- Racial disparity: Institutional Racism from Black Codes to the Present
- Segregation Policies, Redlining and the Present Racial Housing Disparity
- Slave-based Economy: Slavery Was the Source of White Real Estate and Power
- The Racial Wealth Gap: Two Reports on Income and Asset Disparity
- Black Incarceration: War on Crime, RDL, Racial Profiling, Stop and Frisk
To discuss race and real estate, we must go back to the beginning of white land use in America, when the South was a slave-based economy.
(05-16-2018, updated 07-08-2018) Slavery gave the white South land ownership, labor, currency, collateral and political clout. It was a slave economy. The wealth and power of the large plantation owners — the richest and largest property owners in the country –depended entirely on their number of slaves.
#1 American Asset: Real Estate
One of the main ways folks build assets in America is through home ownership. In Part 2 I already laid out the many ways government on every level, together with the housing industry, kept African Americans segregated from whites. They kept them out of middle-class neighborhoods and they refused to give them mortgages. A century of segregated neighborhoods, racially restrictive covenants and redlining have left African Americans far behind where home ownership is concerned. If we’re going to talk about race and real estate, though, to really understand the scope of the disparity, we need to go back to the very beginning of white land use in America. And the enslavement of black people.
So, white people in America enslaved black people for life, and their children were born into slavery for life, etc. from the 1640s to 1865. These people built half of America, they cleared the land, farmed it, built the houses, made the tools with which to do it all, without pay, more often than not on minimal rations, in rags for clothes; overseers whipped and beat an them and… Yes, yes, we know all that, you say.
I hope you do. But in this post I want to focus on real estate and other ways white Southerners built assets using slaves.
(For this post I rely heavily on Ned and Constance Sublette’s eye-opeing book: The American Slave Coast: A History of the Slave-Breeding Industry. In fact, it’s more or less an excerpt.)
The North: Slaves, But Not a Slave Economy
New England was established by Puritans — Protestants who fled England during the Catholic reign. They had a strong work ethic and did things themselves. Potential colonists who wanted to join them were required to have letters of recommendation from people in England. They had a diversified economy that included agriculture of every kind as well as industry, and they quickly built cities that became the economic centers. New England always had a lot less slaves than the South for these reasons. Also, crowded cities didn’t allow for much room to house a lot of extra workers. The Northern states had slaves, but they never had a slave-based economy.
Plantations: The First Southern Real Estate
The South, on the other hand, starting with Virginia and Maryland, was founded by Cavaliers — the royalist gentry from England during the Protestant reign. They liked to live high and let their servants do all the work. Jamestown (founded in 1607) was an abject failure at first because it was the destination for fur traders and gold-crazy men who had fallen for get-rich-quick sales back in England, who weren’t the least bit interested in growing their own food, and it was run by men who knew nothing about building or agriculture or anything a startup colony needed.
Eventually the Virginia colonists settled and were successful, growing tobacco. Even though the colonies were the crown’s property, the governor allowed the purchase of land to keep the planters motivated to produce, and to produce more. (Because the English had immediately become addicted to this tobacco.) And so Virginia got its real estate market.
The Headright System
Land, however, was worthless without workers, since the Cavaliers weren’t going to lift a finger themselves. The governor quickly recognized that the principal wealth was servants. He introduced the headright system to Jamestown in 1617: planters would get fifty acres for every indentured servant for whom they’d pay the crossing. The servants were the poorest of the poor from the English cities, malnourished and not able to do the hard labor for long — if they even survived the crossing — but it was a way for planters to quickly amass lots of land. This is how the division between the rich and poor whites developed in the South. In addition to the indentured servants, The few blacks in the colony since 1619 were indentured servants as well, and free after their contract was up, but starting in 1640, Virginia planters started enslaving local blacks, as well as buying slaves from slave traders who took them from West Africa. These people also counted for the headright, until 1699, when it was limited to transported English citizens. The governor was worried, both that whites were becoming a minority and that the fast expansion westward was creating tension with the Native American peoples.
Two Models of Slavery: Immovable Property and Chattel
There were two models within the slave economy: the Latin model treated slaves as immovable property, like real estate, belonging to the plantation. (That’s why Louisiana slaves were much better able to keep families together. Louisiana was French and then partly Spanish before it became American.) The Anglo-Saxon model, on the other hand, saw slaves as chattel, movable assets that could be sold separately. In 1777 Virginia put a stop to primogeniture. From then on land and other assets were divided up between siblings after a parent’s death, instead of remaining with the eldest son. That meant more slave families were broken up. Soon creditors began lending money to planters who put up their slaves as collateral. That’s how Virginia developed a slave-based economy, where slaves were currency.
Carolina: A Slave-Based Economy
In 1663 Carolina became the third Southern colony, where Cavaliers negotiated with King Charles II for even more land per servant imported (150 acres), including slaves. Half of those Cavaliers were members of the Royal African Company, which was in the business of acquiring slaves in Africa and shipping them to the colonies. So Carolina was set up with a slave economy from the start. All that was needed to acquire land was slaves. Getting land and becoming a slave-owning planter was the main goal for most whites in the Carolinas, even up to the 1860s. It was how the rich planters kept poor Southern whites from revolting too much; they told them that at least they were better than slaves — hey, who knows, maybe they would own slaves themselves someday and be planters, too.
Slaves Were Currency
The colonies didn’t have any official common currency. Folks used Spanish gold coins and Mexican silver pesos, but there was no steady, dependable American money until after the Civil War. By 1850, after the California Gold Rush, the Northern states had their own paper currency based on the gold standard, but the South wanted nothing to do with it, because all its wealth was in slaves. They felt it was best to stick with slaves as currency.
Slaves Were Collateral
So the South had no manufacturing, no diversification. Their technology was purposely backward, because worn-out slaves were less likely to revolt — having them do everything by hand instead of with modern machinery was just fine. All the tobacco, cotton, sugarcane and rice plantation owners made slaves to do all the work. The land was useless without slaves. For the planters, slaves were currency with which to buy land, slaves worked the land and produced the crops, and slaves were collateral with which the planters could invest in more slaves and more land.
Slaves Meant Political Clout
White Southerners could also buy political power with slaves, thanks to the three-fifths clause. Once America won independence, it became clear that the North and South had widely different interests. Both wanted to expand the territories, but the South primarily so they could expand their slave market, the North because it wanted parts of Canada. The only thing they had in common was that they wanted the British out and the ability to protect their property from the British military. The Constitutional Convention was a heated gathering, to say the least, and the U.S. Constitution was a compromise between the states and a future federal government, with the South really not compromising all that much.
The South would only provide soldiers to fight the British on the condition that they got to keep their slaves. Virginia and South Carolina, the wealthiest states, also wanted representation based on wealth. One of the compromises was that there would be two senators from each state, which made the free (and smaller) states happy, while the number of congressmen was based on the population of each state, with a slave counting as three-fifths of a man. So, the more slaves a white Southerner owned, the more say he had in government. This made the leaders of the slave states happy. The South’s only compromise was that their slaves didn’t count 100% but 60%. Slavery and political power were linked from the start.
The Sublettes’ point with this is that the large plantation owners, who were the richest people in the country and the largest property owners, depended for their wealth and power — the power to expand their territory and their slave market — entirely on the number of slaves they owned.
The Slave-Breeding States v. the Slave-Buying States
By the beginning of the 19th century the African slave trade had ended. (Big power struggle between the slave-breeding state of Virginia and the slave-importing state of Carolina — long story, but Virginia won.) In the Deep South, on the sugarcane, cotton and rice plantations, life was so hard that many slaves were worked to death. The crops were seasonal, and since there was little else going on — no economic diversification to speak of — it was cheaper for the planters to have as few slaves as possible and literally work them to death during the season, and buy new ones the next year than to have more slaves so that they wouldn’t have to be worked to death. Because those surviving slaves would then have to be housed, clothed and fed during the off-season. If my wording sounds incredibly crude, that’s because the practice was.
In a way the plantations of the Deep South were America’s version of Germany’s concentration camps, only much earlier, on a much larger scale, over a much longer period of time, and privately run. Unlike with the Nazi concentration camps, the goal on the Southern plantations wasn’t genocide, of course; the planters would have told you it was simply a matter of economics.
Virginia and Maryland were in the tobacco business, but because the climate was milder and tobacco was a less brutal crop to grow than sugarcane and cotton, slaves lived longer and had children. Thomas Jefferson referred to the children of his slaves as ‘natural increase‘ — interest on his investment. So Virginia, and to a lesser extent Maryland, had become slave-breeding states, providing the slaves for the Deep South. (What that entailed for female slaves and families was a whole different nightmare.)
The economic bust of 1839-1840 illustrates to what degree the South had become a slave economy. The wheat harvest in England failed and Britain had to spend its import budget on food instead of cotton. Suddenly the price of cotton dropped, having no overseas buyers, and therefore there was no reason to plant it, so suddenly slaves were not worth as much as they usually were. This was the first and only time that the value of slaves dropped.
In the 1840s the expansion of American territory and the opening of land for cultivation meant that there was always more need for slaves to work the land than there were on the market, thus keeping their price up. The land produced cotton, but only if slaves worked it, so slaves were actually more valuable than the cotton they produced on the land they worked.
The Fight Over the Right to Own Slaves
Like any currency, the value of slaves had to be kept strong. For Southern landowners, slaves were collateral for loans and slaves were currency to buy land with, so land had to be available to be bought. This is one reason the existing slave states fought hard for every new state to be a slave state as well — by the 1850s the existing slave states were reaching their saturation point, and if they didn’t expand, the system would collapse. Before the Civil War, the South was looking to take Cuba next, and then move into Central and South America. The other reason to maintain the slave-based economy was so the Southern states would keep their collective majority in Congress — European immigrants were quickly increasing the population in the North.
By 1860 heated debate was going on among the Southern states about secession. One of the arguments for secession was that freed slaves would rape and murder all the white women, but the most important argument was monetary. The Deep South felt it had to secede because it had a completely slave-based economy, and the American government would abolish slave-ownership sooner or later. Stephen F. Hale, Alabama’s secession commissioner, stated it clearly:
African slavery has become not only one of the fixed domestic institutions of the Southern states, but forms an important element of their political power, and constitutes the most valuable species of their property, worth, according to recent estimates, not less than $4,000,000,000; forming, in fact, the basis on which rests the prosperity and wealth of most of these states.
To make a centuries-long story short, by the end of the Civil War in 1865, most of the land in the South was owned by a relatively few rich planters and others who had acquired their real estate and any other wealth using their slaves not only as labor, but, even more importantly, as currency, as collateral for loans and mortgages, and, in the case of the slave-breeding states, as a good investment that created its own interest — Jefferson’s ‘natural increase’.
President Abraham Lincoln had plans to break up the plantations and give forty acres and some livestock to all the freed slaves after the Civil War, but he was assassinated before he could realize those promises, so we’ll never know if he actually would have. What we do know is that the plantation owners got to keep every bit of their vast properties and that the Black Code and Jim Crow laws and practices prevented many if not most freed slaves and African Americans in general from owning land in the Southern states, often until the Civil Rights Movement of the 1960s — a full century later.
This was an intro to the next post, Part 4 in the series How Whites Hold Blacks Back, which will deal with wealth disparity between Whites and Blacks in America.
(This post was first published on the blog Resident Alien: Being Dutch in America, under the title: “But That Was Then, This Is Now : Part 3 A Little Property History”, 05-16-2018)
- Headright. Wikiwand. – https://www.wikiwand.com/en/Headright
- How Colonists Acquired Title to Land in Virginia. VirginiaPlaces.org. – http://www.virginiaplaces.org/settleland/headright.html
- Sublette, Ned and Constance. The American Slave Coast: A History of the Slave-Breeding Industry. Chicago, Chicago Book Press, 2015.