|'Subprime Mortgages in the Caribbean: the Financial Opportunities Illegal Trade Created, 1740-1815|
|In the second half of the eighteenth century the Dutch created a system of subprime mortgages in the process of expanding their colonies in the West Indies. A complex system of plantation mortgages connected Dutch investors with planters overseas, stimulating not only the bilateral trade in plantation products, but also opening up possibilities for cross-imperial illegal trade within the Atlantic world. While the plantation mortgage structure proved flawed and crumbled down, the riches acquired in illegal trade could postpone or even reverse this process.
This paper examines the trade links and financial connections of planters in the Dutch Guiana's. Under the mortgage agreements, planters were obliged to do most of their business with the Dutch Republic, meaning that they had to buy all their slaves from Dutch slavers and export all their plantation produce to their mortgage brokers. It proved lucrative though to evade these restrictions and do business with North American and English merchants. Connections with Barbados were strong in Essequibo and Demerara, due to the large numbers of English planters in these colonies. This link was crucial in providing the plantations with the necessary slaves, for English slaves were both cheaper and more widely available. Payment with tropical commodities became the method of choice for both parties, resulting in a flow of products going into the Altantic network rather than to the Dutch metropolis. Business was conducted in the same fashion with the North Americans who provided the daily necessities, which Dutch merchants did not adequately supply. Illegal trade could be carried out with little hindrance, partly because institutional capacity was lacking. As a result of the open connection to the Atlantic world planters could get better prices for their produce and pay less for their imports, while risks were few. Illegal trade was thus crucial for the developing Dutch plantation colonies.
The sources used are the Slave Voyages Trans-Atlantic Slave Trade Database, notarial records, petitions filed to the Estates-General, letters from the Governor of Essequibo and Demerara and reports by a ship captain sent to counter the illegal trade.