In February 1824, a baker had John Dickens arrested for a debt of forty pounds. John was taken to the Marshalsea debtors' prison, and his twelve-year-old son Charles was sent to Warren's Blacking Factory to paste labels on bottles of boot polish. The family also moved into the Marshalsea to reduce lodging costs. Charles earned six shillings a week.
The experience left such a mark on Charles that he kept it secret from his wife for the rest of his life. He told only his biographer and wrote an autobiographical fragment, published posthumously. He couldn't bring himself to set a novel in the Marshalsea until 1855 (Little Dorrit).
Honoré de Balzac, working in Paris at roughly the same time, had his own education in debt. His publishing venture failed in 1825. His printing business, for which he acquired seven Stanhope iron presses and slept on a cot to keep them running around the clock, collapsed in 1828. He owed 60,000 francs, 85% of it to his mother. He would spend the rest of his life evading creditors: renting apartments under false names, choosing houses with exits onto multiple streets, exploiting the legal technicality that Parisian debtors could not be arrested between sunset and sunrise. By 1843, he owed more than 200,000 francs, and when he died in 1850 at age 51, the debt remained.
Gustave Flaubert came from money. His father was the chief surgeon at the Hôtel-Dieu in Rouen. But a colleague of his father's, a country doctor named Eugène Delamare, had married a young woman who died at twenty-six under circumstances that suggested financial ruin and suicide. The connection was enough. Flaubert spent five years on Madame Bovary, producing more than 4,000 pages of drafts and keeping fewer than 500.
What these three writers had in common besides their genius was a technical understanding of how nineteenth-century credit actually worked. They knew what it meant to discount a bill. They knew what happened when you renewed one. And they knew that the people who signed these instruments had at best an incomplete understanding of what they were signing.
How Bills Worked
"Bills" were written orders directing someone to pay a specified sum on a specified date. If you sold goods to a buyer who couldn't pay immediately, you drew a bill on them; they signed their acceptance, and you now held a piece of paper that entitled you to payment on a future date. The problem, of course, was that you might need money before that future date. So you sold the bill to someone else for less than its face value, and that difference was the discount.
This seems straightforward until you realize that discount was not legally considered interest. Interest was capped by usury laws at 5% in England, 6% in France. But discount rates could be whatever the market would bear, because the transaction was structured as a purchase, not a loan. As the Royal Court of Paris ruled in 1826, discount rates could not be fixed because they depended on the trust accorded to an individual signatory. A borrower who couldn't get a loan at legal rates could always find someone willing to buy their bills at a steep discount. The usury laws, in other words, were useless.
What made the system dangerous was renewal. When a bill came due, and the debtor couldn't pay, the holder had two options: either formally protest the bill and pursue legal remedies, or agree to extend the term. Extension meant drawing a new bill for a new period, with new charges added: interest on the original sum, commissions, and fees for the trouble. Each renewal compounded the debt. A borrower who renewed often enough could end up owing multiples of what they originally borrowed, and every person who had endorsed the bill along the way remained liable if they defaulted.
This was the trap. The machinery of renewal could convert a manageable debt into an impossible one, and the borrower often didn't understand it was happening until they were already destroyed.
Ralph Nickleby
Dickens published Nicholas Nickleby in monthly parts from 1838 to 1839, and he used it to anatomize the bill-discounting trade. Ralph Nickleby is not a banker, not a merchant, not an attorney. He is something harder to pin down: someone who makes money from money, and who understands that the signature is everything.
Dickens shows us where such men come from. Ralph started young[1] and his rate structure as an adult was two pence for every halfpenny, i.e., 400%[2]. Dickens observes, deadpan, that the professionals still use it.
The novel includes a small subplot about a dressmaking business run by Madame Mantalini. Her husband contributes nothing to the operation except his ability to spend money and, when that runs short, his willingness to procure more credit[3].
They discount until there is nothing left to discount. Then the collectors arrive, and the business is seized. Kate Nickleby, who works there, loses her position. The Mantalinis are minor characters, but Dickens understood that their story was the common one: a functioning enterprise bled dry by renewal fees until the broker took everything. Ralph's brother, meanwhile, speculates and fails[4].
The stockbrokers buy villas. The speculators die broke. Christopher Plummer delivers the relevant speech in the 2002 film, and he underplays it, reading it flat, like a term sheet.
Ferdinand du Tillet
Balzac's César Birotteau, published in 1837, has been called "Balzac on Bankruptcy." He kept the manuscript in rough draft for six years before financial pressure forced him to finish it. The novel concerns a prosperous Parisian perfumer who overreaches in real estate speculation and is destroyed. But the real villain is not the speculation. It's Ferdinand du Tillet.
Du Tillet arrives at Birotteau's shop as a young clerk with no family and no background. A priest had raised him; the priest died when Ferdinand was ten. Balzac describes what Paris made of him, gifted with dangerous abilities[5].
Three thousand francs disappear from the till. Du Tillet probably took them. Birotteau suspects as much but can't prove it, and rather than ruin a young man's prospects, he stages a way for the money to reappear. Du Tillet leaves for a position with a stockbroker.
Months later, he returns. He needs Birotteau to endorse his notes for twenty thousand francs. The man he likely robbed, who knows he likely robbed him, must now decide whether to expose him or fund his ascent. Birotteau signs[6].
Du Tillet becomes one of the great financiers of Balzac's fictional Paris. When Birotteau's speculation fails, du Tillet is the one holding the notes. He completely destroys Birotteau, and his reputation remains spotless.
The mechanism is simple enough that Birotteau can explain it to his wife: I shall sign notes...He will pay the value, less the discount[7]. His wife, Constance, sees the flaw by pointing out that you are giving up your property...going beyond your means[8]:
The speculation fails. The notary handling the transaction, Roguin, absconds with the funds. But the notes remain due, and the discount has already been taken.
Lheureux and Vincart
Flaubert, in Madame Bovary, perfected the portrait of the provincial moneylender. Monsieur Lheureux is a cloth merchant in Yonville who extends credit for luxury goods, and he understands that credit extended is a receivable created. He can sell that receivable to someone else.
First, he coaches Emma into signing a power of attorney, which allows her to endorse bills against her husband's assets without his knowledge; she did not understand[9]. Flaubert repeats this three times in the book, and the repetition carries the weight of the entire novel.
Lheureux doesn't hold Emma's paper himself. He sells it to Vincart, who purchases it at a discount. Emma now owes Vincart, though she has never met him and does not know his name. She learns this when a stranger appears at her door, stating that he had been sent by Vincart. Emma runs to Lheureux, assuming there must be some mistake. But Lheureux shrugs, the knife was at my own throat[10].
Can she negotiate with Vincart? No. Lheureux tells her Vincart is "ferocious." You don't know him.
One day, you owe a shopkeeper who knows your name. The next day, you owe a broker in Rouen who sent a collector. The debt is the same, but the relationship has been significantly altered.
Flaubert precisely traces the cascade, by dint of buying and not paying, of borrowing, signing bills, and renewing these bills[11]:
Frank Allenby plays Lheureux in the 1949 Minnelli film. When Jennifer Jones calls him a monster, his response is perfect: I've tolerated your conduct for too long. The cheating, the lying, the insatiable greed! And now you call me names. The line isn't in Flaubert; it didn't need to be.
From Character Document to Standardized Claim
The generation that followed would not write novels like these. Zola showed speculation as a fever. Much later, Dreiser treated it as nature: the lobster eats the squid. The naturalists could observe credit from a distance. By the 1880s, the "bill" was becoming something else.
The Bills of Exchange Act of 1882 codified English commercial paper into statute. A bill was now negotiable not because the parties knew each other, but because it met formal requirements: it was written, signed, unconditional, and payable to order or bearer. The signature still mattered, but less than the form.
This was what the realists had seen coming. The promissory note was passing from a character document to a standardized claim. In Balzac's world, du Tillet's paper circulated because Paris knew du Tillet: his connections, his protectors, rumors about his origins, and the fact that he had survived. The note was legible only to those who could read the man. In the world coming into being, the note would be legible to anyone who could read the statute. You no longer needed to know that Vincart was ferocious. You needed to know whether the instrument was properly drawn.
The usury laws fell away. England repealed its caps in 1854. France followed in 1886. The legal fiction that discount was not interest had done its work: it showed that price controls on credit simply moved the transaction into a different form. What replaced them was disclosure. The debtor need not be shielded from rates. She need only be informed of them. Whether she understood what she was signing was her affair.
Dickens, Balzac, and Flaubert caught the system at the hinge, in the moment before it abstracted itself, when the violence was still personal. Ralph Nickleby is collecting his due. Du Tillet repaying old humiliation with compound interest. Lheureux shrugged that the knife was at his own throat. After them, the knife would be held by institutions. The debtor would still be destroyed. But there would be no villain to name. Constance Birotteau's question would still be asked. How will you pay your notes? But it would be asked by a clerk, reading from a schedule, in an office where no one knew your face.