MANN, Bruce H. Republic of Debtors: Bankruptcy in the Age of American Independence. Cambridge, MA: Harvard University Press, 2002. 344p. Resenha de: BRILEY, Ron. Canadian Social Studies, v.38, n.3, p., 2004.
In Republic of Debtors, Bruce H. Mann, professor of law and history at the University of Pennsylvania, offers an informative account of the role played by economic insolvency in the creation of the American republic. Nonetheless, most students at the secondary level will struggle with Mann’s prose grounded in economic analysis. Teachers of American history, however, would do well to consult this volume and incorporate Mann’s research into the historical narrative which all too often tends to uncritically celebrate the unfolding of American economic growth and prosperity.
In the midst of a major recession in which the economic gap between rich and poor continues to grow in the United States, it is worth recalling that these issues of economic and social inequality were present at the inception of the American republic. Americans who struggle under the burden of consumer credit card debt, while bemoaning the legal advantages awarded to corporate debt, will discover from reading Mann’s volume that such conditions are hardly new to American capitalism. Indeed, Mann’s attention to issues of class is crucial, for this is a topic which draws scant coverage in textbooks.
Mann argues that debt in the English colonies of North America was considered a moral issue and the failure to honor a debt constituted a character flaw. This situation, however, began to change in the mid-seventeenth century with the expansion of commercial capital activity. Yet, the devastation of the Seven Years War and the tightening of British mercantile regulations over the colonies resulted in an economic downturn, rendering many colonial businessmen and speculators unable to honor their financial obligations. Debtors called for relief, and insolvency was increasingly perceived as an economic failure, often due to market forces over which the individual exercised little control, rather than a moral lapse.
Essential to Mann’s argument is that this evolving attitudinal shift regarding insolvency extended to commercial rather than consumer debt. Thus, Mann asserts that some colonial legislatures began to experiment with limited bankruptcy laws. Also, many began to question whether imprisonment for debt was a proper remedy for merchants who had fallen upon hard times. Reformers complained that in the two major debtors’ prisons, the New Gaol in New York City and Philadelphia’s Prime Street Jail, respectable middle class businessmen and their families were often incarcerated with common criminals.
Appeals for commercial debt relief increased following the American Revolution and the post war depression which disrupted traditional colonial trading relationships. The uncertain financial times led to the imprisonment of such prominent speculators as William Morris, William Duer, and John Pintard. The ensuing social unrest culminated in Shays’s Rebellion and the belief that a stronger central government was necessary to protect property and maintain order. Accordingly, the Constitutional Convention of 1789 provided the national government with the power to create bankruptcy legislation.
During the 1790s popular perceptions regarding debt continued to evolve, and Mann devotes considerable space to newspapers, pamphlets, and reform journals in which debt was perceived as a threat to the independence of the new republic. Thus, Virginia planters complained that their British creditors were attempting to reduce them to the status of dependent slavery. The irony of such rhetoric, however, was apparently not recognized by the slave-owning planters. Some commercial debtors attempted to escape the reach of creditors by moving to the west, where they were able to reestablish themselves as entrepreneurs. Others were not as fortunate, ending up in the New Gaol where Morris, and others of his social background, attempted to maintain their status by orchestrating an elaborate self-governing procedure for the so-called Middle Hall of the New Gaol.
The debate over commercial debt in the new republic culminated in the Bankruptcy Act of 1800. Commercial debtors rejoiced in the passage of a law which, according to Mann, extended only to merchants, bankers, brokers, factors, underwriters, and marine insurers, who owed a minimum of $1,000 and who had committed one or more acts of bankruptcy (p. 222). Despite the class nature of this legislation and the fact that the bankruptcy process could not be implemented without the approval of creditors, the Bankruptcy Act of 1800 was unpopular with creditors. Accordingly, in 1803 the law was repealed, and a permanent piece of bankruptcy legislation was not enacted until 1898. While creditors continued to express some discomfort with debt relief for all social classes, Mann’s main point is that the Bankruptcy Act of 1800 represented a national statement of the ‘principle’ that release from debts was a boon reserved for capitalistic entrepreneurs, while simpler debtors should, by implication, remember the sanctity of their obligations (p. 256).
Mann concludes that the American legal and economic system continues to grapple with these issues of dependence and independence. Students and teachers of American history should pay greater attention to the class origins of this debate which is well outlined in Mann’s volume. The promise of equal economic opportunity in the United States remains an elusive goal.
Ron Briley – Sandia Preparatory School. Albuquerque, New Mexico, USA.