Sugar’s Bitter History

Edward King, The Great SouthEdward King, The Great South (1875)(From Internet Achive)

Sugar is truly bittersweet. We know about the sweet: cane sugar and cane syrup, confectioner’s powder, and molasses have flavored our food for hundreds of years. But the bitter is less known: sugar is the legacy of tens of thousands of slave ships carrying millions of captive Africans to the New World where the survivors and their descendants grew, cut, crushed, and processed a deadly harvest. Sugar, and the slave system that produced it, worked its way deep into world history. America was no exception. In the United States, the expensive but highly profitable sugar industry shaped systems of labor and capital from the early days of slavery, though Reconstruction, and into the present.

Sugar production migrated from the West Indies to southern Louisiana during the Haitian Revolution. Sugar was already the great engine of the trans-Atlantic slave trade when British and French enslavers forced African captives to grow, harvest, and process sugar. The British took over Barbados followed by St. Kitts, Nevis, Antigua, St. Vincent, Granada, and Jamaica. France colonized Guadalupe and Martinique, and by the 1740s Saint Domingue–present-day Haiti–was the jewel in its colonial crown.

Sugar’s impact on the British colonies in North America was enormous and widespread. Rhode Island thrived on its rum distilleries. Connecticut launched slave ships. And New England fishermen, mid-Atlantic horse breeders, and Carolina rice planters furnished provisions to West Indian sugar masters.

Even after the Revolution, Americans processed West Indian and Louisiana sugar. Patriot Isaac Roosevelt, great-great-grandfather of president Franklin Delano Roosevelt, established the first large-scale sugar refinery in New York City in 1786. Philadelphia and New York City each had eleven refineries in 1830, and Baltimore’s directory listed eleven sugar refiners in 1833.

But sugar would become directly woven into the American economy after enslaved sugar workers in Haiti revolted. When the French lost Haiti in 1803, Napoleon Bonaparte set out to conquer Europe, and the Thomas Jefferson administration bought French Louisiana. And refugees from the French and Haitian revolutions experimented in Louisiana with cane cultivation.

Sugar did not grow as well in Louisiana as in the West Indies, but new varieties thrived there. And growers bought gangs of young male slaves, just as in Haiti, to grow it. Relentless labor during winter harvests caused accidents like limbs crushed by rollers or skin scalded by boilers. “It was death to those who worked at the mill,” reported enslaved witness Henry Goings.

The U.S. banned the import of foreign captives in 1808, forcing Louisiana’s sugar masters to import bondspersons not from Africa but from Maryland, Virginia, and the Carolinas to replace their sick, maimed, and dead workers. Activists noticed. American Quakers sponsored a Free Produce Movement. New York grocer David Ruggles who, typified the movement, advertised that his “fine sugars . . . are manufactured by free people, not by slaves.” Yet this effort was buried under a mountain of cheap slave-grown sugar.

As the price fell relative to purchasing power, sugar appetites doubled between 1830 and 1850. Each American ate over 12 pounds in 1830 and 30 pounds by 1860 (per capita, Americans consume several times that quantity today).

With growth, the American sugar industry exerted an extraordinary power over Congress. The 1816 tariff gave domestic sugar an advantage of between 16 and 19 percent of the wholesale price of Cuban sugar. But sugar continued to be a high-risk, high-priced business. A sugar estate cost roughly twice as much as a comparable cotton plantation because enslavers demanded gangs of predominantly adult males. And sugar estates needed on-site processing facilities to crush the juice and commence initial boiling. Louisiana sugar masters demanded expanded credit, and a constellation of interests assembled to supply it.

It was a Louisiana slave trader who first came up with a banking scheme to bolster the position of sugar growers. His plan would help his clients buy slaves while attracting foreign investment in the sugar industry. The scheme was called property banking. Planters pledged their estates and bondspersons as assets to a bank and borrowed back a portion of the assessed value. By mortgaging productive property, enslavers expanded acreage and gangs of sugar slaves. Property banks then bundled those assets, collateralized them, and sold slave-mortgage-backed securities to foreign investors. When investors pointed to the fact that human property was perishable as a reason not to trust the value of those collateralized debt obligations, banks asked the state to step in.

And Louisiana did, issuing state bonds as obligations to property banks, pledging the state’s faith and credit to back the banks in the case that their human-backed securities failed. This offloaded investor risk onto citizens. The newly secure financial instruments attracted Baring Brothers and Company of London, which marketed Louisiana state bonds to investors in Britain, Europe, and even New York through its financial network.

American sugar surged thanks to state sponsorship of a mortgage-backed securities scheme developed by sugar industry insiders. Louisiana sugar estates more than tripled between 1824 and 1830. Slavery in sugar producing areas shot up 86 percent in the 1820s and 40 percent in the 1830s. By 1853, three in five of Louisiana’s enslaved people worked in sugar.

Slave-backed bonds seemed like a sweet deal to investors. They paid high rates of return–5 or 6 percent plus a dividend–and unlike an enslaved worker, the bond could not sicken or die in the canebrakes. Even where slavery was illegal, investors could buy interests in slaves. To make the mathematics easier, state bonds came in slave-sized denominations of $500 or $1000. By 1836 Louisiana state bonds were issued in £100 denominations or $444.44, reflecting foreign exchange rates and the fact that these bonds were sold abroad. Other banks followed Baring Brothers’ lead. Merchant bankers in Britain and Europe marketed slave-backed securities, and American dollars, Dutch guilders, and English pounds sterling funded sugar slavery’s expansion.

Alabama, Arkansas, Mississippi, and the Florida Territory also issued bonds, funding a massive expansion of slave-backed credit. And in the 1830s, the U.S. domestic slave trade surged 84 percent over the previous decade, the miseries of a quarter-million African Americans tracing the paths from Eastern Seaboard homes to Deep South fields of sugar and cotton. By decade’s end, a financial panic soured the banking sector on the newfangled securities system, but there was no structural change in the sugar industry. It cycled through the crisis and emerged in the 1840s and 1850s as robust as ever.

Chattel slavery ended in southern Louisiana after Union forces took New Orleans in April 1862, but the legacy of sugar slavery influenced the course of Reconstruction into the 1880s. Because sugar estates required so much upfront investment, freedpeople could not afford them. By the same token, black sugar workers found a wage labor market more favorable than in cotton areas. African American political clout increased correspondingly in southern Louisiana. But when threatened with worker organization, planters resorted to violence in the 1887 Thibodaux Massacre, killing dozens of black workers–and terrorizing hundreds more–to break a strike supported by the Knights of Labor. The workers returned to the fields on owners’ terms. Jim Crow reigned in the canebrakes.

And sugar slavery’s past is not yet past. In the Dominican Republic, 500 years after the first sugar mill was built there, hundreds of thousands of debt-bound Haitians in labor camps called bateyes under armed guard grow and harvest sugarcane for less than $1 for a 12-14-hour day, often paid in company scrip. Promises of steady wage work lure tens of thousands across the border each year, into the traps of traffickers. Often starving and stripped of papers, the workers toil in slave-like conditions producing the cane juice bound for candy factories and grocery store aisles.

About the Author

Calvin Schermerhorn

Calvin Schermerhorn is Head of History and an associate professor in Arizona State University's School of Historical, Philosophical, and Religious Studies. He is author most recently of The Business of Slavery and the Rise of American Capitalism, 1815-1860 (Yale University Press, 2015), and is now working on a book on slavery and African American life from the Revolution to Reconstruction.

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