The crop-lien system was a credit system that became widely used by

cotton Cotton is a soft, fluffy staple fiber that grows in a boll, or protective case, around the seeds of the cotton plants of the genus ''Gossypium'' in the mallow family Malvaceae. The fiber is almost pure cellulose, and can contain minor perce ...

farmers in the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...

in the

South South is one of the cardinal directions or Points of the compass, compass points. The direction is the opposite of north and is perpendicular to both east and west. Etymology The word ''south'' comes from Old English ''sūþ'', from earlier Pro ...

from the 1860s to the 1940s.

History

Sharecroppers Sharecropping is a legal arrangement with regard to agricultural land in which a landowner allows a tenant to use the land in return for a share of the crops produced on that land. Sharecropping has a long history and there are a wide range ...

and tenant farmers, who did not own the land they worked, obtained supplies and food on credit from local merchants. The merchants held a

lien A lien ( or ) is a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation. The owner of the property, who grants the lien, is referred to as the ''lienee'' and the pers ...

on the cotton crop, and the merchants and landowners were the first ones paid from its sale. What was left over went to the farmer. The system ended in the 1940s as prosperity returned and many poor farmers moved permanently to cities and towns, where jobs were plentiful because of

World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...

. After the

American Civil War The American Civil War (April 12, 1861 – May 26, 1865; also known by other names) was a civil war in the United States. It was fought between the Union ("the North") and the Confederacy ("the South"), the latter formed by states th ...

, farmers in the South had little cash. During the war, British interests had invested in cotton plantations in

Egypt Egypt ( ar, مصر , ), officially the Arab Republic of Egypt, is a transcontinental country spanning the northeast corner of Africa and southwest corner of Asia via a land bridge formed by the Sinai Peninsula. It is bordered by the Mediter ...

and

India India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...

, resulting in an oversupply of the commodity. Cotton prices dropped below the levels enjoyed in the 1850s. The crop-lien system was a way for farmers, mostly black, to get credit before the planting season by borrowing against the value of anticipated harvests. Local merchants provided food and supplies all year long on credit; when the cotton crop was harvested farmers turned it over to the merchant to pay back their loan. In most cases, the crop did not cover the debt, and the farmer started the next year in the red as an

indentured servant Indentured servitude is a form of labor in which a person is contracted to work without salary for a specific number of years. The contract, called an " indenture", may be entered "voluntarily" for purported eventual compensation or debt repayment ...

. Working through a vicious cycle of trying to pay off debt and accumulating more and more debt left many farmers working the rest of their lives under their landowner, usually a white farmer. Additionally, sharecroppers had no mules or tools, but tenant farmers had them and commanded a larger share of the crop. The owner took the rest. At harvest time, the merchant collected his debts from the sale of the crop.Thomas D. Clark, "The Furnishing and Supply System in Southern Agriculture since 1865," ''Journal of Southern History'', Vol. 12, No. 1 (Feb., 1946), pp. 24-44
in JSTOR
/ref> The merchants had to borrow the money to buy supplies and, in turn, charged the farmer interest as well as a higher price for merchandise bought on such credit. The merchant insisted that more cotton (or some other cash crop) be grown (nothing else paid well) and thus came to dictate the crops that a farmer grew.

References

* Thomas D. Clark, "The Furnishing and Supply System in Southern Agriculture since 1865," ''Journal of Southern History'', Vol. 12, No. 1 (Feb., 1946), pp. 24–44
in JSTOR
* Steven Hahn. ''The Roots of Southern Populism: Yeoman Farmers and the Transformation of the Georgia Upcountry, 1850-1890'' (2006) * Roger L. Ransom and Richard Sutch. "Debt Peonage in the Cotton South After the Civil War," ''Journal of Economic History,'' Vol. 32, No. 3 (Sep., 1972), pp. 641–66
in JSTOR
* Roger Ransom and Richard Sutch. " The "Lock-in" Mechanism and Overproduction of Cotton in the Postbellum South," ''Agricultural History'', Vol. 49, No. 2 (Apr., 1975), pp. 405-42
in JSTOR
* Woodman, Harold. ''King Cotton and His Retainers'' (1967) * Harold Woodman. ''New South, New Law: The Legal Foundations of Credit and Labor Relations in the Postbellum Agricultural South'' (1995) * Gavin Wright and

Howard Kunreuther Howard Charles Kunreuther (November 14, 1938 – August 1, 2023) was an American economist. He was the James G. Dinan professor emeritus of decision sciences and public policy at the Wharton School of the University of Pennsylvania. Background H ...

. "Cotton, Corn and Risk in the Nineteenth Century," ''Journal of Economic History'', Vol. 35, No. 3 (Sep., 1975), pp. 526–55
in JSTOR
{{DEFAULTSORT:Crop-Lien System Agriculture in the United States History of the Southern United States Credit Liens

History

See also

References

Further reading