19th Century Credit and Debt

Debt and it’s management were a constant part of life for most people in the C19th.

• Consumer credit was an informal affair for those people who had access to any credit at all.
• The poor were never going to be extanded credit and for others it was based on social position, trust and a moral assessment of the buyer, rather than their ability to pay back.
• Selling on credit was so widely established that by the mid C19th many middle class households and chattils therein were funded on credit.
• Small stores in urban areas are thought to have sold up to 80% of their goods on credit.

Clearly this was not a sustainable scenario for either the seller or the buyer. As households ran up tabs that they were unable to pay off at their local store, so they travelled further and further afield in their search for credit.

• Larger retailers were able to check newspapers such as the London Gazette to check the credit worthiness of their customers and because of their larger customer base were able to decline credit to people.
• Smaller retailers with limited cutomers found it harder to do so and were forced back onto the credit economy.

The result for all was debt. In 1839, 4,000 in London alone were arrested for debt and put into one of London’s debtors prisons.

Charles Dickens knew well the scourge of debt and wrote about it in his novels.

• It was a disease borne out of the new age of Industrial Revolution when mass produced goods came on the market at prices that were keen to lure a new market of buyers.
• The emergence of a new middle class intent on moving socially upwards by acquiring new goods, forced a culture of credit and debt.

We have been surprised by the number of people in our family history who have been in debtors courts and been made bankrupt. To find out more about debtors in your own family view the London Gazette archives