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• 1 media/consolidated1-cropped.jpg 2016-03-24T09:28:01-07:00 Bank Bonds and Bondspersons 4 Chapter 4 plain 254730 2016-04-05T21:13:49-07:00 Hugues Lavergne, a Louisiana state representative and banker, did not look like an agent of a revolution in finance as he waited for a ferry near the southeast tip of New York City in mid-July 1828. City weather had been “beyond measure oppressive” since before the Fourth of July. The thirty-four-year-old comptroller of the recently chartered Consolidated Association of the Planters of Louisiana bank was wilting in heat bothersome even to a native Louisianan. But Atlantic Ocean breezes beckoned and with them the prospect of investment that would open the bank’s doors and inject credit into the Louisiana sugar industry. Lavergne had a ticket to sail to Liverpool on a ship of the Black Ball Line and from there planned to travel to the great metropolis of London. He would pitch Louisiana bank securities to Baring Brothers and Company, one of the premier financial houses in the world. Tucked in Lavergne’s luggage were thousands of thin leaves of paper on which were printed the lion’s share of a $2.5 million bond issue.
  
  This was a new kind of financial instrument with significant implications for the slave trade. If successful, his bank would permit slaveholders access to bank credit that would help buy thousands of enslaved people, hundreds of cotton and sugar plantations, and improvements such as refineries. It did so by leveraging plantations and bondspersons to raise investment capital. The volume of the interstate slave trade closely followed expansions and contractions of credit. In the late 1820s and early to mid–1830s, credit expansion and the financial integration of Britain and the United States helped rationalize the interstate slave trade that populated the canebrakes and cotton fields of the lower South with bound workers. Beyond merely expanding production, the Consolidated Association and banks like it gave the notoriously capital-intensive sugar industry the means to develop more efficient refining technologies and build a robust supply chain. Lavergne’s errand was a small part of an enormous expansion of credit.
  
  Banks like the Consolidated Association of the Planters of Louisiana, the Union Bank, and the Citizens Bank issued mortgages on enslaved people, welling an interest in slavery in the North, Britain, and Europe. Those immortal promises bound bondspersons to the promise of future repayment.