Navigating Failure: Bankruptcy and Commercial Society in Antebellum America

Navigating Failure: Bankruptcy and Commercial Society in Antebellum America. By Edward J. Balleisen. (Chapel Hill: The University of North Carolina Press, 2001. Pp. xv, 322. Illustrations, maps. Cloth, $55.00; paper, $19.95.) In Navigating Failure, Edward J. Balleisen seeks to show how bankruptcy both sprang from and helped shape commerce during the antebellum period. He clearly describes the wide range of difficulties facing "commercially inclined Americans" (3) during the era and gives a sympathetic view of the real lives of people who bought into the idea of capitalism, but who could not quite make the dream work for them. Navigating Failure is worth reading if only for its fascinating description of business life in America from 1820 to 1860. A host of pitfalls awaited merchants in the complicated web of antebellum credit: international economic cycles, bad debt, fraud, fire, and cut-throat competition. To make matters worse, in these far-flung networks, a single person's failure to cover his obligations could bring down businessmen he had never met. This is not to say that the structure of the antebellum economy was solely to blame for bankruptcy-quite the contrary. Balleisen argues that most bankrupts played a role in their own demise. Inexperience in the ways of business was a typical source of trouble, but greed also played a role when merchants overextended themselves or consumed more luxuries than they could afford. When failure did come, it could be a catastrophic experience. Moralists urged debtors to face problems "manfully" (77), rather than scramble to hold off creditors until the last possible moment, but accepting failure was almost unthinkable in the American commercial culture of the time. Creditors also ignored the moralists and their pleas for reason and forbearance. The fact was, those who pushed hardest earliest were most likely to see their debts paid. Compromise between debtors and creditors was possible, however, because both parties were enmeshed in the same network of professional connections from which neither could afford to alienate themselves. At the center of Balleisen's book, both literally and figuratively, is the United States Bankruptcy Act of 1841. The act largely favored debtors, allowing them to declare bankruptcy and seek shelter from creditors. It allowed debtors to keep $300 in personal property and excused them from any debt remaining after court-appointed agents sold off their goods and distributed the proceeds on a pro rata basis. The act also helped create a cottage industry revolving around failure. Creditors might not have seen much money from a bankruptcy judgment, but the officials who handled the claims could do very well indeed. Judges offered clerk positions as political plums, and at least some officials used inside information to speculate on assets sold at bankruptcy auctions. These "vulture capitalists" (18), as Balleisen calls them, initially were scorned as immoral, but began to achieve respectability by the 1850s as Americans began to accept the fluctuations and risks of the capitalist economy. Declaring bankruptcy held out the prospect of a clean slate, but it was not the only strategy that could allow the debtor to start anew. …