Innovation and entrepreneurship as strategies for success among Cuban-based firms in the late years of the transatlantic slave trade

Abstract

This article examines how Cuban-based firms and entrepreneurs circumvented ever- increasing risks in the illegal slave trade. The article sheds light to this question by analyzing new qualitative information of 65 Cuban-based firms against the Slavevoyages database. Our findings indicate that Cuban-based firms were entrepreneurial as they exploited the opportunities arising from the volatility of the slave trade by: (a) internalizing networks of agents which allowed the rapid diffusion of information, (b) diversifying trading goods and expanding the number of partnerships to reduce transaction costs and risk, and (c) adopting technological innovations that modified the design and use of vessels.

Keywords:

• Slave trade
• Cuban firms
• innovation
• diversification
• entrepreneurship
• business agents

Acknowledgements

The authors are thankful to David Eltis for his insightful reading and for his many comments on earlier versions of this article. The authors gratefully acknowledge the editor of Business History and the two anonymous reviewers for their constructive comments. This article received helpful comments from the participants in the 129th Annual Meeting of the American Historical Association, New York, US (2–5 January 2015) and the 11th International Meeting of the Association of the Latin American and Caribbean Historians, University of Vienna, Austria (18–22 September 2014).

Notes

1. Casson and Wadeson, ‘Entrepreneurship and macroeconomic performance,’ p. 239.

2. Schumpeter, Capitalism, Socialism and Democracy.

3. Dimov, ‘Beyond the single-person, single-insight attribution in understanding entrepreneurial opportunities,’ pp. 713–31; Casson and Wadeson, ‘Entrepreneurship and macroeconomic performance,’ p. 239.

4. The Second Slavery period refers to the rise of heavily industrialized, slavery-based plantation economies in various parts of the Americas. See, among others, Tomich, Through the Prism of Slavery; and Laviña and Zeuske, eds., The Second Slavery.

5. In 1820, at the time the Spanish transatlantic slave trade became illegal, Cuban sugar production constituted 13.64 per cent of all sugar bought and sold in the international markets. By 1837 that value had increased to 20.70 per cent, by 1851, 30.99 per cent, and by 1868 it constituted a massive 40.90 per cent of all the sugar traded in the world. Moreno Fraginals, El Ingenio, vol. III, pp. 35–7; Eltis, Economic Growth, pp. 284, 287. See also Sheridan, ‘Sweet malefactor,’ pp. 236–57.

6. Only now are scholars starting to pay attention to these issues. See for example, Felipe Gonzalez and Iglesias Utset, ‘Cuba and the United States in the Atlantic slave trade.’

7. For the Spanish slave trade pre-1800 see: Borucki, Eltis and Wheat, ‘Atlantic history and the slave trade to Spanish America,’ pp. 433–61.

8. Landowners and merchants from Havana to the King. Manifest of 12 January 1803. Archivo Nacional de Cuba (hereafter ANC): Asuntos Políticos 106/9.

9. Murray, Odious Commerce, p. 10.

10. See Real Cédula of 28 February 1789 allowing the direct trade with Africa for a period of two years. Only the ports of Havana and Santiago de Cuba were allowed to import Africans, and only in Havana were foreigners permitted to participate in this business. For a full list of the restrictions imposed, see Murray, Odious Commerce, 11–2.

11. Landowners and merchants from Havana to the King. Manifest of 12 January 1803. ANC: Asuntos Políticos, 106/9.

12. Ortega, ‘The Cuban sugar complex,’ pp. 65–6.

13. Moreno Fraginals, El Ingenio, vol. I, pp. 266–7.

14. See, for example, Nerín, Traficantes d’ànimes.; Barcia, ‘Fully capable of any iniquity,’; and Zeuske, Amistad.

15. There was a large number of African-based slave traders who provided slave shipments to Cuba from the 1790s onwards, including the notorious John Ormond, Tom Curtis, John Lightbourne, and Francisco Felix de Souza, among many others.

16. Murray, Odious Commerce, p. 13.

17. See, among others, Findlay, The Triangular Trade; Morgan, Slavery, Atlantic Trade and the British Economy; and Miller, The French Atlantic Triangle.

18. Eltis, Economic Growth, pp. 47–77. For more recent works discussing these links see: Baptist, The Half Has Never been Told; and Beckert, Empire of Cotton.

19. ‘Reclamations made by various traders from the island of Cuba,’ Madrid, 10 February 1831. Archivo Histórico Nacional, Madrid (hereafter AHN), Estado, 8022/4, No. 6. On this reliance on friends or paisanos, see Lamikiz, Trade and Trust, p. 10; and Baskes, ‘Communication breakdown,’ p. 45.

20. Tolmé to John Backhouse. Havana, 9 May 1835. TNA: Foreign Office, 84/177, f. 252.

21. Eltis, ‘The nineteenth-century,’ pp. 109–11.

22. Haggerty, ‘Risk and risk management.’

23. Richardson, ‘West African consumption patterns.’

24. For a comprehensive discussion on slave traders’ adjustments on the African coast to efforts to suppress the trade see Eltis, Economic Growth, pp. 165–84.

25. Mayer, Captain Canot, p. 100.

26. Ibid.

27. Barcia, West African Warfare, pp. 73–4.

28. James Kennedy and Campbell J. Dalrymple to the Earl of Aberdeen. Havana, 8 November 1843. The National Archives (hereafter TNA): Foreign Office 84/452, ffs. 121–6.

29. He was eventually replaced by John S. Calhoun. Extract from The New York Commercial Advertiser, 7 September 1839. HCPP. 1840 [265]. Class A. Correspondence with the British Commissioners at Sierra Leone, Havana, Rio de Janeiro, and Surinam, relating to the slave trade, f. 198.

30. Report of the Case of the Spanish Schooner ‘Opposição’, João Rodriguez, Master, April 1838. HCPP. 1839 [188]. Class A. (Further series). Correspondence with the British Commissioners at Sierra Leone, the Havana, and Rio de Janeiro, relating to the slave trade. From February 2, to May 31, 1839, f. 6.

31. Francisco Dionisio Vives to the Minister of Foreign Affairs. Reservado. Havana, 6 January 1825. AHN: Estado, 8036.

32. Tacón to ?. Barcelona, 27 June 1844. AHN: Estado, 8035, No. 4.

33. James Kennedy and Campbell Dalrymple to the Earl of Aberdeen. Havana, 9 August 1842. TNA: Foreign Office, 84/396, ffs. 35v.-7.

34. Ibid.

35. Crawford to Malmesbury. Havana, 25 January 1859. TNA: Foreign Office 84/1073, ffs. 23–3v.

36. Murray, Odious Commerce, p. 19.

37. Ibid.

38. Richardson, ed., Bristol, Africa, vol. 4, pp. 182–6; and Thomas, The Slave Trade, pp. 683–4, 694; and Law, Ouidah, pp. 201–79.

39. Pearson and Richardson, ‘Social capital,’ pp. 765–80.

40. Arrow, ‘Economic welfare,’ p. 615. See also Williamson, ‘Transaction costs economics,’ pp. 233–61.

41. There were a number of zones along the African coast – Gold Coast, Bight of Biafra, Mozambique – where establishing successful agents proved impossible in spite of the repeated attempts to replicate the success that such a model had had in other regions like the Upper Guinea coast, the Bight of Benin and the Congo–Angola region.

42. Granovetter, ‘Economic action and social structure,’ pp. 481–510; Gulati, ‘Alliances and networks,’ pp. 293–317.

43. Larson, ‘Network dyads in entrepreneurial settings,’ pp. 76–104; Powell, ‘Neither market not hierarchy.’

44. Uzzi, ‘The sources and consequences of embeddedness,’ pp. 674–98. David Turnbull, who spent time in Cuba in the late 1830s and early 1840s divided up functions or costs in the slave trade into four categories: African costs (which relates to what is being discussed in this section), factor costs, shipping costs, and distribution costs. See Turnbull, Travels in the West, pp. 403–6. Both E. Phillip LeVeen and David Eltis also discussed this issue, relying in Turnbull’s opinion. Phillip LeVeen, British Slave Trade Suppression, pp. 9–34, 164; Eltis, Economic Growth, pp. 269–82.

45. Barcia, West African Warfare, pp. 73–9.

46. See also João Joze Zangrony, hespanhol requesting passport, 28 March 1835. Arquivo Provincial da Bahia: Policia, Maço 5883, passaportes, 1834–37. It is worth noting here that several shipments of slaves were made from Bahia to Cuba during this period, a circumstance that would help explain the presence of Cubans in Bahia.

47. Eltis, Economic Growth, pp. 148–9.

48. ‘Minutes of Evidence Taken Before the Select Committee on Slave Trade Treaties.’ HCPP. 1852–53 (920) Report from the Select Committee on Slave Trade Treaties; together with the proceedings of the committee, minutes of evidence, appendix, and index, ffs. 90–1.

49. Matson, Remarks on the Slave Trade, pp. 46–7. See also Forçade to François Barraillier. Havana, 15 May 1839. HCPP. 1841 Session 1 [330] Class A. Correspondence with the British commissioners at Sierra Leone, the Havana, Rio de Janeiro, and Surinam, relating to the slave trade. From May 11th, to December 31st, 1840, inclusive, f. 118.

50. ‘Abstract of the Proceedings during the year 1844.’ HCPP. 1846 [723] Class A. Correspondence with the British commissioners relating to the slave trade, ffs. 324–5.

51. The bankruptcy of Blanco and Carballo led to the suicide of the latter. The documents recorded before Havana notaries litigating their debts are numerous and can be found at the Archivo Nacional de Cuba’s Tribunal de Comercio and Protocolos Notariales collections.

52. Law, Ouidah, p. 173.

53. ‘Abstract of the Case of the Spanish Schooner San Rafael. Francisco Chinchurreta, Master, liberated on the 19th of January 1823.’ HCPP. 1824 (002) Class B. Correspondence with the British commissioners, at Sierra Leone, the Havannah, Rio de Janeiro and Surinam, relating to the slave trade, 1823, ffs. 50–1; R. Doherty and Walter W. Lewis to Viscount Palmerston, Sierra Leone, 19th August 1837. HCPP. 1837–38 [124] Class A. Correspondence with the British commissioners, at Sierra Leone, the Havana, Rio de Janeiro, and Surinam, relating to the slave trade, 1837, ffs. 3–4; Pedro Martinez & Co. to José H. Alvarez. Havana, 19 September 1838. HCPP. 1839 [188] Class A. (Further series.) Correspondence with the British commissioners. At Sierra Leone, the Havana, and Rio de Janeiro, relating to the slave trade. From February 2, to May 31, 1839, ffs. 41–2. For the most in-depth discussion of the impact of the suppression of the slave trading business see Eltis, Economic Growth, ffs. 148–59.

54. For example, in 1838, Pedro Enarche acted as an agent in Puerto Rico for the notorious slave-trading firm of Pedro Martínez & Co. Equally, Jose Ybern, acted as an agent for the same firm in the island of St Thomas. Pedro Martínez & Co to Jozé H. Alvarez. Havana, 15 September 1838. HCPP. 1839 [188]. Class A. (Further series). Correspondence with the British Commissioners at Sierra Leone, the Havana, and Rio de Janeiro, relating to the slave trade. FromFebruary 2, to May 31, 1839, f. 39.

55. F. G. Veiga to Pedro Blanco. Sierra Leone, 23 January 1839. HCPP. 1841 Session 1 [330] Class A. Correspondence with the British commissioners at Sierra Leone, the Havana, Rio de Janeiro, and Surinam, relating to the slave trade. From May 11th, to December 31st, 1840, inclusive, f. 131.

56. ‘Power of Attorney from Mr. Zulueta to Mr. Martinez.’ HCPP: 1840 [266] Class B. Correspondence with Spain, Portugal, Brazil, the Netherlands, and Sweden, relative to the slave trade. From June 1st to December 31st, 1839, inclusive, ffs. 37–8. See also William Rothery to the Lords Commissioners of Her Majesty’s Treasury. Stratford Place, 7 March 1840. TNA: Treasury, 1/4235.

57. Teece, ‘Economies of scope,’ pp. 223–47.

58. Diversification had been a common pattern in the slave trade. In this sense, Cuban-based slave traders’ new diversification strategies related mostly to the type and quality of merchandise they were able to deal in, and according to the times, to the changes on patterns of human trafficking that from the 1840s involved Chinese and Meso-American indentured workers.

59. Barcia, The Great African Slave Revolt, pp. 68–96.

60. Landowners and merchants of Havana to the King. Manifest of 12 January 1803. ANC: Asuntos Políticos 106/9.

61. ‘Reclamations made by various traders from the island of Cuba,’ Madrid, 10 February 1831. AHN: Estado, 8022/4, No. 6.

62. Eltis, Economic Growth, p. 355.

63. For the British-Atlantic merchants referred to here, see: Hancock, Citizens of the World.

64. McDade, ‘Liverpool slave merchant entrepreneurial networks,’ pp. 1092–109.

65. William Macleay to the Earl of Aberdeen. Havana, 1 January 1830. TNA: Foreign Office, 84/107, ffs. 8–8v.

66. Tolmé to Backhouse. Havana, 9 May 1835. TNA: Foreign Office, 84/177, f. 259.

67. Ibid., ffs. 259–60.

68. José Garde to the British Admiralty. Havana, 11 April 1835. TNA: Admiralty, 1/4670; ‘J. M. Urzaínqui against Font, Ricart and Co. reclaiming pesos, 1839.’ ANC: Tribunal de Comercio, 128/17; and ‘José Miguel Urzaínqui, Director of the Compañía de Seguros Marítimos de la Habana, against Sebastián de Mendoza about nullity of a compromise, 1845.’ ANC: Tribunal de Comercio, 128/19.

69. ‘Project of José María Calvo for fomenting white population immigration to Cuba.’ Havana, 1844; ANC: Real Consulado y Junta de Fomento, 192/8589; ‘Propositions made by Domingo Goicuría for the introduction in this island of colonists from the provinces of Spain.’ Havana, 1844. ANC: Real Consulado y Junta de Fomento, 192/8615; and ‘Project of Colonization by the Count of Jaruco.’ Havana, 1844. ANC: Real Consulado y Junta de Fomento, 182/8284 and 8600; ‘Project submitted by Zulueta y Compañía of a contract to supply this island with free colonists to work on the sugar plantations.’ Havana, 1845. ANC: Real Consulado y Junta de Fomento, 193/8652.

70. ‘José Suárez Argudín, and Ruíz Lacasa y Cía requesting permission to introduce free negroes in Cuba.’ There were also similar requests made by Manuel Basilio Cunha Reis and Ramón Mandillo. AHN: Ultramar, 90/14.

71. Her Majesty’s Commissioners to the Earl of Clarendon. Havana, 15 May 1856. HCPP. 1857 Session 2 [2281] Class A. Correspondence with the British Commissioners at Sierra Leone, Havana, the Cape of Good Hope, and Loanda; and reports from British naval officers, relating to the slave trade.

72. Yun, The Coolie Speaks, p. 15; and Lopez, Chinese Cubans, pp. 19–22. See also Eltis, ‘Free and coerced transatlantic migrations,’ p. 261.

73. See among others: Rugeley, Yucatán’s Maya; and Reed, The Caste War of Yucatan. For the Zangroniz and Goicuría deals with the Mexican government see: Mr .Doyle to the Earl of Clarendon. Mexico, 5 February 1855. HCPP: 1854–55 (0.4) Class B. Correspondence with British ministers and agents in foreign countries, and with foreign ministers in England, relating to the slave trade, ffs. 287–8; and Joseph T. Crawford to Captain General José de la Concha. Havana, 15 April 1858. HCPP. 859 Session 2 [2569-I] Class B. Correspondence with British ministers and agents in foreign countries, and with foreign ministers in England, relating to the slave trade, ffs. 160–1.

74. As we saw before, this process went both ways, and also leading sugar planters invested on the slave trade, also from the 1790s.

75. See Perret Ballester, El azúcar en Matanzas, pp. 390–439.

76. The Palmerston Act of 1839 caused great disturbances among Cuban-based slave trading firms and individuals. Some of them, as Pedro Blanco, went as far as to abandoning their West African factories and moving to Cuba or Spain. The use of existing Courts of Vice-Admiralty to judge slave-trading vessels carrying Portuguese flags, and the destruction of slave factories in the Upper Guinea and Ambriz in 1842, also contributed to a slowdown of business until circumstances changed again in 1842, shortly after Lord Palmerston was replaced by Lord Aberdeen as Foreign Secretary.

77. Schumpeter, Capitalism, Socialism and Democracy.

78. This reliance on small and fast sailing vessels continued at least until the early 1850s, when slave traders decided to start using larger, merchant-looking vessels to carry their slaves to Cuba.

79. Chapelle, The Baltimore Clipper. Large steam vessels were popular again during the late 1850s and early 1860s. See Murray, Odious Commerce, p. 308.

80. The average tonnage for the previous period (1820–1834) was of 159.2 tons. Slavevoyages. http://www.slavevoyages.org/tast/database/search.faces (accessed 8 October 2015).

81. Zeuske and García Martínez, ‘La Amistad,’ p. 224. A study of where slave vessels were built during this period is still wanting.

82. Chapelle, The Baltimore Clipper, p. 108.

83. Schenley and Madden to Admiral Sir P. Halkett. Havana, 11 October 1836. TNA: Foreign Office 84/197, f. 215.

84. Matson to Sir George Cockburn. 8 January 1844. In Matson, Remarks, p. 70.

85. Schenley and Madden to Admiral Halkett. Havana, 11 October 1836. TNA: Foreign Office 84/197, ffs. 215–5v.

86. Extract of a Letter, dated Rio Nuñez, 24 August 1836. HCPP. 1837 [001] Class A. Correspondence with the British Commissioners at Sierra Leone, Havana, Rio de Janeiro and Surinam, relating to the slave trade, f. 7.

87. Schenley and Madden to Palmerston. Havana, 25 October 1836. HCPP. 1837 [001] Class A. Correspondence with the British Commissioners at Sierra Leone, Havana, Rio de Janeiro and Surinam, relating to the slave trade, f. 191.

88. Eltis, Economic Growth, p. 136. See also the tonnage figures from Slavevoyages for the periods 1820–34, 1835–50, and 1851–66.

89. Joseph T. Crawford and Francis Lousada to the Earl of Malmesbury. Havana, 26 February 1858. HCPP: 1859 Session 2 [2569] Class A. Correspondence with the British commissioners at Sierra Leone, Havana, the Cape of Good Hope, and Loanda; and reports from British Vice-Admiralty Courts, and from British naval officers, relating to the slave trade from April 1, 1858 to March 31, 1859; f. 17.

90. Crawford to Malmesbury. Havana, 25 January 1859. TNA: Foreign Office 84/1073, ffs. 21–8v.

91. See graph on Eltis, Economic Growth, p. 100.