New York City became a global financial powerhouse by financing and insuring the Southern cotton trade.

The economic rise of New York City in the 19th century was inextricably linked to the 'Cotton Triangle' trade route. Although New York abolished slavery in 1827, its financial sector became the primary engine for the slave-based cotton economy. Merchants like those at the New York Cotton Exchange, founded in 1870, capitalized on the fact that Southern planters lacked the liquid capital and infrastructure to move their goods globally.By 1860, cotton accounted for nearly 60 percent of all U.S. exports, and New York City handled the vast majority of this traffic. Financial institutions such as Lehman Brothers and JPMorgan Chase have historical roots in this era of commodity financing. These firms provided the necessary credit for planters to purchase land and enslaved people, while New York insurance companies covered the 'property' risks associated with the trade.Research by historians like Sven Beckert in 'Empire of Cotton' highlights that New York's dominance was cemented by the 1830s. During this period, the city’s banks held more than double the specie of Southern banks, allowing them to dictate terms. This massive accumulation of capital allowed New York to outpace rivals like Boston and Philadelphia, eventually transforming it into the world's leading financial center by the early 20th century.