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    Credit Nation: Property Laws and Institutions in Early America
    Credit Nation: Property Laws and Institutions in Early America
    Credit Nation: Property Laws and Institutions in Early America
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    Credit Nation: Property Laws and Institutions in Early America

    By Claire Priest

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    How American colonists laid the foundations of American capitalism with an economy built on credit

    Even before the United States became a country, laws prioritizing access to credit set colonial America apart from the rest of the world. Credit Nation examines how the drive to expand credit shaped property laws and legal institutions in the colonial and founding eras of the republic.

    In this major new history of early America, Claire Priest describes how the British Parliament departed from the customary ways that English law protected land and inheritance, enacting laws for the colonies that privileged creditors by defining land and slaves as commodities available to satisfy debts. Colonial governments, in turn, created local legal institutions that enabled people to further leverage their assets to obtain credit. Priest shows how loans backed with slaves as property fueled slavery from the colonial era through the Civil War, and that increased access to credit was key to the explosive growth of capitalism in nineteenth-century America.

    Credit Nation presents a new vision of American economic history, one where credit markets and liquidity were prioritized from the outset, where property rights and slaves became commodities for creditors' claims, and where legal institutions played a critical role in the Stamp Act crisis and other political episodes of the founding period.

    LanguageEnglish
    PublisherPrinceton University Press
    Release dateFeb 2, 2021
    ISBN9780691185651
    Credit Nation: Property Laws and Institutions in Early America

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      Book preview

      Credit Nation - Claire Priest

      CREDIT NATION

      The Princeton Economic History of the Western World

      Joel Mokyr, Series Editor

      A list of titles in this series appears in the back of the book.

      Credit Nation

      Property Laws and Legal Institutions in Early America

      Claire Priest

      PRINCETON UNIVERSITY PRESS

      PRINCETON AND OXFORD

      Copyright © 2021 by Princeton University Press

      Princeton University Press is committed to the protection of copyright and the intellectual property our authors entrust to us. Copyright promotes the progress and integrity of knowledge. Thank you for supporting free speech and the global exchange of ideas by purchasing an authorized edition of this book. If you wish to reproduce or distribute any part of it in any form, please obtain permission.

      Requests for permission to reproduce material from this work should be sent to [email protected]

      Published by Princeton University Press

      41 William Street, Princeton, New Jersey 08540

      6 Oxford Street, Woodstock, Oxfordshire OX20 1TR

      press.princeton.edu

      All Rights Reserved

      ISBN 978-0-691-15876-1

      ISBN (e-book) 978-0-691-18565-1

      Version 1.0

      British Library Cataloging-in-Publication Data is available

      Editorial: Joe Jackson and Jacqueline Delaney

      Production Editorial: Brigitte Pelner

      Jacket/Cover Design: Karl Spurzem

      Jacket Image: Reverse of $40 colonial currency from the Province of Georgia, 1778. Courtesy of National Numismatic Collection, National Museum of American History, Smithsonian Institution

      To my parents, George and Kathy, and to Neal and Rohan

      CONTENTS

      Acknowledgmentsix

      Introduction1

      PART I. FOUNDATIONS OF PROPERTY AND CREDIT19

      1 Colonial Land Distribution and the Structure of British Colonial Commerce21

      2 The Backbone of Credit: The Institutional Foundations of Colonial America’s Economy of Credit and Collateral38

      PART II. PROPERTY EXEMPTIONS: COMMODIFYING LAND AND SLAVES IN COLONIAL AMERICA57

      3 English Property Law, the Claims of Creditors, and the Colonial Legal Transformation59

      4 Parliamentary Authority over Creditors’ Claims: The Debt Recovery Act74

      PART III. MANAGING RISK IN COLONIAL AMERICA91

      5 Managing Risk through Property: The Fee Tail93

      PART IV. THE STAMP ACT, INDEPENDENCE, AND THE FOUNDING113

      6 The Stamp Act and Legal and Economic Institutions115

      7 Property Exemptions and the Abolition of the Fee Tail in the Founding Era128

      8 Property and Credit in the Early Republic146

      9 Property, Institutions, and Economic Growth in Colonial America153

      10 Conclusion166

      Notes169

      Index223

      ACKNOWLEDGMENTS

      The debts for this project run deep, and none involve collateral. I am deeply grateful for the privilege of studying and working with wonderful scholars who serve as a constant inspiration. A series of fortunate events led me to feel welcome in the field of early American history as a junior professor: meeting Edmund Morgan, whose greatness as a scholar was matched by his magnanimity and kindness; an invitation by Bernard Bailyn to his Atlantic seminar, a remarkable group of scholars; meeting Gordon Wood, with whom I had the privilege of teaching at Northwestern while having a baby mid-semester; and attending Joel Mokyr’s economic history workshop, a step toward publishing this book in Joel’s series at Princeton University Press. Other strokes of good luck: taking inspiring classes unknowingly filled with future colleagues and friends, such as a junior seminar on slavery and antislavery with David Brion Davis and a legal history seminar with Reva Siegel and Bob Gordon. More recently, the mentors whose scholarship I greatly admire—Naomi Lamoreaux, Carol Rose, and Bob Gordon—have become colleagues.

      I am very grateful to Joel Mokyr and everyone at Princeton University Press for bringing this book to print, especially Joe Jackson and Seth Ditchik, Jacqueline Delaney, the anonymous reviewers, and Brigitte Pelner and copyeditor Karen Verde for their detailed work.

      Yale Law School is a tremendous institution to be a part of, and it is an honor to be associated with the legal history group of John Langbein, Sam Moyn, Nick Parrillo, Reva Siegel, Jim Whitman, John Witt, and Taisu Zhang. In the broader faculty, I am especially grateful for the support of the Deans Harold Koh, Robert Post, and Heather Gerken, and for professional camaraderie to Bruce Ackerman, Muneer Ahmad, Emily Bazelon, Sharon Brooks, Stephen Carter, Fiona Doherty, Bob Ellickson, Owen Fiss, James Forman, Abbe Gluck, Miriam Gohara, Henry Hansmann, Oona Hathaway, Brad Hayes, Christine Jolls, Paul Kahn, Al Klevorick, Tony Kronman, Yair Listokin, Jon Macey, Daniel Markovits, Tracey Meares, John Morley, Doug NeJaime, George Priest, Cristina Rodriguez, Roberta Romano, Vicki Schultz, Scott Shapiro, Reva Siegel, Kate Stith, Mike Wishnie, and Gideon Yaffe.

      Karen Crocco and Kelly Mangs-Hernandez have given me wonderful help at Yale Law School. I also thank the Yale Law students who have served as research assistants: Caroline Harkins, Enrique Pasquel, Leah Carter, and especially Brent Salter, whose assistance with the footnotes of this book was invaluable. During a two-week fellowship at PERC in Montana, I first compiled the statutes on colonial title recording that form the basis of chapter 2.

      Northwestern Law School was a terrific place to start my academic career and I thank Steve Calabresi, Charlotte Crane, David Dana, David Haddock, Heidi Kitrosser, Andy Koppelman, Janice Nadler, Jide Nzelibe, Dorothy Roberts, Max Schanzenbach, and Kim Yuracko for their support and friendship. A special thanks goes to Jim McMasters who helped me find documents relating to the Debt Recovery Act.

      My professional friendships mean a great deal and I would like to thank Steve Pincus for bringing together a community of early Americanists, and Holly Brewer, Sally Gordon, Emma Rothschild, Chris Tomlins, John Wallis, and Gavin Wright for their encouragement. Outside of the world of early American studies, I thank Bernadette Atuahene, Kenworthey Bilz, Susanna Blumenthal, Eleanor Brown, Daniela Cammack, Kris Collins, Noah Feldman, David Grewal, Jill Hasday, Amalia Kessler, Alison LaCroix, Carlton Larson, Dan Sharfstein, and Tico Taussig-Rubbo for being great friends and colleagues.

      I am also grateful to my friends Ashlie Beringer, Nina Bhatt, Sarah Bilston, Jonah Blank, Anjanine Bonet, Rick and Heidi Brooks, Belinda Chan, Sue Chan, Judy Chevalier and Steve Podos, Navtej Dhillon, Barbara Endres and Bill Butler, Jacob Hacker, Sheila Hayre and Pericles Lewis, Jim and Leslie Huffman, Alison and Christopher Illick, Binnie Klein, Alison MacKeen, Charity McNabb, Talbot and Tom Mason, Maria Morodo and Patrick Lindley, Kaivan Munshi and Soenje Reiche, Ify Nwokoye, Polly and John Sather, Leslie Stone and Michael Sloan, Marcy Stovall and Jim Farnam, Joe Child and Mary Nell Wegner, Nina Scherago and George Jones, Sara Sullivan and Zachariah Hickman, Amy Vatner, Jason Vincz, and Annie Wareck. And to my family: all the Kiefers and Battles, Shannon, JL, my siblings and their spouses, my nieces and nephews, as well as the Shivakumars, the Rajagopalans, and the entire extended family of Danny Shivakumar who have been so supportive of me, Neal, and Rohan.

      Marcus Rhinelander and I were in Peru with my sons in the spring of 2020 when we learned that instead of working on a project together, we had to leave the country immediately due to the new pandemic. Not able to pursue documentary photography, Marcus read every word of this book (almost), twice, and gave invaluable suggestions throughout. But far more important, I thank Marcus for all of the amazing adventures we have had these past few years and I look forward to many more.

      This book is dedicated to my parents, Kathy and George Priest, and my sons, Neal and Rohan. My parents helped me raise Neal and Rohan and are inspiring role models in their professional life and their love of adventures large and small. Neal and Rohan, thank you for being excellent fellow travelers.

      Excerpts from the book were published as: Claire Priest, Creating an American Property Law: Alienability and Its Limits in American History, Harvard Law Review 120 (2006): 385–458; Claire Priest, Law and Commerce, 1580–1815, in The Cambridge History of Law in America, ed. M. Grossberg and C. Tomlins (Cambridge: Cambridge University Press, 2008): vol. 1, 400–446; Claire Priest, The End of Entail: Information, Institutions, and Slavery in the American Revolutionary Period, in Law and History Review 33 (2015): 277–319; Justin duRivage and Claire Priest, The Stamp Act and the Political Origins of American Legal and Economic Institutions, in Southern California Law Review 88 (2015): 875–912.

      CREDIT NATION

      Introduction

      In the United States today, there is a vast credit economy that almost anyone who owns property or who has a steady income can access by obtaining home mortgages and car loans, by financing a home business, or by running up credit card debt. On a larger scale, corporations rely on institutional credit markets to raise billions of dollars for investments every year. This world of credit, with its many advantages, but also with risks of over-leveraging, real estate bubbles, and widespread foreclosures, rests on a structure of laws and legal institutions that is often obscure in our day-to-day lives. At the most basic level, obtaining credit requires having property, and taking on debt implies the risk of losing that property. Two centuries of American economic prosperity have been based on the laws governing credit and property. We take access to credit for granted but, in fact, decisions made centuries ago set the stage for our modern economy. Credit Nation examines the early origins of property rights and the formal legal institutions serving as a foundation for the market economy and political system of the United States.

      The legal origins of our credit economy were shaped in the British colonial era and the American founding period, from roughly the 1620s to the 1790s. The book describes how British laws relating to property and credit were imported to the colonies and adapted for the colonial context. Laws and legal institutions surrounding property were at the heart of the entire, slowly emerging colonial enterprise. It emphasizes how, in creating an American property law prior to Independence, the colonial legislatures, regulated by Parliament in England, were focused on matters relating to expanding collateral and credit. The expansion of slavery, a labor system based on property rights in human beings, coincided with the reform of legal institutions to encourage slaveholders to obtain credit on the basis of slaves as collateral. A second theme of the book asks how the legal history of credit relates to the political history of the United States. How were property laws shaped by the context of British colonial rule? How are property laws and institutions linked to representative government in American history? The book illustrates the central role of collateral and credit in the rule of Britain over the colonies, the American Revolution, and the reform of legal institutions in the founding era.

      At the Constitutional Convention in 1787, Alexander Hamilton described the security of Property as one of the great obj[ects] of Gov[ernment].¹ Despite gaining independence from Britain, the founding era was a period in which landed wealth still framed conceptions of the economic, social, and political order. At the time of the Revolution, every state but one required freehold land ownership for participation in the franchise, meaning that the voting public was a small minority of the population.² And yet, an idealized view emerged that the country was defined by its relative equality. To Thomas Paine (who immigrated from England to America in 1774), for example, a central difference between English and American society was that [i]n America, almost every farmer lives on his own lands, and in England not one in a hundred does.³

      Whiggish commentators of the founding era and early nineteenth century created narratives of the American Revolution in which property served as a central connection linking the political system, the economy, and the society. Prominent legal treatises emphasized that, in the process of settling British America, the colonists built institutions and reformed the property laws of England in ways that reinforced the republican political and ideological revolution of the times. In his famous Plymouth Oration commemorating the two-hundred-year anniversary of the pilgrims’ arrival, Daniel Webster focused on the exceptional nature of property in America and its relation to republican government. He remarked that [t]he history of other nations may teach us how favourable to public liberty is the division of the soil into small freeholds.⁴ He continued that [A] multitude of small proprietors … constitute not only a formidable, but an invincible power. It followed that, In this country we have actually existing systems of government, in the maintenance of which, it should seem, a great majority, … must see their interest.⁵ Many shared Webster’s belief that the widespread ownership of land across the American states was the linchpin of the republican political system.

      Political leaders of the founding era defined the new American political world by its rejection of hereditary privilege, the core of the European aristocratic political order. In England, from the late medieval period through the modern era, ownership of landed estates was associated with political privileges ranging from, at the highest levels, membership in the House of Lords, to local political offices and social influence.⁶ English law was characterized by a preference for maintaining the integrity and cohesiveness of estates over the generations, securing political power within families.⁷ The English legal scholar William Blackstone’s Commentaries on the Laws of England, published in the years 1765–1769, for example, describes the principal object of the laws of real property in England as the law of inheritance.⁸

      In the American founding era, the prevalence of land ownership in the United States dispersed political power throughout the population. In Europe, one justification for the political power of a landed aristocracy was that it served as an essential counterweight to the tyranny posed by monarchy. In contrast, in a republican America, any political tyranny would be warded off by the masses of freehold property owners who participated in government. Landowners were celebrated as fiercely protective of their civil liberties. As Noah Webster stated in 1787, for example, "[a]n equality of property, with a necessity of alienation, constantly operating to destroy combinations of powerful families, is the very soul of a republic."⁹

      Widespread ownership of property was assumed to flow from easy circulation of land in the marketplace. The dominant ideological framework of the founding era equated large consolidated landholdings with aristocratic property law that privileged inheritance and inalienability. Aristocracies were believed to exist, in part, because property law protected land from the dynamism of the market. Land markets, in contrast, were predicted to break down aristocracy. To many legal thinkers, property laws allowing landowners to sell or devise land out of the family line, in property parlance, the alienability of land, was a defining feature of the American property system.

      Security of title was the foundation upon which the purported political and economic virtues of landowning rested. In England, the legal technicalities of land conveyancing, such as buying, selling, and mortgaging land, and placing land in trusts, often took place in private homes and lawyers’ offices.¹⁰ The transfer of an ownership interest in land was formalized in a public ceremony, but mortgages and other claims against the land were not generally publicized or required to be recorded by the local government or in the courts. Instead, the parties and their lawyers pored over documents relating to the status of title of a particular parcel. In a celebrated treatise in the 1830s, the legal authority James Kent attributes the very limited practice of recording deeds in England to the general and natural disposition to withdraw settlements, and the domestic arrangements, from the idle curiosity of the public.¹¹

      The private English system, however functional, privileged large landowners whose family reputations, political influence, and large income streams provided access to credit unavailable to those with smaller estates. Smaller landowners were excluded from the credit lines available to the elites because of the costs of title authentication under the private system. There were popular movements to introduce public registries in the seventeenth and eighteenth centuries in England to expand access to credit, but large landowners consistently opposed the proposals.¹²

      Supreme Court Justice Joseph Story, explaining the sources of the American Revolution in his 1833 Commentaries on the Constitution, emphasized the role of property as an underpinning of the American political order. Story notes that in the United States, few agricultural estates in the whole country have at any time been held on lease … The tenants and occupiers are almost universally the [owners] of the soil. To Justice Story, the widespread ownership of land and the strength of colonial property rights had made citizens fiercely protective of their civil liberties. He stated, The yeomanry are absolute owners of the soil, on which they tread; and their character has from this circumstance been marked by a more jealous watchfulness of their rights, and by a more steady spirit of resistance against every encroachment, than can be found among any other people.¹³ Perhaps surprisingly from the modern vantage point, Story continued by linking the property rights underlying landowners’ jealous watchfulness of their rights and spirit of resistance in the American Revolution with the history of legal institutions that clarified title and expanded land markets. In Story’s words, Connected with this state of things, and, indeed, as a natural consequence flowing from it, is the simplicity of the system of conveyances, by which the titles to estates are passed, and the notoriety of the transfers made.¹⁴ After describing the system of land title recording, Story continued that It is hardly possible to measure the beneficial influences upon our titles arising from this source, in point of security, facility of transfer, and marketable value.¹⁵ Story described how colonial laws had made land a substitute for money, which he explained as a natural result of the condition of the people in a new country, who possessed little monied capital; whose wants were numerous; and whose desire of credit was correspondingly great. He added, the growth of the respective colonies was in no small degree affected by this legal transformation.¹⁶

      Similarly, Zaphaniah Swift’s 1795 treatise celebrated that our conveyancing can boast of a simplicity, conciseness, facility, and cheapness, superior to any other country.¹⁷ Webster’s Plymouth Oration emphasized as one of many important aspects of property in America that [t]he establishment of public registries, and the simplicity of our forms of conveyance, have greatly facilitated the change of real estate, from one proprietor to another.¹⁸ James Kent’s 1830 treatise remarked in a section on conveyancing law that In no other part of the civilized world is land made such an article of commerce, and of such incessant circulation.¹⁹

      The simplicity and relative inexpensiveness of American conveyancing allowed landowners to buy and sell property as a liquid asset, and supported the vast colonial credit system. Title registries were a quintessentially republican institution in the sense that, by publicizing titles and by prioritizing creditors’ claims at a low cost, they allowed smaller landowners and slaveholders access to credit. The institutional infrastructure developed in colonial America was the formal mechanism for protecting property rights, and essential foundation underlying the credit system and republican government.

      Institutions

      In examining the legal history of colonial British America through the lens of credit, this book traces three themes. First, it examines colonial legal institutions relating to property and credit. Scholars define the term institutions in many different ways. The focus here is on the ground-level legal institutions, such as courts and title recording measures that protected property titles, supported mortgage markets, and processed debt claims. Colonists settling in America brought with them familiarity with British laws, customs, and legal institutions. Building a new society from the ground up, however, offered the opportunity for modifications of British legal traditions, which led sometimes, in aggregate, to dramatic changes. Already in the 1600s, colonial administrations began establishing county-level common law courts where debts could be litigated and enforced and where disputes over land titles could be resolved and publicized. Moreover, each of the colonies enacted laws instituting local title recording that often expressly promoted the security of mortgages. These recording offices or registries allowed for simple conveyances by deed, publicly accessible records, and the extension of credit on the basis of a multiplicity of assets.

      One of the most novel and important features of American property law is centrally linked to American political history: property law and legal institutions were shaped by means of the statutory enactments of representative assemblies in collaboration with the crown-appointed governors. In the American colonies, the colonial administrations defined the problems to be addressed, shaped law, modified it, built institutions, controlled their costs, and regulated their operation in response to local conditions. The creation of property law and institutions by colonial statutes was quite in contrast to the property law of England, which reflected centuries of customary practice, political negotiation between kings and elites, and the legacy of feudalism, in addition to parliamentary and local law. In hindsight, founding era commentators recognized that the legislative creation of property law during the colonial era was a special phenomenon: the colonial legislatures had initiated a process of representative involvement and input into their institutions and laws that reflected a political transformation toward a republican form of government. One of the colonial lawmakers’ tremendously important innovations was the use of local legal institutions in the colonial credit economy. The ease of access to credit that this created was key to the explosive growth of capitalism in nineteenth-century America.

      A major complexity in interpreting the political conception of landownership in the founding era is that commentators avoided the topic of slavery and how their theories of republicanism accommodated property rights in slaves.²⁰ Slavery was a system of labor rooted in the starkest inequality one can imagine: where the laborers are owned as property and their owners capture any profits they generate. Moreover, in colonies relying on slave labor, there was often greater inequality within the free White population, compounding the obvious inequality between owners and slaves.²¹ The liquidity of slave property and the institutional reforms to protect property rights directly promoted the expansion of slavery and the use of slaves as collateral in the credit economy.

      Slaves were among the most valuable of the assets used as collateral in the colonial era and in the early republic. Slaves were valued highly as collateral because of their mobility.²² Having both land and slaves serve as collateral expanded slavery because it expanded access to credit that could be used to finance the purchase of more slaves. It is estimated that by 1770, 467,000 Black people lived as slaves in the North American colonies.²³ Alice Hanson Jones’s study of probate records reveals that, at the time of the American Revolution, in the South, slaves constituted 35.6% of total wealth.²⁴ The use of slaves as collateral for debts was one of the great evils of American slavery. Being sold or auctioned off to pay the slaveholders’ debts tore slaves from their families and communities. The constant threat of such a sale in the context of highly liquid slave markets was coercive and cruel, even by the appalling standards of slavery itself.

      Legal institutions played a central role in advancing this form of cruelty in slavery. Colonial legal institutions offered a centralized location to record mortgages with slaves as the collateral, to enforce debt judgments involving the seizure of slaves, and to administer slave auctions. Free colonists relied on these institutions while treating slaves as a central commodity and form of collateral in the economy.

      Commodification

      A second major development involved the scope and process relating to creditors’ remedies. Traditional English laws and procedures stabilized the society by shielding landed estates against creditors’ claims. Land markets were active in England, but land was primarily treated by the law as a source of wealth that, like an endowment, would persist through the generations. Notably, prior to 1732, the British colonial regime operated under principles of federalism with regard to debtor/creditor and property law: the legal definition of property and the scope of creditors’ remedies were within the discretion of each colonial administration to repeal or amend. Although each colony had its own policies and culture, the British emphasis on protecting stable landownership gave way to a more commercial view: one where, more often, land served as a monetary asset in credit agreements.

      The New England colonial governments initiated the transformation of the legal definition of land. Starting in the seventeenth century, the New England colonies redefined land to be a chattel or commodity when it came to creditors’ claims. When the New England colonies legally defined land as a chattel, even unsecured creditors (for example, merchants who gave goods to shopkeepers on credit, or shopkeepers recording debts of farmers in book accounts) could have courts order that debtors’ land be taken to satisfy their debts if the debtors’ other property was insufficient. In contrast to New England, the colonies in the South initially were more likely to retain English law and protect land against unsecured creditors’ claims. Initially, colonies adopted a variety of policies regarding slaves: they defined slaves either as land (protected from unsecured creditors under English law) or as chattel (available to satisfy the claims of creditors).

      THE DEBT RECOVERY ACT

      In 1732, Parliament acted to push colonial property law farther from the model of English landowning. In 1731, British merchants who had extended credit to planters in the colonies lobbied aggressively for Parliament to pass sweeping legislation regulating the status of colonial property rights. In August 1731, a group of thirty-two merchants in London submitted a petition to the Board of Trade complaining that they had no Remedy for the recovery of their just Debts in some of the colonies due to the laws in place, to court processes, and to currency manipulation.²⁵ Their attention at that moment was focused on Jamaica, where the legislature had passed a law holding that unsecured creditors could not use legal process to seize their debtors’ land.

      In 1732, Parliament responded by enacting the sweeping Debt Recovery Act, which required that, throughout all of the British colonies in America, all land, houses, and slaves were assets available to satisfy creditors’ claims against debtors.²⁶ The Debt Recovery Act was a landmark: English society had long privileged land as a unique form of property that warranted shielding from creditors. Land conferred on its owners political and social status. Legal protections on land from creditors’ claims reduced widespread financial risk, promoted social stability through the inheritance of estates, and stabilized the political system. In contrast, Parliament’s Debt Recovery Act mandated that throughout the British colonies in America and the West Indies, property held in landed estates—as well as slaves—would be mere chattels, or things, when creditors pursued their claims.

      Parliament’s Debt Recovery Act was a law for the colonies only, starkly differentiating the colonial property regime from that of the mother country. Why a separate law for the colonies? According to the Whig agenda of Sir Robert Walpole, the role of the colonies was to benefit the British economy. British authorities prioritized the interests of the English and Scottish creditors who lent extensively to the colonies over any interest in replicating English law and political society. As Joseph Story later described, this law made colonial land, in some degree, a substitute for money, by giving it all the facilities of transfer, and all the prompt applicability of personal property.²⁷ Although not mentioned by Story, in reality slaves, even more so than land, were the primary collateral and liquid asset in many areas.

      Slaves had been used as collateral and had been sold in judicially supervised auctions long before Parliament enacted the Debt Recovery Act. The Act, however, transformed local practice, determined colony by colony, into a parliamentary mandate. The Debt Recovery Act’s enforcement of slave auctions was recognized by the early nineteenth-century abolitionists in Britain. In 1806, in the first known pamphlet on slave auctions, Bryan Edwards, a Member of the House of Commons, describes the practice of auctioning slaves to satisfy the slaveholder’s secured and unsecured debts as a grievance so remorseless and tyrannical in its principle, and so dreadful in its effects, which, though not originally created, is now upheld and confirmed by a British act of parliament.²⁸ Edwards says of the Debt Recovery Act: It was an act procured by, and passed for the benefit of British creditors; and I blush to add, that its motive and origin have sanctioned the measure, even in the opinion of men who are among the loudest of the declaimers against slavery and the slave trade.²⁹ After describing the horrors of the slave auction and the fact that the practice of selling slaves at auction to satisfy debts unhappily … occurs every day, Edwards states: Let this statute then be totally repealed. It is injurious to the national character; it is disgraceful to humanity.³⁰ In 1797, Parliament repealed the Debt Recovery Act with respect to slaves in the remaining British colonies.³¹ In the United States, slaves would continue to be used as collateral until emancipation sixty-five years later.

      What emerged as a result of these wholesale changes to English law was a truly colonial property law: a body of law and institutions developed to encourage liquid markets and the extension of credit on the basis of land and slaves in the British colonies, societies with social, political, and economic structures entirely different from that of the mother country. For the remainder of the eighteenth century in Europe, land might still secure the political, economic, and social status of nobility and other elites. In contrast, in the British colonies and later in the United States, the legal structure made land more liquid, more extendable as collateral, and more readily available as a source of investment capital. This legal shift fundamentally transformed the economic, political, and social structure of the colonies.

      COLONIAL MEASURES TO RESPOND TO ECONOMIC RISK

      Extending property as collateral for a loan means that there is a risk of losing the property. The contradictory desires for available credit and security of property led to a range of solutions that varied between the colonies and over time. A legal regime that prioritized the claims of creditors and expanded access to credit infused the economy with greater financial risk. In times of economic downturn, creditors sued for repayment of debts, increasing the threat to debtors of losing their property in the courts.

      Within this context of expanding collateral and credit, in some

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