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The Rise and Fall of Indentured Servitude in the Americas: An Economic Analysis

  • David W. Galenson (a1)


Indentured servitude appeared in Virginia by 1620. Initially a device used to transport European workers to the New World, over time servitude dwindled as black slavery grew in importance in the British colonies. Indentured servitude reappeared in the Americas in the mid-nineteenth century as a means of transporting Asians to the Caribbean sugar islands and South America following the abolition of slavery. Servitude then remained in legal use until its abolition in 1917. This paper provides an economic analysis of the innovation of indentured servitude, describes the economic forces that caused its decline and disappearance from the British colonies, and considers why indentured servitude was revived for migration to the West Indies during the time of the great free migration of Europeans to the Americas.



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1 Smith, Abbot Emerson, Colonists in Bondage: White Servitude and Convict Labor in America, 1607–1776 (Chapel Hill, 1947), p. 336.

2 Indentured, or contract, labor was also used elsewhere in the nineteenth century, as, for example, significant movements of bound workers occurred within Asia. This paper will not treat these episodes, but will focus only on migrations to the Americas.

3 Throughout this paper, with reference to indentured servitude the term “institution” will be used broadly to refer to the sets of practices and rules—including both statute and common law—that governed the use of labor contracts written for specified periods and entered into by workers in order to finance migration. Contracts of servitude typically differed from hire labor contracts in specifying relatively long terms—e.g., in the colonial period four years or more–and by involving a greater degree of control of the worker's living and working conditions by the employer, and from debt contracts of service in failing to provide for automatic dissolution of the agreement at any time upon repayment of a stated principal sum by the worker. These differences tended to make indentured servitude a distinctive status at most times and places, with a set of rules and practices specific to it, although of course these might differ among particular episodes, or for a single episode over time.

4 Laslett, Peter, The World We Have Lost, Second edition (London, 1971), Ch. 1;Kussmaul, Ann, Servants in Husbandry in Early Modern England (Cambridge, 1981); also Macfarlane, Alan, The Origins of English Individualism (New York, 1979).

5 On early attempts to attract settlers, and the Virginia Company's difficulties, see Diamond, Sigmund, “From Organization to Society: Virginia in the Seventeenth Century,” American Journal of Sociology, 63 (03 1958), 457–75;Morgan, Edmund S., American Slavery, American Freedom: The Ordeal of Colonial Virginia (New York, 1975), Ch. 4.

6 The passage fare normally quoted until the middle of the seventeenth century was £6; for example, Smith, John, The Generall Historie of Virginia, New-England, and the Summer Isles (London, 1624), p. 162. A survey of wages in Cambridge, Canterbury, Dover, Exeter, Oxford, Westminster, Winchester, and Windsor for 1620 found a range of daily wages in skilled trades from 12–20d., and for unskilled laborers from 8–12d.; British Library of Political and Economic Science, Records of International Scientific Committee on Price History (Beveridge Price Commission). Implied annual wages for full-time skilled workers would be approximately £15–25, and for unskilled workers £10–15. The wages of unskilled servants in husbandry in the teen ages would presumably have been lower.For further discussion of the influence of transportation costs relative to income and wealth on the form of migrations, see infra, “The Decline–and Revival–of Indentured Servitude in the Americas.”

7 The large size of the debt meant that repayment would normally take longer than the single year that characterized the employment of farm servants in England. Thus although the early arrangements did not have all the characteristics of indentured servitude that would later develop, one important element of the indenture system–contracts binding the worker to a master for a number of years–appeared at an early stage.

8 Smith, Colonists in Bondage, p. 9. On this early scheme, see also Hughes, J. R. T., Social Control in the Colonial Economy (Charlottesville, 1976), pp. 5557.

9 Brown, Alexander, ed., The Genesis of the United States (Boston, 1890), Vol. II, p. 648.

10 Morgan, American Slavery, American Freedom, pp. 74, 78.

11 This system was clearly used in 1619; Kingsbury, Susan Myra, ed., The Records of the Virginia Company of London (Washington, D.C., 1933). Vol. III, pp. 226–27. It is not clear whether it was in use earlier. A regulation of Virginia in 1616 mentions a covenanted obligation of “every farmer to pay yearly into the [Company's] magazine for himself and every man-servant, two barrels and a half a piece of their best Indian wheat” Historical Manuscript Commission, Eighth Report, Vol. 2, No. 208, p. 31. The payment made by the farmer for himself was apparently a rental payment for an allotment of land from the Company (e.g., see Andrews, Charles M., The Colonial Period of American History [New Haven, 1934], Vol. I, p. 124), but it is not specified whether the payment to be made for each servant was a rental fee for a possible additional allotment of land or a rental payment to the Company for the services of the servant himself.

12 Kingsbury, , Records of the Virginia Company, Vol. III, p. 226; also pp. 246, 257–58.

13 Ibid., p. 221.

14 Ibid., p. 167.

15 Ibid., p. 227.

16 The difficulties of devising rental agreements that would provide the proper incentives for planters would have been enormous in view of the problems involved in determining the presence of negligence by masters in the case of death or escape by servants under the conditions of high mortality and poor communications that existed in early Virginia. Sale of the contracts to masters was therefore superior to rental, and it appears that the Virginia Company realized this very quickly, as the only definite evidence of rentals dates from the same year–1619–in which the first outright sales of servants' contracts occurred. Rentals do not appear to have continued in later years.

17 Smith, Colonists in Bondage, p. 12. The Contract that came to be used in these bargains was of a type commonly used in England for a variety of legal transactions, known as an indenture.

18 Kingsbury, Records of the Virginia Company, Vol. III, p. 313.

19 Davis, Lance E. and North, Douglass C., Institutional Change and American Economic Growth (Cambridge, 1971), P. 211. Like its English counterpart, the system of service in husbandry, in the early British colonies indentured servitude increased labor mobility at a relatively low cost, for it involved the migration only of individual laborers who were currently in the labor force. Unlike most migratory movements, the system therefore did not have to bear the costs of transportation for “tied” movers in families, who would make no immediate contribution to production. It might be argued that indentured servitude was adapted directly from the English system of apprenticeship. Some connections did exist. During 1619–1622 the Virginia Company sent several shipments of vagrant children to Virginia; their passage had been paid by the City of London, and in return the Company agreed to place them with planters as apprentices; see Johnson, Robert C., “The Transportation of Vagrant Children from London to Virginia, 1618–1622,” in Reinmuth, Howard S. Jr, Early Stuart Studies (Minneapolis, 1970), pp. 137–51. This was an example of the compulsory power of parish apprenticeship, an institution distinct from the older system of craft apprenticeship; see Davies, Margaret Gay, The Enforcement of English Apprenticeship (Cambridge, Massachusetts, 1956), pp. 1213. Yet servitude, in which a capital sum was initially provided by the master to the servant (to be paid off by the servant's labor), posed very different problems of contract enforcement and labor motivation than did apprenticeship, in which the initial payment was made by the servant, with the master's obligation, in the form of training, to be paid over the course of the agreement. Thus, although some elements drawn from apprenticeship influenced the development of servitude, the incentives of both master and servant were quite different in the two systems, and servitude was more than a transfer of apprenticeship to the colonies. Although indentured servitude was primarily used in order to facilitate migration, once the legal basis of the institution had been laid down it could also be used to improve the functioning of markets for credit for other purposes. Thus, for example, in 1640 a Barbados planter named Richard Atkinson borrowed the sum of 2,000 pounds of cotton from John Batt. The agreement provided “that if the said two thousand pounds of Cotton shall not be paid upon the day aforesaid, that then and immediately upon default of the said payment, it shall bee for the said John Batt, or his assigns, to take the body of me Richard Atkinson, servant for the terme of sixe yeares, without any further trouble or sute of law…” quoted in Harlow, Vincent T., A History of Barbados, 1625–1685 (Oxford, 1926), p. 294. Although indentured servitude could have been used in a wide variety of other situations involving debt, that it was overwhelmingly used for transportation was clearly because enforcing repayment of debts was relatively inexpensive when borrowing was done locally, and servitude was therefore unnecessary in these cases.

20 Morgan, American Slavery, American Freedom, p. 126.

21 Morris, Richard B., Government and Labor in Early America (New York, 1965), pp. 461500.

22 Indeed, Gloria Main concluded that servant's material condition in seventeenth-century Maryland was typically no worse than that of many small planters; Main, , Tobacco Colony: Life in Early Maryland, 1650–1720(Princeton, 1982), p. 113.

23 Menard, Russell R., “From Servant to Freeholder: Status Mobility and Property Accumulation in Seventeenth-Century Maryland,” William and Mary Quarterly (Third series) 30 (01 1973), 50.

24 Main, Tobacco Colony, p. 118.

25 Hall, Clayton Colman, ed., Narratives of Early Maryland, 1633–1684 (New York, 1946), p. 292.

26 Craven, , White, Red and Black: The Seventeenth-Century Virginian (Charlottesville, 1971), p. 5.

27 Galenson, David W., White Servitude in Colonial America: An Economic Analysis (Cambridge, 1981), Ch. 7.

28 The following four paragraphs are based on the analysis in Galenson, White Servitude in Colonial America, Chs. 8–9.

29 Dunn, Richard S., Sugar and Slaves: The Rise of the Planter Class in the English West Indies, 1624–1713, (Chapel Hill, 1972), pp. 5972, 110–16, 301–34;Sheridan, Richard B., Sugar and Slavery: An Economic History of the British West Indies, 1623–1775 (Barbados, 1974), pp. 131–33, 164, 194, 237–38.

30 Menard, Russell, “From Servants to Slaves: The Transformation of the Chesapeake Labor System,” Southern Studies, 16 (Winter 1977), 355–90;Galenson, David W., “The Atlantic Slave Trade and the Barbados Market, 1673–1723,” this JOURNAL, 42 (09. 1982), 491511. For additional evidence and discussion of slave prices, see Galenson, , Traders, Planters and Slaves: The Atlantic Slave Trade and the English West Indies, 1673–1725 (forthcoming).

31 Wood, Peter H., Black Majority: Negroes in Colonial South Carolina from 1670 through the Stono Rebellion (New York, 1975), pp. 6269.

32 Thus Oldmixon, John noted in 1708 that slaves “that are born in Barbadoes are much more useful Men, than those that are brought from Guinea”; The British Empire in America (London, 1708), Vol. 2, pp. 121–22. On the relation between place of birth and training, see Menard, Russell R., “The Maryland Slave Population, 1658 to 1730,” William and Mary Quarterly (Third Series), 32 (01 1975), 3637;Mullin, Gerald W., Flight and Rebellion: Slave Resistance in Eighteenth-Century Virginia (London, 1972), pp. 39, 47;Duncan, John Donald, “Servitude and Slavery in Colonial South Carolina, 1670–1776” (Ph.D. dissertation, Emory University, 1971), pp. 436–37.

33 For quantitative outlines of the servants' destinations over time, see Smith, Colonists in Bondage, pp. 307–37, and Galenson, White Servitude in Colonial America, Ch. 6. During the eighteenth century a modification of indentured servitude appeared, particularly among German immigrants to Pennsylvania. Under the redemptioner system, a migrant would board a ship in Europe under a promise to pay for his passage after arriving in America. If he were unable to pay within two weeks after arrival, he would be indentured for a term sufficient to raise the fare. This arrangement is treated here as a variant of indentured servitude, for the basic form of the contract was similar, and there was no legal difference between indentured servants and redemptioners once the latter had been bound. For further discussion and references, see Ibid., pp. 13–15.

34 Herrick, Cheesman A., White Servitude in Pennsylvania (Philadelphia, 1926), p. 254.

35 Miller, William, “The Effects of the American Revolution on Indentured Servitude,” Pennsylvania History, 7 (07 1940), 131–41.

36 For a survey of these views, and a discussion of the timing and causes of the decline of indentured servitude for Europeans migrating to the United States—and its subsequent failure to revive—see Erickson, Charlotte, “Why Did Contract Labour Not Work in the 19th Century USA?” (unpublished paper, London School of Economics, 1982). It might be noted that recent research has raised the possibility that the volume of immigration to the United States in the late eighteenth and early nineteenth centuries was substantially greater than has generally been believed; Gemery, Henry A., “European Emigration to the New World, 1700–1820: Numbers and Quasi-Numbers” (unpublished paper, Colby College, 1983). Both the overall magnitude of immigration and the role of indentured servitude during this period remain to be established firmly.

37 Laurence, K. O., “The Evolution of Long-Term Labour Contracts in Trinidad and British Guiana, 1834–1863,” Jamaican Historical Review, 5 (05 1965), 927.

38 On the Indian indentured migration, see Adamson, Alan H., Sugar Without Slaves: The Political Economy of British Guiana, 1838–1904 (New Haven, 1972);Wood, Donald. Trinidad in Transition: The Years After Slavery (London, 1968);Tinker, Hugh, A New System of Slavery: The Export of Indian Labour Overseas, 1830–1920 (London, 1974). On Chinese indentured migration see Corbitt, Duvon Clough, A Study of the Chinese in Cuba, 1847–1947 (Wilmore, Kentucky, 1971);Stewart, Watt, Chinese Bondage in Peru: A History of the Chinese Coolie in Peru, 1849–1874 (Durham, North Carolina, 1951);Campbell, Persia Crawford, Chinese Coolie Emigration to Countries Within the British Empire (London, 1923). In addition to these movements, during the nineteenth century relatively small migrations of indentured workers occurred from Africa and Madeira to the West Indies and South America. For an overview of these bound migrations, see Engerman, Stanley L., “Contract Labor, Sugar, and Technology in the Nineteenth Century,” this JOURNAL, 43 (09 1983), 635–59; also Roberts, G. W. and Byrne, J., “Summary Statistics on Indenture and Associated Migration affecting the West Indies, 1834–1918,” Population Studies, 20 (07 1966), 125–34.

39 For example, see Tinker, A New System of Slavery, Ch. 6. It might be noted that the Asian migrants to the West Indies often appear to have chosen not to return to their native countries after becoming free.

40 Coman, Katharine, The History of Contract Labor in the Hawaiian islands, Publications of the American Economic Association, Third series, 4 (08 1903), 710;Glick, Clarence, “The Chinese Migrant in Hawaii: A Study in Accommodation” (unpublished Ph.D. dissertation, University of Chicago, 1938), pp. 3839.

41 Zo, Kit Young, Chinese Emigration into the United States, 1850–1880 (New York, 1978), pp. 9596.

42 The magnitudes of these population movements were very different. Thus it has been estimated that 45.2 million free Europeans migrated to the Americas during 1846–1920, compared to a total of 775,000 bound Indians and Chinese who migrated to the West Indies and South America in the nineteenth century, and another 100,000 bound Chinese and Japanese who migrated to Hawaii; Engerman, Stanley L., “Servants to Slaves to Servants: Contract Labor and European Expansion,” in van den Boogart, H. and Emmer, P. C., eds., Colonialism and Migration: Indentured Labour Before and Afler Slavery (The Hague, forthcoming), Table II. Yet in spite of the imbalance between these relative magnitudes, due to the enormity of the free European migration, the migration of bound Asians was clearly a significant one for the Americas. For some interesting recent comments on these nineteenth-century migrations, see McNeill, William H., The Great Frontier: Freedom and Hierarchy in Modern Times (Princeton, 1983), pp. 3955.

43 The test proposed here might be seen as an implication of a special case drawn from a more general analysis. In general, a migrant might choose between financing migration costs out of savings or by borrowing by comparing the levels of his income before and after the move; if income after moving is expected to be considerably higher than before, the migrant might prefer to repay moving costs out of the higher post-migration income, in order to smooth the path of his consumption overtime. Therefore, if the question is simply one of whether the migrant will borrow in order to migrate, the answer would depend on a comparison of income levels in the countries of origin and destination. Yet although indentured servitude was a form of credit, it involved more than many credit transactions. For an indentured migrant not only agreed to repay his loan, but to give up much of his freedom during the period of repayment; thus servants typically gave up the freedom to marry during their terms, to engage in business on their own account, to determine where they would live, and so on. The assumption is therefore made here that given these conditions, migrants would strongly prefer not to borrow to migrate by indenturing themselves, but would instead prefer to save prior to migration in order to migrate as free workers. The test of the difficulty of doing this therefore involves a comparison of the wealth of migrants and the costs of migration; the variables examined in the text are intended to be considered as proxies for these less readily measurable variables.

44 An interesting feature of the fares shown in Table 1 is the significant decline in passage costs from Great Britain to the United States during the early nineteenth century. Although the greater regularity of the schedules of steamships apparently did reduce the variability of fares due to such factors as seasonality and the decisions of individual shipping agents–and the greater speed of the steamships reduced the full cost of passage by the opportunity cost of the saved time of passengers–the major decline in fares appears to have been complete by about 1830, well before steamships replaced sailing vessels in the Atlantic passenger trade in the 1860s. For discussion see Gould, J. D., “European InterContinental Emigration 1815–1914: Patterns and Causes,” Journal of European Economic History, 8 (Winter 1979), 611–14; also see North, Douglass C., “Sources of Productivity Change in Ocean Shipping, 1600–1850,” Journal of Political Economy, 76 (09 1968), 953–70.

45 For example, see Galenson, White Servitude in Colonial America, Ch. 2.

46 For example, see Hvidt, Kristian, Flight to America: The Social Background of 300,000 Danish Emigrants (New York, 1975), pp. 91102;Erickson, Charlotte, “Emigration from the British Isles to the U.S.A. in 1831,” Population Studies, 35 (07 1981), 175–97; and Swierenga, Robert P., “International Labor Migration in the Nineteenth Century: The Dutch Example,” paper presented to Economic History Workshop, University of Chicago, 05, 1979. During the colonial period, virtually all English indentured servants were unmarried (indeed, standard servant contracts in the eighteenth century included a declaration that the individual bound was single, as shown in Galenson, White Servitude in Colonial America, pp. 201–02). The same was not true for German redemptioners, who often came in families; quantitative information on their distribution by family status is poor, but the proportions in families generally appear to have been low. For a discussion of the evidence see Wokeck, Marianne, “The Flow and the Composition of German Immigration to Philadelphia, 1727–1775,” Pennsylvania Magazine of History and Biography, 105 (07 1981), 249–78.

47 Farley Grubb has found that among German immigrants arriving in Philadelphia during 1785–1804, 51 percent of single males and 59 percent of single females were indentured, compared with only 35 percent of married adults and 40 percent of children traveling with parents; “Indentured Labor in Eighteenth-Century Pennsylvania” (dissertation in progress, University of Chicago). This result is consisent with the hypothesis that an increase in the importance of families in migration would have tended to reduce the amount of servitude.

48 Kuznets, Simon, Modern Economic Growth: Rate, Structure, and Spread (New Haven, 1966). pp. 235–40. On the rising ratio of wealth to per capita output in Great Britain in the second half of the eighteenth century, see Feinstein, C. H., “Capital Formation in Great Britain,” in Mathias, Peter and Postan, M. M., eds., The Cambridge Economic History of Europe, Vol. VII, Part I (Cambridge, 1978), pp. 9092.

49 Erickson, Charlotte, American Industry and the European Immigrant, 1860–1885 (Cambridge, Massachusetts, 1957). The Act to Encourage Immigration of 1864 made it legal for immigrants to pledge their wages for a period of up to one year to repay costs of their migration that had been advanced to them. That indentures were not openly used for Chinese might have been due to the fact that in practice they were held for terms substantially longer than one year, but evidence on their actual terms is elusive.

50 For example, see the defense of the system by Seward, George F., Chinese Immigration, in Its Social and Economical Aspects (New York, 1881), pp. 136–58. For a brief but interesting discussion of the actual contractual agreements of the Chinese immigrants in California, see Sandmeyer, Elmer Clarence, The Anti-Chinese Movement in California (Urbana, 1973), Ch. 2. I plan to present a further investigation of these arrangements, and of their deviation in practice from the descriptions given at the time by the “Chinese Six Companies” largely responsible for the importation of the Chinese, in a forthcoming paper coauthored by Patricia Cloud.

51 Erickson, American Industry and the European Immigrant, Ch. 1. On the politics of contract labor in the late nineteenth-century United States, and the opposition of unions, see Ibid., Chs. 8–10.

52 The experience of the Chinese in California might offer an example of a significant additional means of enforcement. Gunther Barth wrote of the enforcement of their debt contracts that “the kinship system supplied an extra-legal control in a country where courts and customs failed to support any form of contract labor,” as the families the migrants had left behind them in China remained “as hostages within the reach of their creditors;” Barth, Gunther, Bitter Strength: A History of the Chinese in the United States, 1850–1870 (Cambridge, Massachusetts, 1964), pp. 56, 86. Yet it might be noted that even in this case the ownership of the debt contract by the worker's immediate employer apparently remained typical; Ibid., pp. 55–56. The padrone system used in Italy and Greece in the late nineteenth century was based on securing the loan of passage money to the migrant through mortgages on land held by relatives who remained behind; Taylor, Philip, The Distant Magnet: European Emigration to the U.S.A. (New York, 1971), p. 98. It might be noted here that the American Emigrant Company and the other companies that recruited laborers for northern manufacturers during the mid-1860s in effect operated on a basis similar to the English merchants who sent servants to colonial America, for these companies relied on American employers to provide the working capital to pay for transportation of workers, as well as to secure repayment from the wages of the contract laborers; Erickson, “Why Did Contract Labour Not Work in 19th Century USA?,” p. 19.

53 The quotation is from the prophetic formulation of the indenture system of Sir George Peckham in 1583 in his A True Reporte, of the late discoveries, and possessions, taken in the right of the Crowne of Englande, of the Newfound Landes, By that valiaunt and worthy Gentleman, Sir Humfrey Gilbert Knight, Ch. 7.

The Rise and Fall of Indentured Servitude in the Americas: An Economic Analysis

  • David W. Galenson (a1)


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