Cotton Capitalists

American Jewish Entrepreneurship in the Reconstruction Era

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Michael R. Cohen
Goldstein-Goren Series in American Jewish History
  • New York, NY: 
    NYU Press
    , December
     288 pages.
     For other formats: Link to Publisher's Website.


Following landmark studies which place the cotton trade at the center of the history of global capitalism, Michael R. Cohen’s Cotton Capitalists: American Jewish Entrepreneurship in the Reconstruction Era convincingly puts Jewish merchants in the Gulf South and their connections to coreligionists in both the North and in Europe at the center of this story. The authorrecreates the niche economy Jewish merchants established in cotton-growing regions of the South during the second half of the 19th century. Cohen deftly examines ethnic trust networks among Jewish firms throughout the United States that provided each other with credit “and provided Jews with a competitive advantage” (2). Although scholars of religion might find Cotton Capitalists disappointing, Cohen has produced a work of lasting significance to historians interested in southern merchants, ethnicity in commerce, and global capitalism. 

Cohen centers his narrative along the Gulf South, the epicenter of southern cotton production in the 19th century. He demonstrates that Jewish trust networks provided the connective tissue which funneled credit across the Atlantic to New York City and New Orleans and from there to the southern hinterland. This network “redrew the American Jewish map,” which followed the map of cotton production in the South (16). Cohen claims this niche economy “ushered Jews into the world of global capitalism” (19). In the decade prior to the Civil War, Jewish merchants typically got their start as itinerant peddlers, but later settled and opened their own stores in the interior of the Gulf South. Throughout this period, credit agencies and Anglo-American businesses distrusted Hebrews because of the stereotype of the Jewish shyster, forcing Jews to rely on each other for credit. As general stores emerged as the primary source of southern credit when the old factorage system crumbled, Jewish firms with access to trust works were “in the right place at the right time” to insert themselves in the inner workings of global capitalism (19). This included the famed Lehman Brothers, which established operations in Montgomery before expanding to New Orleans and New York City. Firms which accumulated capital reserves in these years were able to survive the disruptions of war while some made tidy profits as blockade runners or smugglers. Others stockpiled cotton until Grant’s army reestablished commerce with the North. Quickly after the war, southern Jews reestablished trust networks with family and coreligionists in the North. Those who had stockpiled capital or who had access to outside credit networks “became the lifeblood of the southern economy” (21). 

Cohen traces the ups and downs of the cotton market during Reconstruction. Between 1866 and 1867, “floods, crop failures, disease outbreaks, and depressed prices” limited the possibility for success and many Gentiles who established new firms found themselves at the wrong place at the wrong time (82). Meanwhile, successful Jewish firms drew on cash reserves to weather the storm. The economy picked up significantly between 1868 and 1873, and Hebrew merchants thrived like never before and offered credit to farmers, including freedmen. Cohen stresses the importance of railroads which allowed for Jewish merchants to penetrate southern towns far from major waterways, deep in the interior. The period between the Panic of 1873 and 1879 proved decidedly unstable and firms again had to rely “on ingenuity, capital reserves, and credit networks” (83). Cohen describes a two-tiered ethnic network. The top level included capital which moved from Europe or the North to large retailers or wholesalers in the Gulf South. Using Lehman Brothers as a case study, Cohen shows how Jewish retailers and wholesalers in the South relied on ethnic networks extending outside the region for credit which allowed them to stock their shelves and further extend credit to both large planters and businesses. Firms like Lehman Brothers “connected these businesses with the credit and capital they needed to thrive” (153). Cohen then examines how Lehman’s customers provided credit to smaller Jewish merchants and farmers throughout the Gulf South and “infused … global investment through local economies” (160). Finally, Cohen explains the collapse of the niche economy, which he attributes the emergence of impersonal investment banking, major structural changes in the economy, invasive species like the boll weevil, and an uptick in antisemitic violence which drove Jews out of the South. Although this violence occurred at the same time southern governments established Jim Crow, Cohen fails to connect anti-Jewish attacks with concurrent violence against African Americans. 

Cohen convincingly demonstrates that ethnic trust networks allowed Jewish merchants to bring global capitalism to the South. Cohen’s primary sources include Lehman Brothers archives, Dun credit reports, and local ledgers and allow him to reconstruct long-forgotten trust networks which linked Jews in the southern states to those in New York and Europe. In addition, Cohen conducted genealogical research to establish family connections among the firms in his study. Although Cotton Capitalists will be of enduring importance to economic historians, Cohen devotes no space to ways in which religion shaped trust networks, which he describes entirely in ethnic terms. Religious adherence and patronage certainly provided Christian entrepreneurs with spiritual capital among their coreligionists which, in turn, bolstered their reputation and business interests. Similarly, Jewish merchants supported synagogues which became the center of local Hebrew life and which no doubt enhanced their reputation within trust networks. Although Cohen did not set out to examine faith, his research leaves the door open for scholars to clarify what role religion and religious participation played in trust networks. Cohen recognizes that many Jewish merchants conducted business with African American sharecroppers and land owners, but he fails to examine their racial attitudes and how these affected their business dealings with their black neighbors. His persistent argument that Jewish merchants were simply in the right place at the right time during Reconstruction, while obviously true, has little explanatory power. This is a historical contingency that demands more substantial answers than good timing. But these are minor criticisms to an outstanding piece of historical scholarship

About the Reviewer(s): 

Christopher M. Bishop is Adjunct Professor of American HIstory at Auburn University at Montgomery.

Date of Review: 
November 12, 2018
About the Author(s)/Editor(s)/Translator(s): 

Michael Cohen is Associate Professor of Jewish Studies at Tulane University, where he holds a Sizeler Professorship. He is the author of The Birth of Conservative Judaism: Solomon Schechter's Disciples and the Creation of an American Religious Movement, as well as several articles and reviews.


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