Puddy and I struck out again this weekend in the "Silver Bullet" (our 19' Airstream Travel Trailer) for Plantation Country and a little local Southern history. We visited the historic town of Natchitoches, Louisiana, and saw many of the local historic attractions. One of our stops was Oakland Plantation, owned and operated by the U.S. Park Service.
While the main plantation house was being renovated at Oakland, most of the outbuildings and the commissary, or company store, were still available for viewing. A new ugly and completely out of place exterior elevator was being installed at the main house, as proof that the ADA Branch of the Fed soundly defeated the Historic Preservation Branch at the Fed. But, it was the commissary, or company store, that reminded me that while history does not exactly repeat itself, it certainly rhymes.
A U.S. Park Service tour guide explained that the company store was used to cheat minority sharecroppers of their labor. She explained that the sharecroppers were serfs that farmed the land for a percentage of the crop. She further explained that the plantation owner extended credit throughout the year at the company store. In the fall, after the crops were harvested and sold, the debts were settled. The Park Service guide said that because of easy credit and a lack of understanding regarding the consequences of excess credit many sharecroppers ended the harvest season owing more than they earned. (I expected Tennessee Ernie Ford to step out of the wood work singing "I Owe My Soul to the Company Store" at any moment!) In other words, they spent more than they earned because of easy credit at the company store. This resulted in a negative savings rate, where the net worth of the sharecropper decreased year after year, as debt piled up at the company store. The U.S. Park Service tour guide explained how this was terrible and she was glad that this type of system no longer existed.
After Puddy and I left and went outside for a little fresh air, Puddy reminded me of Suze Orman's new book, "The Money Book for the Young, Fabulous and Broke". It is about how todays younger generation in the U.S. overindulges themselves by borrowing irresponsibly with credit cards. They are piling up debt year after year, by living beyond their means, resulting in an ever larger negative net worth. It seems that this young generation just doesn't understand the consequences of excess debt.
In defense of the Company Store, many plantation owners found themselves "land poor" after the War of Northern Aggression. In Louisiana alone, over half the wealth in the State disappeared, in addition, 20% of the male population (not counting those maimed or crippled for life). After the war, many of the slaves refused to leave their home (the plantation was their home, too) and many wanted to stay and continue to work. Since there was little or no money after the war, the only thing the plantation owners could do was to rent them land for a percentage of the crop grown on that land. The times were harsh for both the plantation owner and the sharecropper. Most plantation owners were only one step ahead of the tax collector and many lost their farms because they could not make enough to pay the property taxes. The State of Louisiana was reduced after the war from one of the richest states in the nation to one of the poorest - a condition that still exists to this day.
I can only be proud that the economic system known as "the company store," where easy credit lures poor unsuspecting workers into greater and greater debt year after year no longer exists in this country. Perhaps sometime in the 22nd century, my great, great-grandson will tour the Bank of America Building in New York and some future U.S. Park Service employee will explain the "VISA" system where all the workers were serfs and how they were all victims of easy credit that they did not fully understand...
Larry LaBorde, Silver Trading Company
