She applied the “Page 99 Test” to her new book, Banking on Slavery: Financing Southern Expansion in the Antebellum United States, and reported the following:
From page 99:Follow Sharon Ann Murphy on Twitter.Even in substantiated cases of fraud, if the wife could portray herself as an unwilling victim of the husband’s misdeeds, court rulings became much more unpredictable. A bank often had to prove not only that the husband had acted fraudulently, but that the wife had knowingly participated in the fraud and was not an innocent victim. Or, it had to prove that the (usually now-deceased) husband had not acted in bad faith, and that the wife’s assertion of a prior claim on the enslaved individuals was instead truly fraudulent. The courts’ moral concern for the impact of these loan contracts on financial dependents ignored altogether both the contractual rights of the banks and the ultimate fate of the human collateral at the center of these disputes.The Page 99 Test does a pretty good job of highlighting one of the critical parts of my study. The expanding banking infrastructure, with its emphasis on large, long term loans, backed by land and enslaved property, was critical to the development of the frontier South during the 1820s and 1830s, and marked the pinnacle of the financialization of slavery in the United States. Southerners had found a way to monetize their human property. Enslaved labor had always been an input in production, generating profitable crops for a global market. With the closing of the international slave trade, enslaved people became a store of value for their owners—particularly given their positive rate of natural increase in North America. Slaveholders could not only buy and sell people as needed like any other asset, but they could literally grow their wealth by breeding enslaved children. Yet this substantial investment in land and human property was not very liquid; it tied up capital and limited further investment in the region’s economy. Frontier banks, however, solved this problem by allowing slaveholders to leverage their stored wealth in enslaved people. Slaveholders could now borrow against the market value of enslaved bodies in anticipation of repaying the debt either from future profits or the appreciation in value of the enslaved life itself. Like a home equity loan, they could tap into the value of their human property while still enjoying the full advantage of their profitable labor, natural increase, and appreciating market value. Even more, enslaved people became abstract, fungible assets as part of bond instruments that could be bought and sold on the world’s most modern financial exchanges. But banks also discovered the downsides of accepting enslaved lives as collateral. When it was necessary to foreclose on debtors (especially after the Panic of 1837), these lawsuits were often complicated by the claims of multiple creditors, and the confusing counterclaims of widows like Ann Cross, but also newer difficulties such as the release of a debtor’s obligations through federal bankruptcy proceedings, and the movement of debtors with enslaved people to other states or to the Republic of Texas.
In 1808, Ann Cross had received in trust four enslaved people as a gift from her mother for her personal use during her lifetime, a life estate that would descend to Cross’s children upon her death…. The trust deed legalizing this transaction was recorded eighteen months later in Louisa County, Virginia, where Cross resided with her husband Oliver…. The mother-in- law allegedly purchased three more bondspeople from her son-in- law Oliver in the early 1830s, and then willed these enslaved individuals to her daughter upon her death in 1834, with the same stipulations. Ann Cross added these three individuals to the same trust deed. Yet there was no concrete evidence that a valid sale between mother and son-in-law had ever taken place; the Crosses could produce no bill of sale and their neighbors never saw any change of ownership of the enslaved people in question.
In 1835, the Crosses relocated first to Tennessee and then (in 1836) to Mississippi with these seven enslaved individuals. At that point, Oliver solicited a loan from the newly chartered Northern Bank of Mississippi (1837), offering Ann’s human property as collateral but representing them as his own. Ann was present for the appraisal of the property, and thus was later unable to deny her knowledge of the loan. Yet when Oliver died in 1838, Ann still protested the claims of her husband’s creditors, contending that the enslaved individuals were her own property and thus out of their reach. Despite her clear knowledge of the loan, her lawyers asserted that she had been under no obligation to reveal to the bank the true status of the property as protected by a trust deed.
The Page 99 Test: Other People's Money.
--Marshal Zeringue
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