Skip to content

The History of Debt

Debt in some form or another has been around almost as long as mankind – it goes back to the ancient civilisations, starting with the Sumerians in 3000 BC.  During those days if a debt was owed and not paid back, the debtor and his wife, children and servants would be forced into debt slavery until the creditor recouped his loss through their physical labour!  Some societies carried debts over to subsequent generations and debt slavery would then continue.  However, some of the ancient civilisations had periodic times of debt forgiveness known as “jubilees” or would set a time limit on a debt.  In the Abrahamic religions, lending was discouraged and collecting interest was prohibited – as we see in the story of Jesus chasing the money lenders from the temple.

Moving on to the Middle Ages, laws were developed to specifically deal with debtors – creditors were able to take a debtor to court and obtain a judgement against him.  A bailiff of the court would then visit the debtor’s home and collect goods in lieu of the debt or the debtor would be sent to a debtors’ prison until his family paid off the debt or the creditor forgave him.  

Debtors’ prisons were similar to workhouses and this was a common way of dealing with unpaid debt throughout Western Europe.  Here in the UK throughout the 18th and 19th centuries, around 10,000 people were imprisoned for debt each year.  Charles Dickens’ father was sent to a debtors’ prison and Dickens often described these places in his novels.  In fact, Dickens was a powerful advocate for debt prison reform and dealt with this subject in his novel, Little Dorrit.  

Debt was also the subject of William Hogarth’s “A Rake’s Progress”, a series of eight paintings depicting the downfall of a man to a debt prison.  These powerful works of art tell a cautionary tale of the fall of Tom Rakewell, following his progress as he wastes all his inherited money on living the high life, being sent to Fleet Prison and his eventual degeneration into insanity, resulting in him being sent to Bethlehem Hospital (Bedlam). 

Some of the debtors’ prisons in London were Fleet Prison, Giltspur Street Compter, Coldbath Fields Prison, King’s Bench Prison, and Marshalsea Prison.  The most notorious of all was Clink Prison with its debtors’ entrance in Stoney Street.  The British slang term “in clink” is derived from this prison and its location on Stoney Street resulted in the use of the term “stoney broke” or “stone broke”.

The Debtors’ Act of 1869 somewhat curtailed the ability of courts to sentence debtors to prison which initially had the effect of reducing the numbers of debtors imprisoned.   However, it wasn’t until 1976 that Article 11 of the International Covenant on Civil and Political Rights (ICCPR) came into effect, stating that “No one shall be imprisoned merely on the ground of inability to fulfil a contractual obligation”.

Next week we’ll take a look at the history of Debt Collection Agencies.