The Reconstruction of Southern Debtors: Bankruptcy after the Civil War (review)

Elizabeth Thompson is an independent scholar who holds both a law degree and a Ph.D. in history, and her study of bankruptcy proceedings in the South during Reconstruction demonstrates that she is admirably prepared to analyze her subject. Thompson argues that the federal government's 1867 Bankruptcy Act was not a failure but proved very useful to "white male propertied southerners" and that "one of the law's consequences was the reinforcement of the South's economic hierarchy" (7). Her conclusions are well grounded in thorough research, including a review of more than 3,800 cases filed in federal courts for the District of South Carolina, the Southern District of Mississippi, and the Eastern District of Tennessee. Her research encompasses a large database and areas that were politically and economically diverse.

Although the 1867 Bankruptcy Act was passed on the same day that Congress overrode Andrew Johnson's veto of the Military Reconstruction Act, Republican leaders such as William P. Fessenden saw it as a nonpolitical measure. Ironically, Fessenden viewed everyday "business affairs" as "having no connection with the political power of the country" (20). This act, the third bankruptcy law in U.S. history, gave exclusive jurisdiction to U.S. district courts and offered substantial benefits to debtors. It exempted from sale a modest amount of the bankrupt's personal property plus property that had been exempt under state law in 1864. Together these exemptions were often "substantial and could place a bankrupt in a firm economic position after discharge" (25–26). This fact, along with the decline in the value of Southern property and the use of married women's property laws, which allowed men to sign property over to their wives, benefited debtors at the expense of creditors, who usually received small payments under the law.

Despite implacable opposition to Reconstruction, Southern whites took advantage of this law in disproportionate numbers. Between 1867 and 1878, Southerners brought 36 percent of the bankruptcy cases filed nationally, although they comprised only 25 percent of the population. Southerners thronged the courts in 1868 especially, the last year before a majority of creditors had to agree to discharge a bankrupt whose assets did not cover at least 50 percent of the money owed. The deep South areas made greater use of the law than Unionist east Tennessee, and in the 1870s voluntary filings decreased while involuntary filings increased. Thus, despite many contemporary and scholarly criticisms of the law, these facts show that "thousands of southern debtors did not perceive the 1867 Bankruptcy Act as a failure . . . but rather saw it as serving their needs" (58).

Through detailed analysis Thompson establishes that lawyers typically represented only a few clients; that filings were concentrated in areas near cities and railroads, where commercial activity was greatest; that most Southern bankrupts succeeded in being discharged from their debts; and that merchants as well as professional men and agriculturalists—"those of the trading class" (89)—filed most of the cases. Although at one point she refers to the beneficiaries of the law as "leading secessionists and influential Confederates," her findings show that they were "not commonly landed elites and well-known politicians" (7, 74). They were relatively affluent men, and Thompson concludes that because they were able to clear their debts and retain "a substantial amount of property," the "Bankruptcy Act reinforced the status quo in southern class structure" (89).

Although the authors of the act expected men to file, a few women took advantage of the law in the generally conservative federal courts. Black Southerners and ordinary white people did not benefit from its provisions because they had too little property to make legal proceedings reasonable. The law "resuscitated white southerners" of the commercial class but did little for others. Thompson observes that federal legislators and jurists "attended to the dominant business interests" but "were unwilling to recognize an extension of economic rights for white women and African...