Latest / The Atlantic Slave Trade: Empire Built on Human Suffering — Fexingo History / The Slave Trade's Bankers: How London Insured the Middle Passage
Transcript
- Lucas: We've talked a lot about revolts and the horrors below decks, but I want to step back today and look at something less obvious but just as essential to the Atlantic slave trade: the money. Specifically, the bankers, insurers, and investors in London and Liverpool who made the whole system run. Luna: So it's not just the ships and the captains — there's a whole financial machine behind it. Lucas: Exactly. And it's a machine that we often don't talk about because it's less visceral than the shackles and the holds. But without insurance, the slave trade as we know it couldn't have existed. Think about it: a voyage to Africa, then across the Atlantic with a perishable, high-value cargo of human beings, then back to Europe with sugar or tobacco. That's a round trip of six to twelve months, with enormous risks — storms, disease, revolt. No shipowner would take that on without insurance. Luna: So insurance was actually a prerequisite for the trade. Lucas: It was. And the center of that insurance world was London's Lloyd's Coffee House. By the mid-eighteenth century, Lloyd's had become the go-to place for marine insurance. Shipowners, merchants, and underwriters would meet there to negotiate policies. And among the most lucrative policies were those covering slave ships. An underwriter at Lloyd's might insure a dozen slave voyages a year, each one representing hundreds of lives. Lucas: But here's where it gets morally complicated — and I mean complicated even by the standards of the slave trade. The insurance policy treated enslaved people as cargo, like any other goods. If they died during the voyage, the owner could claim compensation. And that led to a perverse incentive: if a ship faced an insurrection or an outbreak of disease, the captain might decide that killing some enslaved people was more profitable than trying to save them. Luna: You're talking about the Zong massacre. Lucas: Exactly. The 1781 case where Captain Luke Collingwood ordered 133 enslaved people thrown overboard so that the owners could claim on the insurance. The legal case that followed, Gregson v Gilbert, wasn't about murder — it was about whether the insurance policy covered the loss. And the court ruled that it did, because under 'general average' — a principle of maritime law — jettisoning cargo to save the ship is a shared loss. The court treated enslaved people as cargo. Luna: They literally priced human life. Lucas: They did. And that case became a rallying point for abolitionists like Granville Sharp, who tried to have the crew prosecuted for murder. But the legal system wasn't interested. The Lord Chief Justice, Lord Mansfield, actually said the case was 'the same as if horses had been thrown overboard.' That's a direct quote. The insurance system had dehumanised people to the point where their deaths were just a financial calculation. Lucas: But let's go back to the bankers. Because insurance was only one part of the financial network. There were also the investors who funded the voyages. In ports like Liverpool, Bristol, and London, merchants would form syndicates to finance a slave ship. They'd buy shares in the voyage — like a joint-stock company for a single trip. If the voyage succeeded, they made huge profits. If it failed, they lost their investment. Luna: So there were a lot of small investors, not just a few big players. Lucas: Right. And that meant the slave trade was embedded in the local economy. In Liverpool, for example, by the 1750s, about one in every eight ships leaving the port was a slave ship. And the profits from those voyages financed the city's growth — its banks, its warehouses, its fine buildings. One historian estimated that Liverpool's slave traders generated something like forty percent of the city's wealth in the late eighteenth century. Lucas: There were also bankers who specialised in the trade. Take James Rogers, a Bristol banker who lent money to slave traders. He was so deeply involved that when the slave trade was abolished in 1807, his bank collapsed. He'd made loans that were secured against future slave voyages, and when those voyages stopped, the loans went bad. His failure dragged down other businesses in Bristol. So the abolition of the trade had real financial consequences. Luna: And what about the compensation that slave owners got after abolition? Lucas: That's a huge topic. In 1833, when Britain abolished slavery itself, the government paid twenty million pounds in compensation to slave owners — a massive sum, about forty percent of the national budget at the time. That money went to people who had owned enslaved people, not to the people who had been enslaved. And many of those slave owners were the same bankers and investors we've been talking about. So the British government essentially bailed out the investors in the slave system. Luna: It's like the taxpayer was paying the slave traders for their lost property. Lucas: Exactly. And that compensation was a huge transfer of wealth from the public to a small elite. It's one of the reasons why the financial legacy of slavery persisted long after emancipation. Many of the banks and insurance companies that had profited from the slave trade continued to exist, and some still exist today — though they've changed names and distanced themselves from that history. Lucas: But let me give you a specific example of how this worked at the ground level. There was a London merchant named Anthony Bacon. He wasn't a slave trader himself, but he owned sugar plantations in the West Indies that used enslaved labor. He also had a contract to supply the British army with rum. His businesses were interconnected — the profits from enslaved labor on his plantations funded his other ventures. And he was part of a network of merchants who lobbied Parliament to protect the slave trade. Luna: So the financial world and the political world were intertwined. Lucas: Completely. And that's why abolition was so hard. It wasn't just a moral campaign — it was a battle against some of the most powerful economic interests in the country. The slave trade wasn't a marginal activity; it was central to the British economy. And the financial infrastructure that supported it — the insurance, the banking, the investment — was sophisticated and deeply entrenched. Lucas: There's one more figure I want to mention: John Kennion, a Liverpool slave trader who wrote a pamphlet in the 1780s defending the trade. He argued that the slave trade was essential to British commerce and that abolition would ruin the country. He was one of many who saw the trade as simply business — a business that happened to involve human suffering. And his arguments were taken seriously in Parliament. Luna: It's chilling how normal it all seemed to them. Lucas: It is. And that normalization was possible because the financial system abstracted away the human reality. When you're looking at a balance sheet, you see numbers, not people. The enslaved became entries in a ledger, items on an insurance policy. And that abstraction made it easier to justify the trade — and harder to dismantle it. Lucas: If you've been stepping into history with us episode by episode, you know we dig into these connections because they matter. And if you're finding value in these conversations — about the financial side of slavery or anything else — there's a way to help keep the show ad-free and independent. It's buy me a coffee dot com slash fexingo. That's buy me a coffee dot com slash fexingo. No pressure at all, but if you can, it goes straight to keeping this research going. Luna: And honestly, every bit helps. We're not a big network — it's just us digging into archives. Lucas: Exactly. So, back to the financial side — one last thing I want to touch on is the legacy. Today, some historians are tracing the modern banking and insurance industries back to the slave trade. For example, Lloyd's of London has acknowledged its historical involvement. And there's ongoing research into how wealth from slavery funded universities, museums, and other institutions. It's a deep and uncomfortable history that we're still uncovering. Luna: So the ghost of that financial system is still with us. Lucas: In many ways, yes. And understanding that helps us see that the slave trade wasn't just a series of horrific voyages — it was a system, with all the complexity and inertia that comes with that. Next time, we'll look at how abolitionists finally started to crack that system, targeting the insurance and credit that made it run.