The History of Bankruptcy by Safley Thomas Max;

Author:Safley, Thomas Max;
Language: eng
Format: epub
ISBN: 1114675
Publisher: Taylor & Francis Group

8 Bankruptcy and the bank

The case of the “kaiserlich königliche Wiener octroyierte Commercial-, Leih-und Wechselbank” of Vienna in the 18th century1

Dana Štefanová

Introduction

The way banks treated customers who made mistakes with regard to their businesses or failed because of imperfect market structures (institutional failures, failure of contract enforcement, etc.) represents an under- researched area in business and social history. My chapter concentrates on insolvent or bankrupt businesses and how they were treated by their bank. Recent research points to the fact that 51 new laws of the period, 1808–1914, were designed to protect the interests of creditors in case of bankruptcy.2 Such clear policy aims cannot be taken for granted, as the following case study from the period of enlightened absolutism in the Habsburg Empire illustrates. I shall try to show that much depended then on the social status of the individuals involved and on the political ambitions of state authorities.3

This chapter takes as its example the “kaiserlich königliche [hereinafter kk] Wiener octroyierte Commercial-, Leih- und Wechselbank,” chartered in 1787 by Emperor Joseph II and granted privileges for a period of 25 years. In reality, it remained in business until approximately 1830. The reigns of Joseph II (1780–1790) and his mother, Maria Theresia (1740–1780), were characterized by many enlightened absolutist reforms in religion, politics, society and economy. Economic reforms combined mercantiliswt and physiocratic principles. In the context of this study, the efforts to limit the powers of rural landlords vis-à-vis their villagers seem particularly relevant, designed as they were to register and tax assets in landlord property. These only came into practice, however, with the next cadastral survey in the first half of the nineteenth century.

In order to grasp the bank's reactions and activities with respect to insolvent customers, it is crucial to understand the bank itself. The social background of the entrepreneurs as well as of the customers thus plays an important role in this period of reform as does the management organization of the institution. There follows a brief discussion of the bank. Then, two case studies—the Viennese-Greek merchant Johann Georg Paziazi and the woolen manufacturer Johannes Tost of Southern Bohemia—will illustrate questions surrounding the issue of bankruptcy.

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