Title: Republic of Debtors: Bankruptcy in the Age of American Independence
Author: Bruce H. Mann
Year of Publication: 2002
Thesis:
In an environment where specie was scarce, Mann demonstrates how confidence in others' debt served a key role in the economy. As commercial ventures increased, people increasingly shifted from informal means of ensuring debts were paid to more formal means, such as bills of exchange and mortgages in order to secure those debts. One's reputation served as key in these exchanges. Bankruptcy, ultimately, was the domain of those who had accumulated large enough debts (usually large commercial interests) to allow them a way to negotiate their debt, where insolvency was the domain of people without means to repay the debt. Mann highlights the ubiquity of debt for rich and poor, but the uneven ways people were able to manage it. A major shift in thinking was one of a failing based in religious thinking to one of secular thinking, though the moral component has never faded away completely (see quote, p.5 and also 254). Sentiments against it were based in similar anti-Federalist thinking, which explains its short-lived nature heading into the 1800s.
Time: 1750-1800
Geography: American Colonies
Organization:
Acknowledgments
Introduction
1. Debtors and Creditors
2. The Law of Failure
3. Imprisoned Debtors in the Early Republic
4. The Imagery of Insolvency
5. A Shadow Republic
6. The Politics of Insolvency
7. The Faces of Bankruptcy
Conclusion
Notes
Index
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"keeping close." (27) this is an interesting dynamic where people were not jailed, but if they left their homes their creditors could take action against them. Creditors were not allowed to bang through the door, but they could find other ways, so it severely limited the means by which an indebted person could pay back the debt (some forced to do business out of their window, etc.)
honor - seen as less an obligation of the debtor but of the creditor. see pp.260-261
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Quotes:
"When Congress, in response, considered bankruptcy legislation that would relieve only large commercial debtors, the resulting debate went to the heart of what the character of the new nation should be." (4)
"As we shall see, the redefinition of insolvency from sin to risk, from moral failure to economic failure, was not complete by the end of the eighteenth century. Nor is it yet. Although weakened, Moody’s moral economy of debt still shaped attitudes toward insolvency in the Revolutionary era, whether as an ideal to be guided by or as a hindrance to be rejected. Its continued influence assured that insolvency could never be simply an economic issue but rather one with religious, moral, social, political, legal, and ideological dimensions as well. In the chapters that follow we will observe debtors, creditors, lawyers, judges, legislators, ministers, writers, and others struggling with how the law should address the inability of men and women to repay their debts, whether through insolvency, bankruptcy, or imprisonment. At bottom, they were struggling with the place of failure in the new republic." (5)
"The traditional restriction of bankruptcy to elite mer- chants hinted at aristocratic privilege and so made bankruptcy untenable in the new democratic politics that erupted from the election of 1800." (258)
"These promises illustrate how completely the moral economy of debt had lost its religious underpinnings by the end of the eighteenth century, at least for commercial debtors. The redefinition of insolvency from moral failure to economic risk did not eliminate debtors’ legal obligations to repay their debts. Rather, it secularized the foundations of the moral obligation to repay, which now rested on “honor” and “character,” and changed the general understanding of how the law should treat failure." (260)
"Then, when the foundational belief of free Americans was in independence, whatever weakened independence reflected upon the re- public itself. Hence the unease over failure and the difficulty of creating a legal framework for something so redolent of dependence. The solution eludes us still." (263)
Notes: