SESSION 01. Risk, risk management, and insurance in the slave trade business: Connecting Atlantic experiences

1. Risk, risk management, and insurance in the slave trade business: Connecting Atlantic experiences.

Jesús Bohorquez (Instituto de Ciências Sociais – Universidade Lisboa). jesus.bohorquez@eui.eu
Maximiliano Menz (Universidade Federal de São Paulo). maxmacmenz@hotmail.com


The slave trade was a long-lasting enterprise in which many European powers vigorously participated. Throughout the last century, the business of slavery has produced a prolific and hot debate, particularly as regards its actual profits. Both historians and economists have largely discussed on the impact that slavery and the commerce in humans had in the consolidation of capitalism in Europe and North America. On the other hand, abundant research on the activities of slave merchants has put forward the troubles of these ventures and their high transaction costs regardless of their being an apparently highly profitable business whose profits were partly due to sharp price differences across the Atlantic. Only recently, scholars have started focusing more carefully on private-order and formal institutions that contributed lowering business risks and facilitated risk management of Atlantic ventures that were perceived as being highly risky.

This panel seeks precisely to discuss how merchants managed risk through the implementation of a vast set of formal and informal institutions. We are particularly interested in connecting different Atlantic experiences, examining how English, Portuguese, French, Dutch, and Spanish traders faced risk and risk management. Papers will deal with different imperial and temporal settings in order to build a transimperial dialogue of the slave trade business.


Paper 1

Slave trade and institutions in the eighteenth century Iberian Atlantic.

Jesús Bohorquez (Universidade Lisboa)

This paper’s main goal is to analyze local and central institutions that assisted merchants in enforcing contracts and safeguarding property rights. The Iberian Atlantic was no doubt a main stage for the development of the business of slave trade throughout the eighteenth century. Either Brazil or the Spanish overseas territories transformed into major slave importers from Africa. Besides, long lasting trading connections involving borderland territories like the Rio de la Plata basin or the trans-imperial Caribbean Sea further expanded where slave traffic strengthened. Organizing this imperial and trans-imperial business implied risk management, and equally, the selection of widely scattered, trustworthy agents. For the slave trade to work merchants needed to rely on a large network of agents and commissioners located both shores of the Atlantic. This pattern undoubtedly made their monitoring a hot issue. Frequently, merchant networks were transnational or cross-cultural, further complicating not only the organization of the business but also the claiming of property rights before foreign authorities. Enforcing contracts ex post and making credible commitments ex ante obliged merchants to resort to a handful of local and central institutions. Both courts and informal institutions turned out to be key for solving the fundamental problem of exchange. This paper precisely surveys the institutions that were at disposition of merchants to manage risk and enforce contracts in the Iberian Empires.


Paper 2

Risk and opportunity in a trans-imperial perspective: Suriname planters, Amsterdam merchant-financiers and Providence traders in times of crisis.

Pepijn Brandon, (VU, Amsterdam / International Institute of Social History)

The final decades of the eighteenth century formed a period of imperial crisis for the Dutch Atlantic. Financial turbulence, war, and episodes of conquest led to severe disruptions in the connections between the Dutch Republic and its West-Indian colonies. However, crisis did not bring an end to the Dutch involvement in the Atlantic world. Recent scholarship has pointed out that the partial breakdown of older patterns of trade and control went hand in hand with the emergence of new economic ties, especially with traders from the newly independent North-American colonies. In this presentation, I will suggest some important ways in which studying North American commercial records can affect not only our perception of the ‘survival strategies’ of Dutch planters in a period of crisis and (partial) decline, but also our ideas about Dutch economic involvement in Atlantic slavery in a period of transition. In a wider sense, this can help us think about the function of trans-imperial connections as an element of risk management in a line of business that was heavily depended on state intervention and imperial power structures.


Paper 3

Risk Management in the Angola Slave Trade: strategies and conflicts between the Lisbon merchants and their agents (1728-1771).

Maximiliano M. Menz (Universidade Federal de São Paulo, Brasil)

The trade of humans was one of the riskier businesses in the transatlantic markets. Besides the general risks and uncertainties which affected all maritime trade, there were other risks that slavers would uniquely face such as the hazard of the mortality of their products, the high costs to maintain the slaves and, eventually, the flights and rebellions. To deal with these problems in the context of the Angola Slave Trade, the Lisbon merchants active in the wholesale trade developed several strategies to minimize the uncertainty and tried to transfer the risks of the transport of humans onto the middlemen and the merchants in the hinterlands of Angola. Even so, the obstacles to enforce the contracts in the distant markets and the high transactional costs could produce several problems for the Lisbon traders and create conflicts with their agents in the colonial markets eroding the high profits promised by the high price margins between Lisbon and Angola. In this paper, I intend to discuss the different strategies of the Lisbon merchants to endure the risks of the slave trade in Angola and also the said conflicts with their agents. I focus, in particular, on the role of the Contract of Angola, the farming of the slave duties exported through Luanda, and on the different mechanisms of credit between Portugal and Angola. I also try to understand the action of the local merchants and ship captains and their relations with the financiers in Lisbon.


Paper 4

An Even Riskier Business? The British Slave Trade in Time of War.

Sheryllynne Haggerty, (Department of History, University of Nottingham, UK)

It is now well accepted that the British Atlantic slave trade was a particularly risky form of commerce (Haggerty, 2009). Moreover, whilst it is generally accepted that profits from the slave trade, slavery and slave labour more widely contributed to some extent to the British economy (Williams, 1944; Eltis & Engerman, 2000; Inikori, 2002), the profits accruing from individual journeys are far less certain (Thomas & Bean, 1974; Richardson, 1983). The risks were larger and the profits potentially even more uncertain in a time of war. Increased insurance costs are an obvious factor, but what other risks were present which needed managing? This paper, which comes from a larger project on Jamaica in 1756, examines the risks associated with the British slave trade at the start of the Seven Years’ War. The increased uncertainty caused by war potentially restricted credit and therefore the purchase of enslaved people (though the disruption of supplies might increase opportunities for re-exports). Whilst the desertion of men from slave ships in the Caribbean was common after the horrors of the African coast and the ‘middle passage’, the lure of profits on Private Men of War exacerbated this problem. Richard Millerson reported that two of his crew members had jumped ‘overboard’ to serve on a Man of War, and Edward Magner wrote home that he had done the same and joined the Shorham in hope of profits from prizes taken from the French. Returns might be slow getting home due to waiting for a convoy – as Lawrence
Spencer of Liverpool found out. This was exacerbated by the French Squadron being ‘much superiour’ in the Autumn of 1756; and no doubt those returns were also lower, arriving to a glutted market. Most bizarrely, a political conflict that had been running since 1754 between the ‘Spanish Town planters’ and the ‘Kingston merchants’ meant that ‘party prejudice’ made some planters unwilling to buy from particular Kingston slave trade factors, further adding to the problems. This paper will outline the extra risks that attended the British slave trade in a time of war, and consider how the slave traders sought to mitigate them.


Paper 5

Financial mechanisms and risk management in the Iberian slave trade: The commercial enterprise of João de Argomedo (1600-1626).

Miguel Geraldes Rodrigues (European University Institute, Florence)

This paper explores the commercial enterprise of João de Argomedo, a Lisbon-based merchant active in the slave circuits of Angola and Spanish America during the Iberian Union. Focusing in the first decades of the seventeenth century (1600-1620s), his ventures illustrate the multiple financial and credit mechanisms employed by slave merchants, and the way they managed the risks inherent to the slave trade enterprise. From its very beginnings the slave trade congregated agents on a transcontinental and trans-imperial level. The geographical proximity between Portugal and Spain promoted a certain cooperation between its agents, which materialized mostly through the slave trade between Portuguese Africa and the Spanish Caribbean. This situation was further reinforced during the period of the Union of Crowns (1580-1640), as the integration of the Portuguese empire into the Habsburg Monarchy presented the perfect framework for the expansion of the slave trade in the Atlantic at the dawn of the seventeenth century. Both informal and state networks gathered around this activity and attempt to profit from it.

Traditional historiography presents this period of growth of the Atlantic slave trade as one of high profit margins for slave merchants, but often overlooks the various costs inherited to their enterprises. Fleeting contracts, credit instruments for long-distance payment, insurances or other forms of risk spreading or risk prevention, are still somewhat understudied in the Early Modern slave operations. It is the goal of this paper to shed some light into those operations through the analysis of the slave trade ventures of João de Argomedo. Drawing from both notarial and institutional sources, Argomedo’s businesses encompass multiple forms of risk management, in the form of commercial societies, insurances, credit granted at risk or “cartas de riesgo/contratos de perda e ganho”, displaying how Iberian merchants coped with the risks inherent to the Atlantic slave trade at the dawn of the seventeenth century.


Paper 6

Outbidding the risk: competition and cooperation among European e Luso-Brazilian merchants in the Slave Coast trade (early half of the eighteenth century).

Gustavo Acioli (Universidade Federal Rural de Pernambuco)

The West Africa shore, which the European named Slave Coast, was a place of fierce competition among European slave traders from the early eighteenth century on. Dutch, English and French slave ships’ captains and merchants strove to increase their share in the region’s slave market and each of them relied on the fortress which the Northwest European business companies built along the harbors. The Portuguese slave traders, departing from Lisbon or one of the main Brazilian ports, started to purchase slaves in that region at least since the last quarter of the seventeenth century; however, they faced a strong opposition from the other European engaged in trading human cargoes, mainly from the Dutch WIC, while the British Royal African Company and the interlopers used to avoid make business with the Portuguese, who, furthermore, could not rely upon a Portuguese fortress, since there was none. Everything began to change once the Luso-Brazilian slave ships started to carry gold toward the Slave Coast and used it as part of their slave dealings from the early eighteenth century on. Since then, while the Dutch combine hostility and business to cope with the Luso-Brazilian slave ships, the British were in earnest to exchange goods and slaves for the Brazilian gold. In this paper, I discuss how those Atlantic slave traders overcome the risk of trading with rival merchants, in places where there wasn’t any shared formal institution to enforce trade norms.


Paper 7

Credit, Risk, and the inter-Imperial slave trade, c.1783-1807.

Dr. Nicholas Radburn (Lancaster University)

In its illegal era post 1807, the trans-Atlantic slave trade was “internationalized.” A slave ship might have been built in the United States, bought by a Portuguese citizen, manned by a cosmopolitan crew, loaded with a cargo of British manufactures, and sailed to Brazil or Cuba under the American flag. Prior to abolition, by contrast, the trade was shaped by mercantilist laws that restricted who could own and crew slave ships, the origins of their cargoes, and their American destinations. As a result, enslaved Africans tended to be forcibly transported on vessels flying the flag of particular empires and disembarked in the colonies of those same empires. While this pattern holds true for most of the legal era, this division of the slave trade under imperial flags is paradoxical in late eighteenth century because Spain and France began to relax their navigational laws. From the 1780s, foreign flagged vessels could disembark slaves directly in the the Spanish or French Caribbean and help satiate the planters’ growing demand for new laborers. Despite these steps to liberalize the trade, it continued to be divided largely along imperial lines. This paper argues that the financial risks inherent in inter-imperial trade inhibited internationalization. It shows that British merchants—by far the largest slave traders in the eighteenth-century Atlantic World—found their efforts to sell slaves in the Spanish and French Americas to be risky because of the weak institutional foundations upon which credit was extended in the non-Anglophone Atlantic. Following numerous loss-making ventures, British slave traders continued to dispatch their vessels to the British Caribbean or the United States, both areas where slaves were sold using relatively secure credit mechanisms. This paper thus argues that credit and risk helps to explain patterns in the slave trade prior to its abolition.


Paper 8

An Economy Built on Slaves: The Atlantic as a Problem in Risk Management and Financing Growth.

Joseph C. Miller (University of Virginia, emeritus)

Before intrepid explorers, pirates, and devout missionaries ever set sail from Europe in the fifteenth century, the Atlantic was a problem in funding and risk management. Unlike the Indian Ocean, where ancient and intricately financed merchant economies awaited the Portuguese – and later the Dutch, English, and French – the Atlantic was a commercial vacuum. Native American and African economies were internally focused, circulating people among familiars more than they circulated currencies to facilitate transactions among strangers. In commercial terms, they were capital-minimizing, low-risk, use-oriented, “domestic” economies with their productive industries widely dispersed. They had little interest in, or capacity to assemble the very large concentrated investment necessary needed to integrate four remote continents around an entire, empty ocean, their internal orientations left the challenge of the Atlantic up to Europe. However, the modest-scaled fifteenth-century economies in the western Mediterranean and in the North Sea accessible to the Atlantic were operating at the limits of their liquidity and sources of funding, with available capital sucked into the maelstrom of formative military monarchies, posing a further challenge in financing ventures not promising short-term returns in bullion, as Columbus learned. The confined and competitive political spaces of Europe forced them all to search for funding external to local resources, even at the otherwise overwhelming risks of unknown local conditions, distance, time, and control. Mercantile interests in the Atlantic grew first among players marginal to the central European economy or contracts for sovereign revenues, unable to venture out into the open Atlantic under highly uncertain circumstances without fungible security.

In broad terms, undeveloped lands overseas – where it was accessible, mostly on the uninhabited islands of the eastern Atlantic and then in the insular Caribbean– was illiquid and exposed to military threat. The Portuguese brought few assets to their African voyages of reconnaissance and were at pains to find sovereign authorities on the mainland (categorized for the purpose as “kings”) capable of putting their own capital resources into trade. In their low-investment economies, these authorities relied on extraction rather than investing in productive systems, eventually supplementing depleting resources with people. The initial round of Spanish investments in the Americas quickly devolved into systematic plunder, the human equivalent of commodity extraction in Africa. Lacking European capital, violence was the default strategy on both continents. The uninhabited islands of the eastern Atlantic – Madeiras, Canaries, eventually São Tomé – became the sites of primary innovation. Unlike continental Europe, they were unencumbered by ecclesiastical or military-aristocratic competition, creating a field uniquely open for commercial investors. The process of mobilizing capital was slow, proceeding by incremental steps from initial extraction through small family farms to eventual – though only partial – consolidation into larger scale improvements and cultivation of mostly sugar cane; the drag was owing to general shortages of capital, with background scarcities compounded by high risks. Capitalizing the high requirements for labor – by converting Mediterranean uses of slaves for non-productive services, with only incidental function as property in acquiring them, to legal status as fully fungible chattel property capable of serving as collateral for the investments required – was the initial step toward solving the problem.

The general hypothesis is that slaves continued to serve as the significant collateral in succeeding steps toward financing the integration of an Atlantic economy, centered on Europe, and growing at rapid rates unattainable without this specific human form of initial security, convertible into through direct sale and through the commodities they could be compelled to produce values fungible in cash (and near-equivalents) in Europe. Stated alternatively, the economy of the Atlantic – fueled by unprecedented liquidity owing, first, to African gold and subsequently to American silver and then gold from Brazil – grew at brisk rates that continued to outpace even Europe’s growing financial capacities, reserving a place at its start-up cutting-edges for slaves as collateral. The Atlantic grew at a pace that created state of permanent shortage of capital, and the enslaved – Native Americans as well as Africans – covered the gap at the margins where it was growing.

The paper will sketch the geographies and specific circumstances in which people were appropriated as property/collateral – beyond their successors’ value in established enterprises as productive labor – as they changed through the centuries. It will also raise the question of how to integrate the value of the economic systems of Africa and the Native Americas as further supplements for financing the Atlantic economy. The delicate balances of African and Native American political systems leveraged even the minimal investments that Europeans brought to their encounters with them to destructive effect. Extraction – that is, environmental depletion – was an additional indirect capital subsidy financing Atlantic economic growth.


Paper 9

The formation of slaves’ price in the Atlantic Iberian during the 16th century: costs, licenses, insurances, freights and commercial benefits.

Rafael M. Pérez García (Universidad de Sevilla)
Manuel F. Fernández Chaves (Universidad de Sevilla)

In this work the authors try to understand the different issues related to the construction of the slave’s price in the Atlantic Iberian during the 16th century, attending not only to a specifical chronology but also comparing different moments within the century, and paying attention to the differences of the slaves’ price between both atlantic shores. For doing so, we will use different sources, from specialized bibliography to archive material.


Paper 10

Amsterdam Merchants and Insurers in the Atlantic Slave trade business, 1590s-1700s: Investments and risk management.

Filipa Ribeiro da Silva (International Institute of Social History, Amsterdam)

The participation of the Dutch Republic in the Atlantic Slave Trade is, traditionally, associated with the monopoly of the first and second Dutch West India Companies (WIC) and the Middelburg Commercial Company (MCC), established in 1621, 1674 and 1720, respectively. However, private merchants of the Republic, as well as slave traders based elsewhere were also rather active in Atlantic slave trading and other commercial activities throughout the entire early modern period. Amsterdam based insurers and financers played an important role in the slaving operations of these Dutch and foreign merchants based in this city as well as other towns of the Republic, by insuring the casks, and cargoes of the ships engaged in this business sailing not only under Dutch flag but also under the flag of other countries and cities.

In this paper we will examine the strategies adopted by the slave traders based in the Republic and elsewhere who relied on the financial and insurance services provided by Amsterdam to manage the risks involved in their slaving business. In addition, we will also look at the tactics of the insurers and financiers based in the city who were willing to secure the voyages of the aforementioned merchants to safeguard their investments in such a risky business.

Our analysis will be based on a set of circa 400 notarial contracts from the collection of the Amsterdam City Archive concerning slave trade insurance. This set has been extracted from a larger dataset of more than 16.000 notarial contracts gathered during several years of research in collaboration with Cátia Antunes (Leiden University).


Paper 11

The insurance of mass murder. The development of slave life insurance conditions during the Dutch slave trade in the eighteenth century.

Dr. Karin Lurvink (Vrije Universiteit Amsterdam)

Until at least the 1760s, the Dutch Republic was Europe’s financial center with advanced financial institutions and maritime insurance opportunities. From the moment the Dutch became active in the slave trade, merchants insured the lives of the enslaved Africans on board of the ships. This paper explores the development of the insurance policies of Dutch slave ships in the eighteenth century and reveals how debates on the financial handling of bloodily oppressed slave insurrections influenced these conditions. Slave life insurance conditions became increasingly specific and standardized during the eighteenth century. Successful slave revolts were usually not insured, though the insured searched for alternative ways to make the insurers cover the ‘damage’ costs. This paper further explores the group of insurance companies and private insurers active in insuring the lives of enslaved Africans and by doing so were essential in enabling the international slave trade.


Paper 12

Insuring European transatlantic slaving voyages: long term and comparative perspectives.

Robin Pearson (University of Hull)
David Richardson
(University of Hull)

Contemporary investors often saw transatlantic slaving voyages from Africa to the Americas as risky ventures. It is a view shared by modern historians, who have noted both the natural and human risks of such ventures, and have explored some of the institutional arrangements that evolved to mitigate them. Little research has been done, however, on the evolution of insurance practices relating to slaving voyages, whether embarking from Europe or the Americas. In this paper, we seek to rectify that omission by locating recently uncovered findings on insurance in the British slave trade in 1760-1807 in longer term and comparative perspectives. In particular, we propose to use data relating to British, Dutch and French voyages from the late seventeenth to the early nineteenth centuries to examine both the prevalence of insurance arrangements in slaving voyages and their wider significance for the development of marine insurance markets and our understanding of risk evaluation in that period.


Paper 13

Insurance and risk management in an illegal activity: the Atlantic slave trade to Cuba (1820-1866).

Martín Rodrigo y Alharilla (Universitat Pompeu Fabra)

Beginning in 1820, the entry of new slaves into Cuba was prohibited. However, that prohibition did not mean the end of trade of Africans enslavers to the Island that continued for another forty-six years, illegally and clandestinely. More than 500,000 slaves arrived in Cuba during the illegal phase of trafficking. My paper will try to analyze what strategies adopted the ship owners of the expeditions to outwit the persecution of the British Navy and, eventually, of the Spanish officials and also will try to analyze the insurance of an illegal activity.


Paper 14

Fighting risk with cooperation: the internationalization of investment in the illegal slave trade during the 19th century.

John Harris (Erskine College)

The nineteenth century was an era of unprecedented risk for slave trade investors. By the 1830s, the traffic had been declared illegal in almost every part of the Atlantic world and many nations were taking active steps to suppress it. In this context, insuring voyages was out of the question, at least in the ways investors had done it in previous centuries. Many investors simply responded to this new scenario by dropping out of the traffic, but as this paper will show, others adopted new strategies.

One key tactic was to internationalize investments in voyages. In contrast to previous eras, investors in several regions of the Atlantic basin – including North America, the Caribbean, and West Central Africa – began claiming a stake in single voyages. In this way, regional players were encouraged to mitigate the risks from suppression on behalf of all. By the mid nineteenth century, pooling investments had become the dominant investment pattern in the illegal slave trade. International cooperation was also key in circulating profits after voyages had been completed. Investors in many regions recruited merchants and bankers who assisted them in laundering returns from illegal voyages and distributing them across the Atlantic Ocean. In the end, the internationalization of financial arrangements proved quite effective, although tensions remained between regional investors. Ultimately, however, no investment strategy could withstand the final assault on the illegal trade by suppressionist powers in the 1860s, which finally ended the traffic.