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Happy Independence Day! It seems appropriate given Occupiers are in Philadelphia right now to mention an interesting aspect of the American Revolution: debt relief.

From the New Yorker:

The American Revolution, some historians have argued, was itself a form of debt relief. In 1787, just before the Constitution was drafted, New Yorkers formed the Society for the Relief of Distressed Debtors. They launched an investigation and found that, of 1,162 debtors committed to debtors’ prison in New York City in 1787 and 1788, 716 of them owed under twenty shillings. In 1758, New York’s debtors were moved to New Gaol, near what’s now City Hall Park. Describes the horrible conditions in New York’s debtors’ prison. In 1791, John Pintard, a state legislator and stockbroker, fell for William Duer’s financial scheme, which helped trigger the Panic of 1792, the nation’s first stock-market crash. Pintard eventually landed in debtors’ prison in Newark.

The idea that debt is necessary for trade, and has to be forgiven, is consequent to the rise of a market economy. Americans fought to provide the same debt relief to everyone because we believe in equality and because bankruptcy protection makes taking risks less risky. Our willingness to forgive debt lies behind a good part of our prosperity. Pintard got out of jail in 1798, and he filed for bankruptcy in 1800. He went on to found the New-York Historical Society in 1804, and to help open the New York Bank for Savings in 1819. Mentions Joseph Dewey Fay. In 1841, Congress passed a sweeping federal bankruptcy law that offered bankruptcy to everyone. Meanwhile, in 1831, the New York State Legislature abolished imprisonment for debt. Other states soon followed. Debtors’ prison was abolished, and bankruptcy law was liberalized, because Americans came to see that most people who fall into debt are victims of the business cycle, and not of fate or divine retribution.

Oh how far we've fallen.

Today not only do homeowners not get debt relief they get fraudulently foreclosed on. And students are saddled with debt their entire lives that can not be discharged even during personal bankruptcy.

Debt slavery is back in style, will Revolution follow?

Originally posted to Occupy Wall Street on Wed Jul 04, 2012 at 09:07 AM PDT.

Also republished by The Royal Manticoran Rangers and Keynesian Kossacks.

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Comment Preferences

  •  So the Revolution was about debt relief, (0+ / 1-)
    Recommended by:
    Hidden by:
    Calamity Jean

    but somehow Congress didn't get around to doing anything about it until 1840, some 60+ years after the revolution?

    Sure, ok.  There's no doubt that (a) we had a revolution, and (b) American was unique in its attitude toward bankruptcy, but the piece seems to simply infer (badly) a causal link from that correlation.

  •  debt to Northern banks was Civil War grievance (5+ / 0-)

    Land-rich but cash-poor Southern planters had plenty to say about how they were supposedly the real slaves ... to Northern bankers who loaned them the money that ran the plantations day-to-day, and who charged a premium for it while Northern factory owners paid as little as they could for the crops.

    To a lesser extent, every farmer felt this way about bankers.  Farmers spent money year round but only made money with the harvest, so they were dependent on a steady supply of affordable credit to operate, and if the harvest was bad, you only ended up deeper in debt and would lose the farm when you could no longer get new loans.

    To those who say the New Deal didn't work: WWII was also government spending

    by Visceral on Wed Jul 04, 2012 at 10:31:49 AM PDT

  •  Repubbed to The Royal Maticoran Rangers and (4+ / 0-)

    Keynesian Kossacks, gladly.

    A little-discussed topic that needs more eyes. Thom Hartmann gives this subject some air from time to time on his radio show and on Free Speech TV.

    Both parties are beholden to their corporate sponsors. The Democratic Party deigns to throw us a few bones from the table on which to gnaw and squabble over, but it's just kabuki.

    by ozsea1 on Wed Jul 04, 2012 at 10:37:00 AM PDT

  •  Occupy (3+ / 0-)
    Recommended by:
    ozsea1, 714day, Eric Nelson

    Happy 4th, DSWright.  Going over there tonight?  We'll be there around 6.

    IMG_0706


    "Justice is a commodity"

    by joanneleon on Wed Jul 04, 2012 at 11:29:57 AM PDT

  •  Excellent topic. Also this - Debtor prison redux (3+ / 0-)

    ..for 21century?
    The private for profit PIC is rediscovering the lucrative side of debtors prisons in todays world
    New York Times - Published: July 2, 2012
    Poor land in jail as companies add huge fees for probation

    J. Scott Vowell, the presiding judge of Alabama’s 10th Judicial Circuit, said in an interview that his state’s Legislature, like many across the country, was pressuring courts to produce revenue, and that some legislators even believed courts should be financially self-sufficient.

    In a 2010 study, the Brennan Center for Justice at the New York University School of Law examined the fee structure in the 15 states — including California, Florida and Texas — with the largest prison populations. It asserted: “Many states are imposing new and often onerous ‘user fees’ on individuals with criminal convictions. Yet far from being easy money, these fees impose severe — and often hidden — costs on communities, taxpayers and indigent people convicted of crimes. They create new paths to prison for those unable to pay their debts and make it harder to find employment and housing as well as to meet child support obligations.”
     - emphasis added

    This is modern stuff so it's a bit off topic with your post..but as you question:
    Debt slavery is back in style, will Revolution follow?
    Thx DSWright - for the intriguing history
  •  i remember yrs ago reading a banker's (3+ / 0-)
    Recommended by:
    DSWright, Eric Nelson, War on Error

    rule of thumb for making money: the earlier you can drive someone into debt, the harder it is for them to get out, & the deeper they go into it -- it's a kind of permanent slavery, a lot like sharecropping was -- you went into debt when you were young & died in it.

    that's how the student loan scam has been set-up: get young people in debt so deep they will never be able to  pay it off (even if they can find a job) & you got 'em for life.

    it's the live to work, work to earn, earn to consume lifestyle we embrace in america (unfortunately).

  •  I thought it was about the freedom to own people (0+ / 0-)

    Because that's what really happened. American freedom is a big fat lie.

    The radical Republican party is the party of oppression, fear, loathing and above all more money and power for the people who robbed us.

    by a2nite on Wed Jul 04, 2012 at 03:40:08 PM PDT

  •  A great piece of the history puzzle. (1+ / 0-)
    Recommended by:
    DSWright

    Thank you for presenting it, DSWright.

    History rings clearly:

    When the masses are impoverished via the policiies of the few, chaos evolves.

    Pls don't be disheartened by the negativity of a few here on Kos.  Keep on researching and posting, please.

    : ))

    It's difficult to be happy knowing so many suffer. We must unite.

    by War on Error on Thu Jul 05, 2012 at 09:50:11 AM PDT

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