What was crop lien system

However, the loans did not take the form of cash. To cover interest accrued on the debt, farmers buying on this credit paid significantly more for these items than those paying cash. Interest rates ranged between 25 and 60 percent or more. Whatever the reasons for and validity of the high interest rates, they resulted in a situation where both white tenant farmers and black sharecroppers became trapped in a cycle of perpetual debt.

Black sharecroppers in particular found themselves forced to grow cotton in a declining market, increasingly dependent on and regulated by merchants and landlords, and unable to escape the grinding poverty of this economy. Abuses in the crop lien system reduced many tenant farmers to a state of economic slavery, as their debts to landlords and merchants carried over from one year to the next.

Many landowners joined the ranks of farm tenants when excessive indebtedness led to foreclosure. An report of the state's Bureau of Labor Statistics stated that the crop lien system had proven "a worse curse to North Carolina than droughts, floods, cyclones, storms, rust, caterpillars, and every other evil that attends the farmer.

North Carolina leaders of the Farmers Union , which flourished from until the end of World War I , sought to abolish the crop lien system.

Although ultimately not successful, they were able to see a bill go into effect in making it unlawful for merchants to accept more than 10 percent security above cash prices when goods were bought on time. A rapid decline in farm tenancy after brought a corresponding decline in the number of crop liens, especially those signed over to supply-merchants. Landlords and farm lending institutions still use crops as debt security on a regular basis, although under more stringent protective legislation.

Hugh T. Charles P. Near Duck, NC, ca. Comments are not published until reviewed by NCpedia editors at the State Library of NC , and the editors reserve the right to not publish any comment submitted that is considered inappropriate for this resource. NCpedia will not publish personal contact information in comments, questions, or responses. Loss of nerve on the part of the U. Despite some attempts at land redistribution during and immediately after the Civil War, the.

With virtually all farmland in the hands of its antebellum owners and no money of their own, freedpeople had little opportunity to acquire land. Faced with what they perceived as a recalcitrant black labor pool, planters sought other groups of workers as farm laborers. The South had never attracted many foreign immigrants, but postbellum planters believed that they could lure workers from China and Europe, especially Germany, to tend the crops.

Neither group was willing to come to the South, and the efforts failed miserably. Poor labor conditions restricted immigration as a possibility.

Another tack discussed by some southern planters was the colonization of former slaves. Some planters believed that if freedpeople would not work under the conditions that the planters dicated, they should be deported, perhaps to Central America. Blacks opposed colonization during Reconstruction, declaring that they had a right to stay on the lands which they had cultivated for generations.

A few whites removed themselves to Central or South America, unable to bear living in a land with freed slaves. But for both groups, black and white, emigration remained an impractical solution to the problems of Reconstruction. Having exhausted other possibilities, according to Royce, Southern planters and freedpeople eventually settled into the crop-lien system.

It is here that Origins is weakest, as Royce conflates the end of gang labor and the credit system which was based on the expected harvest. The decentralization of plantations into individual farm plots was indeed a victory for freedpeople, giving them a measure of autonomy and privacy.

It did not, however, result in the crop-lien system per se. Royce argues that freedpeople also wanted the crop-lien system, wherein a family would work the crop and receive a portion of the harvest in lieu of cash wages.

Why would a family defer payment for an entire year to receive income at harvest? Although planters denied it, the crop-lien system gave them considerable control over their tenants: no harvest, no payment.

Royce also does not give adequate attention to the collapse of the southern financial system, which left few planters with enough cash to pay their tenants. On its face, the crop-lien system does not look all that bad. A family worked the land; if the crop made well, the family theoretically took home a corresponding payment.

Royce is concerned with origins, not effects, but his lack of focus on the credit system gives short shrift to the most pernicious aspect of the crop-lien system as it took hold on the South for the next seventy years. Under the crop-lien system, a sharecropper planted what the landlord told him to.