For more than 100 years after slavery’s end, white people maintained a legal system in the South that barred Black people from voting or holding office, held down their wages with the threat of the chain gang, and constantly reinforced their inferior status through violence and humiliating acts of discrimination. Looking back on these realities, it is tempting to imagine Black southerners as inhabiting a kind of law-free zone, shut out from the law and afraid to go anywhere near the courthouse, and that the civil rights movement of the 1950s and 1960s was the culmination of a centuries-long struggle toward freedom and full citizenship—to galvanize the power of the federal government against the white supremacists who ruled the statehouse and the county courthouse. Yet, Black people in the Jim Crow South were already using civil rights—not a federal right to protection from racial discrimination, but rather the state-level rights of property, contract, and the right to go to a court of law.
Nowhere did the promise and peril of these fundamental rights loom larger than in the borrowing and lending of money. Nearly everyone in the rural South was simultaneously a debtor and a creditor, signing promises on scraps of paper to cover small debts like a month’s worth of flour and salt, co-signing on bonds for bigger debts, or on deeds of trust (which worked roughly like a mortgage) to buy land.
Nate Shaw, a tenant farmer in Alabama in the early 1900s, relied on a steady flow of credit to buy the things that kept his family’s business (the farm) running. Shaw borrowed his money using a pair of legal agreements called a “promissory note,” a written promise to pay a certain sum of money on a certain date (or dates), and a “deed of trust,” the mortgage-like document that secures the note with collateral. Today, the collateral (or security) typically covers only the asset you are buying. If you default on a car loan, GMAC takes the car; if you default on a mortgage, Citibank takes the house. You negotiate over the interest rate or points, not the collateral.
Farm credit in 1900 was different: Shaw had to negotiate over the collateral too. What those twin papers really did was allocate risk in the frighteningly risky business of farming. By seizing control and oversight of the credit process, a white landlord and his network of white merchants were able to shift the risk onto tenants, dictate where tenants shopped, and inflate the prices tenants paid. Shaw kept an eagle eye not only on his note (the interest rate) but also on his deed of trust (the debt paper), because if the crop failed or if prices fell, the deed of trust showed which of Shaw’s assets could be sold to pay off his debt. All the notorious abuses—the infamous peonage laws, which criminalized the nonpayment of certain debts, the landlords who made people sign a note for $1,250 but actually handed over only $1,000, or who charged 35 percent interest for a week-long loan, secured by the borrowers’ “household effects,” meaning that the borrower could lose everything—all of it stood atop this fundamental struggle over credit, waged through the civil rights of property and contract.
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The note and the deed of trust were the battleground of Black legal life, the place where a family’s fortunes rose or fell. The problem for people like Nate Shaw wasn’t ignorance or fear of getting tangled up in the law. He dealt with legal matters all the time, and he knew a bad loan when he saw one. He took bad loans because there were no good ones. He tried to protect himself, first, by attempting to keep as much of his property off the deed of trust as possible. And second, by shifting his debts around, asking one person after another to “take up” the note for him, the same way that people today juggle credit cards, looking for a lower interest rate or a way to stretch out their payments. That hunt for decent credit was one of the things that propelled Black people out of the countryside toward southern cities like Richmond or Memphis, then north to Chicago and Cleveland and Syracuse. Predatory lending would follow the Great Migration north, disguised as payday loans and contract-selling furniture stores, and so would the migrants’ coping strategies. “Friendship business amongst the white folks,” is what Shaw called the predatory lending he faced in Alabama. It was a spider’s web, spun to control and profit from Black farmers, but the web touched whites, too, and could chafe them if anybody tugged too hard on its filaments.
To credit literally means “to believe,” and every credit transaction is, at bottom, one person putting his faith in another that he will be repaid. What channels that faith and puts the power of the state behind its enforcement are those twin legal acts—the deed and the promissory note. In the Jim Crow South, ordinary people used promissory notes like money: instead of paying cash for your flour and fertilizer, you took a note that someone else had written out to you (that is, someone’s February promise to pay you $100 in May) and you “endorsed” it over to a shopkeeper who could then collect the $100 in May. Usually that endorsee would take it at a discount, so that you got only $95 worth of groceries or $95 taken off your debt, which meant you were effectively paying a 20% interest rate. The resulting daisy chain of “IOUs” represented—and worsened—the region’s economic inequality, grinding millions of Black people into poverty. But there was another dimension to the Jim Crow credit economy: it required whites to recognize Black people’s legal personhood.
A contract is only binding if both parties know what they are doing and enter into it of their own free will— if the words “I accept,” or “I promise to pay” mean something legally. The fact that Black people were now putting their X marks to notes and deeds was both a sign of how vulnerable they were in the New South, and a signal that the rights revolution that had begun during Reconstruction was now fully mature. The South’s small population of free African Americans had signed deeds and notes back in the days of slavery, but by the early 1900s Black people’s capacities and understanding mattered more than ever to white people. And here is another crucial thing: most people did their borrowing and lending without any lawyers.
As a result, the law was full of rules that spelled out how voluntary an assent had to be and how much knowledge and understanding a person needed for a court to say he was legally bound by his promise. For example, the “duty to read” was a set of rules that generally made it hard for people to get out of contracts by saying they hadn’t understood what they signed. But the duty to read also constrained those who wrote deeds and read them aloud: those literate people owed a “confidence” to anyone who did not understand technical legal language. So if the person offering the contract lied about what was in it, or hid important provisions in the “fine print,” then “the minds of the parties did not meet” and he shouldn’t expect a judge to enforce it. Testimony in trial courts and other documents suggests that these official rules, and their underlying assumptions about knowledge and understanding, were more than a figment of law professors’ imagination—that adults, including Black people, generally knew that “it was illegal to force a man to sign a note without readin it to him, tellin him what he’s signin,” that a person should say “whether she understood” what she was about to sign, and that a binding signature could be made by “touch[ing] the pen.” In fact, it is likely that the judges and law professors derived their rules about the duty to read in part from what they knew about how people actually made deals.
In the Jim Crow South, life’s ordinary business could not go on if you could not make contracts with Black people. White people needed to be able to treat African Americans as competent, reasonable people. They needed Black people to have a working legal knowledge. It was an example of what the late Derrick Bell called “interest-convergence”—the system makes room for Black people’s interests only when it converges with the interests of whites.
Every day, Black people used their legal commonsense, their intuitions about how a judge might apply a legal rule, to make sense of what it took to make a binding contract, the difference between a lawful and an unlawful eviction, a borrower’s obligations under a promissory note and deed of trust, and more. They stood at a disadvantage, of course. But not because they were ignorant of the law or scared of the law, and not even primarily because white officials cheated or intimidated them out of their rights. Rather, they stood at a disadvantage because under the ordinary rules of property and contract—the civil rights that belonged to all free people—people on one side of the table started with a bigger pile of bargaining chips. Landlords had more of them than renters, creditors more than borrowers. In the early-20th-century United States, civil rights were vindicated in courts, but they were made and remade by people pursuing their everyday lives, on front porches, in church basements, streets, and fields.
Adapted from Before the Movement: The Hidden History of Black Civil Rights by Dylan C. Penningroth. Copyright © 2023 by Dylan C. Penningroth. Used with permission of the publisher, Liveright Publishing Corporation, a division of W. W. Norton & Company, Inc. All rights reserved.
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