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In his memoirs about his personal life as a slave and slavery in general, Moses Grandy on page 65 claims that:
The proprietors, though they live in luxury, generally die in debt: their negroes are so hardly treated, that no profit is made by their labor. Many of them are great gamblers. At the death of a proprietor, it commonly happens that his coloured people are sold towards paying his debts.
Is his claim that the horrible treatment of the slaves caused them to be not profitable correct?
One of the great things about economics is that, in a way, it is self regulating. If slavery was unprofitable then plantation owners would exit the business and stop investing capital in unproductive capital goods (slaves). Please take into account the source of this comment, a former slave and anti-slavery activist. Which is more likely? A biased commenter was attempting to disparage an industry for political purposes or that there was mass-insanity where business men would allocate capital in such a manner so they often died in debt and year after year would not make a profit.
Slavery was quite profitable, according to Baptist's Half Has Never Been Told. It made many Southern slave owners significant money in the antebellum decades of the 19th century, especially when they raised cotton on large plantations. Baptist draws a strong picture of more and more deliberate violence against slave laborers to make them work harder and faster, raising productivity.
Plantation slavery's potential for ever increasing profit at larger scale demanded increasing investment and growing speculation in land, buying of more slaves from the northern slave states for sale in New Orleans and West, thus using a lot of Northern capital while replying on escalating British demand for cotton. This amounted to ever increasing risk of financial failure, especially severe when cotton prices declined. Some slave owners went bust or ran away from their debts but the money to be made attracted others to take their place, and buy the bankrupts lands and slave assets.
The very nature of the trade in those days ie. cotton , sugar and tobacco are high labour intensive "raw material" crops which required a deal of after processing the profits were mostly made by Merchants and Industrialists rather than the planters of the raw materials. It is said that the Glasgow tobacco merchants (they became known as the Tobacco Lords) specialised in giving American and West Indies plantation owners generous credit lines until they had them in a debt trap to ensure a monopoly on their tobacco/cotton supply at rock bottom prices , or they gained ownership of the plantations. Glasgow is full of grand buildings built from the profits of this trade and of course the profits of the slaves who worked on the plantations.
see attached for further info , particularly under the heading "American Revolution" which clarify's the state of plantation owners precarious financial situation.
