Cotton Capitalists Read online

  COTTON CAPITALISTS

  THE GOLDSTEIN-GOREN SERIES IN AMERICAN JEWISH HISTORY

  General Editor: Hasia R. Diner

  We Remember with Reverence and Love: American Jews and the Myth of Silence after the Holocaust, 1945–1962

  Hasia R. Diner

  Is Diss a System? A Milt Gross Comic Reader

  Edited by Ari Y. Kelman

  All Together Different: Yiddish Socialists, Garment Workers, and the Labor Roots of Multiculturalism

  Daniel Katz

  Jews and Booze: Becoming American in the Age of Prohibition

  Marni Davis

  Jewish Radicals: A Documentary History

  Tony Michels

  1929: Mapping the Jewish World

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  An Unusual Relationship: Evangelical Christians and Jews

  Yaakov Ariel

  Unclean Lips: Obscenity, Jews, and American Culture

  Josh Lambert

  Hanukkah in America: A History

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  The Rag Race: How Jews Sewed Their Way to Success in America and the British Empire

  Adam Mendelsohn

  Hollywood’s Spies: The Undercover Surveillance of Nazis in Los Angeles

  Laura B. Rosenzweig

  Cotton Capitalists: American Jewish Entrepreneurship in the Reconstruction Era

  Michael R. Cohen

  Cotton Capitalists

  American Jewish Entrepreneurship in the Reconstruction Era

  Michael R. Cohen

  NEW YORK UNIVERSITY PRESS

  New York

  NEW YORK UNIVERSITY PRESS

  New York

  www.nyupress.org

  © 2017 by New York University

  All rights reserved

  References to Internet websites (URLs) were accurate at the time of writing. Neither the author nor New York University Press is responsible for URLs that may have expired or changed since the manuscript was prepared.

  ISBN: 978-1-4798-7970-0

  For Library of Congress Cataloging-in-Publication data, please contact the Library of Congress.

  New York University Press books are printed on acid-free paper, and their binding materials are chosen for strength and durability. We strive to use environmentally responsible suppliers and materials to the greatest extent possible in publishing our books.

  Manufactured in the United States of America

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  Also available as an ebook

  For Shira

  CONTENTS

  List of Figures

  List of Maps

  Acknowledgments

  Introduction

  1. The Antebellum Cotton Economy

  2. The War Years

  3. Timing Is Everything

  4. Networks from Above

  5. Networks from Below

  6. The End of the Niche Economy

  Conclusion

  Notes

  Index

  About the Author

  LIST OF FIGURES

  Figure 1.1. “Cotton Levee in New Orleans.” Image courtesy of the Library of Congress (LC-USZ62–4928).

  Figure 1.2. “King Cotton and His Slaves, Greenwood, Mississippi.” Image courtesy of the Library of Congress (LC-USZ62–36638).

  Figure 1.3. “A Cotton Plantation on the Mississippi.” Image courtesy of the Library of Congress (LC-USZ62–345).

  Figure 1.4. “Caricature of Jewish Merchant and Steamboat.” Image courtesy of the Jacob Rader Marcus Center of the American Jewish Archives, Cincinnati, Ohio (MSS 601, box 5, folder 1).

  Figure 1.5. “Julius Weis.” Image courtesy of the Jacob Rader Marcus Center of the American Jewish Archives, Cincinnati, Ohio (PC-4687).

  Figure 2.1. “Sutler’s Tent.” Image courtesy of the Library of Congress (LC-B8171–2448).

  Figure 2.2. “Caricature of Jewish Sutler.” Image courtesy of the Jacob Rader Marcus Center of the American Jewish Archives, Cincinnati, Ohio (PC-4585).

  Figure 2.3. “The Levee at Vicksburg Miss., February, 1864.” Image courtesy of the Library of Congress (LC-USZ61–1597).

  Figure 2.4. “Main Street, Little Rock, Arkansas, 1860–65.” Image courtesy of the Jacob Rader Marcus Center of the American Jewish Archives, Cincinnati, Ohio (PC-2688).

  Figure 3.1. “View from Catholic Hill, St. Francisville, LA, toward Bayou Sara.” Image courtesy of the Louisiana State University Special Collections, Elizabeth Dart Collection (121:9, box 3).

  Figure 3.2. “Preparing Cotton in Bayou Sara.” Image courtesy of the Louisiana State University Special Collections, Elizabeth Dart Collection (121:9, box 14, folder 1).

  Figure 3.3. “Cotton Scene in Houston and Texas Central Railway Yards.” Image courtesy of the Library of Congress (LC-USZ62–29471).

  Figure 3.4. “Architect’s Sketch of Baum Block, Meridian, Mississippi.” Image courtesy of the Jacob Rader Marcus Center of the American Jewish Archives, Cincinnati, Ohio (MSS 601, box 5, folder 2).

  Figure 3.5. “Commercial Street with Wagons Laden with Cotton Bales, Gainesville.” Image courtesy of the Library of Congress (LC-USZ62–16565).

  Figure 3.6. “Cotton Market in Montgomery.” Produced courtesy of the American Museum in Britain, Bath (NA 045).

  Figure 4.1. “Mayer Lehman.” Image courtesy of the Jacob Rader Marcus Center of the American Jewish Archives, Cincinnati, Ohio (PC-2946).

  Figure 4.2. “Receipt for Bonnet from Mrs. B. Gans.” Image courtesy of Temple B’nai Israel, Little Rock, Arkansas.

  Figure 4.3. “Architect’s Sketch, Marks & Lichtenstein, Meridian, Mississippi.” Image courtesy of the Jacob Rader Marcus Center of the American Jewish Archives, Cincinnati, Ohio (MSS 601, box 5, folder 2).

  Figure 5.1. “Cotton Receipt from Julius Freyhan & Co.” Image courtesy of the West Feliciana Historical Society.

  Figure 5.2. “Isaac Lowenburg.” Image courtesy of the Jacob Rader Marcus Center of the American Jewish Archives, Cincinnati, Ohio (MSS 601, box 2).

  Figure 6.1. “A Flooded Bayou Sara.” Image courtesy of the Louisiana State University Special Collections, Elizabeth Dart Collection (121:9, box 3).

  Figure 6.2. “Man Surveying a Flooded Bayou Sara.” Image courtesy of the Louisiana State University Special Collections, Elizabeth Dart Collection (121:9, box 3).

  LIST OF MAPS

  Map I.1. Cotton production in the Gulf South, 1880

  Map I.2. Percentage of Jewish-owned general and dry goods stores in Gulf South towns, 1880

  Map I.3. Jewish percentages of the population, store ownership, and general and dry goods store ownership, 1880

  Map 4.1. Lehman Brothers’ flow of credit and capital

  Map 4.2. Vicksburg and the Bends

  Map 6.1. Incidents of anti-Jewish violence

  ACKNOWLEDGMENTS

  I owe a large debt of gratitude to friends and colleagues who have shaped this project from the start. Jonathan Sarna helped from beginning to end—first inspiring me to undertake this research, and then providing valuable comments throughout. Adam Mendelsohn and Rebecca Kobrin both read the penultimate draft and assisted me through countless conversations as I formulated my argument and narrowed my scope. My discussions with Hasia Diner helped me to situate this project within the field of Jewish history, and my conversations with Sven Beckert helped me to place my work in a broader context within the history of capitalism.

  I also benefited greatly from the discussions at the Center for Jewish History’s scholars’ working group on Jewish economic history, and for that I thank Adam Teller, Derek Penslar, Francesca Trivellato, Jonathan Karp, Susie Pak, Jerry Muller, Judith Siegel, and many others. As I moved into the field of Southern Jewish history, many c
olleagues helped me to understand the lay of the land, including Stuart Rockoff and Mark Bauman. Special thanks also go to Teri Tillman and Anton Hieke, to whom I am indebted for their valuable feedback on my manuscript.

  I am grateful for my Tulane University colleagues in the Department of Jewish Studies, including Brian Horowitz, David Goldstein, Ronna Burger, Sarah Cramsey, Yehuda Halper, Inna Shakster, Allison Mull, and Patrice Nadeau. At Tulane, I have also been incredibly lucky to receive the support of a leadership team that was committed to my success, and I must thank Carole Haber and Scott Cowen for providing me with the space and resources to develop as a scholar.

  Because of the significant amount of travel that my archival research required, this project would also not have been possible without the generous financial support that I have received along the way. I received Lurcy and Glick Fellowships from the Tulane University School of Liberal Arts, a Committee on Research grant from the Tulane University Provost’s Office, and a Monroe Fellowship from the New Orleans Center for the Gulf South. I also received support through the New England Regional Fellowship Consortium, and a Louisiana Board of Regents’ Award to Louisiana Artists and Scholars. Generous support also came through Mellon and Sizeler Professorships at Tulane University, and I was a recipient of a subvention grant and a Carol Lavin Bernick Faculty Grant at Tulane.

  I am also indebted to the many archives and archivists who made this work possible. The staff at Harvard Business School’s Baker Library welcomed me with open arms to what became my home away from home and provided more support than I ever could have imagined. Particular thanks are due to Katherine Fox, Ben Johnson, Tim Mahoney, Melissa Murphy, Christine Riggle, Liam Sullivan, and Abby Thompson. I also must thank the staff at Tulane University Special Collections, Louisiana State University Special Collections, the New-York Historical Society, the Columbia University Rare Book and Manuscript Library, the California Historical Society, the Library of Congress, and the National Archives. Special thanks are also in order for Mimi Miller at the Historic Natchez Foundation, to Helen Williams and the staff of the West Feliciana Historical Society, and to Gary Zola, Dana Herman and the staff of the American Jewish Archives. It was through an article in the American Jewish Archives Journal that I became convinced that this would become my next book project. Thanks also to the many students who assisted me in my research with this project, including Aaron Silberman, Margaret Abrams, and Sam Furman. Special thanks also to Richard Campanella, who not only designed the maps throughout this volume that allowed me to explain a niche economy to my readers through geographic information systems (GIS), but whose maps also revealed to me the patterns that undergird this study.

  My editor, Jennifer Hammer, believed in this project from the start, and she has been essential in seeing it through to completion.

  Finally, I must thank my family for all their support. Leonard Nemon, whose knowledge of Civil War history is rivaled only by his wife Nancy’s, read a full draft of my manuscript and offered superb advice. To my parents Marlene and Bernard Cohen, your support (and editorial hands) have been essential throughout this project and my life, and I couldn’t be prouder to have you as parents. My brother, David B. Cohen, served as digital lead on this project and introduced me to the world of the digital humanities. His unique blend of historical scholarship, business analytics, and patience assisted me in creating databases that uncovered the patterns that shaped my manuscript. And finally, a huge debt of gratitude goes to my amazing wife Shira, without whose support this manuscript would not be possible.

  Introduction

  Upon his arrival at the Port of New Orleans in late 1845, nineteen-year-old Jewish immigrant Julius Weis boarded a Mississippi River steamship bound for the region at the heart of the United States’ cotton production. There, he peddled throughout the countryside, later operating a storefront in the bustling Mississippi River port city of Natchez and then opening what would become one of the most successful cotton commission houses in postbellum New Orleans. For Weis, and most others in the cotton economy, economic success was predicated upon credit. While he had the option of fronting cash to furnish his own stock, he could offer far more variety to his customers if he could acquire credit himself, take delivery of goods before the start of the growing season, and sell staples and luxury goods to his customers.

  But extending credit was risky business in an era before scientific credit reporting. To mitigate risk, entrepreneurs relied on trust; indeed, John Pierpont “J. P.” Morgan considered trust “the fundamental basis of business.” Credit reporters, however, did not trust Jews. They were suspicious of Jewish immigrants like Julius Weis and often advised against extending credit to them. In need of the trust necessary to acquire credit and conduct business, Weis and his fellow Jewish merchants turned to each other. For them, trust generally boiled down to shared ethnicity—a term that I use to emphasize the cultural solidarity and sense of shared past (and future) that bound Jews together. Jews, much like other ethnic minorities, trusted one another more than they trusted strangers with whom they had no connections. Such was the case for Weis, and it was also the case for the prominent Jewish banking house of Lehman Brothers, which relied on ethnic trust networks to conduct business, bringing European investment to the scores of Jewish merchants who fanned out across the cotton-producing regions of the Gulf South. Leveraging these ethnic networks, Jewish merchants created a niche economy in the nation’s most important industry—cotton. In so doing, they positioned themselves at the forefront of global capitalist expansion for much of the second half of the nineteenth century.1

  In many ways, the Jewish economic niche in the cotton industry reflects the quintessential Jewish immigrant experience. As Jews did elsewhere,2 these cotton capitalists peddled on geographic and economic frontiers and graduated from peddlers to shopkeepers. A visible cohort reached the pinnacle of success. Exploring the Jewish niche in this industry reveals the myriad ways in which economic forces defined the contours of the American Jewish experience as a whole. The golden age for American Jewry that grew out of the cotton industry dictated the ways in which Jews shaped, and were shaped by, the communities in which they lived. Their role in the cotton industry redrew the American Jewish map, changing the internal dynamics of American Jewish communities, redefining Jews’ levels of integration in the cities and towns in which they lived, and reshaping the growth and development of the towns themselves.

  But this is more than a book about Jews. The story of these American Jewish entrepreneurs also acts as a case study to explore the role of ethnicity in the development of global capitalism more broadly. Ethnic minorities frequently stood at the forefront of entrepreneurship, clustering in narrow sectors of the economy.3 Yet despite the universality of these minority economic niches,4 very little scholarship has asked how they emerge and function. This book, at its core, asks how such niche economies come to be.5

  In the case of the Jewish niche economy in the cotton industry, some would quickly offer a recipe for success highlighted by ingenuity, an enterprising spirit, and an abiding business acumen. But the ingredients are in fact far more complex. This book argues that Jewish entrepreneurs created a thriving niche economy in the cotton industry because of two interrelated forces: first, structural factors unique to this place and time. Certainly timing mattered, alongside a host of often overlooked forces, that created the conditions that allowed Jewish merchants to succeed in the cotton industry.6 Second, this book also argues that, within this milieu, ethnic networks of trust served as the key force that fueled this niche economy and provided Jews with a competitive advantage.7 In the face of suspicions that limited access to traditional sources of credit, shared ethnicity and the trust that it instilled provided the glue essential for Jewish success within the cotton industry.

  How did these two interrelated forces operate? When Julius Weis stepped off his steamship, he entered a cotton region where structural factors nurtured a Jewish niche economy. Cotton stood at the heart of
the global economy. It fostered industrialization, furthered the emergence of global capitalism, and it stood behind many of the world’s labor battles. It linked farmers and merchants across the globe to wealthy financiers, bringing rural cotton-growing areas to the forefront of the modern world. Because of these connections, cotton, argues Sven Beckert, “provides the key to understanding the modern world, the great inequalities that characterize it, the long history of globalization, and the ever-changing political economy of capitalism.”8

  Nowhere was cotton production more important in the nineteenth century than in the United States, where the fiber dominated exports between 1803 and 1937. And within the United States, no region was more important in the mid-nineteenth century than the Gulf South, which I define here as Louisiana, Mississippi, Alabama, and parts of Arkansas. The former three states saw their share of the cotton crop grow from 22.7 percent in 1821 to 63.5 percent in 1859, and cotton receipts in New Orleans increased from under 40,000 bales in 1816 to nearly 1 million bales by 1840. Cotton from this region provided the raw materials for New York’s garment industry and for textile factories across the world.

  While cotton fueled factories, its growth and production was inextricably linked to slavery. The internal slave trade in the mid-nineteenth century forcibly shifted as many as a million slaves to the region, most of whom were compelled to labor upon cotton lands that had been largely expropriated from Native Americans. One nineteenth-century observer noted that “the expanding geographical distribution of slaves and of cotton cultivation affords the most striking evidence of the close connection of the two institutions that can be had.” Cotton production was so dependent upon slave labor that slave market prices fluctuated in harmony with cotton prices.9

  Cotton and slavery came together to make the Gulf South an incredibly important region within the United States’ economy, and of particular importance were the towns within it along the Mississippi River in an area contemporaries termed “Vicksburg and the Bends,” named for the bends in the river between Greenville, Mississippi in the north and the twin towns of Bayou Sara and St. Francisville, Louisiana in the south. This region, where Julius Weis settled, was inclusive of the Mississippi towns of Natchez, Vicksburg, and the twin towns of Grand Gulf and Port Gibson, as well as small towns and landings alongside the river’s banks. These towns were situated in what U.S. internal commerce reports declared to be “the richest and most productive cotton country in the world” and the Gulf South’s most fertile cotton land, based on yield per acre. Although there was some other agricultural production in this area, the staple was cotton, and Mississippi River traffic in this region consisted almost entirely of bringing cotton and cottonseed to market or in bringing plantation supplies into the region.10