The “gale of creative destruction” that Joseph Schumpeter so resonantly described strikes with such force that the impact upon settled communities and traditional ways of life might hardly be considered benign. Such ill effects cannot, however, be corroborated in historian Michael R. Cohen's monograph on the role of Jewish entrepreneurs in the South after the Civil War. Rather than the unsettling turbulence that business innovation can generate, Cohen discerns opportunities for economic advancement in a region that revered an agrarian ethos. Rather than tabulating how the South paid the price of disruption, he underscores the value of prosperity that the historic outsiders in Christendom provided, in a section of the nation notorious for its xenophobia and rigid political conservatism. Cotton Capitalists shows no signs of a deliberate authorial intention to compose a brief for the virtues of capitalism. But the inference is unmistakable that Jewish businesspeople, through some combination of industriousness and shrewdness, good timing, and a willingness to take calculated risks, merit retrospective praise for making the South less impoverished.
The chronological range of “the Reconstruction era” turns out to be wider than Cohen's subtitle suggests, for his book opens in the antebellum period and then devotes an entire chapter to the devastation of the Civil War. The geographic range is concentrated within a handful of states enjoying shorelines on the Gulf of Mexico: Louisiana, Mississippi, and Alabama. Slivers of Arkansas are added, if only to indicate the centrality of the Mississippi River to the trade in cotton, before railroads gave planters and merchants an alternative. The Jews whose business careers Cohen so adroitly and lucidly portrays generally emigrated from Alsace or from German states like Bavaria and often arrived decades before the birth of the Second Reich. The prospects of these newcomers were hardly propitious. The dangers of financial disaster would include the crop failures of 1866–1867, the Panic of 1873, the remorseless decline in the price of cotton throughout the 1880s, and then the Panic of 1893 that triggered a major depression. Dependent on the rhythms of the seasons and the vagaries of the international market, subject to the caprices of floods, epidemics, and then the boll weevil, Southerners needed credit to get through the year—and access to capital is what Jews, more likely than anyone else in the vicinity, could provide.
Cotton may have been king, but even medieval and early modern royalty needed loans; and Julian Freyhan, Isaias Meyer, and Julius Weis and their coreligionists, with their family connections and their international contacts, could tap into the resources that a parochial economic environment—with few banks—desperately needed. With very little if any experience in tilling the soil, Jews could create a niche economy in which capital could circulate. The thesis of Cotton Capitalists is that Jewish creditors facilitated the sale of the cotton to be sent north and overseas because they trusted one another—at least more than they trusted strangers. That willingness to provide credit, Cohen's evidence indicates, was rarely misplaced. Everyone benefited because of a fundamental honesty and reliability; though the author does not make this implication explicit, much less emphatic, Cotton Capitalists thus collides with the historic reputation of Jewish money lenders (of which Shylock is the classic literary archetype) as cruelly and cunningly exploitative.
How the ethnic network operated, to make the postbellum Gulf South competitive in the global market for cotton, constitutes Cohen's distinctive scholarly contribution. The largest firms—Cohen dedicates a chapter to Lehman Brothers in Alabama, for instance—loaned mostly to Jews through an intricate ethnic network that embraced shopkeepers in towns as small as Bayou Sara, Louisiana (which vanished in the wake of the great Mississippi flood of 1925). “Ethnic networks of trust served as a key force that fueled this niche economy,” Cohen argues, “and provided Jews with a competitive advantage” (p. 2). Whatever success they managed to attain, he often warns, was not linear, and the remorseless specter of failure haunted these entrepreneurs. But their “ethnic economic networks” tended to cushion the shocks of a volatile one-crop economy (p. 201). The case he makes is buttressed with considerable research in archives at Tulane University, where he teaches, and—inevitably—with extensive examination of the indispensable R. G. Dun & Co. credit reports at the Baker Library at the Harvard Business School.
Though trained in American Jewish history, Cohen limits his book to an exploration of the fate of the businesses, so that their owners tend to be rather shadowy figures. Of course their piety had to be almost entirely abandoned; for example, they seem to have taken for granted the obligation to keep their stores open on the Jewish Sabbath. But how economic necessity affected any lingering commitment to traditional Judaism, or how these merchants reflected upon their own Jewishness, is not a topic that Cohen pursues. This reluctance is understandable. Such entrepreneurs exhibited little aptitude for introspection and little interest in leaving behind a record of their interior lives for scholars to follow. The sort of lives that these newcomers led after hours, in the desolate hamlets that offered, however minimally, the only communal life in places like the Delta, must remain obscure. A tantalizing feature of these businesses that Cohen often mentions is their appeal to former slaves. By treating them as customers and debtors, Jews thus generated a larger clientele than did their gentile rivals. Was this advantage understood merely as a business proposition, or was the immigrant generation largely immune to the racist habits that permeated the white South? Burdened with memories as victims of bigotry in the Old World, were Jews simply more likely to recoil from the constant reminders of intolerance? The paper trail that Cohen has traced seems to yield no clues.
