Was the credit-ticket scheme a form of slavery or even indentured servitude?

During the mid-late nineteenth century, the majority of Chinese immigrant workers in the United States were under the supervision of a labour agent.  According to Leland Stanford, the president of the Central Pacific Railroad, labour agents were “shrewd, business men” who essentially advised “their subordinates where employment can be found on the most favorable terms.”^⁠1 The labour agents themselves operated collectively under an organization known as the Chinese Six Companies.  Based in San Francisco, the Six Companies commanded a vast network of intermediaries in both China and California, possessing a virtual monopoly on the migrations of nearly all U.S. bound Chinese immigrants.^⁠2

Credit ticket scheme

The power of the Chinese Six Companies stemmed from the scheme that financed the immigration process. The majority of Chinese immigrants financed their voyage across the Pacific using the debt inducing credit-ticket scheme.  The cost of the voyage was approximately $40, a sum of money out of the reach of the average Chinese migrant.  The credit-ticket scheme effectively became the only way migrants could cross the Pacific. Notably, labour agents cut deals with the steamship companies making sure that no Chinese immigrant could return without the debt being repaid.  This meant that immigrants became financially tied to labour agents, empowering labour agents to redirect immigrants into unskilled labour, such as railroad construction.

Similarities to Indentured Servitude

To many contemporaries, the credit-ticket scheme reduced Chinese immigrants to the status of slaves or a derivative of slaves, “coolies.”^⁠3  However, I would argue that the credit-ticket scheme was essentially a reinvention of indentured servitude.^⁠4

Indentured servitude had been the dominant form of European migration to North America during the eighteenth century.  European migrants who could not pay the cost of the voyage to North America with their own money or were unable to borrow funds from other individuals or financial institutions, turned to indentured servitude to facilitate their migration to the New World.  Through merchants, migrants could borrow the cost of their passage as an advance against their future labour.^⁠5

The credit-ticket scheme followed a similar strategy in regards to repayment of the cost of passage. However, there are some noticeable differences between the two systems.

Differences to Indentured Servitude

The key difference between indentured servitude and the credit-ticket system was the method in repaying the cost of passage.  While indenture servitude rested on migrants being bound to an employer for a length of time in order to pay off the debt, the credit ticket system simply obligated Chinese immigrants to repay the debt rather than to serve a term of years.  As the U.S. Senate reported, “They [Chinese immigrants] often borrow money to get here, and agree to pay high premiums or interest, but the agreement is in the amount of money rather than in the number of years of service.”^⁠6  Frederick Low added, “If I am correct in my supposition, these contracts do not bind them to work for any specific length of time; they only bind them to refund a certain sum of money, and when that money is paid they are as free as you and I.”^⁠7

This still leaves the question, why was indentured servitude reinvented in the mid-late nineteenth century?

Debt and the creation of a new American workforce

The answer perhaps can be found with debt and the creation of a new American workforce. As Sven Beckert has shown in his recent study of cotton production after the Civil War, debt was a powerful tool in re-energising the labour force of the South and developing a new system of labour.  Through schemes such as sharecropping Beckert notes, “[cotton] cultivators were now nominally free,” but, “networks of credit … captured them in an ongoing cycle of indebtedness that required them to grow cash crops.”^⁠8

I believe a similar analogy can be used for understanding the role of the credit-ticket scheme and Chinese immigrants. For Chinese immigrants to escape the cyclical debt of the credit-ticket scheme, meant not only finding work but also sustaining employment. Interestingly, expectations regarding employment were low.  As one contemporary noted, the immigrants hoped “for the present at least, to perform the most common and unskilled labor.”^⁠9

References

¹ Leland Stanford, Central Pacific Railroad. Statement made to the President of the United States, and Secretary of the Interior of the Progress of the Work (Sacramento: H.S. Crocker & Co., Printers, 92 J Street, 1865).

² Gunther Peck, Reinventing Free Labor: Padrones and Immigrant Workers in the North American West, 1880-1930 (Cambridge: Cambridge University Press, 2000), 51.

³ See David Gouter, “Drawing Different Lines of Color: The Mainstream English Canadian Labour Movement’s Approach to Blacks and Chinese, 1880-1914,” Labor: Studies in Working-Class History of the Americas 2:1 (2005), 55-76.

⁴ Lydia Potts, The World Labour Market: A History of Migration (London: Zed Books, 1940); Hugh Tinker, A New System of Slavery: The Export of Indian Labour Overseas, 1830-1920 (New York: Oxford University Press, 1974); David Northrup, Indentured Labor in the Age of Imperialism, 1834-1922 (New York: Cambridge University Press, 1995); Kay Saunders, ed., Indentured Labor in the British Empire, 1834-1920 (London: Croom Helm, 1984); Jan Lucassen, “Free and Unfree Labour Before the Twentieth Century: A Brief Overview,” in Free and Unfree Labor, ed., Tom Brass, Marcel van der Linder, and Jan Lucassen (Amsterdam: International Institute for Social History, 1993), 7-18.

⁵ D.W. Galenson, “The Rise and Fall of Indentured Servitude in the Americas: An Economic Analysis,” Journal of Economic History XLIV (1984), 16-17.

⁶ “Report of the Joint Special Committee Investigate Chinese Immigration.” U.S. Senate, (1877), 405.

⁷ “Report of the Joint Special Committee Investigate Chinese Immigration.” U.S. Senate, (1877), 83.

⁸ Sven Beckert, “Emancipation and Empire: Reconstructing the Worldwide Web of Cotton Production in the Age of the American Civil War,” American Historical Review (December 2004), 1428.

⁹ Otis Gibson, The Chinese in America (Cincinnati: Hitchcock & Walden, 1877), 55.

Coolieism and Slavery

In 1874, President Ulysses S. Grant during his State of the Union address turned to the issue of Chinese immigration.  Alluding to the system of slavery, Grant proclaimed that, “the great proportion of the Chinese immigrants who come to our shores do not come voluntarily, to make their homes with us and their labor productive of general prosperity, but come under contracts with headmen, who own them almost absolutely.”^⁠1  In an open letter to President Ulysses S. Grant, representatives of the Chinese Six Companies, the headmen who Grant referred to, countered the allegation of slavery, declaring that:

It is charged that all Chinese laboring men are slaves. This is not true in a single instance. Chinamen labor for bread. They pursue all kinds of industries for a livelihood. Is it so then that every man laboring for his livelihood is a slave? If these men are slaves, then all men laboring for wages are slaves.^⁠2

The words of President Ulysses S. Grant and the response of the Chinese Six Companies offers an insight into the broader debate over the hiring of Chinese labourers and the crisis “Free Labor” ideology post-Civil War.

Grant’s allusion to slavery clearly reflected concerns about how Chinese labourers were hired, and how that hiring process undermined the ideals of “Free Labor.” However, the statement by the Chinese Six Companies suggests a different understanding of  “Free Labor” post-Civil War.  Defining Chinese immigrants as wage-labourers and not slaves, the Six Companies offered a critique of industrial capitalism by implying that all workers were being transformed into “wage slaves.”^⁠3

References

¹ Ulysses S. Grant quoted in Patrica Cloud and David W. Galenson, “Chinese Immigration and Contract Labor in the Late Nineteenth Century,” Explorations in Economic History, 21 (1987), 34.

² Memorial from Representative Chinamen in America to U.S. Grant President of the United States, reprinted in Otis Gibson, The Chinese in America (Cincinnati: Hitchcock & Walden, 1877), 322.

³ A number of studies have compared wage work and chattel slavery. See David R. Roediger, The Wages of Whiteness: Race and the Making of the American Working Class (London: Verso, 1999), 65-94; Eric Foner, “Workers and Slavery,” in Working for Democracy: American Workers from the Revolution to the Present, ed., Paul Buhle and Alan Dawley (Urbana: University of Illnois Press, 1985), 21-30.