Antebellum Credit: Bills of Exchange in Fiction

This section details the crucial role of bills of exchange in facilitating the transatlantic cotton trade during the antebellum period. The analysis focuses on the cotton-for-credit system, where British commission houses, often located on Lombard Street in London, extended credit to manufacturers. These manufacturers, in turn, provided advance payments to Southern planters based on the anticipated value of their future cotton harvests. The bills of exchange, essentially promises to pay, allowed planters immediate access to capital, bypassing the delay of waiting for the cotton to reach Liverpool and be sold. American banks and bill brokers played a vital role, discounting these bills and selling them to American merchants. This intricate process created a continuous flow of funds across the Atlantic, integrating the various stages of production and distribution. The system illustrates the importance of credit in facilitating international commerce and the complex interplay between different financial actors and geographical locations. The description emphasizes the sophisticated nature of these financial operations and their significance for the expanding antebellum economy.

Complementing the discussion of bills of exchange, this section examines the widespread use of promissory notes in creating local and regional credit networks within the United States. Unlike the international bills of exchange, promissory notes were predominantly used in informal credit transactions among small traders such as farmers, retailers, manufacturers, and artisans. The system operated on the principle of deferral of payment, with interest usually charged only upon non-payment. The notes could be negotiated and discounted at banks, providing a mechanism for short-term finance and facilitating the flow of goods between wholesalers and retailers. By 1832, a substantial sum of approximately $10 million in domestic bills of exchange was circulating through the Mississippi Valley alone, demonstrating the significant role of promissory notes in the domestic credit economy. The examination of promissory notes highlights the significant role that the less formalized internal credit system played in the antebellum United States.

This subsection distinguishes between the concepts of ‘network’ and ‘system’ when analyzing the cotton-for-credit system. While acknowledging the descriptive power of ‘network’ in illustrating connections between individuals and places, the text argues that the cotton-for-credit system is better understood as a structured system. This system, characterized by ‘connection and interconnection’, is described as possessing an organized structure and specific governing logics, rather than a merely spatial arrangement. The cotton-for-credit system is explicitly identified as a ‘regime of accumulation’, indicating a stable and regulated structure that fostered the production and exchange of commodities. This conceptual clarification avoids the potential pitfalls of overly simplistic ‘network’ metaphors that might obscure the organized nature of the economic activity and its capacity for systemic functioning. The study therefore uses the idea of a system to show the complex antebellum finance's structure and interconnectedness.

The temporal dimension of the cotton-for-credit system is examined in detail, emphasizing how the system addressed the inherent temporal discrepancies between agricultural production cycles and urban market demands. The commission houses played a critical role in harmonizing these incompatible temporalities, smoothing the complex transitions between various stages of the system. For instance, they used foreign bills of exchange to provide credit to northern importers during summer months, while using the proceeds of the cotton harvest in the autumn to write ‘cotton bills’. This sophisticated management of time, enabling the seamless transformation of one commodity into another, demonstrates the system's adaptability and its ability to manage diverse time horizons and geographic locations. The overall effect was to imbue the antebellum financial system with ‘unprecedented flexibility, malleability, and multidimensionality.’ This section demonstrates the interplay between finance and the organization of time within the antebellum context. This section demonstrates how the complex economic activities of the antebellum period were managed using sophisticated financial instruments and by strategically controlling time-related processes.

This section explores the concept of temporal discontinuity as it relates to the promissory note within the context of Asa Greene's The Perils of Pearl Street. The novel's narrative structure is analyzed to show how the extended timeframe of a promissory note (six months) is dramatically compressed into a single, high-stakes moment of truth – the due date at the bank. This chronotope, described as a confusing mélange of “the slow and the sudden,” highlights the intense pressure faced by merchants who relied on credit, especially those without substantial initial capital. The story of William Hazard and his firm, Launch & Hazard, illustrates this tension; their reliance on fictitious capital and their inability to secure endorsements on their notes lead to a desperate race against time, culminating in the frantic practice of “shinning” to secure funds before their notes are protested. The narrative powerfully illustrates the anxieties and uncertainties inherent in the antebellum credit system, demonstrating the potentially devastating consequences of relying on credit. The analysis emphasizes how the promissory note itself shapes the narrative temporality, reflecting the lived experience of merchants operating within the credit economy.

Shifting focus to the anonymous The Adventures of Harry Franco, this section analyzes the novel's depiction of multiple and often conflicting temporalities. Unlike The Perils of Pearl Street, Harry Franco initially presents a fragmented, almost random sequence of events, reflecting the protagonist's aimless wandering and his relative detachment from the structured rhythms of the market. The study contrasts this “adventure-time” with the concentrated temporal intensity of the 1837 Panic. The contrasting temporal experiences of the two narratives highlight how the credit system can create a temporal experience of both extended credit and immediate deadlines. The narrative temporality mirrors the economic conditions, showcasing a shifting experience of time. The 1837 Panic introduces a new order of temporality, characterized by periods of speculative mania, financial panic, and economic depression, emphasizing the precariousness of the credit economy and the instability it was capable of creating. The study emphasizes the shifting balance between the rhythms of nature and the accelerating rhythms of the market, contrasting the idyllic rural setting with the frenetic atmosphere of Wall Street. This section highlights the effects of economic temporality on individuals operating within the system.

This subsection focuses on the role of bills of exchange and the principal-agent relationship within the context of the 1837 Panic. The analysis centers on Harry Franco’s employment at Marisett & Co., a commission house where he was tasked with negotiating blank bills of exchange. The ease with which he negotiates these bills contrasts sharply with the subsequent crisis, highlighting the dangers of asymmetric information and misaligned interests. The section illustrates how the formal structure of contracts, particularly those involving principals and agents, could mask the underlying risks and vulnerabilities of the credit system. Franco's involvement with blank acceptances highlights the complex interplay of trust, responsibility, and risk within this form of commercial exchange. The unfolding events underscore the way individual agency is often overshadowed by systemic dynamics and how even seemingly innocuous actions can have significant consequences within a crisis. This section therefore examines the consequences of economic temporality through the lens of contractual relations.

This section frames the cotton-for-credit system as a complex regime of accumulation, using Michel Aglietta's terminology. It moves beyond simply describing the system as a network, emphasizing its structured and organized nature. The system's stability and regulated social relationships enabled the production and exchange of commodities and the extraction of value. The analysis highlights how the system coordinated complex transatlantic exchanges and intervals of time, integrating diverse actors and geographic locations. The key elements of this system included Southern planters, British commission houses (particularly those based in London on Lombard Street), American banks and bill brokers, and various merchants and traders involved in the distribution of goods. The integration of multiple actors and geographic locations is crucial for understanding the regime of accumulation's operation. The system's intricate organization of credit and the flow of goods is emphasized, arguing against simplistic characterizations of the antebellum economy as merely a set of disconnected networks. The study emphasizes the system's function in facilitating the production and exchange of commodities, highlighting the intricate web of relationships and the methods used to generate economic value.

This subsection emphasizes the human labor, especially enslaved labor, integral to the cotton-for-credit system's operation. The process of cotton production, from picking bolls to pressing bales for shipment, involved the coerced labor of enslaved people, highlighting the inextricable link between slavery and the antebellum economy's functioning. This labor is directly connected to other production spheres involved in the system, such as the textile mills of Lancashire. The section emphasizes the work performed in facilitating the flow of cotton and manufactured goods using financial instruments such as bills of exchange and promissory notes. This work is described as an “alchemy of credit”, transforming physical labor into financial value. This analysis counters the tendency to treat these financial flows as separate from production, illustrating how various spheres of production were “connected” and “meshed together” within the overall system. The description emphasizes the role of different kinds of laborers, and how the system connected various aspects of production and trade for economic gain.

This section explores the temporal dynamics of the cotton-for-credit system and how it coped with economic crisis. The analysis highlights the system's ability to reconcile the differing temporal rhythms of agricultural production and urban consumption, achieved through the sophisticated management of credit and financial instruments. This management included using foreign bills of exchange in the summer and ‘cotton bills’ in autumn. The system's flexibility in managing time is portrayed as a key factor contributing to its overall stability. However, the section also notes the system's vulnerability to external shocks, as shown in the discussion of the 1837 Panic. Poor wheat harvests in Britain and subsequent tighter credit conditions caused disruptions, demonstrating the inherent tensions within this regime of accumulation. The crisis shows the system's capacity to adapt by coordinating different times, places, and people. The overall discussion points to the limitations of simplistic notions of linear economic temporality, arguing for a more nuanced understanding of how the antebellum financial system managed its internal contradictions and its susceptibility to external events. This part explores the system's capabilities and limitations over time, showcasing both its successful operations and its weaknesses.