Jenny B. Wahl


The Dred Scott decision definitively opened U.S. territories to slavery. This reduced the probability of westward migration for free-soilers, in part because of expected effects on land markets. Although land was an important part of a slaveholder's portfolio, his ability to hold wealth in mobile assets—slaves—meant that he had a different outlook on internal improvements than his Northern brethren, as well as a production process that emphasized relatively abundant labor inputs. Letting slaves into the territories thus led to uncertainty about future land values. This slowed the flow of Northerners west, dragging present land prices downward. In turn, uncertainty about the future profitability of westward expansion affected the value of railroad investments. The downward spiral in stock prices for western railroads heightened risk in capital markets and ultimately led to financial panic. Data on migration, land prices, and railroad stock prices suggest that Dred Scott played an important role in generating the tumultuous times of 1857, ultimately leading to the election of Abraham Lincoln.

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