I can’t recall if I’ve talked about this here or not. I’ve become interested in early-to-mid 19th century financial institutions for their role in slavery. Here’s what I think happened. Some of this I’m sure of, some is speculative at this point.

The legal importation of slaves ended, demand for cotton on the world market rose, more land became available. This meant restricted supply and greater demand for slaves. Hence it’s no surprise that slave prices quadrupled from 1810-1860. Price rises can gum up markets, though. That didn’t happen for slavery, though. The market remained highly liquid. What assured that liquidity was credit. Slaveholders were a good credit risk because their slaves were assets who were appreciating and who were mobile, and slave-based enterprise tended to be profitable. Thus slaves made good collateral and slave-owners could get credit relatively easily. Slavers were a good credit risk in part because of high demand and high profitability of slave sale; liquidity played an important role in that. Availability of credit meant it was easier to buy slaves. Demand plus ease of purchase is the flip side of the ease of selling slaves. That pair (ease of buying and selling) was part of the slave market being a liquid market. Credit assured liquidity and in a sense liquidity encouraged credit.