A study on the transfer of wealth from Southern slaveholding families to their children helps explain how these advantages came about. Strikingly, the inheritance of actual material profits from the slavery-based economy isn’t the culprit some suppose. The economists Leah Platt Boustan of Princeton University; Katherine Eriksson of the University of California, Davis; and Philipp Ager of the University of Southern Denmark found in their study, “The Intergenerational Effects of a Large Wealth Shock: White Southerners After the Civil War,” that white resilience to economic catastrophe has been almost impenetrable.
According to the study, the largest slaveholding families in the South took a huge hit after the Civil War—a 38 percent drop at the median and a 75 percent loss among the top wealthiest families between 1860, a peak year for slavery profits, and 1870. But by 1880, many of the sons of those families had already recovered that wealth. By 1900, the sons of the richest slaveholders had not only financially recovered but were wealthier than the sons of families who were just as wealthy before the Civil War, but from mostly non-slaveholding assets and activities.
It took just one generation for white slaveholding families to regain their riches, and this rebound was not due to an inheritance of slavery profits. Much of that was devoured by the war, emancipation, and regressive crop productivity in the South after the war. Nor was the recovery owed to an inheritance of entrepreneurial skills, which the study ruled out because of the drastic transition of the economy from agricultural-based to industrial-based.
“Even destroying the capital stock or temporarily expropriating the land of wealthy households would not have been enough to prevent their sons from experiencing full recovery.”
The Southern dollar rally might have had something to do with those slaveholders’ sons marrying into wealthier families. But most of the wealth recovered by slaveholders’ children came from occupation-based earnings. The most likely explanation for the restoration of their wealth, according to the study, is the “role of social networks in facilitating employment opportunities and access to credit”—or, in other words, community context. The wealthy slaveholding families were cozy enough with the wealthy families who weren’t totally in the slavery business to leverage their relationships into preservation of their elite status.
“We think the most likely explanation for the rapid recovery of slaveholders’ sons is that slaveholding families were embedded in social networks that facilitated adjustments to wartime losses,” reads the study. One critical adjustment facilitated in this respect was credit, which was “surprising in light of the fact that slave collateral formed the basis for nearly all southern credit relations and was completely wiped out after emancipation.”