Promises To Pay

08 Dec

A Nest Egg made of Empty Promises [courtesy of Google Images]

A Nest Egg made of Empty Promises
[courtesy of Google Images]

CNN Money reported in “Judge: Detroit can proceed with bankruptcy,” that:

“A federal judge has given a green light for Detroit to proceed with its bankruptcy, the largest municipal bankruptcy in history.

The ruling opens the door for the city to cut billions of dollars in payments that are owed to city employees, retirees, investors and other creditors.

“Unions and pension funds had argued that the city should not be eligible to use bankruptcy court protections. They said that regardless of the Detroit’s financial troubles, city and state officials did not negotiate with creditors in good faith in an effort to reach a deal on its liabilities.”


“Good faith” is important in most bankruptcies, in that the person or institution filing for bankruptcy is expected to make a “good faith” (honest) effort to reveal all of his assets so as to make them all available to his creditors.

However, in the instance of Detroit, I doubt that good faith will be particularly relevant.

Why?  Because What can’t be paid, won’t be paid.

It’s been common knowledge for several years that Detroit is not merely penniless, but so deep in debt that its debts can never be paid in full.  Any errors in good faith will be insignificant when weighed against Detroit’s enormous debt.

No man-made law or federal court can overcome reality.  Detroit is broke; too broke to ever repay all of its debts.  No judge can wave a magic wand that makes a bankrupt pay all of his (or its) bills.  Broke is broke.  That’s why we have bankruptcy law.

Bankruptcy law is simply a legalized recognition of the fundamental idea that What can’t be paid won’t be paid.  There’s no sense in trying to squeeze money out of a bankrupt.  There’s no point to tossing the bankrupts into a debtor’s prison.  Why assume the cost of $25,000 to $50,000 per year to incarcerate a debtor for the offense of going broke?

You might just as well jail all of the creditors who were foolish enough to enable the debtor to go deeper and deeper into debt and finally into bankruptcy.

You can’t fix stupid.  When you run into a man, a city or a nation that’s behaved stupidly, you might just as well let him or them go.  There’s nothing to be done but ascertain that the debtor is really bankrupt, and if so, write off all of his debts and get on with life.


“In his ruling, Judge Steven Rhodes found the city did not meet that [good faith] threshold, yet he ruled that such negotiations were impractical because of the huge number of creditors, which total more than 100,000. So, ultimately, he concluded that the city filed its petition properly.”


Apparently, there were defects in Detroit’s bankruptcy petition and/or procedure.

Nevertheless the judge let Detroit proceed into bankruptcy because reality had overcome the legal technicalities.  Detroit is broke.  Big time.  What can’t be paid, won’t be paid.  Why waste more of time and money trying to squeeze currency out of an absolute bankrupt?


“One major union, the American Federation of State, County & Municipal Employees, has already said it plans to appeal the decision.”

Good luck with that.

I’ll be surprised if any creditor’s appeal succeeds against Detroit’s bankruptcy.  At most, the union might force Detroit to refile its technically defective bankruptcy petition and postpone the inevitable.  But, in the end, Detroit is not the Federal Reserve.  Therefore, no appellate court can make bankrupt Detroit spin currency out of thin air to repay its debts.

Detroit’s creditors are largely screwed.


•  There’s an important lesson in Detroit’s plight.

The Detroit employees accepted Detroit’s “promise to pay” them their pensions—someday.   The city employees worked today in return for a pension that would be paid “someday”.  But Detroit’s promise to pay that pension is proving false.

Why did the Detroit employees trust in the promises of a future pension?  Because they knew that Detroit–being a governmental entity–couldn’t possibly fail to make good on its promises to pay.

Surprise, surprise!  The government of Detroit failed and its promises became worthless.

How many people still believe that the debts rung up by our national government are sure to be paid?  How many creditors will discover (as have the employees of Detroit) that even our national government’s promises are unreliable?

In retrospect, Detroit’s former city employees can probably see that they would’ve been better off to take an actual “payment” (higher wages) at the time when they worked rather than a “promise to pay” a pension as some later date.  If they’d taken the full payment at the time they worked—and—if they also had sufficient discipline to be responsible for saving for their own retirement, their retirement might’ve been successful.  But, because they trusted their government to keep its promises and distrusted themselves to take responsibility for their own retirement, many are going to suffer the unpleasant price of old age and poverty.  

That same lesson is going to be learned by most Americans when it’s finally understood that fiat dollars and all other paper debt instruments (stocks, bonds, bank accounts, pension funds, 401k’s, etc.)  are mere “promises to pay”—not payments.  Payments are tangible and include land, buildings, machinery, goods, products, gold and silver.  All paper debt instruments are merely IOUs—promises to pay.

But we live at a time when there are too many promises, too many debts, for all or even most to be kept.  The promises/debts can’t be paid and therefore won’t be paid. No amount of new governmental promises will overcome this fundamental reality: the existing promises/debt can’t possibly be paid.

Because our national and private debts are even greater than Detroit’s, those debts are also too great to ever be repaid in full.  Therefore, most of the paper debt instruments (promises to pay) that memorialize those debts will one day be openly repudiated or stealthily devalued by inflation.  When that day comes, those Americans who’ve stored their wealth in the form or paper debt instruments will be every bit as angry, frightened and helpless as are today’s former employees of Detroit.

What can be done?

If you have wealth stored in the form of paper promises to pay, think seriously about converting some or all of those promises into payments.  Trade your paper debt instrument for tangible products like land, machines, tools, buildings, and gold or silver.

I’m sure that recommendation seems unnecessary to most people just now.  But I’m convinced that the day is fast-approaching when most will see that recommendation’s common sense.


Posted by on December 8, 2013 in Bankruptcy, Debt, Debt collection, Economic collapse, Lies


Tags: , , ,

19 responses to “Promises To Pay

  1. Cody

    December 8, 2013 at 2:53 AM

    Bankruptcy is a true “civil right.” I suspect it was built right into the Constitution to prevent creditors from keeping there debt slaves perpetually on the hook. Could the authors of the Constitution have been smart enough to see their new country being subdued by a debt society controlled by the creditors?

  2. Martens

    December 8, 2013 at 3:02 AM

    I tend to agree that a default of dollar-denominated assets is in the cards. How soon and how extensive it will be, I don’t know.

    If you’re sure it will happen in the near future and be systemic in scope, there is a way to cash in on your convictions NOW. There’s no need to wait for events to prove you right in order to hit your big pay day.

    How, you ask? Simple: rather than accepting promises to pay, issue them yourself. You do this by shorting the market. You borrow assets – equities would probably be your best bet – and then sell them for cash in hand NOW based on a promise to repurchase them (in the open market) at some point in the future in order to return them to your lender (who may no longer even be in business).

    When (not if, according to some) these equities go bust, you either buy them back at pennies on the dollar or don’t buy back them at all because they’re no longer traded.

    Regardless of which of these outcomes occurs, you get your cash NOW and watch from a safe distance when the inevitable (according to some) global doomsday of paper instruments arrives, because you’re an issuer, not a holder, of promises to pay.

    • Jetlag

      December 8, 2013 at 6:07 PM


      I think I get it.

      What you’re saying is, if the dire opinions of Prof. Adask are correct, we’re soon to enter a bear market for promises to pay. That is, promises to pay are about to lose a significant portion of their value.

      Yet, in the market, disaster is also opportunity. In the crash of 1929, for example, certain insiders actually made a ton of money because they knew what was coming and shorted the rising market (in ways that paid off despite their brokers going bust along with half of Wall Street).

      When promises to pay are wiped out in the near future, this will obviously be a huge loss for the promise holder, but, on the other side of the same coin, it will be a huge gain for the promise issuer.

      Therefore, to be on the winning side of the impending doomsday, don’t be a holder of promises to pay, rather be an issuer of promises to pay. For example: sell short (though do it in a way that pays off despite your broker going bust along with half of Wall Street).

      I’m going to look into this.

      • Martens

        December 8, 2013 at 8:35 PM

        Yes, that is what I meant.

        In a bull market for promises to pay, where the market value of the typical promissory instrument is gaining value, you make money by being a promise holder.

        In a bear market for promises to pay, where the market value of the typical promissory instrument is losing value, you make money by being a promise issuer.

        The market risk Prof. Adask correctly attributes to the promise holder under doomsday conditions actually works to your advantage as a promise issuer.

  3. SovereignMary

    December 8, 2013 at 6:30 AM

    I heard David Webb say on his satellite radio program yesterday while I was out grocery shopping that the U.S. is in debt across the nation to the tune of over $80 Trillion dollars in unfunded liabilities.
    Those liabilities include all the various state governments that have unfunded pensions and health care debt.
    Talk about the “bankruptcy” of this nation and its people!

  4. Pat Fields

    December 8, 2013 at 7:00 AM

    “Although historians do not advertise the fact, a lot of pension funds went bankrupt in the 1930’s, and the remaining ones had to scale back the amounts they had contracted to pay to their pensioners. Economists failed to offer an explanation for this universal phenomenon. Yet the explanation is clear: the accumulated capital of the pension funds was badly impaired, and in some cases completely wiped out, by the falling interest rate structure. Exactly the same causes are operating right now, (2010) and exactly the same effects will follow. The only difference is the larger scale of capital destruction in the present episode.” –Antal Fekete

  5. Pat Fields

    December 8, 2013 at 7:09 AM

    This is a MUST SEE video for everyone to learn from. If your time is tight, skip about half-way to the 12 minute 45 second point. The critical message is in that section. But, certainly, if you have time this weekend, view the whole series. Share it widely because the more folks who know, the fewer fools we’ll have in our society … which can ONLY be a GOOD thing.

  6. Joseph S Haas

    December 8, 2013 at 5:48 PM

    Re: ” paper debt instruments (stocks, bonds, bank accounts, . . . etc.) are mere “promises to pay”—not payments. Payments are tangible and include land, buildings, machinery, goods, products, gold and silver. All paper debt instruments are merely IOUs—promises to pay.” of thus if or when of you investment into stocks, of it be either: (1) “preferred” as a part owner of the assets, or (2) “common” as in to reap x% of the net profits after expenses, of $x.xx per share per quarter as the return of this dividend, of these the two types of ownerships, (rather than the point x% interest at The “Savings” Bank, of that False Advertising when the rate of inflation is computed thereinto to prove it as a Losing Bank) then if they don’t pay on the promise then what? like in SCOTT PAPER CO. of you can visit the warehouse for your share of the toilet paper rolls? (;-) So to stock up on tangibles is right! As in toilet paper! (;-) Ed & Elaine Brown did so as a bunch in their basement plus: knowing that there are supposed to be no “debtor’s prisons” in America, and of the fact that a tax is NOT a debt, but that of a charge; but little did they know of that the ones being paid for such N.,H. Article 12 protection from these “other laws” of Congress never N.H. Article 1 “consent”ed to would be allowed to TAKE their payments of toward the property tax that they paid, of to turn it on them into this “Uncle Sam” combo State of N.H. “Protection Racket” of to say to heck with the RSA Ch. 480:1-9 home-stead, of to make them un-steady and to “put asunder” what God hath joined together by the holy matrimony of their wedding, of also supposed to be protected by N.H. Article 5 for religious rights, send them to places called FCI’s to “correct” but hold no course with X number of classes in this subject matter because to do so would expose the gov’t corruption! Instead send him to a penal colony out in Marion, ILl.inois to penalize him for speaking the truth. TRY to sell his land and buildings even though the NH RSA Ch. 80:7-b statute reads that the one in possession of the place has to pay, of Uncle Sam a dead-beat, but the local taxing authorities, who supposedly took the RSA Chapters. 42:1 to 92:2 to Article 84 oaths of office to OBEY the law, NOT to violate such as outlaws! do NOT send that agent of “Uncle Sam” the bill, even though by RSA Ch. 123:2 the land be exempt for Uncle Sam BUT only when the 40USC255 to 3112 agent as head of agency files the RSA Ch. 123:1 paperwork with the N.H. Secretary of State, see: , (reference: each state different for its compliance with 1-8-17 of the U.S. Constitution, as like to the governor in Florida as another example, of this being Attorney Lowell “Larry” Becraft’s website from Huntsville, Alabama), and U.S. Attorney Manual 664:

  7. troublmkr

    December 8, 2013 at 8:32 PM

    Detroit isn’t broke and never has been.

    There are at least 100 government entities with respective CAFRs (comprehensive annual financial reports) flush with money. Money that all people in Detroit, and all that traveled through Detroit, paid in taxes, fees, permits, fines, etc.

    The schools alone in Detroit have enough in investment income to cover all of Detroit’s retiree costs for 50 years.

    Did anyone look into any CAFRs for Detroit? Do you people believe that a deciding judge doesn’t know or isn’t aware of the city and county financial reports? That judge knows and is being given a bribe to ‘be a good ol’ boy’. What about the attorneys and mayor? They all have the CAFR sitting on their desks. FRAUD, that’s what is happening. Make no mistake about it.

    Detroit city proper may have a CAFR showing a negative in one of it’s columns, but there are many, many columns. Maybe a negative in the ‘cash’ column, probably moved to an investment column somewhere earning 20% offshore. There will be a column titled ‘liabilities’. That isn’t what the city owes, it is investment bonds using city employees salary base to make HUGE amounts of money for select people operating the city.

    Look this stuff up. Detroit has plenty of money to spare.

    • Adask

      December 8, 2013 at 10:44 PM

      You’re probably right. If you are, then the intent of the bankruptcy is to rob the creditors. If that’s true, then we catch a glimpse of the governmental system as not simply incompetent, stupid or negligent. We see government as intending to rob the creditors from the git-go. If that were true for Detroit, it would probably be true for virtually every other major city, state and national government.

      More, given that Detroit and its associated entities presumably have CAFR accounts, and given that Detroit presumably didn’t mention the assets in those accounts when if filed for bankruptcy, then Detroit did not act in “good faith” if it failed to disclose assets in its CAFR account(s) and its bankruptcy might be reasonably denied. If Detroit’s former employees understood CAFR (Comprehensive Annual Financial Reports), they might have a shot at recovering their pensions.

      • scottie morgan

        December 9, 2013 at 12:44 AM

        Here are a few of links that will add another layer of truth in regards to the FRAUD/EMBEZZLEMENT that is taking place in Detroit:


        By: scottie morgan: Expressly Reserving All Liberties. A Man and A Living
        Spirit. Not a person, human-being, corporation or other type of
        abomination! All rights reserved. Without Prejudice, UCC 1-308

      • Pat Fields

        December 9, 2013 at 3:38 AM


        If I understand these CAFRs correctly, their ‘contents’ include very few banknotes, but rather various forms of claims and entitlements which can either be potentially converted (given market liquidity supporting the stated ‘values’) or channel revenue (again, market constrained) from demands based on those entitlements.

        Most of the discussion forums I’ve seen, focused on these CAFRs, are socialist oriented gimmie-groups seeking to commandeer them for those ends, but I doubt they’re as ‘valuable’ as claimed by either the politicos who’d built them up, or the collectivists who crave milking them. This is especially so now that the circulation of banknotes is deflating from significantly reduced borrowing, in turn causing a huge deficit in debt service currency creation. (see the Maloney video posted)

        If the ‘assets’ in the CAFRs went ‘on the block’, I venture their true market valuations would prove a small fraction of what’s recorded and the revenues from those ‘assets’ have GOT to be under intense systemic pressure by the same token.

  8. pop de adam

    December 9, 2013 at 8:24 AM

    GM and Chrysler get bailed out, given a free pass on their debts, maybe local taxes are forgiven in the interest of a future that may never occur……..Detroit cries: “I’m broke”

  9. Anthony Clifton

    December 10, 2013 at 10:22 AM

    apparently the terrorists who pay the employees in the USGOV have a

    fairly elastic and flexible definition of Good Faith…

    Vickie Weavers head shot…”was in good faith”

    ATF gunfire from helicopters into a church roof on Sunday morning

    was in Good Faith…like the Good Faith Tanks…51 days later.

    Good faith effort
    In the United States, the federal government and some state governments are required to look for disabled, minority, and veteran business enterprises when bidding public jobs….seriously.

    In law
    Good faith

    In contract law, the implied covenant of good faith is a general presumption that the parties to a contract will deal with each other honestly, fairly, and in good faith, so as not to destroy the right of the other party or parties to receive the benefits of the contract…..hmmmm

    • Adask

      December 10, 2013 at 2:06 PM

      So far as I know, “good faith” is not implicated in contracts at law. However, “good faith” is a central concept in trust relationships that are litigated only in equity.

      • Anthony Clifton

        December 11, 2013 at 8:46 AM

        Good Faith is a manifestation of the Christian nature of the Law….Jesus.

        Bad Faith is a manifestation of Talmudic Law…..”Jewish”.

        who controls the money is the issue.

  10. EarlfromOregon

    December 10, 2013 at 2:52 PM

    To Pay or Not to Pay,
    that is the Question

    Fighting Foreclosure:
    The Blaisdell Case, the Contract Clause, and the Great Depression

    In the depths of the Great Depression,
    when foreclosure rates skyrocketed across the United States,
    more than two dozen states passed mortgage-extension or -adjustment laws
    to help farmers and homeowners keep their properties.

    One such statute in Minnesota
    led to the most important property law case of its time and still casts a long shadow
    upon constitutional debates and our own era’s severe economic downturn.

    Fighting Foreclosure
    marks the first book-length study of the landmark 1934 Supreme Court decision
    in Home Building and Loan Association v. Blaisdell,
    which, by a 5–4 vote, upheld the Minnesota Mortgage Moratorium Act.

    Blaisdell validated efforts by states to offer legislative relief to citizens
    struggling to keep their farms and homes.

    But it caused an outcry among banking interests and conservative legal theorists,
    who argued that these laws
    violated the Contract Clause of the Constitution
    and interfered with our free market system.

    In his majority opinion,
    Chief Justice Charles Evans Hughes argued that the reasonable and limited nature of the law
    and the unusual severity of the emergency it addressed
    placed it firmly within the “police powers” of the states to protect the health and safety of the people.

    In a strongly worded dissent,
    Justice George Sutherland argued for a consistent and strict interpretation of the Contract Clause regardless of economic exigency.

    John Fliter and Derek Hoff provide a concise history and analysis of not only this landmark case and the reasoning behind its sharply divided decision
    but also of the entire history of the Contract Clause.

    They trace closely the agricultural crisis, political pressures, and farmer-protest movement
    that produced the Minnesota law.

    And their study contributes to scholarly debate
    about the origins of the Constitutional Revolution of 1937,
    by which the Supreme Court accepted the New Deal,
    as well as to public debates about constitutional interpretation
    and the role that government should play in providing relief to distressed citizens.

    In the midst of our nation’s ongoing suffering from massive foreclosures and bankruptcies,
    Fighting Foreclosure
    also offers a potent reminder that the High Court’s decisions
    often revolve around lives at risk
    as much as abstract legal debates.

    This book is part of the Landmark Law Cases series.

    Fighting Foreclosure:
    The Blaisdell Case, the Contract Clause, and the Great Depression

    John A. Fliter , Derek S. Hoff
    (2012) Univ Press of Kansas 224 pages
    Series: Landmark Law Cases & American Society
    ISBN- 0700618724


    • Pat Fields

      December 11, 2013 at 12:46 AM

      A material fact that none of those parties involved in Blaisdell could allow out into plain view, is that for a contract At Common Law to be valid, there must be consideration of tangible money in which the offering party has unquestionable Title. The ultimate act, regardless of the items involved, is to exchange Titles in the things exchanged.

      ‘Modern’ mortgage notes deal exclusively in ‘Trade Facilitation Instruments’. These credits are NOT money, thus the derivative ‘mortgages’ and ‘loans’ wholly depend on statutory legitimization to ‘allow’ the FORM and appearance of trade.. Banknotes ‘paid’ to sellers of land and buildings, thus never receive consideration meeting that constraint of Law (starkly distinguishable from Statute). Neither does the ‘buyer’ ever ‘repay’ anything but those banknote credits, in which he has no Ownership Title.

      That raises the OBVIOUS difficulty, coyly deflected with contrivance of ‘police power’. Regardless of the Constitutional ‘contract clause’, the ‘mortgage-extension or -adjustment’ statutes violate Common Law!

      As with ALL these blatant departures from Constitutional limits constantly arising, folks reflexively refuse to accept that for the ‘judges’ and ‘justices’ to maintain their ‘honor’, they can ONLY be speaking in and of a jurisdiction wholly apart from that in which the Constitutions … and Common Law itself … is inapplicable! That is SOLELY to be found under Art. IV, Sec. 3, cl. 2, wherein it’s provided that … “nothing in this Constitution shall be so construed as to Prejudice any Claims of the United States, or of any particular State.” … such that ‘any particular State’ is proceeding under extended jurisdiction of the foreign, independent DC city-state, without doing so overtly!

      “Talis non est eadem, nam nullum simile est idem. What is like is not the same, for nothing similar is the same.” –4 Coke 18.

  11. EarlfromOregon

    December 11, 2013 at 12:37 PM

    Republic of Debtors:
    Bankruptcy in the Age of American Independence

    Debt was an inescapable fact of life in early America.
    At the beginning of the eighteenth century,
    its sinfulness was preached by ministers and the right to imprison debtors was unquestioned.

    By 1800, imprisonment for debt was under attack
    and insolvency was no longer seen as a moral failure, merely an economic setback.

    In Republic of Debtors,
    Bruce H. Mann illuminates this crucial transformation in early American society.

    From the wealthy merchant to the backwoods farmer,
    Mann tells the personal stories of men and women struggling to repay their debts
    and stay ahead of their creditors.
    He opens a window onto a society undergoing such fundamental changes
    as the growth of a commercial economy, the emergence of a consumer marketplace,
    and a revolution for independence.

    In addressing debt
    Americans debated complicated questions of commerce and agriculture,
    nationalism and federalism, dependence and independence, slavery and freedom.

    And when numerous prominent men-
    -including the richest man in America and a justice of the Supreme Court-
    -found themselves imprisoned for debt or forced to become fugitives from creditors,
    their fate altered the political dimensions of debtor relief,
    leading to the highly controversial Bankruptcy Act of 1800.

    Whether a society forgives its debtors is not just a question of law or economics;
    it goes to the heart of what a society values.
    In chronicling attitudes toward debt and bankruptcy in early America,
    Mann explores the very character of American society.

    Editorial Reviews

    Bankruptcy is in the air these days,
    So-called “bankruptcy reform”
    — intended to make bankruptcy more difficult and more punitive for debtors –
    – has been pushed by large creditors for years,
    and almost passed in the most recent session of Congress.

    Focusing primarily on the second half of the eighteenth century
    (both before and after the American Revolution),

    Back [in colonial days] debtors were treated worse than thieves.
    In prison they had to foot the bill for their own food and heat, or else go without.

    In 1798, when yellow fever swept Philadelphia,
    all prisoners from city jails were evacuated to safety-
    -all, that is, but the deadbeats.

    Republic of Debtors
    does an amazing job of showing the social, humanitarian and economic consequences
    of failing to provide for an orderly discharge of debts in bankruptcy,
    especially when combined with creditors’ remedies such as imprisonment for debt.

    the fact that imprisonment for debt survived so long after the American Revolution,
    nor did I realize that, aside from some brief experiments,
    the US did Not adopt a set Nationwide laws on bankruptcy until the late nineteenth century.

    One particularly interesting chapter
    deals with the an elaborate form of self-government
    that evolved within one of the debtor’s prisons.

    As many of those imprisoned were relatively well-educated
    and had been involved in the movement for independence from England,
    it was only natural that they would have their own constitution and elected government.

    Then, as now, there was a tension between the moral and economic aspects of bankruptcy.
    On one hand, debtors can be viewed immoral spendthrifts,
    on the other,
    as hapless victims of the vicissitudes of a world-wide economy or the bad actions of others.

    These same tensions underlie the current debate on changes to bankruptcy law,
    driven by creditors who are seeking a return to
    a more punitive, approach to dealing with insolvent creditors.

    Debtor-relief movements like Shay’s Rebellion,
    a post-Revolution wave of business failures
    and the need to pay off the public Revolutionary War debt
    made the problem of debt central to the politics of the new Republic,
    while the growth of consumer and credit markets
    enmeshed ever greater portions of the public in debt.

    A complex imagery of manhood, honor and dependency
    surrounded the perception of debt in the public mind,
    while debtors began to invoke the Rights of Man as an argument against debtors’ prison.

    The result, is that by the end of the 18th century insolvency
    increasingly came to be viewed as economic misfortune
    rather than moral failure-but only for some.

    Bankruptcy laws were written to shield wealthy commercial debtors,
    while broke farmers and workers continued to face prison.

    Republic of Debtors
    is a superb, even dramatic, book about debt, the law on debt,
    and the experience of debt in the early American republic …

    Writing with a far better grasp of the complexities of paper money and credit
    it is useful to reflect on the deeply ironic relationship
    among personal independence, personal identity, and personal indebtedness
    that has long characterized American life.

    Readers now owe Bruce Mann a hefty debt of their own
    for this imaginative and painstakingly researched account
    of changing ideas of credit, debt, and bankruptcy in eighteenth-century America.

    Debt is one of those pervasive aspects of society that we take for granted,
    yet its functions and complications require unusual diligence to master.
    But mastery of this rich subject is exactly what Mann has gained.

    This model study contributes at once
    to the legal, social, economic, moral, political, and intellectual history of early America,
    while telling an intriguing story of shifting attitudes and relations.


    that familiar constant in an age of boom and bust, has a moral as well as financial component. Deservedly or not, in the early days of the American republic,
    shame and mistrust attached to a debtor who sought shelter and relief under the law…
    A fascinating work of economic history that sheds light on daily life in the young Republic.

    This new work examines the relationship between creditors and debtors during late 18th-century America. He specifically focuses on the transformation of society’s view of indebtedness
    from a moral failing to an economic one…

    He traces the evolution of American attitudes toward debt and insolvency throughout the 1700s, culminating in the first federal bankruptcy law in 1800.

    In this gripping account of being in debt in the land of the free,
    illuminates the origins of Americans’ ambivalent relationship to business failure.
    …Mann employs his considerable talents to bring to life a world where much that seems normal and logical to us now–like a unified currency, or the fact that you cannot pay off a debt
    if you are stuck in jail–was not.
    Mr. Mann’s genius is to explain in clear and human terms the legal and economic intricacies
    by which early American creditors and debtors lived and died.

    Bruce Mann, a law and history professor at the University of Pennsylvania,
    says such harsh treatment reflected a culture in which failure to repay debt
    was regarded as a moral failing rather than a business one.

    Bankruptcy scholars and conventional legal historians aim to capture [societal and political tensions] by directing their attention to high legal text and their framers’ original intentions.

    But for Mann, such documents serve only as points of reference on a journey whose aim is to understand contemporary cultural conceptions.

    Mann wisely identifies debtors’ prisons,
    rather than legal texts or political discourse, as the path into his world…

    Mann uses the correspondence, memoirs, and pamphlets written by inmates
    to portray not only their miserable daily lives but also their cries for help…

    It is also just a cracking good read.

    Bruce H. Mann
    Harvard University Press
    2003 / 358 pages


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