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Southern Agrarian Labor Contracts as Impediments to Cotton Mechanization

Published online by Cambridge University Press:  03 March 2009

Warren C. Whatley
Warren C. Whatley
Affiliation:
The author is Assistant Professor of Economics, University of Michigan, Ann Arbor, Michigan 48109.
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Abstract

The traditional view of cotton mechanization, first advanced by rural sociologists in the 1920s, is that southern agrarian institutions impeded progress. Recently their view has been questioned. New studies attribute much of the southern lag to factors like small-scale production, cheap labor, the cotton crop, and environment. I contribute to the debate by emphasizing how the structure of the southern economy encouraged landlords to use annual labor contracts that hindered attempts to mechanize. I present evidence that supports the traditional view and suggest how the incentive structure of annual labor contracts delayed invention of the mechanical cotton picker.

Type
Articles
Information
The Journal of Economic History , Volume 47 , Issue 1 , March 1987 , pp. 45 - 70
Copyright
Copyright © The Economic History Association 1987

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References

1 On the reaper see David, Paul, “The Mechanization of Reaping in the Ante–Bellum Midwest,” in David, Paul, Technical Choice, Innovation and Economic Growth: Essays on the American and British Experiences in the Nineteenth Century (Cambridge, 1975).Google Scholar On the picker see Street, James H., The New Revolution in the Cotton Economy: Mechanization and its Consequences (Chapel Hill, 1957).Google Scholar

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9 Sargen, “Tractorization” in the United States; Musoke, “Mechanizing Cotton Production.” Sargen's calculations are for the wheat belt, but he makes inferences about the South. Musoke's calculations are for the South, but they do not incorporate many important features of the problem like multi-row animal techniques, capacity constraints, and the tenant plantation. For a more complete calculation with results critical of Sargen and Musoke, see Whatley, “Institutional Change and Mechanization,” chaps. 3, 4.Google Scholar

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14 For formal models see Whatley, Warren C., “A History of Mechanization in the Cotton South:The Institutional Hypothesis,” Quarterly Journal of Economics, 100 (11 1985), pp. 1191–1215;CrossRefGoogle Scholar and Bardhan, “Wages and Unemployment”.Google Scholar

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17 U.S. Department of Agriculture, “Plantation Organization and Operation,” pp. 59–60.Google Scholar

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19 For a formal model of these markets and some econometric evidence, see Whatley, , “A History of Mechanization”;Google Scholar see also Newberry, David M. G. and Stiglitz, J. E., “Risk Sharing, Sharecropping and Uncertain Labor Markets,” in Roumasset, James A. et al. , eds., Risk, Uncertainity and Agricultural Developement (1980).Google Scholar

20 The wage is assumed to be exogenous because the wage labor market was broader in geographic scope than the tenant market. Tenants had to signal characteristics such as credit worthiness and productivity to landlords. In addition, tenancy was a family-based contract, while wage contracts tended to attract younger, more mobile single men. See Whatley, “A History of Mechanization”; Allen, Franklin, “On the Fixed Nature of Sharecropping Contracts,” The Economic Journal, 95 (03 1985), pp. 30–48.CrossRefGoogle Scholar For an excellent account of the structure of these markets see Wright, Gavin, “Postbellum Southern Labor Markets,” in Kilby, Peter, ed., Quantity and Quiddity: Essays in Honor of Stanley Lebergou (Middletown, 1987).Google Scholar

21 This occurs when an increase in the wage results in a percentage increase in the equilibrium size of tenant plots that is greater than the percentage decline in the equilibrium number of tenants on plantations. Elsewhere I have called this case the Strong Interpretation of the Institutional Hypothesis of mechanization. The Weak Interpretation is the simpler claim that the tenant system was unmechanizable. See Whatley, “A History of Mechanization,” pp. 1204–7.Google Scholar

22 Manuscripts for 22 plantations surveyed in 1910 survived and were analyzed in Alston and Higgs, “Contractual Mix in Southern Agriculture since the Civil War”.Google Scholar

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25 The sample was drawn from the 1930 census by Lee J. Alston. The same counties are used for 1910 and 1930 in this study. They are 25 from each of the following ten states: North Carolina, South Carolina, Georgia, Alabama, Tennessee, Louisiana, Mississippi, Arkansas, Oklahoma, and Texas. Only 240 of these were found in the 1910 census, 10 being part of other counties. These 10 were dropped from the 1910 analysis.Google Scholar

26 The probit model is a specification of the relationship between a binary dependent variable and a continuous explanatory variable that eliminates the heteroskedastic nature of the disturbance term. See Kmenta, Jan, Elements of Econometrics (New York, 1971), pp. 425–28.Google Scholar

27 These equations should be run on nontenant farms only, but the census did not report size distribution by tenure.Google Scholar

28 A Gini coefficient is not used as the independent variable because the available classes are very uneven in size and the Gini coefficient is very sensitive to this.Google Scholar

29 The wage is exogenized because this market is broader in geographic scope than the tenant market and is beyond the determination of local market forces.Google Scholar

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31 Pedersen and Raper, “The Cotton Plantation in Transition,” p. 26.Google Scholar

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37 Whatley, Warren, “Labor for the Picking: The New Deal in the South,” this JOURNAL, 43 (12 1983), pp. 905–29.Google Scholar

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39 International Harvester Archives, New Works Reports, Engineering Department, General Office, meeting no. 22, Oct. 30, 1906.Google Scholar

40 Whatley, Warren, “Labor for the Picking: The New Deal in the South,” this JOURNAL, 43 (12 1983), pp. 905–29, meeting no. 46, 04 1, 1907.Google Scholar

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42 Fite, Gilbert, “Recent Progress,” p. 25; Street, The New Revolution, pp. 117–18, 120–23. Campbell took out his first patent in 1895.Google Scholar

43 McCormick Collection, Cyrus H. McCormick, Jr. Papers, Series 4C, Box 11, vol. 101, p. 493.Google Scholar

44 “New Work Reports,” meeting no. 604, October 22, 1924.Google Scholar

45 Ibid., emphasis added.

46 Ibid., meeting no. 680, Mar. 29, 1928.

47 Ibid., meeting no. 704, Apr. 4, 1930. On the success of the experiments of 1928 see ibid., meeting no. 694, Mar. 14, 1929.

48 Ibid., subreport no. 388, Mar. 25, 1931.

49 Ibid., subcommittee report no. 495, Apr. 11, 1932.

50 This calculation assumes a $1500 machine with operating costs of $5 for a 500-pound bale.Picking wages are for Mississippi and are taken from U.S. Department of Agriculture, “Crops and Markets,” 19 (May 1942).Google ScholarThe average 1930–1940 wage for picking 100 pounds of seed cotton was $0.51. The USDA uses a 35 percent factor to transform seed cotton into lint cotton. See U.S.Department of Agriculture, Bureau of Agricultural Statistics, “Statistics on Cotton and Related Data,” Statistical Bulletin No. 99 (June 1951). This yields a cost of $7.29 to hand-pick a bale of lint cotton. The calculation also assumes a 6 percent interest rate and a ten-year service life.Google Scholar

51 Street, The New Revolution, pp. 107–29.Google Scholar

52 See fn. 50. The average picking wage for 1925–1930 was $1.14. The average cost of hand-picking a bale was $16.29.Google Scholar

53 A similar kind of result is found in Wright, Gavin and Kunreuther, Howard, “Cotton, Corn and Risk in the Nineteenth Century,” this JOURNAL, 35 (09 1975), pp. 526–51;Google Scholar and Ransom, Roger and Sutch, Richard, “The ‘Lock-in’ Mechanism and Overproduction of Cotton in the Postbellum South,” Agricultural History, 49 (04 1975), pp. 405–25.Google Scholar