Between the end of the Civil War and the 1930s, Southern cotton farmers used the crop-lien system for credit so that they could survive until the crop came in each year. Tenant farmers and sharecroppers who were not landowners had to get food and supplies on credit from local business owners. When the cotton crop came in, these merchants had a lien on the crop, and they received the first share of the profits, with the leftovers going to the farmer.Continue Reading
When the Civil War came to an end, the economy in the South was a shambles. Farmers did not have much in the way of cash and cotton prices were rock-bottom. This system gave both black and white farmers a way to receive credit in the months before planting. Some years, there was enough money to pay the debts and leave the farmer a little seed money for the next year, but in other years, prices were so low that the debt was not fully paid and farmers still owed at the beginning of the next growing season.
Because cotton was the only crop that paid well at all, many merchants insisted that the sharecroppers who were in their debt grow it. Cotton is particularly hard on the soil, and the areas that sharecroppers used over and over lost their fertility. When prosperity hit the country at the end of World War II, the system ended, with many farmers leaving their pastures for new city jobs.Learn more about Agriculture