The New Student's Reference Work/Peonage

Pe′onage, a system of servitude common in Mexico and some Spanish-American states. By the Spanish colonial system the peon in debt to his employer was bound to labor for him until the debt was paid. It is claimed that under this system employers often contrived to keep their laborers in continual servitude by advancing them money for needless expenditures or selling them goods on credit and at high prices. Peonage in the territory of New Mexico was abolished by act of Congress in 1867. It has also been abolished in the Argentine Republic and some other South American countries.