Republic of Debtors: Bankruptcy in the Age of American Independence
by Bruce H. Mann
Harvard University Press, 344 pp., $29.95
A Free Nation Deep in Debt: The Financial Roots of Democracy
by James Macdonald
Farrar, Straus and Giroux, 564 pp., $30.00
Perhaps it’s the total collapse of major corporations like Enron, WorldCom, and Global Crossing, or the over 60,000 companies like US Airways and United Airlines that have sought bankruptcy protection in the past two years, or important countries like Argentina defaulting on their debt, or the record numbers of people using bankruptcy to wipe out their mounting personal debts. But whatever the reason, there is an increased interest everywhere in the problems of debt and bankruptcy—an interest reflected in the publication of these two history books.
Each of these books deals with debt, one, Bruce H. Mann’s Republic of Debtors, with private or individual debt in eighteenth-century America; the other, James Macdonald’s A Free Nation Deep in Debt, with public or governmental debt throughout Western history. Although the two books are very different in focus and scale, they both closely connect credit, or the ability to borrow money and pay it back, with freedom.
In the case of Mann’s book, which concentrates on eighteenth-century America, individual or personal debt could mean both figuratively and literally the deprivation of freedom. Indeed, the loss of freedom, as Mann, who is professor of law and history at the University of Pennsylvania, points out, was very much part of the imagery of insolvency. Not only did the eighteenth-century Virginia planters identify their indebtedness to British merchants with slavery, but imprisoned debtors in the North eventually used the same image of slavery to describe their plight. Although debtors were, of course, never slaves (though debtors could be placed in servitude to their creditors for a number of years to work off their debts), their imprisonment did take away their freedom.
In eighteenth-century America, as earlier, debtors who could not meet their obligations were usually sent to prison. Indeed, in the pre-modern era a court judgment of insolvency, or the inability to pay one’s debts, was really the only judgment for which imprisonment was the punishment. Traditionally accused criminals were held in jail only until they went to trial; then if convicted they were fined, whipped, mutilated, or executed, but not incarcerated. But actions for debt could send the debtor to prison where he languished until he or his friends and relatives could come up with the money to pay his creditors.
Before the Revolution in America the debtors’ prison could often be the same jail that held criminals awaiting trial or punishment, or else it could be a room in the sheriff’s office or some outbuilding. Indeed, mingling debtors with criminals became a major complaint of reformers in the eighteenth century. Even after the debtors were separated from criminals in the years following the Revolution, conditions in the debtors’ prisons remained appalling. Unlike criminals, debtors were expected to pay for their own food, heat, and other supplies, and if they could not, they went hungry and cold unless some humanitarian group came to their aid.
Of course, sending their debtors to prison was usually the last resort …