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Scott suffered two major financial crises, in 1813 and 1825-26,
both sparked by the collapse of his publishers:
- The Fall of John Ballantyne and Co. (1813)
- The Fall of Archibald Constable and Co. (1825-26)
1. The Fall of John
Ballantyne and Co. (1813)
In 1809, Scott had broken with Archibald Constable and helped to
set up the rival publishing house of John Ballantyne and Co. (see
The Ballantyne Brothers). Scott obtained
a half-share in this new business, and the Ballantyne brothers,
John and James acquired a quarter share each. Profits were to be
divided in the same proportion, and policy to be decided jointly.
In practice, however, Scott, who had loaned an additional £1,500
to increase the business's liquid assets, made all major decisions
and determined which titles should be published. Like Scott's involvement
with James Ballantyne's printing house, his participation in this
new enterprise was a closely guarded secret.
May 1810 John Ballantyne and Co. published Scott's The
Lady of the Lake, the immense success of which led the three
partners into a wildly optimistic assessment of their prospects.
The profits, however, were not ploughed back into the business,
and Scott selected a series of financially disastrous titles for
publication where loyalty or personal esteem for the author outweighed
cold commercial logic. 1810, for example, saw the publication of
a posthumous three-volume edition of the poems of Anna Seward, 'the
Swan of Lichfield', one of Scott's great correspondents. Seward
(portrayed, right) had appointed him her literary executor with
instructions to bring out her collected works, most of which Scott
himself judged 'absolutely execrable' (letter to Joanna Baillie,
March 18, 1810). Equally unsuccessful were Scott's friend John Jamieson's
The Historical Account of the Ancient Culdees of Iona (1811)
and a fourteen-volume edition of the plays of Beaumont and Fletcher
Another long-cherished Scott project, however, proved the chief
drain on the firm's resources. The Edinburgh Annual Register
began with encyclopedic ambitions and an impressive list of contributors.
Each volume was originally to include an account of world events
in the year covered, followed by surveys of developments in the
spheres of literature, science, fine arts, 'useful arts', meteorology,
and commerce. It suffered, however, from desultory and inconsistent
editing (at the hands of Scott and James Ballantyne) and fell well
short of its ambitions. It failed to print most of the advertized
essays, always appeared at least two years late, and was too politically
partisan for an annual publication. By 1812, it was losing £1,000
a year. Such errors of commercial judgment were to prove fatal in
a war-ravaged economic climate marked by banking crises and the
increasing unavailability of credit.
||Click on the thumbnail for a full-scale reproduction
of the title page of the first edition of the Edinburgh Annual
Register. This, the volume for 1808, did not appear until
In 1811, as unsold stock gathered in dust in the warehouse , Scott
paid the exorbitant price of £4,200 for Cartley Hole Farm,
the property which he was soon to expand into the estate of Abbotsford.
He borrowed half the sum from his brother Major John Scott, and
the rest was raised by John Ballantyne on the security of Rokeby,
the as yet unwritten poem on which Scott was banking to restore
the fortunes of the publishing house. When, in 1813, sales of the
completed poem proved disappointing, the financial standing of John
Ballantyne and Co. fell so low that no bank would extend it a further
loan. Worse still, the publishing house was threatening to drag
James Ballantyne's printing house down with it. The Ballantyne Press,
in fact, was John Ballantyne and Co.'s principal creditor, having
as yet received little payment for the volumes it had printed for
its sister-company. Scott resolved to wind down the publishing house,
but how to do so without revealing his own role was a delicate matter.
Scott's social (and quite possibly professional) position would
have suffered by the revelation that he was partner in a debt-ridden
business and that he had profited in three ways (publishing, printing,
and copyright) from the sales of his own books.
||Click on the thumbnail for a full-size
engraving by William Richard of Cartley Hole Farm as it appeared
when Scott bought it in 1812. This engraving appeared on the
title page of Vol. V of Lockhart's Life of Sir Walter Scott,
Bart. (Cadell, 1839)
Much to Scott's embarrassment, the publishing house was obliged
to turn to Archibald Constable in the hope that he might take over
its surviving assets. Constable drove a hard bargain offering £1,300
for part of John Ballantyne's unsold stock, on condition that the
firm wind up immediately and Scott allow him to purchase a quarter
share of the copyright of Rokeby for an extra £700.
Constable also agreed to prepare a report into the financial state
of both the printing and publishing houses. His conclusion, that
they must raise £4,000 immediately to avoid bankruptcy, came
as a shock to all three partners. Scott, though, was particularly
shaken, as bankruptcy would mean not only revealing his dubious
financial dealings to the world but resigning his post as Clerk
to the Court of Session (see Professional Life).
In desperation, he appealed to his patron and clan-chief, the Duke
of Buccleuch, who generously agreed to stand guarantor behind an
overdraft of £4,000.
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2. The Fall of Archibald Constable and Co.
the mid-1820s, Archibald Constable (portrayed, right) was becoming
increasingly nervous about the huge number of bills in circulation
bearing his firm's name. These were of two kinds. Firstly, beginning
with Marmion (1808),
Constable had pioneered an advance system of authorial payment,
whereby Scott was paid for a literary work before it was actually
written. With Scott requiring ever greater funds for his work on
Abbotsford and for the lavish entertaining that his public role
entailed, he had taken increasing advantage of this arrangement.
By 1825, Scott had outstanding contracts for nine works with Constable,
for which he had received advance payment of £10,000. Although
Constable himself required to invest immense sums in re-editing
the Encyclopaedia Britannica, fear of losing his most bankable
author lured him into dangerous levels of debt.
Secondly, there were 'accommodation bills' issued not in payment
for any work done but for the purpose of raising money on credit.
One company or individual would make out a credit note for an amount
repayable by a certain date. In return, they required the recipient
to make out a counter-bill to the same amount (in order to permit
the issuing body to obtain credit for such a sum and to continue
trading). These counter-bills were usually held in reserve but were
sometimes cashed by the issuing body. If the issuing body could
not meet its obligations and the bill proved worthless, the recipient
was liable for the entire sum drawn. If, however, the issuing body
had cashed or circulated the counter-bill, the recipient was again
liable for the amount for which it had been granted. In other words,
the recipient would be required to repay the same loan twice. This
was a system that tied businesses together in a most precarious
manner. Archibald Constable and Co. and James Ballantyne and Co.
had each backed the others bills. If either company fell, the other
was likely to collapse in its wake.
Just as Scott's financial demands were undermining the foundations
of Archibald Constable and Co., they were placing the Ballantyne
Press in increasing jeopardy. Between 1816 and 1822, unknown to
the business world, Scott was the sole owner of the Ballantyne Press.
Considered a sound concern by the banking houses, the press enabled
Scott to raise bills that he would never have been granted as a
private individual. He had made extensive use of these credit facilities
to finance work on Abbotsford, with the result that when, in 1822,
James Ballantyne was re-admitted as co-partner, the business had
debts of £27,000. (Ballantyne and Constable too had acquired
the dangerous habit of using accommodation bills to fund work on
their own property.) Scott acknowledged to Ballantyne both the extent
of these debts and his personal responsibility for them. Ballantyne
believed that the lands and estate of Abbotsford proved more than
adequate security for the firm's liabilities. But in 1825 Scott
settled the estate upon his newly married son (though a clause permitted
Scott to enjoy life-rent of the property). According to Scots Law
as it then stood, Abbotsford was thus put beyond the reach of creditors.
James Ballantyne was kept in ignorance of this settlement, and it
would come as a rude shock to discover that Abbotsford was not a
Printing Office asset (see The Ballantyne
In 1825 the City of London was swept by a wave of speculation.
This soon gave way to panic selling, tumbling prices, and a credit
squeeze by the Bank of England. At the height of speculation fever,
J.O. Robinson of Constable's English agents, Hurst, Robinson, &
Co. had bought over £40,000 in hops in the hope of cornering
the market. The market was already glutted, and he was forced to
sell at rock-bottom prices. Under pressure to return the £30,000
capital Robinson had borrowed, Hurst, Robinson, & Co. were soon
having the greatest difficulty in meeting their obligations. Constable
& Co. had backed their bills; James Ballantyne & Co. had
backed those of Constable & Co. As none of the three firms had
a solid security, the collapse of one would bring all three crashing
down. Hurst, Robinson & Company were able to meet their most
pressing debts for a few weeks by raising short-term loans, but
by December 1825 bankruptcy appeared inevitable.
Click on the thumbnail to view the full-size image
of part of a letter from Scott to Adam Ferguson arranging
a meeting at Abbotsford Sent on 20 December 1826, it dates
from the height of Scott's second major financial crisis.
The letter forms part of Edinburgh University Library's Laing
Collection of manuscripts.
In Edinburgh, frantic efforts were made to drum up credit for Archibald
Constable & Co. A clause inserted in his son's marriage settlement
enabled Scott to raise a £10,000 mortgage on Abbotsford. This
he promptly did with the bulk of the sum going straight into Constable's
coffers. On January 5, 1826 an ever more anxious Scott suffered
a slight stroke. On January 14, the crisis finally materialized.
A bill for £1,000 made out by Robinson in favour of Constable
could not be honoured on its due date. Constable had long since
cashed and spent the amount. The Bank of Scotland immediately refused
any further credit, and Archibald Constable & Co. were forced
to stop payment.
As a private individual and as a partner in James Ballantyne and
Co., Scott found himself with debts of £121,000, largely as
a result of the duplication of bills under the 'accommodation' system.
Scott had four options. He could declare personal bankruptcy, apply
for trade bankruptcy (for the majority of his debts had been incurred
via his trade partners), apply to friends and relatives for loans,
or effect a trust deed. The first would have involved the loss of
his library, furniture, and life-rent of Abbotsford and would probably
have meant exile. The second would have allowed him to set up in
business again in a matter of months by paying his creditors as
little as seven shillings in the pound. His sense of honour, however,
would not permit such an escape route. Offers of financial assistance,
meanwhile, were flooding in - from his son and daughter-in-law,
from the Dukes of Buccleuch and Somerset, from Scott's friends,
J.S. Morrit, James Skene, and Colin Mackenzie - but Scott was appalled
by the thought of charity. It was the final option, the trust deed,
that Scott preferred and which his creditors were happy to accept.
creditors, then, set up a private trust into which Scott would pay
his entire revenue from literary sources and thus eventually clear
his debts. Scott's close friend, the Edinburgh banker Sir William
Forbes (portrayed, right), was instrumental in persuading the Bank
of Scotland to accept this arrangement. The Bank had initially argued
that Scott's contracts with Constable should be honoured, and that
the money from the works in hand should go to the publisher's estate
and creditors. They had also felt that Scott's alienation of his
creditors' claims on Abbotsford might be open to legal challenge.
Forbes also served Scott in paying off the sole creditor who refused
to accept the trust option, the London firm of Abud & Sons .
The other creditors' clemency stemmed partly from a reluctance to
drag down a man regarded as a national treasure, the news of whose
ruin had awakened great public sympathy. There was also, however,
the hard-headed calculation that should Scott continue writing best-sellers
at his current rate (he had written eighteen novels in the previous
ten years), they might well see their money back in the not too
distant future. They nonetheless took the precaution of insisting
Scott take out a life-insurance policy of £20,000 payable
to the Trust in the event of his death.
Scott was permitted to continue to receive the benefits of his
official salaries (see Professional Life).
He voluntarily sold his house at 39 Castle
Street but was able to preserve his life-rent of Abbotsford.
Constable, conversely, was utterly ruined, and his relations with
Scott came to an abrupt end. Scott felt that the crash was largely
his publisher's responsibility and was particularly bitter about
the mortgage on Abbotsford which he had fruitlessly raised to bail
him out. Subsequent research, however, has suggested that Cadell
was the prime mover in the mortgage episode, and most recent biographers
feel that Constable was harshly judged by Scott. Be that as it may,
Scott threw in his lot with Cadell, regarding his contracts with
Constable as null and void (a point on which the courts eventually
He launched himself into a ferocious period of writing (Woodstock,
Chronicles of the Canongate,
The Life of Napoleon
Buonaparte) that had already brought in £40,000 by
Christmas 1827. The most lucrative project, however, would be the
'Magnum Opus', a readily affordable edition of the Waverley Novels
with new introductions and copious notes. Originally floated to
Constable, this would be brought out in 48 volumes by Cadell between
1829 and 1833. By the time of Scott's death on September 21, 1832
the debt had been reduced to £53,000. It would finally be
paid off in 1847 by the sale of Scott's remaining copyrights.
Click on the thumbnail for a full-size image of the title
page of the first volume of the 'Magnum Opus' (1829) with
a vignette of David Gellatley engraved by William Raddon after
a design by Edwin Henry Landseer.
For further information on Scott's
financial dealings, consult the following in addition to the other
works cited on the Bibliography
- Grierson, H.J.C., Sir Walter Scott,
Bart.: A New Life, Supplementary to and Corrective of, Lockhart's
Biography (London: Constable, 1938)
- Quayle, Eric, The Ruin of Sir Walter
Scott (London: Rupert Hart-Davis, 1968)
- Sutherland, J.A., The Life of Sir Walter
Scott: A Critical Biography (Oxford: Blackwell, 1995)
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Last updated: 24-Oct-2003
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