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One cannot properly discuss a history of debtor’s prisons without bringing up the topic of bankruptcy. While debtor’s prisons and compensation through incarceration had existed for centuries in Europe, we’ll stay focused on the United States for the most.
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Vast amounts of literature exist that reference or use the situation of unpaid debts as the backdrop or centerpiece of the story. From Charles Dickens, who was inspired to write several classic novels based on the inspiration of his father who was imprisoned in England’s infamous Marshalsea prison in the early eighteen-twenties, to references in Shakespeare’s King Lear, the topic of debt was usually referenced as a tale of immorality or of misfortune.
“Neither a borrower nor a lender be;
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.”
Shakespeare, Hamlet 1602
The irony of debtor’s prison in its time is that the prisoners were charged for room and board but were expected to repay the debts while provided no means to earn it. Re-compensation, for those lucky enough to pay it, usually came from family members or others with a vested interest in the debtor’s freedom.
Accomack, Virginia Debtors Prison est. 1783
The earliest record of a debtor’s prison in the Americas goes as far back as 1678 in Salem Massachusetts. It is estimated that as many as two out of every three Europeans that came to the Americas in the seventeenth and eighteenth centuries were debtors as soon as they arrived. Many served in indentured servitude to pay off the price of their excursion to the Americas. Some historians go as far to argue that the American Revolution was a form of debt relief to those indebted to the Royal Crown.
Bankruptcy in Pennsylvania in 1785 was quite an ordeal. They were frequently flogged in public and could be subjected to having their ear nailed to a post or outright cut off. To assure no one would lend to them again, an old English Tudor era method for punishment and identification was used. The bankruptcy petitioners were branded on the thumb with a “T” for thief.
Debt in colonial America was not isolated to the poor and meek. Several prominent figures in early American history had debt issues;
Thomas Jefferson, who at the time of his death in 1826, had amounted an astounding at that time, $107K in debt which required the liquidation of all of his assets to attempt to satisfy. Had he survived in good health much longer, he very likely would have found himself a prisoner.
James Wilson, Associate Justice of the United States Supreme Court, was once jailed in debtor’s prison in 1796 but released after a short time.
Robert Morris, a signer of the Declaration of Independence was incarcerated for a series of debts incurred through borrowing unsuccessful land speculation deals. Sadly, Morris himself was partially responsible for funding the Revolution. As illustrated, debt affected all persons alike and the penalties were quite severe.
The Bankruptcy Bill of 1841 allowed for a full discharge of debt unless fifty percent of the lenders opposed. Many of the features of bankruptcy from this bill are still in effect today. Such was the uproar of this leniency and absolution of debt that it was repealed thirteen months later.
In 1846 a magazine known as “Hunt’s Merchant Magazine” suggested the dissolution of creditor’s rights and that the remedies of attachment, similar as they are today, become a more financially responsible and reasonable way to manage debt.
In the eighteenth century, the most common form of debt was “Book Debts”, very similar to modern credit with the exception of interest. Interest was considered by most as “usury” and was deemed immoral. Debtors had the right to an examination of records and to present evidence to a court to appeal the court’s ruling for attachment. Even then, creditors were subject to a statute of limitations.
As the methods of debt collection began to standardize and the barbaric conditions of these prisons became the subject of much public discourse, the necessity of debtor’s prison lessened until they were abolished in 1849. Even then, the idea of punitive action for the mere sake of itself was recognized as counterproductive to the alleged goal, which was re-compensation.
