Cotton price collapse triggered a sovereign debt default by Southern states

Evidence

When the price of cotton tumbled, it pulled down the value of enslaved workers and land along with it. Because enslavers couldn’t repay their loans, the state-chartered banks couldn’t make interest payments on their bonds. Shouts went up around the Western world, as investors began demanding that states raise taxes to keep their promises. After all, the bonds were backed by taxpayers, leaving states on the hook for the enslavers’ debt. Facing a swell of populist outrage, states decided not to squeeze the money out of every Southern family, coin by coin. Furious bondholders mounted lawsuits, but the bankrupt states refused to pay. The South chose to cut itself out of the global credit market, the hand that had fed cotton expansion, rather than hold planters and their banks accountable for their negligence and avarice. — Nikole Hannah-Jones et al., The 1619 Project, 566

Categorization

• QUESTION: Which Southern states defaulted and which did not? The contrast (e.g. some states repudiated, others honored) is a known historical wrinkle worth chasing.
• XREF: A sovereign-debt default grounded in commodity price collapse — echoes the Milgrom/Roberts law-merchant material on credit and reputation institutions, but here reputation failed catastrophically.