Question

By 1850, which of the following describes the relationship between capital and cotton in the American banking system?

A. Capital and cotton were unrelated in the American banking system.
B. Capital was primarily invested in industries other than cotton.
C. Capital was increasingly tied to the cotton industry in the American banking system.
D. Cotton had little impact on the flow of capital in the American banking system.

Answer 1

By 1850, capital in the American banking system was closely tied to the cotton industry, which depended heavily on slave labor and became the Southern economy's dominant factor.

Step-by-step explanation:

By 1850, capital was increasingly tied to the cotton industry in the American banking system. Cotton had become the key cash crop of the Southern economy and the most important American commodity, dominating not only agricultural but also financial sectors.

The production and export of cotton were highly dependent on the labor of enslaved people, being the most significant factor for the Southern economy. Banks provided the necessary capital to acquire more land for cotton cultivation and more slaves for labor. This financial support ensured that cotton and capital were deeply interconnected within the banking system.