The Complete English Tradesman (1839 ed.)

CHAPTER VII

OF THE TRADESMAN IN DISTRESS, AND BECOMING BANKRUPT

In former times it was a dismal and calamitous thing for a tradesman to break. Where it befell a family, it put all into confusion and distraction; the man, in the utmost terror, fright, and distress, ran away with what goods he could get off, as if the house were on fire, to get into the Friars14 or the Mint; the family fled, one one way, and one another, like people in desperation; the wife to her father and mother, if she had any, and the children, some to one relation, some to another. A statute (so they vulgarly call a commission of bankrupt) came and swept away all, and oftentimes consumed it too, and left little or nothing, either to pay the creditors or relieve the bankrupt. This made the bankrupt desperate, and made him fly to those places of shelter with his goods, where, hardened by the cruelty of the creditors, he chose to spend all the effects which should have paid the creditors, and at last perished in misery.

But now the case is altered; men make so little of breaking, that many times the family scarce removes for it. A commission of bankrupt is so familiar a thing, that the debtor oftentimes causes it to be taken out in his favour, that he may sooner be effectually delivered from all his creditors at once, the law obliging him only to give a full account of himself upon oath to the commissioners, who, when they see his integrity, may effectually deliver him from all further molestation, give him a part even of the creditors' estate; and so he may push into the world again, and try whether he cannot retrieve his fortunes by a better management, or with better success for the future.

Some have said, this law is too favourable to the bankrupt; that it makes tradesmen careless; that they value not breaking at all, but run on at all hazards, venturing without forecast and without consideration, knowing they may come off again so cheap and so easy, if they miscarry. But though I cannot enter here into a long debate upon that subject, yet I may have room to say, that I differ from those people very much; for, though the terror of the commission is in some measure abated, as indeed it ought to be, because it was before exorbitant and unreasonable, yet the terror of ruining a man's family, sinking his fortunes, blasting his credit, and throwing him out of business, and into the worst of disgrace that a tradesman can fall into, this is not taken away, or abated at all; and this, to an honest trading man, is as bad as all the rest ever was or could be.

Nor can a man be supposed, in the rupture of his affairs, to receive any comfort, or to see through his disasters into the little relief which he may, and at the same time cannot be sure he shall, receive, at the end of his troubles, from the mercy of the commission.

These are poor things, and very trifling for a tradesman to entertain thoughts of a breach from, especially with any prospect of satisfaction; nor can any tradesman with the least shadow of principle entertain any thought of breaking, but with the utmost aversion, and even abhorrence; for the circumstances of it are attended with so many mortifications, and so many shocking things, contrary to all the views and expectations that a tradesman can begin the world with, that he cannot think of it, but as we do of the grave, with a chillness upon the blood, and a tremor in the spirits. Breaking is the death of a tradesman; he is mortally stabbed, or, as we may say, shot through the head, in his trading capacity; his shop is shut up, as it is when a man is buried; his credit, the life and blood of his trade, is stagnated; and his attendance, which was the pulse of his business, is stopped, and beats no more; in a word, his fame, and even name, as to trade is buried, and the commissioners, that act upon him, and all their proceedings, are but like the executors of the defunct, dividing the ruins of his fortune, and at last, his certificate is a kind of performing the obsequies for the dead, and praying him out of purgatory.

Did ever tradesman set up on purpose to break? Did ever a man build himself a house on purpose to have it burnt down? I can by no means grant that any tradesman, at least in his senses, can entertain the least satisfaction in his trading, or abate any thing of his diligence in trade, from the easiness of breaking, or the abated severities of the bankrupt act.

I could argue it from the nature of the act itself, which, indeed, was made, and is effectual, chiefly for the relief of creditors, not debtors; to secure the bankrupt's effects for the use of those to whom it of right belongs, and to prevent the extravagant expenses of the commission, which before were such as often devoured all, ruining both the bankrupt and his creditors too. This the present law has providently put a stop to; and the creditors now are secure in this point, that what is to be had, what the poor tradesman has left, they are sure to have preserved for, and divided among them, which, indeed, before they were not. The case is so well known, and so recent in every tradesman's memory, that I need not take up any more of your time about it.

As to the encouragements in the act for the bankrupt, they are only these – namely, that, upon his honest and faithful surrender of his affairs, he shall be set at liberty; and if they see cause, they, the creditors, may give him back a small gratification for his discovering his effects, and assisting to the recovery of them; and all this, which amounts to very little, is upon his being, as I have said, entirely honest, and having run through all possible examinations and purgations, and that it is at the peril of his life if he prevaricates.

Are these encouragements to tradesmen to be negligent and careless of the event of things? Will any man in his wits fail in his trade, break his credit, and shut up his shop, for these prospects? Or will he comfort himself in case he is forced to fail – I say, will he comfort himself with these little benefits, and make the matter easy to himself on that account? He must have a very mean spirit that can do this, and must act upon very mean principles in life, who can fall with satisfaction, on purpose to rise no higher than this; it is like a man going to bed on purpose to rise naked, pleasing himself with the thoughts that, though he shall have no clothes to put on, yet he shall have the liberty to get out of bed and shift for himself.

On these accounts, and some others, too long to mention here, I think it is out of doubt, that the easiness of the proceedings on commissions of bankrupt can be no encouragement to any tradesman to break, or so much as to entertain the thoughts of it, with less horror and aversion than he would have done before this law was made.

But I must come now to speak of the tradesman in his real state of mortification, and under the inevitable necessity of a blow upon his affairs. He has had losses in his business, such as are too heavy for his stock to support; he has, perhaps, launched out in trade beyond his reach: either he has so many bad debts, that he cannot find by his books he has enough left to pay his creditors, or his debts lie out of his reach, and he cannot get them in, which in one respect is as bad; he has more bills running against him than he knows how to pay, and creditors dunning him, whom it is hard for him to comply with; and this, by degrees, sinks his credit.

Now, could the poor unhappy tradesman take good advice, now would be his time to prevent his utter ruin, and let his case be better or worse, his way is clear.

If it be only that he has overshot himself in trade, taken too much credit, and is loaded with goods; or given too much credit, and cannot get his debts in; but that, upon casting up his books, he finds his circumstances good at bottom, though his credit has suffered by his effects being out of his hands; let him endeavour to retrench, let him check his career in trade – immediately take some extraordinary measures to get in his debts, or some extraordinary measures, if he can, to raise money in the meantime, till those debts come in, that he may stop the crowd of present demands. If this will not do, let him treat with some of his principal creditors, showing them a true and faithful state of his affairs, and giving them the best assurances he can of payment, that they may be easy with him till he can get in his debts; and then, with the utmost care, draw in his trade within the due compass of his stock, and be sure never to run out again farther than he is able to answer, let the prospect of advantage be what it will; and by this method he may perhaps recover his credit again, at least he may prevent his ruin. But this is always supposing the man has a firm bottom, that he is sound in the main, and that his stock is at least sufficient to pay all his debts.

But the difficulty which I am proposing to speak of, is when the poor tradesman, distressed as above in point of credit, looking into his affairs, finds that his stock is diminished, or perhaps entirely sunk – that, in short, he has such losses and such disappointments in his business, that he is not sound at bottom; that he has run too far, and that his own stock being wasted or sunk, he has not really sufficient to pay his debts; what is this man's business? – and what course shall he take?

I know the ordinary course with such tradesmen is this: – 'It is true,' says the poor man, 'I am running down, and I have lost so much in such a place, and so much by such a chapman that broke, and, in short, so much, that I am worse than nothing; but come, I have such a thing before me, or I have undertaken such a project, or I have such an adventure abroad, if it suceeds, I may recover again; I'll try my utmost; I'll never drown while I can swim; I'll never fall while I can stand; who knows but I may get over it?' In a word, the poor man is loth to come to the fatal day; loth to have his name in the Gazette, and see his wife and family turned out of doors, and the like; who can blame him? or who is not, in the like case, apt to take the like measures? – for it is natural to us all to put the evil day far from us, at least to put it as far off as we can. Though the criminal believes he shall be executed at last, yet he accepts of every reprieve, as it puts him within the possibility of an escape, and that as long as there is life there is hope; but at last the dead warrant comes down, then he sees death unavoidable, and gives himself up to despair.

Indeed, the malefactor was in the right to accept, as I say, of every reprieve, but it is quite otherwise in the tradesman's case; and if I may give him a rule, safe, and in its end comfortable, in proportion to his circumstances, but, to be sure, out of question, just, honest, and prudent, it is this: —

When he perceives his case as above, and knows that if his new adventures or projects should fail, he cannot by any means stand or support himself, I not only give it as my advice to all tradesmen, as their interest, but insist upon it, as they are honest men, they should break, that is, stop in time: fear not to do that which necessity obliges you to do; but, above all, fear not to do that early, which, if omitted, necessity will oblige you to do late.

First, let me argue upon the honesty of it, and next upon the prudence of it. Certainly, honesty obliges every man, when he sees that his stock is gone, that he is below the level, and eating into the estate of other men, to put a stop to it, and to do it in time, while something is left. It has been a fault, without doubt, to break in upon other men's estates at all; but perhaps a plea may be made that it was ignorantly done, and they did not think they were run so far as to be worse than nothing; or some sudden disaster may have occasioned it, which they did not expect, and, it may be, could not foresee; both which may indeed happen to a tradesman, though the former can hardly happen without his fault, because he ought to be always acquainting himself with his books, stating his expenses and his profits, and casting things up frequently, at least in his head, so as always to know whether he goes backward or forward. The latter, namely, sudden disaster, may happen so to any tradesman as that he may be undone, and it may not be his fault; for ruin sometimes falls as suddenly as unavoidably upon a tradesman, though there are but very few incidents of that kind which may not be accounted for in such a manner as to charge it upon his prudence.

Some cases may indeed happen, some disasters may befall a tradesman, which it was not possible he should foresee, as fire, floods of water, thieves, and many such – and in those cases the disaster is visible, the plea is open, every body allows it, the man can have no blame. A prodigious tide from the sea, joined with a great fresh or flood in the river Dee, destroyed the new wharf below the Roodee at West Chester, and tore down the merchants' warehouses there, and drove away not only all the goods, but even the buildings and altogether, into the sea. Now, if a poor shopkeeper in Chester had a large parcel of goods lying there, perhaps newly landed in order to be brought up to the city, but were all swept away, if, I say, the poor tradesman were ruined by the loss of those goods on that occasion, the creditors would see reason in it that they should every one take a share in the loss; the tradesman was not to blame.

Likewise in the distress of the late fire which began in Thames Street, near Bear Quay, a grocer might have had a quantity of goods in a warehouse thereabouts, or his shop might be there, and the goods perhaps might be sugars, or currants, or tobacco, or any other goods in his way, which could not be easily removed; this fire was a surprise, it was a blast of powder, it was at noonday, when no person coud foresee it. The man may have been undone and be in no fault himself, one way or other; no man can reasonably say to him, why did you keep so many goods upon your hands, or in such a place? for it was his proper business both to have a stock of goods, and to have them in such a place; every thing was in the right position, and in the order which the nature of his trade required.

On the other hand, if it was the breaking of a particular chapman, or an adventure by sea, the creditors would perhaps reflect on his prudence; why should any man trust a single chapman so much, or adventure so much in one single bottom, and uninsured, as that the loss of it would be his undoing?

But there are other cases, however, which may happen to a tradesman, and by which he may be at once reduced below his proper stock, and have nothing left to trade on but his credit, that is to say, the estates of his creditors. In such a case, I question whether it can be honest for any man to continue trading; for, first, it is making his creditors run an unjust hazard, without their consent; indeed, if he discovers his condition to one or two of them, who are men of capital stocks, and will support him, they giving him leave to pay others off, and go on at their risks, that alters the case; or if he has a ready money trade, that will apparently raise him again, and he runs no more hazards, but is sure he shall at least run out no farther; in these two cases, and I do not know another, he may with honesty continue.

On the contrary, when he sees himself evidently running out, and declining, and has only a shift here and a shift there, to lay hold on, as sinking men generally do; and knows, that unless something extraordinary happen, which, perhaps, also is not probable, he must fall, for such a man to go on, and trade in the ordinary way, notwithstanding losses, and hazards – in such a case, I affirm, he cannot act the honest man, he cannot go on with justice to his creditors, or his family; he ought to call his creditors together, lay his circumstances honestly before them, and pay as far as it will go. If his creditors will do any thing generously for him, to enable him to go on again, well and good, but he cannot honestly oblige them to run the risk of his unfortunate progress, and to venture their estates on his bottom, after his bottom is really nothing at all but their money.

But I pass from the honesty to the prudence of it – from what regards his creditors, to what regards himself – and I affirm, nothing can be more imprudent and impolite, as it regards himself and his family, than to go on after he sees his circumstances irrecoverable. If he has any consideration for himself, or his future happiness, he will stop in time, and not be afraid of meeting the mischief which he sees follows too fast for him to escape; be not so afraid of breaking, as not to break till necessity forces you, and that you have nothing left. In a word, I speak it to every declining tradesman, if you love yourself, your family, or your reputation, and would ever hope to look the world in the face again, break in time.

By breaking in time you will first obtain the character of an honest, though unfortunate man; it is owing to the contrary course, which is indeed the ordinary practice of tradesmen, namely, not to break till they run the bottom quite out, and have little or nothing left to pay; I say, it is owing to this, that some people think all men that break are knaves. The censure, it is true, is unjust, but the cause is owing to the indiscretion, to call it no worse, of the poor tradesmen, who putting the mischief as far from them as they can, trade on to the last gasp, till a throng of creditors coming on them together, or being arrested, and not able to get bail, or by some such public blow to their credit, they are brought to a stop or breach of course, like a man fighting to the last gasp who is knocked down, and laid on the ground, and then his resistance is at an end; for indeed a tradesman pushing on under irresistable misfortunes is but fighting with the world to the last drop, and with such unequal odds, that like the soldier surrounded with enemies, he must be killed; so the debtor must sink, it cannot be prevented.

It is true, also, the man that thus struggles to the last, brings upon him an universal reproach, and a censure, that is not only unavoidable, but just, which is worse; but when a man breaks in time, he may hold up his face to his creditors, and tell them, that he could have gone on a considerable while longer, but that he should have had less left to pay them with, and that he has chosen to stop while he may be able to give them so considerable a sum as may convince them of his integrity.

We have a great clamour among us of the cruelty of creditors, and it is a popular clamour, that goes a great way with some people; but let them tell us when ever creditors were cruel, when the debtor came thus to them with fifteen shillings in the pound in his offer. Perhaps when the debtor has run to the utmost, and there appears to be little or nothing left, he has been used roughly; and it is enough to provoke a creditor, indeed, to be offered a shilling or half-a-crown in the pound for a large debt, when, had the debtor been honest, and broke in time, he might have received perhaps two-thirds of his debt, and the debtor been in better condition too.

Break then in time, young tradesman, if you see you are going down, and that the hazard of going on is doubtful; you will certainly be received by your creditors with compassion, and with a generous treatment; and, whatever happens, you will be able to begin the world again with the title of an honest man – even the same creditors will embark with you again, and be more forward to give you credit than before.

It is true, most tradesmen that break merit the name of knave or dishonest man, but it is not so with all; the reason of the difference lies chiefly in the manner of their breaking – namely, whether sooner or later. It is possible, he may be an honest man who cannot, but he can never be honest that can, and will not pay his debts. Now he, that, being able to pay fifteen shillings in the pound, will struggle on till he sees he shall not be able to pay half-a-crown in the pound, this man was able to pay, but would not, and, therefore, as above, cannot be an honest man.

In the next place, what shall we say to the peace and satisfaction of mind in breaking, which the tradesman will always have when he acts the honest part, and breaks betimes, compared to that guilt and chagrin of the mind, occasioned by a running on, as I said, to the last gasp, when they have little to pay? Then, indeed, the tradesman can expect no quarter from his creditors, and will have no quiet in himself.

I might instance here the miserable, anxious, perplexed life, which the poor tradesman lives under; the distresses and extremities of his declining state; how harassed and tormented for money; what shifts he is driven to for supporting himself; how many little, mean, and even wicked things, will even the religious tradesman stoop to in his distress, to deliver himself – even such things as his very soul would abhor at another time, and for which he goes perhaps with a wounded conscience all his life after!

By giving up early, all this, which is the most dreadful part of all the rest, would be prevented. I have heard many an honest unfortunate man confess this, and repent, even with tears, that they had not learned to despair in trade some years sooner than they did, by which they had avoided falling into many foul and foolish actions, which they afterwards had been driven to by the extremity of their affairs.

CHAPTER VIII

THE ORDINARY OCCASIONS OF THE RUIN OF TRADESMEN

Since I have given advice to tradesmen, when they fell into difficulties, and find they are run behind-hand, to break in time, before they run on too far, and thereby prevent the consequences of a fatal running on to extremity, it is but just I should give them some needful directions, to avoid, if possible, breaking at all.

In order to this, I will briefly inquire what are the ordinary originals of a tradesman's ruin in business. To say it is negligence, when I have already pressed to a close application and diligence; that it is launching into, and grasping at, more business than their stock, or, perhaps, their understandings, are able to manage, when I have already spoken of the fatal consequences of over-trading; to say it is trusting carelessly people unable to pay, and running too rashly into debt, when I have already spoken of taking and giving too much credit – this would all be but saying the same thing over again – and I am too full of particulars, in this important case, to have any need of tautologies and repetitions; but there are a great many ways by which tradesmen precipitate themselves into ruin besides those, and some that need explaining and enlarging upon.

1. Some, especially retailers, ruin themselves by fixing their shops in such places as are improper for their business. In most towns, but particularly in the city of London, there are places as it were appropriated to particular trades, and where the trades which are placed there succeed very well, but would do very ill any where else, or any other trades in the same places; as the orange-merchants and wet-salters about Billingsgate, and in Thames Street; the coster-mongers at the Three Cranes; the wholesale cheesemongers in Thames Street; the mercers and drapers in the high streets, such as Cheapside, Ludgate Street, Cornhill, Round Court, and Grace-church Street, &c.

Pray what would a bookseller make of his business at Billingsgate, or a mercer in Tower Street, or near the Custom-house, or a draper in Thames Street, or about Queen-hithe? Many trades have their peculiar streets, and proper places for the sale of their goods, where people expect to find such shops, and consequently, when they want such goods, they go thither for them; as the booksellers in St Paul's churchyard, about the Exchange, Temple, and the Strand, &c., the mercers on both sides Ludgate, in Round Court, and Grace-church and Lombard Streets; the shoemakers in St Martins le Grand, and Shoemaker Row; the coach-makers in Long-acre, Queen Street, and Bishopsgate; butchers in Eastcheap; and such like.