Indentured Servant and the Company Town

A labourer under contract to work for an employer for a specific amount of time is a bonded labourer also known as a Indentured Servant. Typically the employer provided little or no monetary pay, but was responsible for accommodation, food, other essentials, training and when applicable passage to a new country. Upon completion of the term of the contract the labourer sometimes received a lump sum payment such as a parcel of land and was free to farm or take up trade of his own. In other words indentured servants are very poor people obligated to forced labor for a fixed number of years, often in exchange for passage to the New World or other benefits. The term comes from the medieval English "indenture of retainer" a contract written in duplicate on the same sheet, with the copies separated by cutting along a jagged line so that the teeth of the two parts could later be refitted to confirm authenticity.

North America

Indentured servitude is not identical with involuntary servitude and slavery. However, there have been multiple occasions where the indentured servitude has been abused. For example, indentured servants may be forced to purchase goods or services from the employer in exchange for an extension to the period of their indenture. In these circumstances, the system can represent a form of unfree labour.The labour-intensive cash crop tobacco was farmed by indentured labourers in the 17th century. It was the legal basis of the apprenticeship system by which skilled trades were learned. In North American history, employers usually paid for European workers' passage across the Atlantic Ocean, reimbursing the shipowner who held their papers of indenture. In return, the servants agreed to work for a specified number of years. The agreement could also be an exchange for professional training, after being the indentured servant to a blacksmith for several years, one would expect to work as a blacksmith on one's own account after the period was over. During the 17th century most of the white labourers in Maryland and Virginia came from England this way. Their masters were bound to feed, clothe, and lodge them. Ideally, an indentured servant's lot in the establishment would be no harder than that of a contemporary apprentice, who was similarly bound by contract and owed hard, unpaid labour while "serving his time." At the end of the allotted time, an indentured servant was to be given a new suit of clothes and set loose.

However, according to author Michael A. Hoffman, of They Were White and They Were Slaves: The Untold History of the Enslavement of Whites in Early America (1993), the system was rife with abuse. Unscrupulous creditors could buy the debts of the unwitting poor in Britain and Ireland, and these people might find themselves involuntarily separated from their families and shipped off to America as indentured servants. Some masters also found ways to keep their charges indebted to them, and therefore unable to leave their bondage. Indentured servitude was a method of increasing the number of residents/emigrants, especially in the British colonies. Convict labour only provided so many people, and since the journey across the Atlantic was dangerous and disease-stricken, resulting in deaths on every journey, other means of encouraging settlement were necessary. In fact contract-labourers were so important a group of people and so numerous that they were mentioned in the US Constitution:

"Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers, which shall be determined by adding to the whole Number of free Persons, including those bound to Service for a Term of Years, and excluding Indians not taxed, three fifths of all other Persons".

Although the system was still going strong in the 1780s, picking up immediately after a hiatus during the American Revolution.In modern terms, the shipowner was acting as a contractor, hiring out his labourers. Such circumstances affected the treatment a captain gave his valuable human cargo. After indentures were forbidden, the passage had to be prepaid, giving rise to the inhumane conditions of Irish "coffin ships" in the second half of the 19th century. Indentured Servitude was used by the Hudson's Bay Company to staff the coal mines around Nanaimo well into the late 1800's.

The Company Town

The company town was an economic institution that was part of the market for labor. In a company town a single firm provided its employees with goods and services, hired police, collected garbage, dispensed justice, and answered (or failed to answer) complaints from residents. The economy of the company town was totally "privatized" community services that today are provided by municipal governments were provided by the profit-maximizing firm, which ran the company town. Property rights were defined in such a way that companies could exclude competition by other firms that wished to provide goods and services to their employees.

Although company towns were most closely associated with the coal mining industry it should be noted that they existed in a number of other industries. For example, Homestead, Pennsylvania was a company town situated next to the Homestead Steel Mill. Similarly, Pullman, Illinois was a company town for workers employed at the factory that produced Pullman railroad cars. Because of large and persistent labor struggles associated with the coal industry the focus of interest, both historical and scholarly, has been on coal company towns.

Prevalence of Company Towns in the Coal Industry

The prevalence of company towns, at least in the coal industry, was related to the settlement of regions where mines were developed. When mines opened in isolated regions they needed to provide housing and other necessities to their employees. Thus in more settled regions, the proportion of miners living in company towns was less than in areas that were less settled. In the early 1920's the United States Coal Commission found that in Southern Appalachia (West Virginia, Eastern Kentucky, Tennessee, Maryland, Virginia, and Alabama) and in the Rocky Mountains 65 to 80 percent of miners lived in company towns. In most of the Midwest only 10 to 20 percent of miners lived in company towns. In Ohio 25 percent lived in company towns, while in Pennsylvania 50 percent lived in company towns.

Property Rights in Company Towns

The leases for company houses that miners rented to a certain extent governed property rights in these company towns. These leases were also something like "tied" contracts in that miners rented