Bankruptcy as a family disaster? Paper on the business practices of Christian and Jewish merchants in Early Modern Period Prague
Abstract
The cases presented show various situations in which Christian and Jewish merchants went bankrupt in Prague in the 16th century. In light of the fact that we no longer have any of the companies' accounts at our disposal, neither the causes nor the process of falling into debt can be observed in more detail or precisely determined.
We can therefore merely speculate on the extent to which particular causes led to those bankruptcies: for example, poorly estimating the volume of credited goods and loans, the choice of unstable business partners (secondary insolvency), the erroneous estimation of customers' interest in a given type of goods, or the overestimation of their purchasing power. We are able to observe the course of bankruptcy and its consequences only in a limited way using Prague sources.
Although each of the cases described had its own specifics and its own individual level, certain strategies can be seen as having been employed by the bankrupt traders in an attempt to reduce the impact on the family. These most certainly included the quick transfer of real estate and money to relatives, the aim of which was to save at least part of the family's property.