Ingather Liens

Emerging in the chaos and economical devastation that followed the Civil War, crop liens were advances of credit to farmers with their time to come crops every bit collateral. When modest farmers, tenants, and sharecroppers possessed niggling or no significant existent or personal property, the only fashion they could get loans to purchase seed, mules, and other necessities was to mortgage their crops (and oft whatever piffling property they did possess). When harvested, crops would be used to pay off the loan.

The crop-lien system allowed the decentralized postwar economy to function but imposed significant costs on individuals and on lodge every bit a whole. It focused on cotton product fifty-fifty equally prices declined toward the turn of the twentieth century. Merchants and landowners advantaged themselves by exploiting dirt-poor farmers, farther crippling those at the very bottom of the economical ladder.

Crop liens averaged roughly eighty dollars per yr simply varied depending on the amount of state to be farmed, the size of the farm family, the number of mules available to the farmer, and the farmer'southward reputation. However, the loans did non take the form of cash. Instead, farmers would receive credit at the merchant's store with which to purchase food, clothing, shoes, household items, feed, fertilizer, and farm implements. To cover interest accrued on the debt, farmers ownership on this credit paid significantly more than for these items than those paying cash. Interest rates ranged betwixt 25 and 60 percentage or more. Defenders of the system argued that these rates were justified based on such factors as the high risks involved in agriculture and high involvement rates the merchants paid to their northern suppliers; critics, conversely, charged that merchants extending credit took reward of their monopolies and of debtors' poverty. Any the reasons for and validity of the high involvement rates, they resulted in a situation where both white tenant farmers and black sharecroppers became trapped in a bicycle of perpetual debt.

Black sharecroppers in item constitute themselves forced to grow cotton in a declining market place, increasingly dependent on and regulated by merchants and landlords, and unable to escape the grinding poverty of this economy. In the words of Edward Royce, sharecropping and crop liens ultimately led to a devastating "constriction of possibilities."

In Mississippi, conflicts betwixt white aristocracy landlords and merchants and poorer whites led to political struggles over crop-lien laws. In 1875 the state gave landlords precedence over crops, preventing sharecroppers from using the crop as collateral. In 1886, with many poor whites losing their farms to banks and merchants, Mississippi rescinded the crop-lien law, ostensibly to protect small-scale farmers, although the laws and the courts generally continued to uphold the rights of creditors.

Further Reading

  • Thavolia Glymph, Harold Woodman, Barbara Jeanne Fields, and Armstead L. Robinson, Essays on the Postbellum Southern Economy (1985)
  • Robert Higgs, Competition and Compulsion: Blacks in the American Economy, 1865–1914 (1977)
  • Roger Ransom and Richard Sutch, One Kind of Liberty: The Economic Consequences of Emancipation (1977)
  • Edward Royce, The Origins of Southern Sharecropping (1993)
  • Gavin Wright, Old South, New South: Revolutions in the Southern Economy since the Civil War (1986)