@Book{ kilbourne1995,
	author = {Kilbourne, Jr., Richard Holcombe},
	title = {Debt, Investment, Slaves: Credit Relations in East Feliciana Parish, Louisiana 1825--1885},
	address = {Tuscaloosa},
	publisher = {University of Alabama Press},
	year = 1995,

This is a detailed study of how slave property was used to collateralize loans in one Louisiana county before the Civil War. Abolition and emancipation led to an “implosion” of credit in the region. As the introduction puts it, this is a study of “how slavery shaped the development of the South’s financial system, along with planters’ perceptions regarding property rights in human beings as financial assets” (1-2). Slavery created “unique credit markets” (2) that largely operated outside of formal institutions, especially because slave property was more mobile and liquid than land, which was not a major part of most planters’ investment portfolios.

The consolidation of the credit system in the late antebellum period led to “a regionwide network of private investment banks” with small clienteles but each with “upwards of one million dollars in assets invested in financing plantation agriculture” (p. 3). Slaves were used to collateralize accommodation endorsers (third-party co-signers) whose credit-worthiness then became the basis for loans from city lenders.

Kilbourne argues that the South was “very much a society of rentiers,” whose income came primarily from capital (i.e., slaves) rather than commodities. That made them risk averse. “the key to understanding the rentier mentality is to recognize that profits from growing staples were highly contingent; the successful planter at some point had to choose whether winning gambles should be reinvested in expanding production or invested in relatively riskless, heavily collateralized income streams generated by third parties” (p. 7).

After the war, however, rentiers and factorage firms disappeared, as credit became more localized and risk was transferred to tenants and sharecroppers. Debt peonage was the logical outcome of the inability of landlords any longer to purchase supplies and furnish laborers wholesale on credit. Now furnishing merchants became essentially unsecured creditors, who made loans based on collateral that did not really yet exist until the making of the crop. “Crop privileges [or liens] and exorbitant interest rates were only symptomatic of the loss of wealth in the region and a radically changed configuration for producing staples for distant markets” (p. 10).

Crop liens were also symptomatic of the collapse of long-term debt relationships between commission agents and planters before the Civil War. These annualized “open accounts” with merchants were seldom collateralized, since by law the furnisher had a lien already on the previous year’s crop and the crop in the ground. In the event such a crop might fail, a furnisher might well have asked for additional mortgages on slaves, land, or other property, but generally such debts were not collateralized directly—until after the war.