Contract labor

The term contract labor generally refers to alien workers imported under the Contract Labor Act of 1864. Designed to address the labor shortage accompanying the Civil War, the law permitted employers to recruit workers in Europe and advance them the cost of their transportation to America. The loan was secured by a lien, for not more than 12 months, against the immigrants’ wages and all property that they might acquire in the United States. As a further inducement, the law exempted immigrants from the military draft.

Organizations such as the American Emigrant Company, capitalized at $1 million, quickly formed to recruit workers and supply them to manufacturers. Established immigrants also took advantage of the law, using their knowledge of English and American customs to exploit their compatriots after they arrived. Some of the most unscrupulous brought over entire families, placing the men in jobs, forcing the women into prostitution, and driving the children into the streets to shine shoes, beg, or steal for them.

Although contract laborers were relatively few in number, American workers blamed them for lowering wages and denounced them as strikebreakers. Both the National Labor Union and the Knights of Labor agitated for the repeal of the 1864 law, and their efforts finally resulted in the passage of the Foran Act in 1885. That act, however, contained a major loophole in that it forbade only prevoyage contracts. But even without this loophole, the act was difficult to enforce. The exact number of immigrant contract laborers is unknown, but the practice most likely continues to this day.

Convicts were another form of contract labor as governments sought to recoup the cost of keeping prisoners. In some instances prisons became factories manufacturing products for general consumption. Some states even leased their inmates to employers on a per diem basis. Organized labor protested that consumer goods produced by convicts represented unfair wage competition and demanded that it be stopped. Northern states began abolishing their convict labor systems in the 1880s, and the federal government stopped contracting its prisoners in 1887. By 1900 the system prevailed only in the South.

Further reading: Humbert S. Nelli, “The Italian Padrone System in the United States,” Labor History (1964): 153167.

—Harold W. Aurand

Cooke, Jay See Volume V