3

DEBT LITIGATION AND SHAYS’S REBELLION

Jonathan M. Chu

On April 19, 1785, ten years to the day after Concord and Lexington, William Cushing and four associate justices convened the Worcester session of the Supreme Judicial Court. Collectively, the details of the cases provide a window into the very human circumstances precipitating the events of 1786–87 and foreshadowing the growing crisis within post-Revolutionary legal institutions. The court’s list of cases on appeal from the Worcester Court of Common Pleas illustrated profoundly the impact of economic recession and monetary deflation: virtually all the civil cases considered by the court were for problems associated with debt.1

The increase in litigation over private and public debt has long been cited as a major cause of Shays’s Rebellion. Historians have taken at face value the statements that creditors used the courts to suppress poor agrarian debtors. In this view creditors, usually eastern monied men, ruthlessly pursued small debtors in court, causing the additional burden of fees that frequently exceeded the actual debt. When the burdens became excessive, the exploited debtors attempted to obtain debt relief by shutting down the courts.2 Yet the court session presided over by Justice Cushing does not illustrate a legal system that was a tool of creditor interests. Quite the contrary. As any observant creditor in Worcester that April of 1785 probably would have realized, the courts were all too easily being manipulated to delay the repossession of assets. Moreover, the debtors were not a weak yeomanry driven to the wall by the commercial classes. Rather they were a special class of debtors who on paper may have had adequate assets to meet their obligations but who had guessed wrong on the twin forces of recession and deflation and found themselves without enough specie to pay their bills. Indeed, the pattern of litigation, the relationships of the parties involved, and the institutional structure of the courts indicate the evolution of a legal system that by 1785 seemed to favor not creditors but debtors.

Massachusetts’s historic difficulties in sustaining a positive balance of trade meant a continual shortage of specie that encouraged the use of credit, first predominantly in the form of book debt and then increasingly in promissory notes. Book debts were simply the delineation of a series of mutual promises and obligations rendered in precise economic terms and carried in a merchant’s account book. The process by which book debt was accumulated denoted a constant pattern of interaction and a constant ebb and flow of credit and debit. Payable on demand, book debt was a legally enforceable economic obligation, but it might go years without settlement or collection since it also represented ties of social relationships. Under these circumstances repayment rested upon the trust of the creditor and the ability of the debtor to provide labor or goods when the occasion arose over a lifetime. Gradually, however, promissory notes replaced book debt. Like book debt, these notes also reflected the actual transaction of goods and services.3 Yet promissory notes also intimated that a different legal and commercial reality was in the offing. Written debt instruments created the basis for more impersonal relations between debtor and creditor. They reduced debt to specific transactions that could be assigned and transferred as assets or the equivalent of cash. Once created, promissory notes in lieu of cash could change hands at a dazzling and confusing rate. On the reverse of a January 15, 1785, note from Jonathan Lynde for £18.4.8, Edward Bangs wrote, “Rec’d £11 by your note against John Parker, I sold to Nathan Patch.” Whatever the final obligation, it was due Stephen Salisbury, the possessor of the note. Further, by making possible the assigning of assets to third parties, promissory notes facilitated economic transactions; but in so doing, they also eliminated the moderating effects of multifaceted social relationships when hard times struck.4

Deflation and recession undermined the equilibrium of the money supply in post-Revolutionary Massachusetts and further helped to depersonalize debt relationships. The state’s return to a hard money policy in the aftermath of the war and its insistence on a high level of taxation to redeem the state’s war debt severely deflated the money supply and placed a premium upon specie. Generally, deflation of this sort would have meant the transfer of real wealth to creditors and retarding the calling of notes. With the customary 6 percent interest assessed, creditors would have compounded their rate of return the longer the debtor delayed repayment. A wise investor preparing for bad times, however, would have tried to sell notes payable to him, used the proceeds to pay off debts, and converted as much as possible to hard money.

The twin forces of deflation and recession furthermore accelerated the calling of notes by leading creditors who questioned the ability of debtors to meet their obligations. As notes entered the stream of commerce and as economic conditions worsened, the ability of writers to satisfy their obligations in cash increasingly depended upon the impersonal criteria of a market in which the relative value of notes declined. Simply too much money in the form of promissory notes was chasing a limited amount of specie, and, as a result, the worth of the former shrank relative to the latter.5 All too quickly, the solvency of the holders of notes came to rest upon the economic worth of men with whom they had only a secondary or tertiary relationship and about whom they knew little. In the search for greater liquidity, promissory notes doubtless became the bad money that drove out good. Where a creditor might allow a neighbor or relation to defer payment, he could not afford to hesitate when his own solvency was in jeopardy. And to save himself, the creditor had to use the law as a collection agency.

While creditors theoretically had extensive remedies for the collection of debts, these were to be tested fully in the economic crisis of post-Revolutionary Massachusetts.6 Before the Revolution the particularistic nature of communities tended to ameliorate the harsher attributes of the system. Smaller debtors were more likely to be exempt from the most punitive attributes of insolvency. When bringing suit, plaintiffs had to prove their claim in the county where the debtor resided or the debt contracted. While colonies varied in their specific terms, in general there were limitations on creditor remedies. Some colonies provided immunity from subsequent prosecution for debts if the debtor took a bankruptcy oath, substituted indentured servitude for imprisonment, and limited the range of goods that could be attached. Before the Revolution the Massachusetts General Court had passed a number of bankruptcy laws only to have them disallowed by the Privy Council. Some of these provided for restrictions on the rights of creditors. Innkeepers, for example, would not have been able to pursue debts of ten shillings or less owed by local residents and would have been barred from enforcing sailors’ debts for wine or liquor that had been incurred without the consent of their captains.7

Moreover the punishment of insolvency reflected a similar pattern of weakening creditor remedies. Although debtors in post-Revolutionary Massachusetts were subject to imprisonment for debt and to sale into servitude, these measures were increasingly anachronistic. Imprisonment, the ultimate sanction upon debtors, failed to achieve two general objectives of bankruptcy law: protection of other creditors and the prevention of actions that might be detrimental to their interests. The point of jailing someone for debt rested upon the presumption that the alleged insolvent was hiding assets or that relatives could be induced to satisfy the obligation.8 Indeed, the failure to pay one’s legitimate debts denoted fraud. It destroyed the creditor’s faith in his debtor and made possible the vision of a smiling bankrupt with money in his pocket. Advising Stephen Salisbury to have Jon Bellows imprisoned, Stephen Sewall declared: “The particular circumstances of the Creditor make it absolutely necessary that Bellows the Debtor should be taken by his body and be obliged to pay immediately, or be committed. I am informed he is a man of considerable Estate—and presume there will be no difficulty in obtaining the money.”9

Once, however, the insolvent took an oath attesting to his economic circumstances, as he could in Massachusetts, the cost to the creditor of continuing imprisonment dictated release. Significantly, the burdens of pursuing the debt fell upon the creditor after the first fifty days of imprisonment, the 1763 statutory limit. Thereafter, the individual debtor could swear to the fact of his insolvency. Then the creditor could keep him imprisoned if he were willing to pay the jail fees, sell him, if he were single, into servitude, or release him and hope for better days.10

The personal circumstances of the small debtor could preclude imprisonment. The smaller the debt, the greater the likelihood the debtor was judgment-proof. Nathaniel Jennison owed Stephen Salisbury three pounds in April 1785. The pursuit of the debt by attaching his body, Jennison pointed out to Salisbury, would not secure payment.11 Furthermore the incarceration of a debtor cost communities in another way: towns were expected to assume the cost of subsidizing families or individuals because a presumably able individual was rendered unproductive. Unless there was a mean-spirited desire for punishment or a strong presumption of hidden assets, imprisonment for debt in Massachusetts or elsewhere made little sense.12

The imprisonment for debt that in fact took place in eighteenth-century Massachusetts was relatively infrequent and mild. Debtors were segregated from other criminals. In Worcester, debtors had one cell on the main floor while criminals were relegated to another and, in special cases, to the dungeon on the lower level. The debtors’ accommodations were supposed to have ample space and light and the prisoners themselves to have access to the exercise yard. Some debtors could post bond allowing them to rent rooms next to the jail. Throughout the eighteenth century relatively few persons were imprisoned for extended periods. According to Robert Feer, between 1785 and 1800 only 35 out of 1,905 debtors remained imprisoned longer than one year. Most were released within two weeks; some, within a day.13

The sanction of jail in Worcester County became impossible to sustain as large numbers of debtors were incarcerated during 1785–86. On December 6, 1785, there were nineteen in the debtors’ cell in the county jail. The next day an additional four were added to the fourteen- or fifteen-square-foot cell designed for eight or nine prisoners. So crowded were conditions, the jailer placed some of the debtors in the lower dungeon and contemplated using the room reserved for women. Nor had conditions improved by March 16, 1786; on that day twenty-five prisoners were in custody.14 As the prison became overcrowded, its capacity was increased by permitting some debtors to be confined to their homes.15 Yet, neither jail nor house arrest could produce cash that did not exist.

Reasons for long-term incarceration were self-evident. Public institutions, state and town governments, were generally responsible for those inmates with the longest periods of imprisonment. Joseph Wiser was kept for about a year under the authority of the town of Southborough. His circumstances also illustrate the way in which individuals were vulnerable to the vagaries of local experience. Wiser’s term may well have been the result of his sizable debt to the town; he owed £3,121.11.3. One possible explanation for Wiser’s plight is that he somehow had become personally liable for uncollected town taxes probably dating back a number of years.16

Similarly, the town of Sterling had ordered the holding of Tilly Richardson beyond the statutory limit. His case, however, may well have reflected his jailers’ conviction that he had hidden assets. Jailed on March 5, 1785, he was still there a year later, but the reason for his commitment was a debt of only £14.2.4. That their respective towns were prepared to keep Wiser and Richardson in jail also indicates that any costs incurred by their imprisonment were thought to be outweighed by real prospects of financial return.17

More significantly, private creditors appeared less forgiving of their debtors in 1785 than were state and local governments. If state and local authorities were prepared to absorb the costs of extended jail terms, private creditors had to weigh more carefully the benefit of the additional charges over the likelihood of eventual collection. At the same time, they had to use whatever sanctions existed to preserve their own solvency. As the premium placed upon specie aggravated the problems of private debt, private creditors began to keep their debtors in jail longer.18 Of the 101 persons imprisoned for private debts, forty served terms in excess of the statutory requirement. Asa Danforth, a Westminster blacksmith, was kept for nearly two years; John May, Jr., for over a year. The sums owed by the two men were not large in comparison with others similarly detained. Danforth owed £156.5.3; May, £98.4.19

Creditors increasingly put their debtors in jail either to apply added incentive to pay or to prove to their own creditors that they were making every effort to remain solvent. When they did, insolvency moved like ripples through a pond. Benjamin Cogswell, a Sutton trader, disputed a debt claimed by Timothy Rawson, another trader from neighboring Uxbridge. The cause of the dispute was a note of uncertain value. In light of the confusion surrounding the assignability of different notes between the two men, there was some question as to whether the note had been discharged. The original note dated back to April 5, 1781, when Thomas Bicknell gave Rawson a note for twenty-eight hundred new emission dollars. Rawson endorsed the note to Cogswell who promised to deliver cash or goods. Cogswell presumed he had satisfied his part of the bargain when he recovered payment from one Daniel Warren, who had another note with Rawson’s endorsement to Cogswell on it. Although the Worcester Court of Common Pleas held for Cogswell, the Supreme Judicial Court reversed the decision and granted Rawson the judgment for £520. In the process Cogswell became responsible for an additional £37.8.10 in court costs. When Cogswell was unable to pay, Rawson had him placed in the Worcester County jail for 104 days.20

Cogswell’s legal defeat had further repercussions. Had he won his case, he might have been able to use the award of court costs in the Rawson action to satisfy another outstanding debt. At the December Worcester session of Common Pleas, he had lost a judgment of £13.13.10 to another creditor, Samuel Read, Jr. Cogswell had appealed but seemed to have had little hope of winning. Indeed, when the case was called before the Supreme Judicial Court, Cogswell made no effort to defend himself. He did not appear, and a default judgment was entered against him.21

Cogswell’s highly problematic situation also placed Rawson, himself in striatened circumstances, in financial peril. Rawson had had to have Cogswell jailed because he was trying desperately to come up with enough cash to satisfy his own creditors and avoid imprisonment. In addition to the Cogswell action, he was involved in six other pieces of litigation. Besides Cogswell, Rawson had to contend with David Thayer’s pro forma appeal to the Supreme Judicial Court of an £829.17 judgment. Thayer had not appeared when the case was called in the lower court, and a default judgment had also been entered against him. Thayer, like Cogswell, chose to appeal the judgment after it was entered. When the case was called in April, Thayer once again defaulted, and the Supreme Judicial Court entered an affirmation of the lower court’s judgment and added court costs and interest. The total owed Rawson just from these two actions exceeded £1,370.22 Rawson also had three individual judgments against him and was the codefendant in two other debt actions. In all five actions Rawson had little expectation of avoiding legal responsibility for his debts. All five were appeals of default judgments, and in four of the cases, the appeals again were not prosecuted.23 In the fifth, Rawson was named as a codefendant with Aaron Taft, Jr., who had received a note from Rawson and passed it to Elijah Alexander. When Taft could not pay the note and accumulated interest, Alexander sued. Although Taft and Rawson had defaulted at the lower court, Alexander settled out of court for an additional note and payment of court costs by Taft when the case came up on appeal. While the settlement absolved Rawson of any further liability, he had provided the major surety for the appeal and thus could have borne some responsibility for the costs in the event Taft proved to be insolvent.24 If one assumes Rawson had no financial responsibility in the Taft case and a half interest in the other action in which he was a codefendant, he would have been liable for £61.16.7.25 By July 22, 1785, Rawson had secured executions on the debts owed him, yet the assets available were clearly insufficient to meet his outstanding obligations. On August 1 Joseph Sibley and others had him committed to the Worcester jail for debts totaling £480. Eleven days later, Rawson had Benjamin Cogswell committed for his outstanding obligations.26

Rawson’s inability to find the cash to avoid jail forced another of his creditors, John Weson, Jr., to accelerate the collection of a relatively small note, creating in the process new channels of economic distress. Weson had obtained a promissory note written by Rawson to David Sherman on May 24, 1784. Sherman had passed the note to Weson, and Weson demanded payment almost immediately. When Rawson refused, Weson filed suit at the next available opportunity, the September 1784 session of the Worcester Court of Common Pleas. Weson agreed to a continuance to the December session. When Rawson did not appear, a default judgment was entered in Weson’s favor. Rawson further sought to delay judgment by appealing to the Supreme Judicial Court even if it meant additional court costs. At the appeal he again failed to appear when the case was called.27

The search for money to satisfy obligations and keep these men solvent soon affected others. Although he had won this small judgment, Weson found himself unable to help his father, who would subsequently be jailed in January 1786 by Elijah Dix.28 Dix, like Weson and Rawson, was afflicted with non- or slow-paying debtors. In addition to Weson’s father, Dix was pressing Daniel Road and William Jennison Stearns for payment. Road owed him slightly over six pounds; Stearns £29.6.29 Dix was an apothecary and had a practice as a physician. He also needed the funds to remain solvent. On the nineteenth, he was also being sued by Daniel Hey wood, Jr., for nearly eighty pounds. Heywood had taken Dix to the December common pleas court. Like many others, Dix did not appear, had a default judgment entered against him, and then appealed to the Supreme Judicial Court. Not contesting the appeal, Dix managed to postpone his day of reckoning with Heywood until May 12, the day the writ of execution was returned. While the delay was not long enough for him to be able to use the proceeds from his small judgment against Road, he had shortened the period of his embarrassment.30

Dix’s other debtor, William Jennison Stearns, was, it would seem, the kind of debtor who stretched the terms of payment beyond tolerable limits even while he was apparently solvent. Stearns may have had difficulties in managing his flow of cash; he also may have chosen to delay payments to maximize his economic advantages. Stearns participated in one of the few appeals actually to be contested during the April Supreme Judicial Court session. This was not surprising since he was the creditor in the action and the lower court had found against him. When the Supreme Judicial Court heard the case, it reversed the lower court’s judgment, awarded him £10.12.6, and levied costs upon his opponent.31 Still, when Stearns was unable or unwilling to come up with the £29.6 he owed, Dix had him committed to jail for nearly two weeks. Stearns, though, probably had sufficient resources to avoid continued imprisonment. On August 10, the day after he was imprisoned, he and two other Worcester residents joined to give Dix a bond for over three times the amount owed—in essence providing, at three times the value, assets to secure the bond. One of the guarantors of Stearns’s bond was Nathan Patch. Patch was one of Worcester’s solvent citizens. An innkeeper, he had four cases before the April session, the most by any single plaintiff, collected over £140 in judgments, and most significant, had no creditors suing him. Stearns, moreover, was a cosurety of Benjamin Cogswell’s prisoner’s bond to Timothy Rawson.32 Whatever his difficulties were in August 1785, Stearns was sufficiently creditworthy to pay his annual bill with Stephen Salisbury the next March with a combination of cash and a promissory note. Salisbury’s acceptance of the note in light of his other collection problems of 1785–87 is ample evidence of Stearns’s ability to pay.33

With all their problems Dix, Stearns, Rawson, Cogswell, and the other debtors in court on April 19, 1785, looked to the solution Mr. Micawber knew so well: if one could hold out a little longer, something might turn up. Delay, though, was costly once one allowed debts to be litigated. Since costs in Massachusetts were allocated to the loser, the number of default judgments entered against debtors meant an increase in the burden of debt. Still, debtors used the court system to postpone what they recognized to be their obligations. Nearly two of every seven debt cases heard at the December session of the Worcester Court of Common Pleas were subsequently appealed and heard at the April session of the Supreme Judicial Court.34 Of the 194 debt-related cases heard by the Supreme Judicial Court, 165 were simply affirmations of lower court default judgments. That is, the debtors involved had not contested their obligations at the Court of Common Pleas; they did not even appear in court. Yet they still chose to prolong the contest and refused to prosecute their appeals when called before the Supreme Judicial Court. To do this created additional costs: interest, computed at 6 percent, new writs, appeal bonds, and lawyers’ fees would be assessed against the losing litigant, in this case the defaulting debtor. Average court costs for April 1785 were nearly £5.35

Costs, however, were unrelated to the size of judgments. The payment schedule rested upon flat-rate assessments such as the filing of writs, judges’ and clerks’ fees, and lawyers’ per diem and litigation charges. A default judgment might save an individual the lawyer’s twelve-shilling litigation fee, but it still required the payment of a one shilling sixpence per diem for travel and attendance at the court session. The other charges would have to be paid or guaranteed if the appeal was to be placed on the docket.36 As a result, the ratio of costs to judgment varied considerably. In the two cases in which Timothy Rawson was a codefendant, White v. Trask and Alexander v. Tafi, itemized court costs were £4.6.10 and £4.5.2, respectively. The figures were 26.6 and 5.7 percent of the respective judgments. Daniel Road’s appeal of the Dix case cost him £3.7.7, but the judgment against him was only £7.4.3. Moreover, the costs in the court records understate the actual cost of litigation that would ultimately be borne by the loser since only the winner would have to itemize his costs when the fees became part of the judgment. Thus, it would not be inconceivable, in light of the functional symmetry of legal process, that Road’s costs, including his need to file answers to complaints and to secure appeal bonds, equaled his debt judgment.37

Despite the eccentricity and burden of legal cost, appeal was one means of coping with insolvency. Appeal was the eighteenth-century equivalent of telling a creditor that a check was in the mail. It provided the debtor an invaluable commodity at no immediate cost: time. Defaulting indicated that the debtor was fully aware of his legal obligation to pay his debts. Defaulting and appealing meant postponing the reckoning beyond the day of judgment to the point when the creditor secured the return on his writ of execution. On June 7, 1783, John Keith issued a note promising to pay Jonathan Livermore £7 on demand with interest. Keith made no payments on the note, and in September 1784 Livermore took him to court. Keith convinced Livermore, the court, or both to grant him a continuance. At the next session in December, Keith defaulted and then like Cogswell, Rawson, and the others, he appealed the lower court’s judgment against him. In April he again defaulted. By the time Livermore was able to secure his writ of execution, it was May 16, 1785.38

The procedural mechanisms of the Massachusetts legal system and the nature of the relationship between creditor and debtor provided Livermore, Stearns, and others with a distinct advantage. In possession of the goods and cash that may already have been consumed or spent, these debtors forced their creditors to find and regain assets that would make them whole again. Although Massachusetts courts ultimately levied the costs of legal action against the evading, delinquent debtor, the creditor still had to initiate the action. He had to advance the sums necessary to file the writs, copy the papers, and retain the lawyer to pursue the debt. Delay might not be to his advantage. If he failed to act, the debtor retained the cash or goods—or worse, consumed them in the meantime. Alternatively, some other creditor might obtain judgment against the debtor and seize what assets remained or establish a priority against future earnings or acquisitions of property. Indeed, once the creditor obtained judgment against his debtor, he had an indefinite period of time to proceed against person or property in any Massachusetts county.39

Popular opposition to the hard money policies of the state portended still more dangers for the anxious creditor: the passage of a new tender law and the spread of cheap money. If a creditor did not act quickly enough, he might have to accept payment in inflated currency. The prospects for the passage of measures to increase the money supply were, however, slim. George Minot estimated that about 19 out of 118 in the House and 35 of 120 in the Senate favored inflating the currency. The problem was that too many looked upon an inflated currency as a salve for “male contents [who] must look to themselves, to their idleness, their dissipation and extravagance, for their grievances.”40 In regions where the absence of specie was most noticeable, some could still hope that legislative adjustments might be made to enable debtors to make payments in tender other than specie, relieve the shortage of money, and provide relief.41

Litigation was one, albeit desperate, way to extend one’s payments. All the appellant had to do was post a bond for six pounds to cover court costs in the event the case were lost. The bond required one major surety for six pounds and two secondary sureties for three pounds each. Defendants secured bonds with relative ease; one’s defense counsel usually provided it. Levi Lincoln provided bonds for twenty-nine appellants, twenty-two of whom had been clients. Two of Lincoln’s clients were Daniel Road and a codefendant of Timothy Rawson, Nicholas Trask. In addition, lawyers were frequently subsidiary sureties for nonclients. Lincoln, who tended to be a plaintiff’s counsel, provided secondary sureties for thirty-nine defendants; Edward Bangs was the primary surety for twenty-one clients and gave secondary sureties for eighty-nine other litigants.42 Indeed, one could prevail upon plaintiff’s counsel to be a secondary surety for his appeal. Lincoln also was the secondary surety in six other actions in which he had been the attorney for the opposition, and he was not the only lawyer to provide sureties for the opposing party in a legal action. In eleven other cases, four different lawyers cosigned bonds for their opposition.43

The ease with which debtors received help from lawyers in pursuing appeals that were unlikely to be prosecuted raises a question about their supposed antipathy. Even if, as L. Kinvin Wroth and Hiller Zobel believe, the appeal bonds were a mere formality, their presence in such large numbers of default judgments during the April court session argues for a symbiotic relationship between debtor and lawyer that prolonged the appeal process. Assistance to opposing clients even went beyond the provision of a surety bond. Levi Lincoln defended Asaph Sherman when he attacked the deputy sheriff attempting to execute a judgment upon his property. Sherman had been committed to debtor’s prison by Lincoln and a number of other frustrated creditors in September 1785.44

Defendants may not have objected to lawyers’ fees because of the specific charges in their individual cases. It would be a rare defendant-debtor who was sufficiently naive to presume that the offering of sureties on an appeal bond amounted to an act of friendship or kindness. Lawyers who offered themselves as sureties were obviously self-interested.45 Resentments may well have originated in the debtor’s recognition of his dependence upon a group that was everywhere. The multitude of bonds or cases and the sustaining of litigation meant the accumulation of small fees that made for large incomes. Bangs had relatively few clients for whom he was the primary counsel. In 1785 he had twenty-six, of whom twenty-one were defendants and for whom he provided the major surety bond. In one instance, his client was involved in two actions. However, with 89 appeal bonds in which he participated, Bangs had a hand in 116 of 194 actions. Levi Lincoln was the most active attorney representing litigants at the April court. In ninety actions he represented eighty-three litigants.46 Debtors could easily have allowed the lower court’s judgment to stand and thereby have saved themselves Bangs’s and Lincoln’s fees and the other appellate costs, but they chose not to. That debtors could sustain their actions meant that lawyers were willing to provide services at costs that, for the moment, were acceptable or, in economic terms, cheap relative to the situation.

But the purchase of such services did not have to lead to any love or respect for the legal profession. The pervasiveness of Bangs’s practice was not unusual. Eight lawyers handled virtually all the litigation on April 19; of 392 possible parties in litigation, the 8 represented 334. Lawyers like Edward Bangs were young men on the make. After spending the war at Harvard College and then in legal studies at Newburyport, Bangs arrived in Worcester in 1780 to begin his practice.47 He was part of a young group of newly arrived artisans, merchants, and lawyers who almost immediately tried to change the religious and political institutions of the town. The peak of the divisions occurred in 1785–86 as the town debated the separation of the church into two parishes and its response to the county conventions.48 These developments and the rapid growth of lawyer’s practices did not diminish long-standing antilawyer sentiment. Indeed, lawyers came to be seen as symptomatic, if not the cause, of hard times. Even if lawyers had not produced the distress, it was readily apparent to all that they had done nothing to alleviate it. More significant, they grew fat off creditor and debtor alike.49

Since debtors in court could sustain legal costs relatively cheaply, the incentives favored doing anything that might avoid bringing the litigation to an end, for then the additional court costs would come due. As debtors dragged the legal process on, a number of fortuitous events might make possible the redemption of their obligations. Circumstances might arise that would allow the debtor to defer payment. Daniel Bigelow had to sue Jonas Gibbs for payment of legal fees to the deceased William Stearns.50 The fees due Stearns had begun to accrue as early as March 1781 and ran until January 1783. Stearns’s death gave Gibbs a breathing spell of nearly two years. Legal action was initiated in 1783, but it was not until April 1785 that final judgment was rendered for Stearns’s estate.51

It could also be in the interest of creditors to delay the trial of cases. The creditor might conclude that the effort required to collect the debt was greater than the potential return, or he might make some technical error that would imperil the suit. There was the possibility that the creditor could be compelled to settle for a lesser amount or even lose. In 1781 Ephraim Butler agreed to serve in the Continental army as a substitute for Elisha Clary, Jeremiah Woodbury, John Hammond, and William Bowman. Clary and the others in return promised to give Butler £90 in silver money, along with any produce and necessaries Butler’s family might need; the value of the goods was to be set at common prices and subtracted from the total obligation. The sum of £30 was to be given upon Butler’s passing muster, and the remaining spread out in monthly payments. Clary and the others further agreed that if they did not make the payments, they would incur an additional £180 penalty. Monthly payments of £2.10 were made until Butler died in February or March 1782, about a year after he concluded the agreement. After his death the family filed suit to recover the remainder of the money and the penalty. At the appeal trial, the family withdrew its suit and was assessed court costs. Arguably, the Butlers may not have had grounds to sue. The agreement conceivably died with Butler, and no further obligation might be seen to exist. The lower court, however, had held for the creditor interest, the Butlers, and still the defendants were able to appeal and pass the costs on to the family. In all likelihood, the defendant debtors offered the Butlers an out-of-court settlement and thereby reduced their obligation below the judgment granted in the lower courts.52

For the cash-poor debtor unable to make reduced settlements, delay allowed something to turn up. Clearly, so many debtors would not have routinely appealed their default judgments if they felt the costs outweighed the benefits. Even if judgment was a foregone conclusion, as it was in 165 out of 194 cases, the additional costs might have been negligible at any price. As any bankrupt would have known, a shilling one cannot pay might as well be a thousand.

Stephen Salisbury seemed to realize the perils of the legal process, and debtors seemed to be able to get him to avoid courts on a number of occasions. In January 1786 Thomas Andrews of Leicester acknowledged Salisbury’s patience with him, yet when Salisbury appeared at his home, Andrews refused to answer the door. Salisbury, in fact, seemed prepared to accept notes, but Andrews wanted to hold out until the spring, when he could raise cash by selling his farm. Keeping his doors shut on Salisbury, Andrews explained, gave him the opportunity “to settle with my Creditors justly.” The next month Andrews again wrote Salisbury that he was trying to arrange with his creditors some resolution of his problems and again begged for time that he might “have an opportunity of transacting some business and disposing of [his] farm.”53

Deferring legal action under the right circumstances might also have been good business. Salisbury’s bluster could have been used to exact more profitable payments in kind. With his brother, Salisbury maintained two stores, one in Worcester, the other in Boston. Trade between the two branches accounted for much of the business’s success, and any goods received in kind could be valued at wholesale prices and sold at a profit. Debtors sought to put Salisbury’s need for goods to their own advantage. One Ephraim Wetmore advised Salisbury, “I have been informed that you have said that you would have my Body Dead or a Live in case I did not pay you.” Nonetheless, if Salisbury was prepared to wait, Wetmore would send him a ton of potash in May in compensation for about half the debt, have enough of a breathing spell to stay in business, and be able to forward the final installment. If Salisbury sued, Wetmore assured him it would only cause him time and trouble.54

Stephen Sewall also preferred to pressure his debtors rather than seek legal judgments. Sewall’s efforts, however, may have initiated a chain of circumstances that resulted in the imprisonment of other debtors. By March 1786 William Jennison was under heavy pressure to pay his obligations to Sewall. While ostensibly solvent, Jennison had been seriously affected by deflation and was unable to raise the cash needed to settle with Sewall. Unfortunately, Jennison had not been able to get, as he put it, a shilling on the pound from his own debtors and had initiated a number of suits to get the money to discharge his debts. Jennison asked Sewall not to put his note into suit, for “it would be Expensive and disagreeable to me, and I apprehend, no advantage to you.”55

The dilemma of Salisbury and Sewall, as well as that of other creditors, was to find the process that promoted the maximum return from delinquent debtors. But finding a strategy that curbed the ability of debtors to manipulate the legal system and postpone further payment was most difficult. There were dangers in waiting too long if the debtor became insolvent and other creditors had established priority on his assets. But acting too soon might precipitate a wave of insolvencies affecting the ability of other debtors to pay their obligations. Salisbury and Sewall could avoid legal action since they obviously commanded sufficient influence and resources to compel debtors to give them primacy and thus security. For litigants in difficulty like Timothy Rawson, William Jennison Stearns, and Nathaniel Jennison, legal action was an uncertain process resorted to only if one were also in imminent danger of being declared insolvent. Judicial process made one’s solvency dependent not only upon a debtor’s willingness to pay his due but also upon the timing of court sessions and the prompt cooperation of local authorities.56 The commitment to legal action for the creditor implied a kind of despair, a sense that the debtor probably could or would not satisfy his obligations. For the debtors who appealed, their presence before the Supreme Judicial Court expressed an analogous kind of despair—the final attempts to stave off an insolvency brought on by bad bets on the money supply, economic activity, or the reliability of their own debtors.

The actions of debtors at the April 19, 1785, session of the Supreme Judicial Court provide important insights into the legal system. They suggest the need to reconsider the traditional account of the movement for court reform in post-Revolutionary Massachusetts. The assumption that debtors necessarily disliked courts and that creditors liked them misreads the dynamics of the tension between the two and overlooks the specific role courts played in solving their respective problems. If, as current historical wisdom asserts, debtors found the legal system burdensome, creditors also did not find the system to their advantage. The call for the reduction of court fees, the enlargement of the jurisdiction of justices of the peace, and the elimination of the Court of Common Pleas advocated by Benjamin Austin and others ought not to be seen as reforms indiscriminately favorable to debtors.57 Despite his obvious hostility to lawyers, Austin’s suggestions for reform would not have been an unqualified benefit for debtors. His bitter attack upon lawyers’ sophistry addressed not the interest of the hopelessly indebted but the claims of those who had been penalized most by drawn-out legal actions, creditors. It was, after all, Austin who argued in March 1786 for the elimination of an order of men “who are practising the greatest art in order to delay every process . . . who are taking advantage of every accidental circumstance which an unprincipled person might have by the lenity and indulgence of an honest creditor.”58

Austin’s calls for the use of binding arbitration and the reduction of fees would have facilitated, not hindered, the collection of debts. Reducing fees lowered the threshold creditors had to cross before initiating action. Smaller amounts would have to be placed at risk in starting litigation, thereby making the action less of a gamble. Binding arbitration would have foreclosed the appeal process that had been so effective in delaying payment. With reforms like these, creditors would be able to initiate action more quickly, they might be more inclined to bring small debtors to court, and they could obtain judgment and collect their money faster. Indeed, the lower fees coupled with the expansion of the jurisdiction of the justices of the peace would have greatly facilitated bringing small, relatively solvent debtors to judgment more rapidly.59

The reduction of fees and the changes in court structure would have favored a particular kind of debtor, one who was caught between his own creditors and debtors and was being pressured by larger, more powerful creditors, who had guessed right on the twin forces of recession and deflation or who had far greater resources to weather economic adversity. This intermediate speculator had the most to gain from reform: he could pursue debts owed him that previously were too small to be litigated, while further postponing his other obligations. The expansion of the jurisdiction of the justices of the peace and the elimination of the Court of Common Pleas would give him the best of both worlds. It eliminated an intermediate layer of the system, thereby reducing costs, while it postponed larger judgments to the more infrequent sessions of the Supreme Judicial Court.60

Ironically, the apologist for the General Court, George Minot, recognized how delay provided advantages for debtors and how “their perplexities might lead them to an undue use of any advantage.” He may also have seen the ways in which the legal system could be used for very selective interests. That, indeed, may ultimately have been the basis of his brief against Shaysites like Timothy Rawson. Minot’s sense that the distinction between those who sought to stop specific executions of judgment and those who wanted the complete elimination of courts was being blurred touches upon what may have been the real fear for men like him. If, as the events of the April 1785 court session suggest, reform appealed to a narrow interest that was already manipulating the structure quite well and was being “blended incautiously” with general discontent to promote a more deep-seated animosity to all authority, then anarchy loomed. Advancing a self-interest born of extravagance and indulgence, some men were using recession and deflation as excuses to save themselves from bad bets and bargains. The danger to the republic and to society ought to have been all too obvious: this particular expression of private interest and vice attacked the institutions and public virtue that were vital to sustaining republican governments.61