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The Price of Misfortune

Rights and Wrongs in Indebted America


A history of the struggle for debtors’ rights from the Civil War to the Great Depression

What can be taken from someone who has borrowed money and cannot repay? What do the victims of misfortune owe to their lenders, and what can they keep for themselves? The answers to those questions, immensely important for debtors, creditors, and society at large, have changed over time. The Price of Misfortune examines the cause of debtors’ rights in the modern United States and the struggles of reformers who fought to establish financial freedoms in law.
Daniel Platt shows how, in the wake of the Civil War, a range of advocates drew potent analogies between slavery, imprisonment for debt, and the experiences of wage garnishment and property foreclosure. He traces the ways those analogies were used to campaign for bold new protections for debtors, keeping them secure in their labor, property, and personhood. Yet, as Platt demonstrates, those reforms tended to assume as their ideal borrower someone who was white, propertied, and male. In subsequent decades, the emancipatory promise of debtors’ rights would be tested as women, wage earners, and African Americans seized on their language to challenge other structural inequalities: the dependency of marriage, the exploitation of industrial capitalism, and the oppression of Jim Crow. By reconstructing these forgotten developments—and recovering the experiences of indebted farmwives, sharecroppers, and wage workers—The Price of Misfortune narrates a new history of inequality, coercion, and law amid the early financialization of American capitalism.

224 pages | 5 halftones | 6 x 9

History: American History, History of Ideas


"A detailed account of debtor rights in the 'Age of Capital.' Platt brilliantly weaves together legal, political, social and economic history into a truly interdisciplinary narrative of how some Americans in the red received legal protection from their creditors--while others did not. At a time when debt forgiveness has gone from theory to practice, this book is more important than ever."

Eli Cook, author of The Pricing of Progress

Daniel Platt has written a remarkably rich, meticulous, and illuminating book about debt in the United States. Platt's wide-ranging study employs the techniques of intellectual, legal, labor, and cultural history to explore the transformation of debt in the period from the Civil War to the New Deal. In addition to offering a refreshingly original narrative of the history of the Gilded  Age and Progressive era, this book offers a learned meditation on how conceptions about debt shaped the very meaning of slavery, citizenship, and freedom. With attention to the bottom up and the top down, The Price of Misfortune highlights how debt structured the lives of freedpeople, women, and workers, alongside the history of capitalists and politicians reconsidered and remade the politics and economics of debt in modern America."

Lawrence B. Glickman, Cornell University

"The Price of Misfortune combines distinctive historical imagination, analytical power, and extensive, penetrating research. In exploring the dilemmas posed by poverty in the American democratic polity, Daniel Platt sheds new light on inequality, coercion, dependence, and differences of race and gender as he traces how notions of moral and dangerous debtors became pervasive amid the development of capitalism and state formation. This is a terrific book; standing at the intersection of legal, cultural, and economic history, it will surely become a leading contribution to all of these fields."

Amy Dru Stanley, University of Chicago

Table of Contents

1. Jubilee
2. The Debtor’s Wife
3. Accounting for Freedom
4. The Wages of Credit
5. A New Deal for Debt


On October 30, 1871, Judge George G. Barnard, justice of the New York Supreme Court, ordered an investigation of the conditions at the Ludlow Street Jail in Manhattan’s Lower East Side. At least thirty-seven men were there imprisoned—some for days, others for months—for failing to pay their debts. One had neglected to pay alimony. Another had defaulted on a court judgment. The rest had been interned because of the failure to pay back ordinary cash loans taken to fund business risks or to meet the expenses of living. “Technically, these [men] are within the grasp of the law,” the New York Times reported. Their lenders had sworn to a magistrate that they were planning to flee the city, empowering officials to issue a warrant for their arrest. Yet “according to the spirit of our code they are . . . illegally restrained of their liberty.” Their true fault lay in having suffered the twofold misfortune of failing in the market and owing money to parties eager to punish them to the fullest extent of the law. Judge Barnard’s interest in the issue stemmed from the reputed state of the jail, where many inmates were said to endure “filthy quarters, bad food, harsh treatment, and close restraint.” For the Times, however, the injustice was the practice of imprisonment for debt itself. Inmates interviewed by the newspaper attested to their misery. They explained that their failings owed to bad luck and not to reckless borrowing or want of industry. Misfortune joined to legal restraint now resulted in the twin tragedies of being unable to work and unable to provide for their families. “But for the malice of enemies who put me here . . . I could and would have been doing well now,” one assured. Another maintained that when his credit had been good, he had been capable of earning thousands of dollars each year. For a third, the loss had been felt most at home. His wife had been forced to pawn everything, “even the family Bible, and had it not been for the kind offices of the City Mission she and the little ones would have starved.”[i]

Readers of the Times might have been surprised to learn that the debtors’ prison still existed in their city. They may have recalled the campaigns to shutter the institution in the 1830s and 1840s—efforts that had likened civil incarceration to slavery and had contributed to its prohibition in New York in all instances other than those involving fraud or attempted flight, of which the Ludlow inmates were accused. Upon discovering that delinquent debtors could still be thrown into the prison’s hold and locked away, many no doubt wished for its final demise. Critics had long insisted that imprisonment for debt was a vestige of barbarism. It conjured images of medieval dungeons, feudal justice, and even the savagery of the slave plantation. It was “wrong in principle” and harkened “the ignorance and tyranny of the darker ages.” “The power of a creditor to imprison his debtor, is the only case in the United States, where, among free men, one citizen has legal authority to deprive his co-equal fellow citizen . . . of the right of personal liberty,” the prison’s antebellum opponents had insisted. “For the mean and contemptible sum of one hundred dollars, a single exasperated creditor may treat his debtor worse than a criminal.” He may confine him to “a filthy cell behind ponderous doors—grated windows—massy [sic] locks—and damp walls, [and] thus actually [purchase] . . . the positive but useless slavery of a free citizen.” Even as the practice of arrest and imprisonment had faded as a common financial remedy, reformers had cast its formal excision from the law as a necessary measure of the nation’s moral progress. The federal government had banned the practice (for interstate debts that fell under federal jurisdiction) in 1833. Many states had abolished it before the Civil War, while others announced the closure of their debt prisons soon after. Its gradual eradication was heralded by Americans across the political spectrum as a decisive step in the “struggle for human liberty.” It was a triumphant star in the constellation that stretched from “the Declaration of Independence and its successful assertion [to] the emancipation of 4,000,000 slaves.”[ii]

Even as the debtors’ prison was shuttered during the mid- and late nineteenth century, however, there were those who questioned whether its closure meant that the debtor’s body had truly been freed. It was a fact that the debtor could, in most instances, no longer be seized and caged; the lender could not summon the sheriff or bailiff to lock the debtor away, isolating him from family and friends. Surely, however, freedom required more than the possession of one’s body. Most agreed that it also included the rights to own and control one’s labor, to form and maintain a family, and to make independent moral choices. These liberties the creditor could still take away—formally, using writs, attachments, and foreclosure proceedings, and informally, by harassing the borrower, impugning his reputation, or threatening him with violence. In the late eighteenth century, William Blackstone, the English jurist, had described the debtor’s condition as falling somewhere between that of the free citizen and that of the criminal. Theophilus Parsons, in his Law of Contracts (1853), counted the insolvent among those persons whose legal agency was “disabled in whole or in part,” along with children, married women, soldiers, and slaves. “At one point the debtor might be sold into slavery,” a Wisconsin editorialist mused in 1848. Eventually he was freed from the threat of bondage, but “the fangs of the law fastened upon his corpse and forbade its burial until his relations or friends had paid his debts.” Later, the corpse was freed, but the living debtor “might be buried in jail during his life.” In the modern era, imprisonment was increasingly abolished, yet the borrower’s hands remained “effectually bound” so long as his wages could be garnished, his “bed, pillow, and blankets seized,” and “his wife and children made into houseless, homeless beggars.” Narratives that suggested lingering traces of incarceration in the seizure of property, the pressure to make payments, the impoverishment of the family, and the ruining of one’s name highlighted a moral goal that the nation had yet to achieved. The debtor should have the right to exit financial relationships when they became burdensome and oppressive, and he should be able to protect from seizure those possessions deemed essential to the experience of freedom.[iii]

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