And another thing

25 October 2008

Jane Austen knew all about a banking crisis

Alas, Henry’s personal problem coincided with the universal economic downturn which followed the end of the afflatus of wartime finance. Businesses slumped, especially those heavily involved in supplying the expanded armies and navies of wartime. With the peace, contracts and orders were cancelled and goods piled up in the warehouses. Henry’s Alton partner, Gray, had done a roaring trade supplying not only food but clothes to the armed forces. Towards the end of 1815, his trade having collapsed, he went bankrupt, and his funds in the bank were swallowed up in the ruin. So the Alton branch fell, and all those who held Henry’s banknotes found themselves with worthless paper. The knock-on effect spread to Petersfield, where Henry’s bank had to shut its doors. In turn, the Henrietta Street bank, un-able to redeem its notes in gold, collapsed, and on 6 March went bankrupt, carrying with it £13. 7s. of Jane Austen’s money. Henry’s brother Edward and the Leigh-Perrots lost their sureties. The bank also had an army agency for which Henry’s brothers James and Frank provided hundreds of pounds as surety. All these sums were lost, so the family as a whole was badly hit by Henry’s failure. It is a testimony to the common sense and solidarity of the Austens that there were no recriminations.

However, 1816 was a year of worry for Jane Austen, for her brother Frank lost his ship about this time in a hurricane sweeping the Greek islands, where HMS Phoenix was hunting down pirates. He was exonerated at the court of inquiry but despaired of getting another command. Every second naval officer was on half-pay for, as Admiral Croft says in Persuasion, the peace was hard on career officers: ‘These are bad times for getting on.’ The censoring of Jane’s letters has deprived us of her true feelings about it all. But it is significant that the back pains, a symptom of the illness which caused her death a year later (Addison’s disease) appeared about this time. Poor Jane must have shared to the full Henry’s troubles, guilt and remorse. She is often thought of as leading a life of exceptional freedom from stress and dramatic incident. Not so. She certainly went through as severe a banking crisis as anyone is experiencing today.