of inequality and differences in access
and power are shaped by complex interactions of local and international
Recognize how meanings of justice and reconciliation are mediated by
identity, historical experience, and future imaginaries.
Identify some of the economic and social advantages of being involved
with the slave trade.
Research the American corporations and institutions that directly or
indirectly trace their wealth to the slave trade era.
Research the current status of the reparations movement.
For Teachers:
smart board/projector
handouts (attached to lesson plan)
Interactive Timeline of the History of Reparations (!date=1838-10-20_17:54:24!)
videos (Traces of the Trade)
For Students:

Key Terms and



Ivy League schools: a group of long-established colleges in the eastern United
States having high academic and social prestige.
Emissary (-ies): a person sent on a special mission, usually as a diplomatic
Endow: to give or bequeath an income or property (to a person or institution).
Indigenous: originating or occurring naturally in a particular place; native.
Commodity: something that is bought and sold; something or someone that is
useful or valued.
Indentured servant: a person who came to America and was placed under
contract to work for another person over a period of time, usually seven years,
especially during the seventeenth to nineteenth centuries. They generally
included victims of religious persecution, people kidnapped just for the purpose of
working, and/or convicts and paupers.
Textile: any cloth or goods produced by weaving, knitting, or felting.
Capitalism: an economic system in which trade, industry, and the means of
production are controlled by private owners with the goal of making profits in a
market economy.
Reparations: repair; amends for a wrong that was done; atonement.
Internal reparations: all actions taken by victims of the system of slavery and
their descendants to in any way grant themselves a greater sense of humanity
than that which was/is offered to them by an unjust system.
External reparations: redress that people receive from governments or
Repatriation: the process of returning a person to his or her place of origin or
Geography/History: Have the students research different ethnic groups
and what they receive as reparations and compare/contrast with African
Writing: Students can write a letter to their local congressman/senator
asking for the passage of the bill H.R. 40 (Commission to Study
Reparation Proposals for African-Americans Act).
Math: Students can use their research to calculate how much the
descendants of a slave should be compensated monetarily. They can also
research companies that can trace their wealth to the slave era and try to
estimate how much money they made from the slave trade.
1. Opening: Teacher can use a PowerPoint presentation showing the
companies that have benefited from slavery and Ivy League colleges and
ask the students, What do all of these companies and institutions have in
common? Get some responses from the students; then let them know that
ALL of these companies/institutions have directly benefited from slavery.
2. Introduction to New Material: Have the students discuss what happens to
them when they do something wrong or when someone does something

wrong to them. They can talk about how they apologize and whether they
have to compensate for the wrong that they committed. Let them discuss
whether that is the right way to handle an issue. Teacher can then segue
into the concept of reparations.
Americans made huge amounts of money from the transatlantic slave
Many of the financial advantages gained from slavery are still evident in
Americas social classes and economy today.
3. Discussion:
Have the students debate whether the descendants of slaves
should receive reparations. Also, they should discuss what type of
reparations would be appropriate and how much should be
disbursed (ex. free education, land, money, or a combination of
those items).
Students can research and discuss the effects of slavery on African
Americans today.
4. Critical Reflection Activity: Students can conduct research on their own.
Have them interview three to five people to see if they are in favor of
reparations. The students could come back to class to discuss their
findings, or use their research to write a paper.
5. Closing: Have the students do an exit slip or the 3-2-1 activity. (After the
lesson, have each student record three things he or she learned from the
lesson. Next, have the students record two things that they found
interesting and that theyd like to learn more about. Then have students
record one question they still have about the material.)

Observation, critical reflection activity, class discussion/participation, writing,

geography, and math activities


Observation, critical reflection activity, class discussion/participation, writing,

geography, and math activities