Loyalists, blockade runners, and bootleggers

After the American Revolution, several thousand Loyalists from the former colonies immigrated to The Bahamas. Some of the immigrants, especially Southerners, brought slaves with them and tried their luck at planting sea-island cotton in the Out Islands. Growing cotton was unsuccessful (the plants fell prey to the chenille bug), but the former deep South planters learned to fish, grow vegetables, and provide for themselves in other ways.
The first white settlers of The Bahamas also brought slaves with them, but when slavery was abolished throughout the British Empire in 1834, they were freed. The settlers achieved a fairly peaceful transition, although many years passed before any real equality between blacks and whites existed.
During the American Civil War, blockade running brought prosperity to The Bahamas. Nassau became a vital base for the Confederacy, with vessels taking manufactured goods to South Carolina and North Carolina and bringing back cotton. The Union victory ended blockade running and plunged Nassau into an economic depression. The islands’ next real economic boom resulted from Prohibition in the U.S. Just like the blockade runners who preceded them — only with faster boats and more of them — rumrunners plied the waters between The Bahamas and the southeastern U.S. From the enforcement of the 18th Amendment in 1920 to the repeal of that law in 1933, bootleggers used Nassau, Bimini, and Grand Bahama as bases for running contraband alcoholic beverages across the Gulf Stream. The U.S. Coast Guard and the bootleggers waged a ceaseless battle on each other. The repeal of Prohibition dealt another shattering blow to the vulnerable Bahamian economy.