English Bankrupts

 
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A brief look at the etymology of the language of bankruptcy might be a start.

Louis Levinthal said ‘for the historian, the etymology and derivation of the word "bankrupt" must be of some value’, and attempts at definition have their own history. Sir Edward Coke wrestled with bankruptcy in the seventeenth century, reflecting that:


 banque in the French is mensa, and a banquer or exchanger is mensarius, and route is a sign or mark; as we say, a cart rout is the sign or mark where the cart hath gone; metaphorically, it is taken from him that hath wasted his estate and removed his banque, so as there is left but a mention thereof. Some say it should be derived from banque and rompue, as he that hath broken his banque or state.[1]

 Levinthal adds that: ‘Mr. Justice Heath says that the word comes from the Italian banco rotto, but it appears rather to be immediately formed from the Latin bancus ruptus.’[2]  Levinthal continues:

 It is interesting to find that the first time the word is used in English legislation, it is not applied to the agent or person, but to the act or thing, as in the title to the Statute 34 & 35 Henry VIII: "An act against such persons as do make bankrupt." It is of further interest to note that, in the pleadings and the commission in bankruptcy, "decoctor" was the word used in bankruptcy proceedings, until the statute of 4 George II, c. 26 (1730).[3]

 Early instances of the word ‘Bankrupt’ show that it enters the English language as a noun in the sixteenth century. As Justice Heath suggests the word comes from the Italian banco rotto, literally broken bench, meaning failed business. This was a reference to medieval banking and trading practices that operated from benches at trade fairs. The Anglicization of the word is most likely to have come from the French adaption banqueroute. The early employment of ‘bankrupt’ was in a description of a type of behaviour, and it was used thus in the early statuteAn Act against suche parsons as do make bankrupt’.[4] So the term neither referred to a state nor a person. In the first half of the sixteenth century several written forms coexisted: banke rota (1539); bankrupt (1543, as in the Act of Henry VIII above); bankeroute (1564). Variations in spelling continued into the seventeenth century before the form ‘bankrupt’ became the dominant one. By the second half of the seventeenth century ‘bankrupt’ was used less to point to an act, and more to denote a type of business failure. We can see this in 1664 withTrade Strengthned, Encreased, and many Bankrouts prevented’[5], or in 1684 with ‘Empowered by the Commissioners of Bankrupt’.[6]  However, we do not yet find business failure described as ‘bankruptcy’.

 In the sixteenth century ‘bankrupt’ also came to denote a particular type of person. The popular belief was that such a person had run up debts with extravagant living, and then sought not to pay his creditors. For example a 1533 use: ‘Suche bancke rouptes ... which whan they haue wasted and missespent their own, woulde than be very faine ... robbe spirituall and temporall to’.[7]  A use from 1580: ‘One that hath riotously wasted his substance, a banqueroute’.[8] Or rather pithily in a 1604 book of reference: ‘Bankerupt, bankerout, waster’.[9]  This use of ‘bankrupt’ with its popular meaning continued well into the eighteenth century. However, at the same time ‘bankrupt’ to denote a person who had displayed certain business and financial behaviours was coming into use in legal contexts. Blackstone’s description was ‘A trader who secretes himself, or does certain other acts tending to defraud his creditors’.[10] Arguably this does not sound very dissimilar to the uses cited earlier. However, the crucial difference is in the inclusion of ‘acts’ in the use. Later as both attitudes and law changed ‘bankrupt’ was still understood to be a person that committed certain ‘acts’ which had consequences in law, but the intention to defraud was not assumed as it had been previously.

 In 1707 it is possible to see indications of the emergence of modern uses of ‘bankrupt’, for example the London Gazette lists ‘A Commission of Bankrupt being awarded against John Oliver ... and he being declared a Bankrupt’.[11]  The term ‘bankruptcy’ is still not yet used to identify the legal state, rather ‘bankrupt’ is used to identify the legal state and to denote the person. By the late sixteenth century we begin to find instances of the adjective ‘bankrupt’ being used to describe a person’s legal status or credit-worthiness. For example in 1580 ‘He is banqueroute’[12], and in 1566 ‘For farder Credit off your Worde, you will stande (I feare) for banckeroute’ [13], or in 1592 ‘To make that Nobody bankrout, make him flie His Country, and be never heard of more’,[14] and in 1631 ‘A bankrupt Tenant ... That flyes by night from an unprofitable Farme’.[15] 

 In the sixteenth century a number of short-lived nouns to describe the legal state were in circulation, for example ‘bankrupting’, ‘bankruptism’, ‘bankrupture’, ‘bankruptship’.   However, it is little surprising that ‘bankruptcy’, with a form which is closely analogous to ‘insolvency’, emerged the dominant term at the beginning of the eighteenth century. In the eighteenth century we begin to encounter ‘bankruptcy’ being used much as we might use it today. ‘That most dreadful of all human Conditions, the Case of Bankruptcy’ can be found in The Spectator in 1712.[16] We understand Adam Smith when in 1776 he states ‘Bankruptcies are most frequent in the most hazardous trades’.[17] 


[1] Sir Edward Coke in 4 Inst. 277; 2 Bl. Cor. 472, n. in Louis Edward Levinthal, ‘The Early History of English Bankruptcy’, University of Pennsylvania Law Review and American Law Register, Vol. 67, No. 1(Jan., 1919), 1-20, p. 1.

[2] Judine v. Da Cossen, I New Reports 234 (Eng. I805). in Louis Edward Levinthal, ‘The Early History of English Bankruptcy’, University of Pennsylvania Law Review and American Law Register, Vol. 67, No. 1(Jan., 1919), 1-20, p. 1.

[3] Louis Edward Levinthal, ‘The Early History of English Bankruptcy’, University of Pennsylvania Law Review and American Law Register, Vol. 67, No. 1(Jan., 1919), 1-20, pp. 2 - 3.

[4] 1543   Act 34 Hen. VIII iv. (title).

[5] 1664   B. Gerbier Counsel to Builders (new ed.) i. sig. d6v in OED, second edition, 1989; online version November 2010.

[6] 1684   London Gaz. No. 1980/4 in OED, second edition, 1989; online version November 2010.

[7] 1533   T. More Apol. xxi, in Wks. 881/2 in OED, second edition, 1989; online version November 2010.

[8] 1580   J. Baret Aluearie (rev. ed.) B 140 in OED, second edition, 1989; online version November 2010.

[9] 1604   R. Cawdrey Table Alphabet in OED, second edition, 1989; online version November 2010.

[10] Blackstone in OED, second edition, 1989; online version November 2010.

[11] 1707   London Gaz. No. 4335/4 in OED, second edition, 1989; online version November 2010.

[12] 1580   J. Baret Aluearie (rev. ed.) B 139 in OED, second edition, 1989; online version November 2010.

[13] 1566   T. Stapleton Returne Vntruthes Jewelles Replie in OED, second edition, 1989; online version November 2010.

[14] 1592   No-body, & Some-body (1878) 283 in OED, second edition, 1989; online version November 2010.

[15] 1631   R. Knevet Rhodon & Iris ii. iii. sig. D3v in OED, second edition, 1989; online version November 2010.

[16] 1712   R. Steele Spectator No. 428. ⁋2 in OED, second edition, 1989; online version November 2010.

[17] 1776   A. Smith Inq. Wealth of Nations I. i. x. 136 in OED, second edition, 1989; online version November 2010.

Rembrandt, a bankrupt?

Rembrandt Harmenszoon van Rijn was, by comparison to English interpretations, a kind of bankrupt.  Art historian and archaeologist Paul Crenshaw built a sociohistorical narrative around a bankruptcy in his 2006 monograph Rembrandt’s Bankruptcy: The Artist, His Patrons, and the Art Market in Seventeenth Century Netherlands. From it we learn that: 

On 14 July 1656, Rembrandt applied to the High Court in The Hague for cessio bonorum, a type of bankruptcy in which the insolvent ceded his assets to his creditors with the condition that they could make no further claims on him.[1]

 Crenshaw does not approach accounts of debt and bankruptcy in quite the way that most economic, business, or legal historians do. The account is refreshing, not just because of the high-profile subject, but also because it reveals at least one of the human experiences that will inevitably have accompanied all personal insolvencies. The work does not attempt to embark on wider enquiry, and the contextualisation provided by the first two chapters is very tightly written around Rembrandt’s circumstances and milieu. However, in terms of turning the spotlight on bankruptcy through the experience of an individual, Crenshaw pulls all the causal strands together. Chapter three examines the dangerous interaction between Rembrandt’s flawed business practices and chaotic personal life against a backdrop of war and problems in the wider economy.[2] Not just for Rembrandt in the mid-seventeenth century, but for many others trading well into the nineteenth century, this cocktail of factors would be their undoing. The archival sources examined in chapters four to six serve to penetrate the nitty-gritty of an individual’s mismanagement of their personal circumstances, their spending, and their business relationships during their relentless slide into insolvency.[3] 

Despite the value of this work in illuminating the personal experience of bankruptcy, it is arguably biography before it is history, but one that uses the bankruptcy as an organisational device to revise existing accounts of the subject’s life. Crenshaw acknowledges that he is not the first historian to be drawn to the financial side of Rembrandt’s life. He makes the point that the bankruptcy had been ‘a focal point in the construction of the artist’s character, in the assessment of his career’ and ‘a barometer of Rembrandt’s critical fortune’.[4] Crenshaw sees bankruptcy, not as a mere financial disaster, but as an exterior manifestation of crisis in the individual. However, the kind of questions that Crenshaw asks might equally be applied to any individual whose enterprise and circumstances reach breaking point: 

‘What got Rembrandt into this predicament? What were the options available to him at each stage? What were the motivations of his creditors? What was the effect on his public reputation?[5] 

Importantly what Crenshaw does with this study is put Rembrandt at the centre of his business failure, rather than as simply a victim of extraneous historical factors. The book is one of the few works on bankruptcy that is primarily preoccupied with the agency of individuals, in this case a great artist, in their own demise. Crenshaw says of Rembrandt’s bankruptcy that it was ‘a product of deliberate choices he made over the course of his career in relation to available, and for the most part commonplace, alternatives’.[6] 

Rather oddly in a place that is supposed to be about English bankrupts, I have brought up a continental one. My point in doing this is simply to demonstrate that when a bankrupt is famous enough, their story as a bankrupt gets told. It is also a good way to learn about what might otherwise threaten to be a dull subject. My real interest is in the stories of the relatively ordinary and forgotten people who became bankrupts, but a few accounts and analyses of more notable subjects can help to illuminate the experience of the majority. It can work the other way too.



[1] Paul Crenshaw, Rembrandt’s Bankruptcy: The Artist, His Patrons, and the Art Market in Seventeenth Century Netherlands (Cambridge, 2006), p. 69.

[2] Ibid., p. 3.

[3] Ibid., p. 3.

[4] Ibid., p. 2.

[5] Ibid., p. 14.

[6] Ibid., p. 15.