Take Our Money - Go Directly to Gaol

In a time when our government runs deficits of hundreds of billions of dollars on a regular basis, it's hard to determine the difference between good debt and bad debt. My oversimplified take on the matter is debt that you considered "bad debt" five years ago isn't magically transformed into "good debt" this year just because you're short. That's a message that our leading economists seem to be ignoring as they state (paraphrase) "We don't understand why the chickens haven't come home to roost, but we're hoping it's an unseen grace that has been bestowed on our great nation." I'm as in favor of grace as the next guy, I just don't believe it to be the case in this instance. Alan Greenspan worries the hell out of me when he says that America has always found solutions to it's problems so this time shouldn't be any different.

Good times or bad, there will always be people ready to advance you a small sum of money on a large quantity of possessions. The following ad from the front page of the London Times, June 19, 1805, caught my eye.

Money Ready to Advance - All Persons in possession of incomes arising from freehold, copyhold or leasehold estates in land or houses, money in the funds, rent charges, marriage settlements, widows jointures, annunities, patent places, church livings, or any certain income for life, may be supplied with temporary or permanent sums to any amount by paying annuity interest on the same. The Nobility and Gentry of known property, or their heirs, may be accommodated on their own personal security; and any instance where the single security of an individual may be deemed insufficient, the addition of another person to guarantee the payment of the interest, will remove the objection; and in all cases privilege will be given to the public to return the principal at their own option. Personal applications will be received every day until 4 o'clock, and letters from Correspondents in town or country, post-paid, will be immediately answered, addressed to the Director of the Knightsbridge Bank, at his town house, No. 8, Lower John street, Golden square.

How nice of them to give special consideration to the Nobility and the Gentry when it came to loan-sharking. The previous day, on nearly the exact same place on the page, a much clearer request for funds was displayed.

A Young Lady, through the unforeseen misfortune of losing her friends, is reduced to the painful necessity of soliciting the attention of some Gentleman of honour to extricate her from the most distressing situation, by only assisting her with the small sum of Ten Pounds, for which sum, unless procured, she is fearful of confinement. Letters addressed to M. M. Twopenny, Post-Office, Bridge street, Westminster, will be instantly acknowledged, with most grateful thanks.

The 19th century historians amongst us might be tempted to read "confinement" as "an interesting situation" but in this case it clearly means debtors gaol. It's hard to imagine that the standard punishment for being unable to pay your bills was to be thrown into prison, where your only chance of getting out was if your family or friends would then come up with the scratch to pay off your debts. I wonder how effective it was particularly with those who had no friends or family, but then again, maybe nobody would extend them credit.