The Atlantic Ocean posed a great barrier to settlement in North America. In the early seventeenth century, the cost of the Atlantic passage was ￡9 to ￡10 per person, more than an average English person's yearly income. Throughout most of the later colonial period1, the peacetime costs of passage were ￡5 to ￡6. Consequently, in the seventeenth century, a majority of British or European newcomers could not and did not pay their own way to America. By 1775, however, more than half a million English, Scotch, Irish, German, and other Europeans had made the transatlantic voyage. More than 350,000 of them paid their way by borrowing and signing a unique IOU2, an indenture contract.

The indenture contract was a device that enabled people to pay for their passage to America by selling their labor to someone in the New World for a specified period of time. These contracts were written in a variety of forms, but law and custom made them similar. Generally speaking, prospective immigrants would sign articles of indenture binding them to a period of service that varied from three to seven years. Typically, an indentured immigrant signed with a shipowner or a recruiting agent in England. As soon as the servant was delivered alive at an American port, the contract was sold to a planter or merchant. These contracts typically sold for ￡10 to ￡11 in the eighteenth century nearly double the cost of passage. Indentured servants, thus bound, performed any work their "employers" demanded in exchange for room, board, and certain "freedom dues" of money or land that were received at the end of the period of indenture.

The first indentured immigrants were sent to Jamestown and sold by the Virginia Company3: about 100 children in their early teens in 1618, a like number of young women in 1619 for marital purposes4, and a young group of workers in 1620. Soon thereafter, private agents scoured the ports taverns, and countryside to sign on workers for indenture. The indentured servants were drawn from a wide spectrum of European society, from the ranks of farmers and unskilled workers, artisans, domestic servants, and others. Most came without specialized skills, but they came to America voluntarily because the likelihood of rising to the status of landowner was very low in Britain or on the Continent. They were also willing to sign indenture contracts because their opportunity cost5, the next best use of their time, was typically very low — room and board and low wages as a rural English farm worker, a "servant in husbandry." Children born in English cottages usually went to work at the age of 10, moving among families and farms until good fortune allowed them to marry. For many, a period of bondage for the trip to America seemed worth the risk.

Whether the life of a servant was hard or easy depended primarily on the temperament of the taskmaster; the courts usually protected indentured servants from extreme cruelty, but the law could also be applied quickly to apprehend and return servants who ran away. The usual punishment for runaways was an extension of the contract period. The indentured period for women was originally shorter than for men because of the greater scarcity of women in the colonies, but by the eighteenth century, the periods of service were comparable for both sexes. The indentured servants?work conditions and duration of service also depended on location. Generally, the less-healthful living areas, such as the islands of the Caribbean, offered shorter contractual periods of work than did the mainland colonies. Skilled and literate workers also obtained shorter contracts, as a rule. Overall, it was a highly competitive labor market system steeped in rational conduct.

Immigrants from continental Europe, mainly Germans, usually came as redemptioners6, immigrants brought over on credit provided by ship captains. Sometimes the redemptioners prepaid a portion of the costs of passage. After arrival, they were allowed a short period of time to repay the captain, either by borrowing from a relative or a friend or by self-contracting for their services. Because they usually arrived with no ready contacts and typically could not speak English, the contract period for full cost of passage was sometimes longer than for indentures, up to seven years.

As the decades passed, the percentage of European immigrants arriving as indentured servants or redemptioners declined. By the early nineteenth century, the market for indentures had largely disappeared, done in by economic forces7 rather than legislation. Alternative sources of financing largely from residents in the United States paying for their relatives?passage from the Old World, were the main cause of this market's disappearance.