World History 2 157 - 10.3.2 Contract Labor and Debt Bondage

While slavery and serfdom disappeared from the industrialized world in the nineteenth century, other means remained for securing a long-term or permanent labor force for both agricultural and industrial production. Two such systems are contract labor and debt bondage. Contract labor, a system in which people sign contracts promising to perform work in exchange for a fee, still exists today. Indentured servitude is a form of contract labor in which people pledge to work for an agreed period of time for an agreed form of compensation. Although indentured servants are not enslaved, while their contract is in force, their employers have nearly total control over them, and they are not allowed to leave their service. Debt bondage is a system in which a person who owes money works (or provides someone else to work) for the creditor until the debt has been repaid through labor. Indentured servitude and debt bondage are similar and were common in the later nineteenth century; they differ from slavery in that, theoretically, at a point in time the bondage will end.

In the United States, indentured servitude had been common during the colonial period, and it was the means by which many Europeans obtained passage to North America. The practice had largely died out in the United States by the middle of the nineteenth century but still existed in a few places. In Hawaii, plantation owners used contract labor from Portugal, China, Korea, Japan, and the Philippines to grow their crops, especially sugarcane. Many Chinese immigrants also came to the United States as contract laborers. They were not working under a contract with their employer. Instead, they had agreed to work for one of their compatriots to pay for their passage to the United States. Many Chinese workers were taken abroad by the Six Companies, a Chinese-owned business formed to transport Chinese immigrants to North America, and they had to repay their debt to the company before they were allowed to return home.

Other parts of the world also relied on various forms of contract labor once slavery had been abolished. During the nineteenth century, Australia depended on indentured laborers from the islands of the Pacific, such as the Solomon Islands, Tuvalu, Samoa, and the Gilbert Islands (now called Kiribati). A flourishing trade also provided Chinese and Indian laborers to work in Latin America, the Caribbean, Southeast Asia, and European colonies in Africa. These laborers were underpaid, overworked, brutally disciplined, and given only enough food to allow them to work. Reports about their poor treatment convinced many industrialized countries to end participation in the trade. Britain prohibited its ships from carrying Asian laborers to Cuba and Peru, two of the main destinations. In 1874, Portugal, following Britain’s example, prevented the trade from being carried on in Macao, a Portuguese colony in Asia through which many Chinese laborers were shipped elsewhere in the world.

Debt bondage was also a common source of labor in some parts of the world in the late nineteenth century. In the 1880s in Japan, faced with an economic depression that led many to bankruptcy and starvation, parents “rented” their children, especially daughters, to factories. The girls were provided with food and shelter, and money they earned was sent home to their parents. Daughters might also be hired out to brothels; dutiful ones might make the decision themselves to spare their parents the pain. In the United States, debt bondage was a common means by which southern farmers kept a labor force of African American people and poor White people at their disposal. It also trapped many Asian laborers who immigrated to South America, even after their contracts had expired.

In some places, debt bondage was nearly impossible to escape. Sharecroppers and tenant farmers working other people’s land depended on the harvest for their income. In the time before the harvest, they purchased necessities like food on credit from a local store, which was usually owned by the landlord. They also often needed to purchase seed and use equipment owned by the landlord. When they sold their crops following the harvest, they repaid their debts. Often, the prices of goods and the interest charged by the store owner were so high that income from the harvest was insufficient to satisfy the workers’ debts, and the unpaid portion was added to the amount borrowed against the next harvest. Some employers paid their workers with scrip, a substitute for money that could be exchanged only at the store the employer owned; because they could not shop elsewhere, laborers had no choice but to go into debt. In Japanese brothels, the young women were not paid in scrip, but the cost of everything provided for them, including clothing and food, was recorded, and the women could not go free until they had repaid both the original sum exchanged for them and the total cost of their upkeep.

The content of this course has been taken from the free World History, Volume 2: from 1400 textbook by Openstax