It is ironic that the cover of Eric Hobsbawm's classic study of the mid-nineteenth-century “Age of Capital” is adorned by Edgar Degas's famous 1873 painting of New Orleans cotton merchants. Hobsbawm's book elaborated a classical Marxist perspective on the development of industrial production in the core regions of Europe (England, France, Germany) and the northern United States. In this view, industrialism fostered the formation of two new classes defined by their relationships to each another in the nascent economic order: the proletariat, who owned only their own commodified labor power; and the bourgeoisie, a class that owned the means of production and employed wage labor. In the American South, however, the system of plantation slavery suppressed the formation of these two classes, even in metropolitan settings such as New Orleans. In fact, the rather sedentary Crescent City gentlemen depicted in Degas's painting, the use of which was presumably intended to typify the thrust of Hobsbawm's arguments about mid-nineteenth-century industrial change, represented a much older and less dynamic form of wealth based on the extraction of profit from exchange differentials.Footnote ¹

Using a category long accepted by other political economists and historians, and one that is also central to my dissertation, Marx termed this qualitatively distinct form of wealth-accumulation strategy “merchant capitalism.” Unlike industrialists, who derived their profits from the organization of production itself, merchant capitalists typically operated at a cautious remove from production processes and concerned themselves primarily with their ability to exploit differences in commodity values in geographically distant markets—that is, by “buying cheap and selling dear.” Merchant capitalists were in many ways a conservative lot. Although they were often chary of direct involvement with production, once they had established consistently profitable relationships on the production end of the commodity chain, they became dependent on those forms and were reluctant to see them change.Footnote ²

Such was the case with the mercantile firm depicted in Edgar Degas's 1873 painting. Michel Musson, seated in the front left foreground, was Degas's uncle, and like his father before him, he had been involved with the cotton trade in New Orleans for many years. Musson was a “factor,” a commercial agent who served as an intermediary between southern plantation owners and distant textile producers. Even though he was never directly interested in planting himself, Musson, like many other cotton factors in New Orleans, had been a slaveholder before the Civil War. Many antebellum merchants routinely invested in slaves, which gave them a crucial financial stake in the maintenance of the South's “peculiar institution” during an era when it was under increasing siege from the very industrial capitalists who were the main subject of Hobsbawm's book.Footnote ³

The importance of the Crescent City's mercantile community to the U.S. and world economies during much of the nineteenth century once led the distinguished historian Clement Eaton to declare that “New Orleans is the ideal city for the study of the business class of the Southern states.” Eaton understood that the hundreds of businessmen such as Michel Musson who comprised the city's “gentlemen of commerce” represented the largest such concentration of merchant capital in the Old South, and their port handled a disproportionate share of the various flows of commodities into and out of the region. Surprisingly, though, subsequent scholars have been remarkably slow to fulfill the promise of Eaton's commonsensical insight. Indeed, there have been more studies about Edgar Degas's experiences in New Orleans than about the Crescent City business community per se—and thus Clement Eaton's injunction still remains true today. My study aims to begin filling this gap in the voluminous historiography on the American South by offering a perspective on the epochal events of the “Age of Capital” as experienced by merchants in Louisiana.Footnote ⁴

Part One of my study focuses on what is broadly termed the antebellum era. Like the South more generally, Louisiana was located on the nonindustrial periphery of the so-called Atlantic World, yet the commodities produced on its slave plantations, along with the New Orleans–based commercial agents who shepherded them to national and global markets, played a crucial role in the new forms of capitalist development taking root elsewhere. In the first chapter, the development of the New Orleans merchant community is examined during the first half of the nineteenth century. In it, Eaton's suggestion is approached cautiously by paying close attention to the many highly unique aspects of New Orleans, such as its unusual location and demographic composition, particularly the ethnocultural diversity that was a vestige of the city's lengthy Eurocolonial past. Because of its geographically advantageous site near the base of the Mississippi River system, the city grew rapidly as an export point for agricultural products, but tensions between American migrants to the city and “Creole” residents of Spanish or French heritage (such as Michel Musson) diminished the cohesiveness of its merchant community. After setbacks associated with the Panic of 1837, merchants and bankers thrived on profits from the city's increasingly monopolistic position over the burgeoning cotton trade. During the 1840s the wealth they derived from handling southern staple crops caused them to overlook the city's loss of the upriver grain trade to new canal and lake routes linking western states to urban markets on the northeastern seaboard. Although the local economy continued to grow during the 1850s, the city's merchant community became dangerously dependent on commodities produced in the southern countryside, and their stake in the perpetuation of the controversial slave-labor system that underpinned plantation agriculture grew accordingly.

Yet despite this support, the city's cosmopolitan character caused New Orleans to be widely disparaged as corrupt and dissolute throughout the Old South. Such attitudes also prompted disdain toward the city's commercial elites and their extensive northern and transatlantic connections. Their reputation was further undermined by the high prices that Crescent City factors charged for goods sold to their clients in the countryside. Inefficiencies and excessive charges in the port's handling of outbound commodities also struck many planters as evidence that wealth generated in the southern countryside had made New Orleans merchants not only rich, but also arrogant and lazy. As discussed in Chapter 2, such attitudes were reinforced by the inability of the city's merchants to implement much-needed improvements to the port's infrastructure during the antebellum decades. In particular, their failure to adequately promote local railroad construction was widely viewed as a sign that the ease of river transportation fostered complacency among the city's merchants. Some prominent businessmen publicly deplored the local failure to sponsor railroad and industrial development, and they noted that the lack of such investments made New Orleans unique among major American cities and bode ill for its long-term economic prospects. But although men such as the commercial publisher J. D. B. De Bow sometimes blamed aspects of the fickle, speculative, and migratory nature of merchant capital for these failures, they danced more gingerly around the relationship of the southern slave system to the regional suppression of fixed capital investments, particularly in manufacturing enterprises.

As Crescent City merchants' economic gaze remained fixed outward toward still-booming global cotton markets rather than on internal economic development during the 1850s, others began to take advantage of their inattention. The loss of the western grain trade had provided an early signal that New Orleans's river-based “natural advantages” might not be enough to ensure its continued commercial dominance, but the city's formerly secure hold on its plantation hinterlands now also started to come under siege. Some of this came in the form of competition from other cities, but erosion appeared from within as well. Chapter 3 discusses the increasing role played by hundreds of country stores scattered throughout the antebellum Louisiana interior. Although they have frequently been downplayed in historical studies that emphasize the dominance of the factorage system, rural and small-town merchants in Louisiana benefited from anti–Crescent City sentiments during the years prior to the Civil War. By selling goods on credit and marketing the crop production of small farmers, these storekeepers laid the foundations for the later expansion of their importance to the postbellum southern agricultural economy.

As described by Hobsbawm, the development of industrial capitalism played a decisive and often-causative role in the political and military events of the mid-nineteenth century, from the European revolutions of 1848 through the Franco-Prussian War of the 1870s. The same can also be said of the role played by industrial development in the United States, where irreconcilable conflicts between North and South were created by the two very different labor systems in each section. Part Two of my study focuses on the Louisiana merchant community's role in the South's withdrawal from the Union and the bloody civil war that followed. Chapter 4 discusses commercial attitudes toward the secession movement in Louisiana in late 1860 and how most New Orleans merchants rallied behind the new Confederate nation the following year. The city's long-standing and lucrative connections to global markets complicated the support offered by certain segments of the business community, however, most notably among its powerful banking sector. Furthermore, the local economy quickly began suffering the war's effects, particularly after a Federal blockade of southern seaports was instituted in May 1861.

The blockade and its effects prompted significant policy divisions between the New Orleans merchant community and the Confederate government, which are the subject of Chapter 5. Frustrated by the failure of European governments to intervene in the war on behalf of the South, New Orleans merchants sought to use “King Cotton” as a diplomatic weapon by spearheading a region-wide cotton embargo during the summer of 1861. Although Crescent City businessmen hoped their action would prompt Great Britain and France to break the blockade, the embargo they organized ran counter to the cautious foreign policies being pursued by the Confederate government, which feared that attempts at economic coercion would prove counterproductive. An earlier proposal for an official embargo had been quashed when advanced in the Confederate Congress by Duncan F. Kenner, a Louisiana sugar planter who had extensive connections to the Musson-Degas family in New Orleans and France.

As the Great Powers continued to dither over intervention, regional conditions worsened, and hundreds of merchants fled New Orleans before its fall to Union forces in May 1862. Michel Musson stayed, however, although he sent his daughters to refuge in France after the city's surrender to the domineering Union general Benjamin F. Butler. During Butler's controversial eight-month rule over New Orleans, the subject of Chapter 6, Crescent City merchants found themselves the rhetorical and political target of the demagogic Massachusetts general. Butler proved especially vindictive toward Crescent City banks, which had shipped most of their ample bullion reserves out of the city before its surrender. The harsh reign of “Beast” Butler over New Orleans represented in many respects the continuation of the war by other means, and his administration exacerbated the anti-Unionist attitudes held by most of the city's white residents.

The consequences of Butler's draconian regime were of particular importance, because the relative moderation born of merchants' pragmatic desire for the resumption of commercial relations might have aided in the postwar “reconstruction” of the South, a period that is discussed in Part Three of my study. In New Orleans, the process of federal Reconstruction began in earnest in 1863 under Butler's replacement, General Nathaniel P. Banks, another political general from Massachusetts. However, as is described in Chapter 7, Crescent City merchants continued to find themselves frozen out of federal attempts to reestablish the flow of cotton and other commodities to distant markets. Despite General Banks's less hostile style of administration over the city, the corruption first apparent under Butler worsened and grew more diffuse in the wake of his departure, especially as interbelligerent trading became more prevalent. After the war's conclusion in 1865, the mercantile and financial elites of New Orleans gradually came to realize the severe consequences that the conflict had permanently wrought on their previous dominance of regional commerce. Opportunistic northerners hoping to profit from exorbitant wartime prices for cotton now successfully competed with the remaining resident merchants for the southern trade. As Reconstruction-era politics in New Orleans devolved into often-violent factionalism between racist Confederate veterans and federally backed Republicans, most Crescent City merchants found their political influence reduced to ineffective calls for “good government” and other carping against “carpetbaggers” and newly empowered blacks.

Like the famous 1864 naval battle between the CSS Alabama and USS Kearsarge included on the wall of his uncle's office in Degas's 1873 painting, the Confederacy's defeat in the Civil War continued to hover over New Orleans merchants for many years to come. In fact, at the very moment that Degas painted his piece in late January 1873, Musson's firm was on the brink of financial failure. Chapter 8 examines how the fate of merchants such as Musson and many others paralleled the rapid economic decline of New Orleans during and after Reconstruction. The city's banking sector never recovered from the wartime blows it had suffered, which contributed to a severe capital shortage in the postbellum South as a whole. Furthermore, cross-lines trading during the war had provoked a sharp rise in overland transportation routes, which worked to the long-term advantage of interior cities such as Memphis, at the Crescent City's expense. Attempts to resecure the Midwestern grain trade that the city's businessmen had ceded decades before proved an ineffective panacea for New Orleans's many interrelated economic woes. As a result of numerous changes to the structures of regional, national, and global commerce, the fortunes of the quondam “Queen City of the South” plummeted during and after the Civil War. Neither before nor since has a first-rank American city fallen from economic grace so swiftly and decisively.

Even the revival of southern cotton production, which grew well beyond its pre-1860 levels before the end of the century, could not save the former factorage community of New Orleans. Unlike the “gentlemanly capitalists” of nineteenth-century Great Britain, who were able to preserve their City-based wealth and influence in the face of ascendant industrialism, the blows suffered by Crescent City merchants such as Michel Musson proved too numerous and powerful to be absorbed. However, as is discussed in Chapter 9, the culture and practices of merchant capitalism did persist in postbellum Louisiana and the South, albeit in greatly changed form. Because of the dispersal of postemancipation cotton production from the gang labor of plantation slavery into thousands of individuated small-farming units under sharecropping, the rural and small-town furnishing merchant assumed a pivotal role in the agricultural economy of the “New South” during Reconstruction. This chapter builds not only on the discussion in Chapter 3, but also on the careful foundations laid by historians Roger L. Ransom and Richard Sutch in their influential 1977 study of “the economic consequences of emancipation.” Ransom and Sutch relied on econometric modeling to assert that rural merchants in the Cotton South enjoyed “territorial monopolies” as a result of their dispersal throughout the countryside. Chapter 9 tests this and other arguments by using aggregate data and methods similar to those of Ransom and Sutch (whose study is also discussed at more length in an appendix). It also examines the very different ways that “country stores” developed in discrete local economic environments within Louisiana after the Civil War.Footnote ⁵

During and after the Civil War, merchant capital, a qualitatively distinct form of wealth and investment that had made the Crescent City a dominant player in national and global commodity markets for most of the nineteenth century, found itself exiled from its urban stronghold by the literal armies of industrialism and forced to seek refuge among the impoverished hamlets of the southern countryside. Thus, contrary to its popular appropriation by historians of industrialism such as Hobsbawm, Edgar Degas's cotton office painting shrewdly expressed the swift decline of this last bastion of the old Atlantic World system—as well as the system of southern slavery under which it had thrived—during the “Age of Capital.” By considering these changes in a global comparative context, my wide-ranging epilogue assesses the significance of the newly dispersed culture of merchant capitalism for southern economic underdevelopment through the New Deal's restructuring of regional agriculture during the 1930s.

There is a great deal that my study of Louisiana merchants hopes to add to our understanding of the nineteenth-century South. It should help “repopulate” the historiographical Old South with more than just masters and slaves, while also casting fresh light on debates, both old and new, over the socioeconomic ramifications of plantation slavery. In addition, close examination of their economic activities necessarily involves situating Louisiana's businessmen in wider national and international contexts, with implications for studies of comparative regional development, the U.S. economy, and the Atlantic World. Finally, my study should contribute to nineteenth-century business history more generally, a field that has long seemed to accept the reflexive orientation of contemporary economics toward production rather than distribution. As two historians of cotton's role in the Industrial Revolution recently declared, it is astonishing that “the role of merchants has been largely neglected” by scholars, even though their “rehabiliation . . . [has] the potential to transform wide swathes of economic history.” My dissertation seeks to help alleviate that long-standing neglect.Footnote ⁶