Legal Definitions - contract system

The contract system refers to a historical practice, primarily in the United States following the Civil War, where state or local governments would lease out the labor of incarcerated individuals to private businesses or individuals. Under this system, private entities paid the government for the right to use prisoner labor, often for demanding and dangerous work, effectively privatizing aspects of the penal system and profiting from the labor of those imprisoned.

Here are some examples illustrating the contract system:

• Imagine a large timber company in the late 19th century that needed a constant supply of cheap labor to cut down trees and process lumber. Instead of hiring free workers, the company enters into an agreement with the state prison system. Under this arrangement, the state provides a group of prisoners to work in the company's logging camps and sawmills for a set period. The timber company pays the state a daily or monthly fee for each prisoner's labor, and in return, the company benefits from a readily available, low-cost workforce, while the state reduces its incarceration expenses.

  This illustrates the contract system because a private business (the timber company) is leasing the labor of incarcerated individuals from the government (the state prison system) for its own profit, paying the government for their work.

• Consider a burgeoning railroad construction project in the American South during the Reconstruction era. The railroad company faces immense pressure to lay tracks quickly and cheaply across challenging terrain. To meet this demand, the company negotiates a contract with a county sheriff's office. The sheriff agrees to supply a contingent of county jail inmates to perform manual labor, such as grading land, blasting rock, and laying ties, along the proposed rail line. The railroad company provides basic food and shelter for the prisoners at work sites and pays the county a sum for their collective labor, significantly reducing its operational costs compared to hiring free laborers.

  This example demonstrates the contract system as a private entity (the railroad company) secures the labor of prisoners from a governmental authority (the county sheriff's office) for a fee, utilizing their forced labor to advance a commercial enterprise.

• In the early 20th century, a private brick manufacturing plant is struggling to compete due to high labor costs. To gain an advantage, the plant owner strikes a deal with the state penitentiary. The agreement allows the plant to house and employ a specific number of prisoners within a designated section of its factory. These prisoners are put to work molding, firing, and stacking bricks for long hours, often under harsh conditions. The brick plant pays the state a nominal fee for each prisoner's output or for their time, effectively securing a captive workforce that cannot demand higher wages or better working conditions, thereby boosting the plant's profitability.

  This scenario exemplifies the contract system because a private manufacturing business is directly utilizing the labor of incarcerated individuals, obtained through a payment agreement with a government correctional facility, to produce goods for commercial sale.