Debt and Stimulus: The Roots of America

by Glenn Alan Cheney

Let us bow our heads and remember: America was founded on crushing debt, failed bailouts, and the worst kind of stimulus.

The Pilgrims came to America on a business venture. Some of them came seeking religious freedom, but all of them were in it for the money.
It was a joint venture under the nebulous auspices of The Virginia Company.

Investors (not the company) put up most of the cash. The contract called that party the “Adventurers,” and indeed their investment was going on a little adventure. Their investment bought shares in a business that would end up at a no-man’s-land called Plymouth. In return, they were to receive, seven years thence, a share of the profits derived from sales of fish, timber, furs and houses.

The other party: some settlers — or call them workers — who would turn sweat into equity. The contract called them “Planters,” and indeed they would plant not only crops but bodies and souls in the rocky soil of New England. Each Planter’s labor was worth a share in the venture. They owed the venture seven years. During that time, the Planters were to send products to the Adventurers, and the Adventurers would send supplies to the Planters. When the contract expired, everyone would receive their shares of the profit. For some Planters, this was the way to religious freedom. For others, it was the way to ownership of a house and a plot of land — the American dream in the minds of people who had never seen America.

The contract was less understandable than the darkest of derivatives. It would never hold up in court. Actually, there were two contracts, neither signed by both parties. One the Planters signed. It seemed to require them to work four days a week for the venture and two for themselves, with a day off for God. It was understood (they thought) that they could keep the houses they’d build and live in.
The Adventurers rewrote the contract. This version, which the Planters never signed, seemed to require six days of labor, with one day off for God. And the houses went to the venture, to be liquidated and divvied up along with everything else, every stone of every wall, each sprig of parsley in each garden.
The Mayflower arrived at Plymouth a little short on supplies but heavily laden with debt. Not trillions of anything, but a debt no less than total. The 102 passengers owed everything they had and would have over the next seven years — roughly the situation of today’s average mortgagee.

Their stimulus: Cold. Hunger. Fear. Debt.

The cold, hungry, indebted (and arguably illegal) immigrants got to work. They built shacks to live in, planted gardens out back. They kicked themselves for forgetting to bring fishhooks. Half of them died that first quarter. Come spring, the survivors sent the Mayflower back with nothing in its hold but rocks, ballast where there should have been assets.
The Adventurers then sent a ship, but as a bailout, it failed. It carried no supplies, just more people. It also brought a nasty note from the Adventurers. And the new immigrants brought questions: Are we expected to take on your debt? Do we have equity in this venture? What’s for dinner? Where do we sleep?

It was a fiscal mess. The debt got too big and complex to pay off, the dividends impossible to calculate. No supplies arrived. In time, a few of the Planters made a side deal to satisfy the Adventurers. People moved on. So did history. And here we are, still dealing with weird agreements and crazy debts in the shadow of hunger, cold, and fear. And we’re still earning our sweat-equity in America. We are here to stay, and we will survive. We’ve seen worse, and we’ll see better. We still have the dream.
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This is based on a book I wrote: Thanksgiving: The Pilgrims’ First Year in America. You can read excerpts and comments at NLLibrarium.com.