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Economics of the Cuban Slave Trade: A look at the Initial US Investment in Cuba

By Collin Box

Today Americans think of Cuba as that tiny island ninety miles south of the tip of Florida where countless refugees have attempted an escape on inner-tubes or anything that floats. A few people in the United States might even know that we have had an economic embargo against Cuba for more than forty years. With the exception of a few American scholars and students, very few Americans are aware of the fact that we have an economic history with Cuba that stretches back more than two hundred years. By looking at the origins of the Cuban slave trade, the economics of the Cuban slave trade itself, and the Cuban sugar economy based on slave labor, we can see what led to one of North America’s longest lasting economic relationships.
 
While slaves had been a part of Cuban life since Spanish colonization began in 1511, it would take a major slave revolt to set in motion the development of Cuba’s slave-based economy. The year 1791 would see the beginning of a slave revolt in the French colony of San Domingue in the Caribbean Sea. The French Revolution of 1798 unconsciously sparked a fire in their wealthiest colony. The principles of the French Revolution were the ideals of “liberty and equality.” It is not surprising the people of a French colony would have wanted the same freedoms of the people of France. The white population of San Domingue wanted to have full citizenship or complete independence from France. The Black population, as slaves, simply wanted to be free. This led to an all out slave rebellion in a colony where slaves vastly outnumbered whites.[1] In regards to the Haitian revolution Tomich states, “The Haitian Revolution not only destroyed the world’s richest colony and the source of nearly half the world’s sugar but signaled the end of French imperial ambitions in the Americas.”[2] [3]
 
Cuba, however, was not the heir apparent to the sugar producing throne. Cuba’s land mass is approximately 46,000 square miles. At the time of the revolution in San Domingue, Cuba was producing about 10,000 tons of sugar annually.[4] To give us an idea of how comparatively little that amount was, Perez gives us several comparisons. “Cuban sugar production of 10,000 tons was matched by St. Christopher (68 square miles) and Antigua (108 square miles).”[5] He goes on to list Jamaica as having roughly one tenth the land mass but producing three times as much sugar. San Domingue at one fourth the size of Cuba produced almost 71,000 tons of sugar. Cuba at the time was producing only about 3.2% of the worlds sugar even though its land mass was equal to the entire rest of the West Indies combined. What this data tells us is that Cuba was very ill prepared to make the production increases necessary to replace San Domingue in the sugar market. Britain on the other hand seemed to be ready to step in and fill the hole in the sugar market left by San Domingue. Most of the small West Indies islands listed above were British possessions. How did Cuba become the greatest sugar producing nation?[6]
 
There were a number of elements that led to Cuba’s success. The first contributing factor was that most of the British colonies had already reached the limits of their ability to produce sugar. Tomich reflects that even in colonies such as Jamaica, Trinidad, and Guiana, “where expansion was still at least technically feasible, economic and political restructuring restructured the development of the sugar industry.”[7] Tomich attributes the failure of Jamaica’s sugar potential to the high price of transportation in the inland valleys where sugar could be grown. The obstacles in Trinidad and Guiana are more representative of the problem as a whole. In 1807 Britain banned the slave trade. The lack of slave importation would prove to be the decisive factor in the failure of a sugar economy based on slave labor.[8]
 
With British colonies stymied, Cuba stood poised to inherit the world sugar market. The rebellion in San Domingue had been a blessing to Cuba in several ways. With the collapse of Haitian sugar production the price of sugar world wide had begun to skyrocket. At the same time demand for sugar grew. When you combine this with the fact that sugar was now in very short supply, Cuba had a wonderful opportunity on its hands. As good an opportunity as this was for Cuba, its greatest gift may have been the “émigrés” from San Domingue itself. Perez estimates that as many as 30,000 of them came to Cuba. He states, “Many arrived with capital and slaves, but most of all with experience and skill in the production of sugar and coffee.”[9]
 
In 1796 the war between Spain and England would open up a whole new market for Cuban goods. The Cubans would begin trade with the United States. “Cuba exported sugar, molasses, rum, and coffee; the United States provided foodstuffs, clothing, furniture, manufactured goods, and slaves.”[10] The most important of these items in terms of the Cuban economy were the slaves. The Cuban sugar industry was based, like all successful sugar industries, on slave labor. According to Tomich, sugar became the dominant sector of the Cuban economy by 1820. Ten years later it would become the world’s largest producer of sugar with an annual production of over 105,000 tons. By 1868 Cuba’s sugar production would reach over 720,000 tons annually. This is roughly thirty percent of the world’s sugar production. All the while this massive production of sugar was based on the labor of slaves. They cleared the land. They planted the sugarcane. When harvest time came they harvested and then processed the sugar. They efficiently performed all aspects of the labor needed for profitable sugar production, at very little expense to their owners. All the owners provided for them were basic sustenance and a few pairs of clothes each year.[11]
 
The number of slaves imported to Cuba to create this labor force was huge. The official number of slaves imported to Cuba between 1790 and 1821 was 240,721.[12] Although the Anglo-Spanish of 1835 outlawed the importation of slaves to Cuba, the law, was almost a joke. It was overlooked and barely enforced. Evidence of this can be seen in the fact that between 1835 and 1864 an additional 387,000 slaves were imported to Cuba from Africa.[13] The fact that so many slaves came to Cuba even after slave trading had become illegal suggest that slavery and slave trafficking were hugely profitable and that nothing was a deterrent to their growth.. In order to acquire slaves for its booming sugar economy, Cuba did not have to look very far. They needed only look ninety miles to the north to find a country ready and willing to supply them with all the slaves they could possibly want.
 
America’s role in the Cuban slave trade came about largely due to logical capitalist economics. Although American slave importation had been made illegal by congress in 1808, bringing slaves to Cuba was profitable. Although profitable, the slave trade had many risks. In response to these risks, Americans would develop an intricate system of bringing slaves to Cuba that made it worth the potential disaster for all persons involved, slaves excepted.
 
An American Naval Officer named Robert Wilson Schufeldt, provides us with one of the most informative accounts of slave trafficking. Schufeldt was commissioned by Judge Truman Smith to write a report that would inform him of the inner workings of the slave trade. The report was commissioned just after a treaty was signed by the United States and Britain giving each mutual search rights in an effort to stop the illegal transportation of slaves. This decisive action against the slave trade came in April of 1862. It was very late in the game as far as having any real effect on the slave population in Cuba. It was however, the first real step by the Americans to discourage the slave trade.[14]
 
An average slave voyage started with a company based out of Havana. Schufeldt listed that unnamed company, as having “$1,000,000″ in capital. One of the largest importers of slaves in Havana was a man by the name of Juaquin Gomez. Gomez was a prominent Spaniard, who had contributed to the founding of the Bank of Havana.[15] At this point the Company based in Havana would send a letter to a “Correspondence” in New York. Schufeldt lists a Mr. Machado as being one of the most common correspondents. The contact was often a “naturalized citizen of the US” who originated in Cuba. This correspondent was responsible for obtaining several things. The first thing needed was a ship. Schufeldt stated that a ship brokerage Wenburg & Weeks was often used. They were said to have made the process quite “facile.” The ship was selected so as to be, “not too large and not too expensive (in order to divide the risk of capture among several with the same amount of capital.)”[16]
 
The next thing that must be obtained was insurance for the voyage. Originally insurance for such an illegal venture would have been obtained in Havana from a company such as “Compania de Seguros Martimos and Especulacion.”[17] After the Anglo-Spanish treaty of 1821 the insurance rates for Havana-based insurers skyrocketed; insurance firms in 1840 were on average charging premiums of 35 to 40%. United States based firms at the same time were charging around 2.5%. The shipping insurance industry can be seen as one of the first sectors of the Cuban economy to fall into American hands. The Cuban companies simply could not compete with the extremely low U.S. premiums.[18]
 
After Insurance was obtained, a captain had to be found. This was often done by the same company that obtained the ship. Schufeldt says that most often the captains of these ships were from New England, especially from Massachusetts and Rhode Island. After the captain was found, he and the owner of the ship (the correspondent would act as the American-based owner) would begin to assemble a crew. In New York the crew would be comprised of just the bare minimum necessary to sail the ship to Havana, where the real voyage would begin. In the early 19th century the ships would sail directly from New York to go slaving. In order to achieve this, they would simply bribe the United States Customs Marshal into ignoring their outgoing cargo of goods which was used to purchase the slaves. This could be accomplished for as little as $1000.[19] As pressure from local people became greater, ships would load a non-slaving cargo on board and then sail to Havana and load the necessary cargo for slaving. When the captain and the crew were assembled, the only thing left was to clear customs and head for Havana.[20]
 
Upon the ships arrival in Havana had no trouble “discharging” her cargo, as it had nothing to do with slavery. The crew then began to, “take in a new cargo, which consists of articles used in the purchase of slaves, & their subsistence on the homeward voyage-via Barrels of bread, puncheons of rum-tierces of rice & beans-jerked beef-tobacco-pickles & vinegar, powder & old muskets–& together with lumber, for the slave deck.”[21] The previous mention of lumber for a slave deck is worth a note. The ship itself was not built as a slave ship. There was nothing in it or on it that would give the perception that it was meant for carrying human cargo. All the goods taken on board at that time were either used for purchase of slaves, i.e. rum, or as general subsistence provisions.[22]
 
Once the ship had loaded its new cargo it began the process of acquiring the necessary crew. In addition to the captain, a few officers, and the normal crew, several other important people were brought on board. The first was called the “Sobrecargo.” Schufeldt described him as, “the great factotum & transactor of all the business of the ship, & in case of need when boarded by American Men of War, he hoists the Spanish flag & is called the Spanish Captain.” It is important to note that although many American businesses and people participated in the slave trade, it was still technically illegal. This was the rationale behind the hoisting of the Spanish flag on the ship, as Americans had no jurisdiction over a Spanish ship. Normally the ship would fly an American flag; other countries ships could not legally stop a ship flying the American flag until 1862. The second crewman that comes aboard was called the “Contra Maestro.” He is “the brute who manages & beats into submission the human cargo on its homeward trip.”[23] With the ship’s cargo and crew now complete there was just one thing left to do, obtain sailing papers from the United States Consul General in Havana. These papers make the voyage a legal one in name, in spite of the content of whatever cargo it may carry. With this done the ship began its 45 day journey to the “Rio Congo” in Africa.[24]
 
The process after the ship arrived in Africa is much the same as it was when the slave trade was legal, with a few exceptions. The first exception would be the construction of the ship itself. Since it was not initially built as a slave ship, several modifications had to be made. The first thing was the loading of old rum puncheons from previous voyages. The lumber that had been brought for a slave deck was then laid out on top of the puncheons creating the slave deck itself. The puncheons were then filled with water for the return voyage. In the meantime the Sobrecargo would conduct the purchase of the slaves using the rum the ship had brought as payment. Once all transactions were complete, the slaves were loaded onto the ship. The figures given by Schufeldt are that 750 slaves were loaded onto a ship that was was one hundred feet long and thirty feet wide, a tiny amount of space for that many people to occupy. When the slaves were fully loaded, the ship headed back to Cuba.[25] With a human cargo of that size, only 500 of the 750 slaves were expected to survive, a mortality rate of about 34%.
 
Upon arrival in Cuba the ship then needed to discharge its contents and sell its cargo. One of the most popular ways of discharging the cargo was to sail to a secluded island off the coast and unload the cargo of slaves. The ship would then sail to the port of Havana. Schufeldt gave the example of Key St. Phillip as being a popular island upon which to discharge a slave cargo. The ship would then sail around to the port of Havana and hoist a red flag. After hoisting the flag the ship would be inspected by the Consul and certified as not having a slave cargo. This was all a bit of a farce as the red flag was a well know signal to merchants that a slave cargo had been landed and was ready for sale at the market.[26]
 
Now that the slaves have made it to market let us examine the actual numerical economics of the trade. The first example pertains to a ship called the Firme in the year 1829. Its expenses are listed as follows: Outward cargo for slave purchase, $28,000/ 16 able seamen at $40 a month 20 ordinary seamen at $35 a month Vessel 10 months absent, $13,400/ Wear and tear of Voyage, $10,600. This brings the total expenses for the voyage to $52,000. It is then listed as selling 484 slaves at $300.39 a head for a total of $145,200. This means that the net profit for the voyage was $93,200.[27] This assessment by Hugh Thomas is slightly flawed in that it does not account for several common expenses. First there was the initial cost of the slave when they were purchased in Africa. Second was the expense of the bribes that were commonly used to make slaving voyages go more smoothly. Schufeldt presents us with another example of a ships financing as follows. The cost of the ship at $7,000/ Advance wages for the crew at $1500/ Cost of Negroes @ $50 for a total of $37,500/ Captain’s wages $5000/ Super Cargo & Boatswain $5000/ Crew of ten men @ $750 $7500. He then adds another $100,000 worth of bribes to the ledger of expenses. This brings the total expenses to $163,500. He then records that 500 slaves were sold at $800 a head for a total of $400,000. This results in a net profit of $237,500 for one successful slaving voyage. When compared to the wage of an ordinary sailor or many of the other low paying laborers of the 19th century who made around $420 a year slaving was a profitable enterprise.[28] Even if the voyage was unsuccessful it was insured. This meant that there was very little in the way of real economic risk involved with the slave trade.
 
The fact is that profits from the slave trade were huge. It was the dot com craze of its day. Cuba had become a sugar based economy and was in need of slaves to make the sugar economy profitable. American smugglers in turn had the ability to provide Cuba with the slaves they so badly needed. The symbiotic relationship for the two countries was based on ones need of the other to thrive and prosper. Cuba needed the slaves for its sugar industry. The United States needed Cuba to purchase of the slaves that they had available to sell. By banning the slave trade Britain had inadvertently made it even more prevalent. Now the slaves could be obtained from Africa for a fraction of their previous price. At the same time demand for slaves was growing. This meant that the profit margins would continue to increase. It became a matter of supply and demand. The Cuban slave trade with the United States became just the first of many economic relationships in the history that intertwines the United States and Cuba. Cuba’s need for slaves had pushed it into the arms of a giant that it would not break free of for almost 160 years.

[1] Louis A. Perez, Jr., Cuba Between Reform and Revolution (New York: Oxford University Press, 1995), 70-71[2] Dale Tomich, “World Slavery and Caribbean Capitalism: The Cuban Sugar Industry, 1760-1868,” Theory and Society 20 (June 1991): 302[3] Perez 70-71[4] Ibid, 70[5] Ibid, 70[6] Ibid, 70-73[7] Tomich, 303
[8] Ibid, 300-304
[9] Perez, 71
[10] Ibid, 73
[11] Tomich, 304
[12] D.R. Murray, “Statistics of the Slave Trade to Cuba, 1790-1867,” Journal of Latin American Studies 3 (Nov. 1971): 134
[13] Tomich, 304
[14] Frederick C. Drake, “Secret History of the Slave Trade to Cuba Written By an American Naval Officer, Robert Wilson Schufeldt, 1861,” The Journal of Negro History 55 (July 1970): 218-233
[15] Hugh Thomas, Cuba or the Pursuit of Freedom (New York: De Capo Press, 1998), 156
[16] Drake, 221
[17] Thomas, 126
[18] Ibid, 226
[19] Drake, 221
[20] Ibid, 221-222
[21] Ibid, 223
[22] Ibid, 222-223
[23] Previous two quotes and info from Ibid, 223
[24] Ibid, 222-224
[25] Ibid, 225
[26] Thomas, 164-165
[27] Thomas, 163
[28] Drake, 227