- The Reconstruction of Southern Debtors: Bankruptcy after the Civil War
Most studies of the post–Civil War American South have focused on either the politics of reconstruction or the long-term impoverishment of the region due to the war's devastation. Yet despite the fact that the South was much poorer in the decades after the war than it was beforehand, southern businessmen and planters seemed to rebound financially with less difficulty than observers, in retrospect, might have expected. This intriguing volume explains why.
The author argues that the short-lived federal Bankruptcy Act of 1867 proved to be a godsend to southern debtors and creditors alike. States-rights rhetoric notwithstanding, southern whites flooded the federal courts in the South seeking to take advantage of the law's provisions. Focusing on cases arising in the South Carolina lowlands, eastern Tennessee, and southern Mississippi, Thompson demonstrates that although lawmakers viewed bankruptcy legislation as distinct from reconstruction, the statute played an important part in the program's outcome. By economically empowering southern whites, it allowed them to reassert control over the region's politics.
Southern debtors benefited from the bankruptcy act in several ways. [End Page 301] The law exempted from execution for debt a substantial amount of property (often based on the value thereof instead of acreage), reaffirmed state laws permitting planters to transfer property into their wives' names to shield it from attachment, made it easier for debtors to initiate voluntary bankruptcy proceedings, and permitted (unlike earlier statutes) partnerships and corporations to file for bankruptcy. In addition, federal district courts tended to favor local interests, and the judges thereof were less susceptible than state judges to the effects of oscillating party fortunes in state politics.
Although historians are certainly cognizant of how economic self-interest has often trumped ideological consistency among states-rights proponents, Thompson is nonetheless to be lauded for bringing to the surface the remarkable breadth of that hypocrisy. Whereas southerners comprised about one-quarter of the population in 1870, they accounted for 36 percent of all bankruptcy filings (a disproportion that was no doubt greater given that nearly all proceedings involved white debtors). In the districts under study, more than eight times as many voluntary bankruptcy proceedings were adjudicated as involuntary ones. Creditors filing involuntary proceedings were most prevalent during the mid 1870s—after the economic depression had begun. Although northern creditors were more likely to initiate involuntary proceedings than southern creditors, the latter accounted for 45 percent of the involuntary cases studied. Nor were the voluntary bankruptcy filings the work of a few fee-hungry attorneys. Most law firms represented no more than three or four debtors, and those firms included prominent anti-reconstruction attorneys.
Problems? Given the closeness of the votes in each branch of Congress when enacting the law, Thompson might have explored the various partisan, factional, and regional components of those divisions. Moreover, her analysis of the law's repeal in 1878 seems hurried. A lack of data, finally, hampers Thompson's efforts to reconstruct an accurate portrait of debtors' property holdings. Nonetheless, historians of Reconstruction must come to grips with the findings of this exceptionally well-researched and well-written book.