In 1833, the British Parliament ended slavery across the empire with a trade‑off: freedom for enslaved people, and £20 million in compensation for slave owners. At the Cape, two design choices shaped everything that followed. First, almost all payments would be made in London, not in the colony. Second, owners would be paid only after a four‑year “apprenticeship” period that kept formerly enslaved people tied to their former masters until 1838. Cape claimants submitted 6,579 claims covering roughly 36,000 enslaved people. The colony’s share of the imperial fund was about £1.2 million, mostly in government stock – essentially government IOUs rather than cash. Cape slaveholding tended to be small and spread across many resident owners, which meant lots of modest claims rather than a few large ones. That structure created an opening for middlemen. If you had London connections, capital and good information, you could gather claims at scale, process the paperwork, wait out the delays – and take a cut.
In a new paper, LEAP’s Kate Ekama shows how quickly a market formed.1 From early 1835, Cape Town firms began advertising three services: collecting awards for a commission, advancing cash against future payments, or buying claims outright. A 2.5 per cent agency fee became the standard headline rate. The dominant model, though, was to buy claims at a discount and bear the risk and delay of settlement. Contemporary observers said owners who “sacrificed” their claims took 12–25 per cent below the certificate value – a wide enough spread to cover costs, risk and healthy profits for well‑connected merchants. The decision to pay in London amplified these incentives. Without a metropolitan partner, most Cape owners simply could not turn a paper certificate into money.
Into this new market stepped Thomson, Watson & Co., a long‑lived Cape Town merchant house whose surviving ledger lets us see the business from the inside. Before emancipation, the firm imported goods, insured ships and salvaged wrecks. Like many peers, it was deeply enmeshed in slavery as both owner and mortgagee. (A mortgagee was a creditor who could claim enslaved people as collateral.) The Slave Office records list an enslaved man, Jack, held by the firm; the company later claimed £61 8s. 6d. for his emancipation in 1837. Thomson, Watson & Co. were both participants in the slave economy and beneficiaries of the way it ended.
Their account book shows the scale. The firm handled 830 compensation claims worth about £110,000 – close to 10 per cent of all Cape compensation by value. It worked through an inland network of agents and partners, notably Barry & Nephews in Swellendam, who supplied more than 200 claims on agreed terms and earned the standard 2.5 per cent. Family branches in the eastern districts helped gather claims, and the paperwork was then sent to London under powers of attorney – legal permissions to act on the owners’ behalf. In London, the firm relied on associates such as Cockerell & Co., Curries & Co., and members of the Thomson family to present at the Bank of England, liquidate stock and remit proceeds. The logistics were old‑world and very physical. Ships including the Ann, Guiana, Sesostris and Broxbornebury delivered around £35,000 in specie – coin – to close accounts in Cape Town while London waited to be reimbursed by the Commissioners’ payouts.
But how, precisely, did Thomson, Watson & Co. make its money?
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