Debt Burden
American merchants owed money to English creditors; however, American merchants had trouble selling their wares, but still had to satisfy their creditors. To raise money to pay their British creditors, American merchants tried to collect all the money that was owed to them.
Farmers were accustomed to paying their debts seasonally with crops or labor. Using agriculture goods to pay debts was a common practice. Most did not have cash. However, merchants wanted to be paid in cash [gold and silver], not goods.
The barter system fell apart. This created a chain reaction between creditors and debtors at all levels of the economy. When merchants were unable to collect the money owed to them, they took legal action against debtors. As a result, the 1780s say a dramatic increase in the number of debt suits.
Debt Collection
An estimated one out of every four
In the early American legal system, the debtor had to pay court costs and lawyer’s fees, so being taken to debtor’s court was an expensive experience. Yeomen who were unable to pay back their debt faced prosecution and had their land and goods taken from them by the courts.
Debtors lived in fear that their land and livelihoods might be taken from them by lawyers. The seizure of their land was a horrifying prospect to yeoman farmers, for whom ownership of land was their only means of earning a living. Their land was one of the things for which they had fought during the revolution.
Debtors came to hate lawyers. Perhaps unfairly, yeomen blamed the explosion of debt cases in the courts on lawyers, who profited by prosecuting the ever-growing number of debtors from the western counties. Lawyers were so hated in country areas that they became the butt of many jokes.
Debtor’s Prison
The also feared another fate: being thrown in to debtor’s prison. Debtor’s prisons were overcrowded and unclean places. Cells were damp and often lacked proper light and ventilation. These conditions bred sickness and all kinds of problems.
A man sitting in debtor’s prison could not earn any money to pay his way out. But creditors often insisted that someone who owed them money remain in jail, in the hopes that his friends or family would pay his debt in order to have him released. Sometimes this ploy worked. Other times, people remained in debtor’s prison for their entire term with no way to pay their debt. The majority of people in debtor’s prison were yeoman farmers, rural laborers, and craftsman.
Tax Burden
In addition to the chain of debt, taxes had been increasing in
This was an especially terrible blow to yeoman, who preferred to pay their taxes with labor rather than with cash. Previously, yeomen worked out their highway taxes by fixing and improving the roads, rather than paying cash. People now had to come up with gold or silver, not paper money or goods, to pay their taxes.
