The Complete English Tradesman (1839 ed.) by Daniel Defoe

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If, then, the contingent nature of trade renders every man liable to
disaster that is engaged in it, it seems strange that tradesmen should
be outrageous and unmerciful to one another when they fall; and yet so
it is, that no creditor is so furious upon an unhappy insolvent
tradesman, as a brother-tradesman of his own class, and who is at least
liable to the same disaster, in the common event of his business.

Nay, I have lived to see--such is the uncertainty of human affairs, and
especially in trade--the furious and outrageous creditor become bankrupt
himself in a few years, or perhaps months after, and begging the same
mercy of others, which he but just before denied to his not more
unfortunate fellow-tradesman, and making the same exclamations at the
cruelty and hard-heartedness of his creditors in refusing to comply with
him, when, at the same time, his own heart must reproach him with his
former conduct; how inexorable he was to all the entreaties and tears of
his miserable neighbour and his distressed family, who begged his
compassion with the lowest submission, who employed friends to solicit
and entreat for them, laying forth their misery in the most lively
expressions, and using all the arguments which the most moving distress
could dictate, but in vain.

The tradesman is certainly wrong in this, as compassion to the miserable
is a debt of charity due from all mankind to their fellow-creatures; and
though the purse-proud tradesman may be able to say he is above the fear
of being in the like circumstances, as some may be, yet, even then, he
might reflect that perhaps there was a time when he was not so, and he
ought to pay that debt of charity, in acknowledgement of the mercy that
has set him above the danger.

And yet, speaking in the ordinary language of men who are subject to
vicissitudes of fortune, where is the man that is sure he shall meet
with no shock? And how have we seen men, who have to-day been immensely
rich, be to-morrow, as it were, reduced to nothing! What examples were
made in this city of such precipitations within the memory of some
living, when the Exchequer shutting up ruined the great bankers of
Lombard Street.[23] To what fell Sir Robert Viner--the great Alderman
Backwell--the three brothers of the name of Forth, of whom King Charles
II. made that severe pun, that '_Three-fourths_ of the city were broke?'

To what have we seen men of prodigious bulk in trade reduced--as Sir
Thomas Cook, Sir Basil Firebrass, Sheppard, Coggs, and innumerable
bankers, money-scriveners, and merchants, who thought themselves as
secure against the shocks of trade, as any men in the world could be?
Not to instance our late South Sea directors, and others, reduced by the
terrible fate of bubbles, whose names I omit because they yet live,
though sinking still under the oppression of their fortunes, and whose
weight I would be far from endeavouring to make heavier.

Why, then, should any tradesman, presuming on his own security, and of
his being out of the reach of disaster, harden his heart against the
miseries and distresses of a fellow-tradesman, who sinks, as it were, by
his side, and refuse to accept his offer of composition; at least, if he
cannot object against the integrity of his representations, and cannot
charge him with fraud and deceit, breaking with a wicked design to cheat
and delude his creditors, and to get money by a pretended breach? I say,
why should any tradesman harden his heart in such a case, and not, with
a generous pity, comply with a reasonable and fair proposal, while it is
to be had?

I do acknowledge, if there is an evident fraud, if he can detect the
bankrupt in any wicked design, if he can prove he has effects sufficient
to pay his debts, and that he only breaks with a purpose to cheat his
creditors, and he conceals a part of his estate, when he seems to offer
a sincere surrender; if this be the case, and it can be made appear to
be so--for in such a case, too, we ought to be very sure of the
fact--then, indeed, no favour is due, and really none ought to be shown.

And, therefore, it was a very righteous clause which was inflicted on
the fraudulent bankrupt, in a late act of Parliament, namely, that in
case he concealed his effects, and that it appeared he had, though upon
his oath, not given in a full account of his estate, but willingly and
knowingly concealed it, or any part of it, with design to defraud his
creditors, he should be put to death as a felon: the reason and justice
of which clause was this, and it was given as the reason of it when the
act was passed in the House of Commons, namely, that the act was made
for the relief of the debtor, as well as of the creditor, and to procure
for him a deliverance on a surrender of his effects; but then it was
made also for the relief of the creditor, too, that he might have as
much of his debt secured to him as possible, and that he should not
discharge the debtor with his estate in his pocket, suffering him to run
away with his (the creditor's) money before his face.

Also it was objected, that the act, without a penalty, would be only an
act to encourage perjury, and would deliver the hard-mouthed knave that
could swear what he pleased, and ruin and reject the modest
conscientious tradesman, that was willing and ready to give up the
utmost farthing to his creditors. On this account the clause was
accepted, and the act passed, which otherwise had been thrown out.

Now, when the poor insolvent has thus surrendered his all, stript
himself entirely upon oath, and that oath taken on the penalty of death
if it be false, there seems to be a kind of justice due to the bankrupt.
He has satisfied the law, and ought to have his liberty given him _as a
prey_, as the text calls it, Jer. xxxix. 18., that he may try the world
once again, and see, if possible, to recover his disasters, and get his
bread; and it is to be spoken in honour of the justice as well as
humanity of that law for delivering bankrupts, that there are more
tradesmen recover themselves in this age upon their second endeavours,
and by setting up again after they have thus failed and been delivered,
than ever were known to do so in ten times the number of years before.

To break, or turn bankrupt, before this, was like a man being taken by
the Turks; he seldom recovered liberty to try his fortune again, but
frequently languished under the tyranny of the commissioners of
bankrupt, or in the Mint, or Friars, or rules of the Fleet, till he
wasted the whole estate, and at length his life, and so his debts were
all paid at once.

Nor was the case of the creditor much better--I mean as far as
respected his debt, for it was very seldom that any considerable
dividend was made; on the other hand, large contributions were called
for before people knew whether it was likely any thing would be made of
the debtor's effects or no, and oftentimes the creditor lost his whole
debt, contribution-money and all; so that while the debtor was kept on
the rack, as above, being held in suspense by the creditors, or by the
commissioners, or both, he spent the creditor's effects, and subsisted
at their expense, till, the estate being wasted, the loss fell heavy on
every side, and generally most on those who were least able to bear it.

By the present state of things, this evil is indeed altered, and the
ruin of the creditor's effects is better prevented; the bankrupt can no
more skulk behind the door of the Mint and Rules, and prevent the
commissioners' inspection; he must come forth, be examined, give in an
account, and surrender himself and effects too, or fly his country, and
be seen here no more; and if he does come in, he must give a full
account upon oath, on the penalty of his neck.

When the effects are thus surrendered, the commissioners' proceedings
are short and summary. The assignees are obliged to make dividends, and
not detain the estate in their own hands, as was the case in former
days, till sometimes they became bankrupts themselves, so that the
creditors are sure now what is put into the hands of the assignees,
shall in due time, and without the usual delay, be fairly divided. On
the other hand, the poor debtor having honestly discharged his part, and
no objection lying against the sincerity of the discovery, has a
certificate granted him, which being allowed by the Lord Chancellor, he
is a clear man, and may begin the world again, as I have said above.

The creditor, being thus satisfied that the debtor has been faithful,
does not answer the end of the act of Parliament, if he declines to
assent to the debtor's certificate; nor can any creditor decline it, but
on principles which no man cares to own--namely, that of malice, and the
highest resentment, which are things a Christian tradesman will not
easily act upon.

But I come now to the other part of the case; and this is supposing a
debtor fails, and the creditors do not think fit to take out a
commission of bankrupt against him, as sometimes is the case, at least,
where they see the offers of the debtor are any thing reasonable: my
advice in such case is (and I speak it from long experience in such
things), that they should always accept the first reasonable proposal of
the debtor; and I am not in this talking on the foot of charity and
mercy to the debtor, but of the real and undoubted interest of the
creditor; nor could I urge it, by such arguments as I shall bring, upon
any other foundation; for, if I speak in behalf of the debtor, I must
argue commiseration to the miserable, compassion and pity of his family,
and a reflection upon the sad changes which human life exposes us all
to, and so persuade the creditor to have pity upon not him only, but
upon all families in distress.

But, I say, I argue now upon a different foundation, and insist that it
is the creditor's true interest, as I hinted before, that if he finds
the debtor inclined to be honest, and he sees reason to believe he makes
the best offer he can, he should accept the first offer, as being
generally the best the debtor can make;[24] and, indeed, if the debtor
be wise as well as honest, he will make it so, and generally it is found
to be so. And there are, indeed, many reasons why the first offers of
the debtor are generally the best, and why no commission of bankrupt
ordinarily raises so much, notwithstanding all its severities, as the
bankrupt offers before it is sued out--not reckoning the time and
expense which, notwithstanding all the new methods, attend such things,
and are inevitable. For example--

When the debtor, first looking into his affairs, sees the necessity
coming upon him of making a stop in trade, and calling his creditors
together, the first thought which by the consequence of the thing comes
to be considered, is, what offers he can make to them to avoid the
having a commission sued out against him, and to which end common
prudence, as well as honest principles, move him to make the best offers
he can. If he be a man of sense, and, according to what I mentioned in
another chapter, has prudently come to a stop in time, before things are
run to extremities, and while he has something left to make an offer of
that may be considerable, he will seldom meet with creditors so weak or
so blind to their own interest not to be willing to end it amicably,
rather than to proceed to a commission. And as this is certainly best
both for the debtor and the creditor, so, as I argued with the debtor,
that he should be wise enough, as well as honest enough, to break
betimes, and that it was infinitely best for his own interest, so I must
add, on the other hand, to the creditor, that it is always his interest
to accept the first offer; and I never knew a commission make more of an
estate, where the debtor has been honest, than he (the debtor) proposed
to give them without it.

It is true, there are cases where the issuing out a commission may be
absolutely necessary. For example--

1. Where the debtor is evidently knavish, and discovers himself to be
so, by endeavours to carry off his effects, or alter the property of the
estate, confessing judgments, or any the usual ways of fraud, which in
such cases are ordinarily practised. Or--

2. Where some creditors, by such judgments, or by attachments of debts,
goods delivered, effects made over, or any other way, have gotten some
of the estate into their hands, or securities belonging to it, whereby
they are in a better state, as to payment, than the rest. Or--

3. Where some people are brought in as creditors, whose debts there is
reason to believe are not real, but who place themselves in the room of
creditors, in order to receive a dividend for the use of the bankrupt,
or some of his family.

In these, and such like cases, a commission is inevitable, and must be
taken out; nor does the man merit to be regarded upon the foot of what I
call compassion and commiseration at all, but ought to be treated like a
_rapparee_,[25] or plunderer, who breaks with a design to make himself
whole by the composition; and as many did formerly, who were beggars
when they broke, be made rich by the breach. It was to provide against
such harpies as these that the act of Parliament was made; and the only
remedy against them is a commission, in which the best thing they can do
for their creditors is to come in and be examined, give in a false
account upon oath, be discovered, convicted of it, and sent to the
gallows, as they deserve.

But I am speaking of honest men, the reverse of such thieves as these,
who being brought into distress by the ordinary calamities of trade, are
willing to do the utmost to satisfy their creditors. When such as these
break in the tradesman's debt, let him consider seriously my advice, and
he shall find--I might say, he shall _always_ find, but I do affirm, he
shall _generally_ find--the first offer the best, and that he will never
lose by accepting it. To refuse it is but pushing the debtor to
extremities, and running out some of the effects to secure the rest.

First, as to collecting in the debts. Supposing the man is honest, and
they can trust him, it is evident no man can make so much of them as the
bankrupt. (1.) He knows the circumstances of the debtors, and how best
to manage them; he knows who he may best push at, and who best forbear.
(2.) He can do it with the least charge; the commissioners or assignees
must employ other people, such as attorneys, solicitors, &c., and they
are paid dear. The bankrupt sits at home, and by letters into the
country, or by visiting them, if in town, can make up every account,
answer every objection, judge of every scruple, and, in a word, with
ease, compared to what others must do, brings them to comply.

Next, as to selling off a stock of goods. The bankrupt keeps open the
shop, disperses or disposes of the goods with advantage; whereas the
commission brings all to a sale, or an outcry, or an appraisement, and
all sinks the value of the stock; so that the bankrupt can certainly
make more of the stock than any other person (always provided he is
honest, as I said before), and much more than the creditors can do.

For these reasons, and many others, the bankrupt is able to make a
better offer upon his estate than the creditors can expect to raise any
other way; and therefore it is their interest always to take the first
offer, if they are satisfied there is no fraud in it, and that the man
has offered any thing near the extent of what he has left in the world
to offer from.

If, then, it be the tradesman's interest to accept of the offer made,
there needs no stronger argument to be used with him for the doing it;
and nothing is more surprising to me than to see tradesmen, the hardest
to come into such compositions, and to push on severities against other
tradesmen, as if they were out of the reach of the shocks of fortune
themselves, or that it was impossible for them ever to stand in need of
the same mercy--the contrary to which I have often seen.

To what purpose should tradesmen push things to extremities against
tradesmen, if nothing is to be gotten by it, and if the insolvent
tradesman will take proper measures to convince the creditor that his
intentions are honest? The law was made for offenders; there needs no
law for innocent men: commissions are granted to manage knaves, and
hamper and entangle cunning and designing rogues, who seek to raise
fortunes out of their creditors' estates, and exalt themselves by their
own downfall; they are not designed against honest men, neither, indeed,
is there any need of them for such.

Let no man mistake this part, therefore, and think that I am moving
tradesmen to be easy and compassionate to rogues and cheats: I am far
from it, and have given sufficient testimony of the contrary; having, I
assure you, been the only person who actually formed, drew up, and first
proposed that very cause to the House of Commons, which made it felony
to the bankrupt to give in a false account. It cannot, therefore, be
suggested, without manifest injustice, that I would with one breath
prompt creditors to be easy to rogues, and to cheating fraudulent
bankrupts, and with another make a proposal to have them hanged.

But I move the creditor, on account of his own interest, always to take
the first offer, if he sees no palpable fraud in it, or sees no reason
to suspect such fraud; and my reason is good, namely, because I believe,
as I said before, it is generally the best.

I know there is a new method of putting an end to a tradesman's
troubles, by that which was formerly thought the greatest of all
troubles; I mean a fraudulent method, or what they call taking out
friendly statutes; that is, when tradesmen get statutes taken out
against themselves, moved first by some person in kindness to them, and
done at the request of the bankrupt himself. This is generally done
when the circumstances of the debtor are very low, and he has little or
nothing to surrender; and the end is, that the creditors may be obliged
to take what there is, and the man may get a full discharge.

This is, indeed, a vile corruption of a good law, and turning the edge
of the act against the creditor, not against the debtor; and as he has
nothing to surrender, they get little or nothing, and the man is as
effectually discharged as if he had paid twenty shillings in the pound;
and so he is in a condition to set up again, take fresh credit, break
again, and have another commission against him; and so round, as often
as he thinks fit. This, indeed, is a fraud upon the act, and shows that
all human wisdom is imperfect, that the law wants some repairs, and that
it will in time come into consideration again, to be made capable of
disappointing the people that intend to make such use of it.

I think there is also wanting a law against twice breaking, and that all
second commissions should have some penalty upon the bankrupt, and a
third a farther penalty, and if the fourth brought the man to the
gallows, it could not be thought hard; for he that has set up and broke,
and set up again, and broke again, and the like, a third time, I think
merits to be hanged, if he pretends to venture any more.

Most of those crimes against which any laws are published in particular,
and which are not capital, have generally an addition of punishment upon
a repetition of the crime, and so on--a further punishment to a further
repetition. I do not see why it should not be so here; and I doubt not
but it would have a good effect upon tradesmen, to make them cautious,
and to warn them to avoid such scandalous doings as we see daily
practised, breaking three or four, or five times over; and we see
instances of some such while I am writing this very chapter.

To such, therefore, I am so far from moving for any favour, either from
the law, or from their creditors, that I think the only deficiency of
the law at this time is, that it does not reach to inflict a corporal
punishment in such a case, but leaves such insolvents to fare well, in
common with those whose disasters are greater, and who, being honest and
conscientious, merit more favour, but do not often find it.

FOOTNOTES:

[23] [This event took place in 1671, Charles II. finding it necessary to
suspend the national payments for a year.]

[24] [The truth of this continues to be matter of daily observation in
our own times.]

[25] [A name applied, in the seventeenth century, to a certain class of
robbers in Ireland.]

CHAPTER XIV

OF THE UNFORTUNATE TRADESMAN COMPOUNDING WITH HIS CREDITORS

This is what in the last chapter I called an alternative to that of the
fortunate tradesman yielding to accept the composition of his insolvent
debtor.

The poor unhappy tradesman, having long laboured in the fire, and
finding it is in vain to struggle, but that whether he strives or not
strives, he must break; that he does but go backward more and more, and
that the longer he holds out, he shall have the less to offer, and be
the harder thought of, as well as the harder dealt with--resolves to
call his creditors together in time, while there is something
considerable to offer them, and while he may have some just account to
give of himself, and of his conduct, and that he may not be reproached
with having lived on the spoil, and consumed their estates; and thus,
being satisfied that the longer he puts the evil day from him, the
heavier it will fall when it comes; I say, he resolves to go no farther,
and so gets a friend to discourse with and prepare them, and then draws
up a state of his case to lay before them.

First, He assures them that he has not wasted his estate, either by vice
and immorality, or by expensive and riotous living, luxury,
extravagance, and the like.

Secondly, He makes it appear that he has met with great losses, such as
he could not avoid; and yet such and so many, that he has not been able
to support the weight of them.

Thirdly, That he could have stood it out longer, but that he was
sensible if he did, he should but diminish the stock, which, considering
his debts, was properly not his own; and that he was resolved not to
spend one part of their debts, as he had lost the other.

Fourthly, That he is willing to show them his books, and give up every
farthing into their hands, that they might see he acted the part of an
honest man to them. And,

Fifthly, That upon his doing so, they will find, that there is in goods
and good debts sufficient to pay them fifteen shillings in the pound;
after which, and when he has made appear that they have a faithful and
just account of every thing laid before them, he hopes they will give
him his liberty, that he may try to get his bread, and to maintain his
family in the best manner he can; and, if possible, to pay the remainder
of the debt.

You see I go all the way upon the suggestion of the poor unfortunate
tradesman being critically honest, and showing himself so to the full
satisfaction of his creditors; that he shows them distinctly a true
state of his case, and offers his books and vouchers to confirm every
part of his account.

Upon the suggestion of his being thus sincerely honest, and allowing
that the state of his account comes out so well as to pay fifteen
shillings in the pound, what and who but a parcel of outrageous
hot-headed men would reject such a man? What would they be called, nay,
what would they say of themselves, if they should reject such a
composition, and should go and take out a commission of bankrupt against
such a man? I never knew but one of the like circumstances, that was
refused by his creditors; and that one held them out, till they were all
glad to accept of half what they said should be first paid them: so may
all those be served, who reject such wholesome advice, and the season
for accepting a good offer, when it was made them. But I return to the
debtor.

When he looks into his books, he finds himself declined, his own fortune
lost, and his creditors' stock in his hands wasted in part, and still
wasting, his trade being for want of stock much fallen off, and his
family expense and house-rent great; so he draws up the general articles
thus:--

STOCK DEBTOR

To cash of my father (being my stock) to begin with in
trade L800 0 0
To Cash of my father-in-law, being my wife's portion 600 0 0
To household-goods, plate, &c. of both 100 0 0
To profits in trade for ten years, as by the yearly balance
in the journal appears 2469 10 0
To debts abroad esteemed good, as by the ledger appears 1357 8 0
To goods in the warehouse at the prime cost 672 12 0
Plate and some small jewels of my wife's left, and old
household-goods altogether 103 0 0
------------
L6102 10 0
Estate deficient to balance 1006 2 0
------------
L7108 12 0
STOCK CREDITOR

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