If … the bankrupt be convicted, he shall be set upon the pillory in some public place for the space of two hours, and have one of his ears cut off.
Bankruptcy Act 1623
Alan Bond is lucky he didn’t go bust 150 years ago, because creditors in those days had the right to lock debtors in jail and throw away the key. The rules then were simple. If you borrowed money, you had to pay it back. Full stop.
There were no compromises, no settlements, no lengthy court battles, and no living high on the hog while debts remained unpaid. And the mere fact that court proceedings had started was enough for a creditor to have the debtor arrested by the sheriff, so that he did not abscond.
London’s notorious Newgate prison was full of such wretched people who often rotted inside for years over debts as small as a few shillings. Sometimes they died there, because if they couldn’t pay what they owed, they stayed behind bars until their creditors decided to release them … if they ever did.
Once jailed, there was also no guarantee that these poor debtors wouldn’t starve to death, as an English judge once reminded an unfortunate subject in passing judgement:
Neither the plaintiff nor the sheriff is bound to give him meat or drink … If he has no goods, he shall live off the charity of others, and if others give him nothing, let him die in the name of God … for his presumption and ill-behaviour brought him to that imprisonment.1
It was all a world away from our current lax attitude to credit. In those days, people who ran up debts that they couldn’t pay were regarded quite simply as criminals.
Conditions in the jails were horrendous, with no attempt to segregate by sex or by gravity of the crime. And since many prisons were owned privately and run for profit, they typically demanded payment from their inmates for the most basic comfort. At Newgate, for example, there was an entrance fee of three shillings, a weekly rent of two shillings and sixpence, and a further weekly payment of one shilling and sixpence to share a straw mattress with another prisoner. In the debtors’ section, where by definition no one had money to purchase such things, you fought for floor space and scraps of food with murderers, rapists, footpads and anyone else who happened to be there. The inmates at Newgate called the debtors’ section Tangier, because it was reminiscent of the suffering inflicted on British sailors by Arab pirates off the Barbary Coast.
But the punishment for people who could be shown to be concealing assets from their creditors was even more severe, as England’s 1623 Bankruptcy Act made clear:
If upon such indictment the bankrupt be convicted, he shall be set upon the pillory in some public place for the space of two hours, and have one of his ears cut off.
And after 1705, if you failed to hand over all your assets to the King’s Commissioners so they could be shared among your creditors, you could find yourself being sent to the gallows, which is almost certainly where Alan Bond would have ended up.