Merchants and the Political Economy of Nineteenth-Century Louisiana: New Orleans and Its Hinterlands

As the locus of cotton production shifted toward the newer southwestern states over the first half of the nineteenth century, the city of New Orleans became increasingly important to the slave-plantation economy of the U.S. South. Moreover, because of its location near the base of the enormous Mississippi River system, the city also thrived on the export of agricultural commodities from western states farther upriver. Handling this wide-ranging commerce was the city's business community: bankers, factors, and wholesalers, among others. This globally oriented community represented an older and qualitatively unique form of wealth accumulation, merchant capitalism, which was based on the extraction of profit from exchange processes. However, like the slave-based mode of production to which it was closely allied, the New Orleans merchant community faced increasing pressure during the antebellum decades even while its fortunes seemed otherwise secure. The city lost most of its market share in western grain products to railroads and other routes linked directly to northeastern urban centers, and its merchants' failure to maintain port infrastructure or create a viable manufacturing sector reflected their complacency and left them vulnerable to competition from the fast-developing industrially-based economy of the North. These and other weaknesses were fatally exposed during the Civil War and Reconstruction. As a result of many changes to the regional and national political economy after northern victory in the war, the New Orleans merchant community was never able to recover its previous commercial dominance, and the former first-rank American city quickly became a site of notorious political corruption and endemic poverty. Much the same can be said of the postbellum southern economy in which it was embedded, where the practices of merchant capitalism nevertheless managed to persist by becoming dispersed throughout the agricultural interior in the form of "country stores." Under the sharecropping system that became prevalent in cotton production, rural merchants furnished seasonal credit to the small farming households that had replaced plantation slavery. Although these stores played different roles in Louisiana cotton and sugar parishes, the culture of merchant capitalism hampered economic development in the South for many decades to come