[Sherman Logan]

Again, the capital that constituted slave workers was not lost. The ownership of the capital was lost. The banks would have had to loan the money to the black agricultural worker, or to a corporation that had an employment contract with him.

Disagree. The capital represented by the slaves disappeared when they were freed, or to put it another way, demonetized.

They no longer represented money, since they could not, for example, be used as collateral for a loan.

If in 1860 a planter owned 100 slaves with average value of $750, he could easily borrow $75,000 using the slaves as collateral. If he defaulted on the loan, the lenders could attach the slaves to get their money back.

In 1865 not one of those slaves would have been able to borrow $750 from the same lender using himself as collateral, since if he defaulted on the loan the lender could not seize and sell him as collateral.

So while the labor of the freedman still had a monetary value, that value could no longer be converted to capital and thus had no capital value. The $3B of capital represented by the slaves disappeared during the war and its immediate aftermath. That had an enormous financial impact on the areas where slaveholding had been most prominent.

Not being a student of economics, I'm probably expressing this idea poorly and without using the correct language, but I'm pretty sure I have the basic idea down properly.

[donmeaker]

I think it was the use of force that was monetized. Corporations required willing workers, but willing workers enabled higher productivity. It did take a while for people to realize that.

I wonder how black owned corporations were able get capital before the war to buy slaves (to set them free), but corporations were unable to borrow money after the war?

Part of it may be that with the government borrowing money to finance the war, interest rates were higher.

Some part of it may have been KKK activity, that threatened anyone who did business with freedmen.