Financial considerations

Slave labour

Figure caption,
An illustration from 1897 depicting an auction of enslaved Africans in America. (Source: World History Archive/Alamy.)

The plantation economies of the New World were built on slave labour. Enslaved people were seen as commodities rather than human beings. ,

Decisions about enslaved people's lives were made based on money: how could costs be kept down and profits maximised. The huge profits to be made by European merchants drove the continuation of the slave trade until its abolition in 1807.

Buying enslaved people was expensive, but the profits from their labour outweighed the costs. Approximately 70 per cent of enslaved people were brought to the New World to produce sugar, the most labour-intensive crop. The rest were employed in harvesting coffee, cotton and tobacco.

Sugar growing was labour-intensive, requiring many enslaved people to make it profitable. The rich planters could also afford to work enslaved people to death and then buy more.

Profits from slave labour

By far the most financially profitable West Indian colonies in 1800 belonged to Britain. The handful of British individuals who became planters made small fortunes. This advantage was reinforced when France lost its most important colony, Saint Dominigue (now Haiti), to a rebellion of enslaved people in 1791.

After 1791, the British Caribbean islands produced the most sugar and the British people quickly became the largest consumers. West Indian sugar became commonplace as an additive to tea. The profits of slavery were ploughed back into the economy and helped to develop industry in Britain and its colonies.

Manchester became an important textile centre, where factories made cloth from cheap slave-picked cotton. Much of this cloth was sold back to African traders in return for more enslaved people.

Between 1630 and 1807, Britain's slave merchants made a profit of about £12 million on the purchase and sale of African people. Enslaved people produced about 75 per cent of exports of raw goods from the new colonies.

Banks and insurance

Figure caption,
The Lutine Bell at the headquarters of Lloyd's of London. The bell used to be rung when a ship insured by Lloyd's sank. Lloyd's of London's began business selling insurance to the shipping industry - many of the ships were involved in the slave trade. (Source: Peter Huggins/Alamy.)

Fitting out a slave ship for the triangular trade was an expensive and very time-consuming business. Ships could take over a year to return to Britain and make a profit. In order to afford such voyages, merchants needed money to cover their initial costs.

The Bank of England made capital available for slave voyages and the City of London became the financial centre of the slave trade.

Sailing across the Atlantic was dangerous however and combined with the harsh conditions on the slave ships, there was a high risk of human and non-human cargo being lost 'en route'.

Britain's oldest insurance company, Lloyd's of London, underwrote (insured) slave ships. Barclays Bank also began by investing in the slave trade.

Falling profits

There is some evidence that the slave trade was becoming less profitable towards the end of the 18th century

The price of buying enslaved people in Africa was rising, reaching £25 in 1800, but the price for selling enslaved people in the Americas had not risen as quickly, and was only £35 in the same year.

Britain and the CaribbeanFinancial considerations