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The Observatory · Case 51 · Labor and land · 1825 to 2023

Private prisons and the history of prison labor (United States, 1825 to 2023)

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2. The article

American states leased out prisoners to private firms before and after the Civil War, Alabama did so until 1928, and today private companies run prisons holding about 7 percent of people in state and federal prison; these are different systems and the record on payments is thin.

The record

Four things that are not the same

Public talk often merges them. This case keeps them apart.

| System | Who runs the prisoners | Who is paid | Where it appears here | |---|---|---| | Convict leasing | A private lessee houses, guards and works prisoners | The lessee pays the state (or county) a set amount for labor | Kentucky, Texas, Tennessee, Alabama, 1825 to 1928 | | State-run prison labor | The state keeps custody and runs or contracts the work | State sells goods or services; "state-use" and "public account" models | Alabama state-run mines after 1912 | | Modern private prison operation | A company manages a prison under contract | The government pays the company to run the facility | Corrections Corporation of America, founded 1983 | | Immigration detention contracts | Federal immigration agencies contract for detention beds | Government pays contractors or local governments | ICE detention, 2022 |

The 1923 U.S. Bureau of Labor Statistics report, Bulletin 372, defines the terms. Under the "lease system" the lessee "feeds, clothes, houses, and guards" the convict, keeps him at work, and pays the state a set amount. Under the "contract system" the state still houses and guards and a contractor pays per convict. It also names the "piece-price," "public-account" and "state-use" systems. The bulletin found no leasing in any of the 104 state and federal institutions it surveyed in 1923, compared with 26 percent of convicts at productive labor in 1885, but it excluded county and city institutions. (BLS Bulletin 372, Convict Labor in 1923, FRASER; opened; first 100,000 characters read)

The Thirteenth Amendment clause

• Section 1, ratified December 6, 1865: "Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted" shall exist in the United States. (National Archives, 13th Amendment; opened)
• Leasing of prisoners predates this text. Kentucky leased its penitentiary around 1825. The clause did not create leasing, but it kept punishment for crime outside the ban on involuntary servitude. A review of Matthew Mancini's book, which the review says documents leasing in every Confederate state except Virginia, argues that the clause "enabled" the postwar system (EH.Net review; opened, secondary).

Before the Civil War: Kentucky

• Kentucky's penitentiary opened in 1798. A National Criminal Justice Reference Service document says Kentucky first leased it "around 1825" to a private businessman, who paid the state a share of profits from prison labor and made about $40,000 over nine years (1825 to 1834). It says private businesses then controlled the penitentiary for about 55 years. (NCJRS document 111551; opened)
• The African American Intellectual History Society article gives "as early as 1825" and notes that Edward Ayers dates it 1828. (AAIHS; opened)
• An earlier outside draft cited a justice-department catalog abstract giving about 1824. We did not find that abstract.

| Item | Figure A | Figure B | Notes | |---|---|---| | Kentucky first lease | 1825 (NCJRS 111551; AAIHS) | 1828 (Ayers, as cited in AAIHS); 1824 (outside draft, not found) | Disputed; no contract text opened |

After the Civil War: Alabama, the long case

• Alabama's Encyclopedia says that in 1875, after a fiscal crisis, the state began leasing individual prisoners to coal mines, farms and lumberyards for monthly payments; it reports a first-year profit "between $11,000 and $12,000." Counties soon ran their own leases. In 1883 most state prisoners went to three firms: Pratt Coal and Iron, Tennessee Coal, Iron and Railroad (TCI), and Sloss Iron and Steel. In 1888 TCI received a ten-year contract for all able-bodied state prisoners at $9 to $18.50 per prisoner per month, depending on ability. (Encyclopedia of Alabama, Convict-Lease System; opened)
• The Library of Congress's Historic American Engineering Record (Pratt mines) says private companies paid state and county governments a set amount per convict each month, built the prison facilities, clothed and fed the men, and required ten-hour days and a quota. It reports a 1888 contract covering 500 to 600 convicts and 906 state convicts at the Pratt mines in August 1906. It also says mortality fell from 18 percent in 1881 to 2 percent in 1884 after sanitation changes. (HAER, Pratt Mines; opened)
• Deaths: the Encyclopedia reports annual death rates of 4 to 5 percent among state prisoners, and that in 1896, 233 of 1,710 state mine prisoners and 181 of 745 county mine prisoners had died over the previous two years (by our arithmetic, about 13.6 and 24.3 percent over two years). It reports that more than 95 percent of county prisoners and 90 percent of state prisoners were African American. (Encyclopedia of Alabama; opened)
• Alabama Archives compilation, 1896 state convict population: 87.5 percent Black, against 44.8 percent of state residents (Biennial Report of the Inspectors of Convicts). The compilation says these are different populations; it does not establish why any person was charged. (ADAH and Legislative Services compilation; opened)
• The same compilation covers state prisoners only: it "does not include revenue from lease of county prisoners." It reports, for 1918, a Convict Department transfer to the State Treasury of $2,115,019, equal to 40.4 percent of the General Fund ($5,230,537) and 25.0 percent of all funds ($8,450,857). Its share-of-revenue chart has a 0 to 30 percent axis, and its notes say the share was 2 to 7 percent from the 1870s to 1895. (ADAH compilation; opened)

The "73 percent" claim

A review of Mancini's book says leasing supplied 10 percent of Alabama state revenue in 1883 and 73 percent in 1898. The Encyclopedia of Alabama gives no such percentage. The state archive compilation's chart axis stops at 30 percent for 1896 to 1929 and gives no 1898 value. We found no primary source (Treasurer's report) for 73 percent and do not use it as fact.

When leasing ended: dates conflict

| Place | Date | Source | Note | |---|---|---| | Alabama, TCI | Ended 1911 or 1912 | U.S. Steel statement of July 16, 2001 (U.S. Steel bought TCI in November 1907 and "inherited this practice"); Encyclopedia of Alabama (TCI announced in 1912 it would use free workers, state then ran the prison mines) | Company statement is retrospective | | Alabama, TCI at Pratt mines | "until 1914" | HAER | Conflicts with 1911 or 1912 | | Alabama, all leasing | July 1, 1928 | Mancini review (EH.Net); Encyclopedia of Alabama: "1928," last state | Scope: state and county; DOC's 1923 act and 1893 and 1895 laws not opened | | Texas | Leases ended by end of 1912; all prisoners under exclusive state control by January 1, 1914 | Texas State Historical Association | Termination of leases and full state control are two separate dates | | Tennessee | 1871 to 1896 | Mancini review (EH.Net) | Review only; TCI held an exclusive lease in 1884 per outside lead, not opened | | Kentucky | Lessee system gave way to a warden system in the 1880s | AAIHS | | | Florida | About five years before Alabama | Encyclopedia of Alabama | One-line mention |

Sources: U.S. Steel statement, 2001; Texas State Historical Association; EH.Net review of One Dies, Get Another. All opened. The Encyclopedia says the 1911 Banner mine explosion killed 123 African American county prisoners, while a related snippet on the same page says 128 miners died; we show both without choosing.

Payments: what the records show and do not show

• The Alabama Archives holds "Convict Lessee Payment Ledgers" (finding aid v34781): SG016417 (1889 to 1892, mainly TCI, also Milner, Caldwell, and Flowers Co. and one named individual lessee), SG016418 (1894 to 1897, TCI and Milner, Caldwell, and Flowers), and SG016419 to SG016421 (1907 to 1920, various lumber and turpentine companies). The finding aid "does not give any" payment amounts, and folder contents are blank. (ADAH finding aid v34781; opened)
• We found no itemized payment in any source we opened. The 1888 rate ($9 to $18.50 a month) is a contract rate reported by the Encyclopedia. The ledgers exist; the entries have not been read by us. Statements that a named company paid a given amount are allegations or unverified, not findings.
• The 1910 State Auditor invoice to a lumber company named in an outside lead (an amount owed, not a receipt) and the 1914 Banner mine daily reports (385 incarcerated and 84 free workers on February 19, 1914) were not opened; they are workforce and billing records, not payment proof.

Modern private prisons

• Corrections Corporation of America (now CoreCivic) was founded January 28, 1983, in Nashville, Tennessee. Its first contracts, per Wikipedia, were in 1984: with the Immigration and Naturalization Service (a converted motel in Houston) and a juvenile facility in Memphis. We did not confirm a 1984 Tennessee adult-prison contract. (Wikipedia, CoreCivic; opened, secondary)
• Counts from the Bureau of Justice Statistics (BJS), prisoners held in private prisons at year end:

Total prison population: 1,230,143 in 2022; 1,254,224 in 2023. In the 2023 report, federal "private" counts include people in privately operated halfway houses (8,000) or on home confinement (5,400). (BJS, Prisoners in 2022, statistical tables; BJS, Prisoners in 2023, statistical tables; opened) The 2022 report text says 13 percent of all prisoners were in privately operated prisons (91,300) or local jails (65,600), so that 13 percent is not the private-prison share alone (Courthouse News copy of the BJS tables; opened).

| Item | Figure A | Figure B | Notes | |---|---|---| | Private prison population, 2022 | 91,320, 7.4% (BJS) | 90,873, "about 8%" (The Sentencing Project, Feb. 2024) | The group says it used BJS data and Connecticut figures; BJS is preferred | | 2000 comparison | 85,027, about 8% (Sentencing Project) | not checked against BJS | Secondary only |

• The Sentencing Project (secondary, advocacy) reports that in 2022 Montana held 49 percent of its prisoners in private facilities, Hawaii 39, New Mexico 31, Arizona 29 and Tennessee 29; that 23 states used none; and that about 28,289 people were held daily in immigration detention, an estimated 79 percent in privately run facilities. It credits a Biden executive order with phasing out Bureau of Prisons private beds. We did not open the order or any later change. (The Sentencing Project, Private Prisons in the United States; opened)
• ICE's own page says detention facilities may be owned and operated by ICE, a state or local entity, or a contractor; it gives no counts on that page. (ICE, Detention Management; opened)

What this case shows

1. A constitutional exception sat in plain text. The clause allowing involuntary servitude "as a punishment for crime" was in the 1865 amendment that voters' representatives ratified. Whether people understood how it would be used by states and counties is not in the record we opened. What the record shows is that the practice continued for decades after 1865. (National Archives)
2. Who was affected is documented; why is not. In Alabama in 1896 the state's convict population was 87.5 percent Black against 44.8 percent of the state. The compilation itself warns these are different populations. The numbers show who was working in the mines. They do not show the reason any individual was charged. (ADAH compilation)
3. The public could see money, not conditions. Annual transfers to the Treasury ($2,115,019 in 1918) were reported, but we found no accessible record of payments by company and no direct view of mortality in the legislature's budget lines. The ledgers sit in an archive; the finding aid has no amounts. The record exists for the public to open but has not been read here. (ADAH)
4. Ending leasing took decades and moved in steps. Texas ended its leases by 1912 with full state control by 1914; Alabama's TCI ended between 1911 and 1914 by different accounts; Alabama as a whole ended in 1928. Reform came after investigations and in some places after newspaper reports (Texas, 1908), not from one law. (TSHA; Encyclopedia of Alabama)
5. Today's question is smaller than its reputation, and different. About 7 percent of people in state and federal prison were in private prisons in 2023, and the share fell from 2021. Immigration detention is a separate system with different contractors and a much higher estimated private share. Treating the three as one makes it harder to see which rules apply to which. (BJS; Sentencing Project)

The strongest objections, and our answers

1. Objection: Leasing was a cost-saving measure for broke states, not a plot. The Encyclopedia says leasing began in 1875 after a fiscal crisis and made a profit for the state. Mitigation: We report it. We make no claim about intent. The record shows mortality of 4 to 5 percent a year among state prisoners, and higher in county leases, in the same period.
2. Objection: Modern private prisons are not convict leasing. Mitigation: Agreed. The table separates them. Modern operators are paid to run facilities under government contracts and oversight; lessees took prisoners' labor for payment to the state. We do not equate them.
3. Objection: Companies named in the ledgers did nothing illegal. Mitigation: Leasing was legal under state law. The finding aid names counterparties, not wrongdoing. We make no accusation of illegality.
4. Objection: The 73 percent figure is widely repeated. Mitigation: One review of a scholarly book attributes it to that book; we could not find the Treasurer's report or the book's table. The state archive's own compilation uses a 0 to 30 percent axis. We label the figure unverified.
5. Objection: Private prisons hold only about 7 percent of prisoners, so the issue is overblown; or the reverse, that the share hides immigration detention. Mitigation: Both facts are in the record: 7.1 percent in 2023 and an estimated 79 percent private share of ICE detention in 2022 (secondary).

Open questions: what would change our minds

• The payment ledgers (ADAH SG016417 to SG016421) and the 1910 invoice have not been opened. Any payment claim awaits an itemized entry with a page image.
• The 1888 TCI contract, 1883 law and 1923 and 1893 acts were not opened. The Alabama DOC history page could not be fetched (robots restriction).
• The 73 percent figure: needs the 1898 State Treasurer and Convict Inspectors' reports or Mancini's table.
• Kentucky 1825 versus 1828 (and 1824): needs the lease contract or statute.
• The 1911 versus 1912 versus 1914 end of TCI leasing, and whether those dates cover state or county prisoners.
• Louisiana 1844 and California 1851 leases from an outside lead: not opened.
• Georgia and Mississippi end dates: not verified.
• Share of private beds after 2023, the 2025 federal policy on private prison and immigration detention contracts, and ICE counts: not opened.
• Wage, injury and death records for modern private prisons: out of scope here.

Sources

Evidence status and correction history

Key claims

Correction history

Found an error or a better source? We keep every correction on the record with its date and reason. Nothing here is quietly rewritten.

3. Sources and their details

One entry per source in the page's Sources table. "Checked" is the date the page says its sources were checked. A Wayback link and SHA-256 appear only where a snapshot has been recorded.

4. Every link used in the article

1. Review history
   https://michiinstitute.com/members/reviews.html?case=private-prisons
2. BLS Bulletin 372, Convict Labor in 1923, FRASER
   https://fraser.stlouisfed.org/title/convict-labor-1923-4005/fulltext
3. National Archives, 13th Amendment
   https://www.archives.gov/milestone-documents/13th-amendment
4. NCJRS document 111551
   https://www.ojp.gov/pdffiles1/Digitization/111551NCJRS.pdf
5. AAIHS
   https://www.aaihs.org/looking-back-convict-leasing-and-the-trusty-system/
6. Encyclopedia of Alabama, Convict-Lease System
   https://encyclopediaofalabama.org/article/convict-lease-system/
7. HAER, Pratt Mines
   https://tile.loc.gov/storage-services/master/pnp/habshaer/al/al1000/al1048/data/al1048data.pdf
8. ADAH and Legislative Services compilation
   https://alison.legislature.state.al.us/files/pdf/lsa/proposed-constitution/Alabama_Convict_Labor_ADAH_LSA.pdf
9. U.S. Steel statement, 2001
   https://uss.mediaroom.com/index.php?item=111538&s=32722
10. Texas State Historical Association
    https://www.tshaonline.org/handbook/entries/convict-lease-system
11. EH.Net review of One Dies, Get Another
    https://eh.net/book_reviews/one-dies-get-another-convict-leasing-in-the-american-south-1866-1928/
12. ADAH finding aid v34781
    https://archives.alabama.gov/research/finding-aids/v34781.htm
13. Wikipedia, CoreCivic
    https://en.wikipedia.org/wiki/CoreCivic
14. BJS, Prisoners in 2022, statistical tables
    https://bjs.ojp.gov/document/p22st.pdf
15. BJS, Prisoners in 2023, statistical tables
    https://bjs.ojp.gov/document/p23st.pdf
16. The Sentencing Project, Private Prisons in the United States
    https://www.sentencingproject.org/publications/private-prisons-in-the-united-states/
17. ICE, Detention Management
    https://www.ice.gov/detain/detention-management
18. https://bjs.ojp.gov/document/p24st.pdf
    https://bjs.ojp.gov/document/p24st.pdf
19. https://www.doc.state.al.us/History.aspx
    https://www.doc.state.al.us/History.aspx

5. Revision history

First published (earliest change on record): 2026-10-25.

Corrections on the page

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6. How to cite

The Way (Michi Institute). "Private prisons and the history of prison labor (United States, 1825 to 2023)." Case 51, The Observatory. Sources checked 2026-10-25. Packet built 2026-10-28. https://michiinstitute.com/cases/private-prisons.html

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