Henry Austen’s role as Receiver-General of Taxes for Oxfordshire is remembered as the cause of the collapse of his bank, Austen, Maunde and Tilson, and of the bankruptcy of all the partners.  Henry owed the exchequer £44,445 for taxes that he had collected in Oxfordshire that quarter but had not paid over to the Exchequer.1  The events immediately leading up to the collapse and the subsequent recovery of assets have been fully covered in an earlier article (Avery Jones).  Whatever fault can be attributed to Henry in causing the collapse we can put to one side.  This article looks at Henry’s eventful earlier years as Deputy Receiver and then Receiver before the collapse, a history that puts Henry in a different and far more favorable light.  As Deputy Receiver to the Hon. John Spencer, he acted with great foresight in taking security when he deposited part of the tax collected with Bolderos—one of the leading banks in the City, which unexpectedly went bankrupt—thus avoiding what could have been a serious problem.

The Receiver formed the link between the local parish Collectors of Taxes and the Exchequer.  The need for such a person was, at least originally, because of the need to collect money from numerous local parish Collectors, often paid by taxpayers in notes issued by local banks.  The Restriction on Cash Payments Act of 1797 had removed the Bank of England’s obligation to pay gold for its banknotes.  As the Bank of England notes, which circulated mainly in London, were no longer backed by gold, there was no objection to country banks also issuing their own banknotes, which were not backed by gold either.  Notes issued by country banks were not acceptable to the Exchequer in payment of taxes, so one of the duties of the Receiver was to arrange for their conversion into an acceptable form of payment.  The Receiver made quarterly visits round his county shortly after the end of the twenty-one days’ grace period after the tax quarter day for payment of taxes.2  He would be accompanied by two other persons for security.  Otherwise, if there was a loss, they could not claim against the parish or Hundred (43 Geo. 3 c 99 s 58).  The Receiver would meet Collectors of Taxes at points within ten miles of several Collectors’ residences, usually the main town of the Hundred (43 Geo. 3 c 99 s 50).  Receivers were expected to transmit the amount collected to the Exchequer by the end of each quarter but were permitted to retain a permanent balance of £6,500. 

Henry’s predecessor as Receiver was the Hon. John Spencer, son of Lord Charles Spencer, the Lieutenant-Colonel of Henry’s Oxfordshire militia regiment, who had been Receiver since 1804 (Finance Accounts of Great Britain 1804 [1805] HC 56, 47).  Spencer ceased to hold the post when he fled the country to evade his creditors (including Henry for £7,200, of which £6,500 may be the permanent balance that a Receiver was permitted to retain).  Henry had previously been Spencer’s Deputy Receiver probably from 1810 or 1811; as it is not an official appointment there is no official record of when he was appointed.3  Henry’s successor was John Henry Tilson, the elder brother of Henry’s now bankrupt banking partner James Tilson. 

Spencer’s fleeing the country resulted in Henry’s taking over as Receiver-General and inheriting the problem of an existing debt to the Exchequer for taxes collected by the Receiver that greatly exceeded the permitted balance of £6,500. The following Table extracted from the Finance Accounts for Great Britain4 shows the amount owing by the Receiver to the Exchequer at each 5 January year-end, with the reason why this was allowed even though it exceeded the permitted limit.  The reason that the Exchequer took no action over the excess is that Henry’s bank had taken security in the form of Exchequer Bills (short-term negotiable bills issued by the government carrying interest) from the bank in which the money was deposited, and it could be transferred to the Exchequer to secure the outstanding debt.

Table: Taxes owing to the Exchequer at the end of each year by the Receiver-General for Oxfordshire

The strange paradox of this table is that although Henry and his predecessor had balances in excess of the permitted £6,500 every year-end from 5 January 1812 to 1815, the Crown did nothing about it.  Henry was within the permitted limit on 5 January 1816, however, and was bankrupted by the Crown a little over two months later, on 15 March 1816, owing taxes of £44,445. 

Although the Finance Accounts on 5 January 1812 show Spencer as Receiver, as Deputy Receiver Henry was the person more directly involved in the debt’s increase from £6,370 on 5 January 1811 (within the permitted £6,500 permanent balance) to £34,597 a year later.  The reason can be seen from a case in the Exchequer Court in June 1814 and documents in the National Archives.6 

This is where it gets complicated.  There are three banks involved:  Austen & Co., Henry’s London bank Austen, Maunde & Tilson; Boldero & Co., one of the leading banks in the City, which went into bankruptcy on 2 January 1812, three days before 5 January 1812, the date to which the annual accounts were made up; and Lushington & Co., which went into bankruptcy a few days later, on 6 January 1812.7  There were close family connections between all three banks.  The father of James Tilson, one of Austen & Co.’s partners, was married to Maria Lushington; Maria’s brother, Sir Stephen Lushington, married Hester Boldero and became a partner in Boldero & Co. (the senior partner of Boldero & Co. was Hester’s brother, Charles); and another brother of Maria, William Lushington the Elder, and his son were the partners in Lushington & Co.8  The financial relations between Boldero & Co. and Lushington & Co. were connected.  At the time we are considering, a Miss Dehany owed about £5,000 to Lushington & Co., which owed £200,000 to Boldero & Co., which owed £29,000 to Austen & Co., which owed £48,000 to the Exchequer for taxes collected by Henry as Deputy Receiver and deposited with Austen & Co., with part in turn deposited with Boldero & Co. 

According to the explanation for 1813 (see Table above), funds were remitted to Boldero & Co. for payment into the Exchequer at the end of the quarter, which seems like a short-term deposit by Austen & Co. with Boldero & Co. before the tax was due to be paid to the Exchequer by 5 January 1812.9  The failure of Bolderos three days before the due date of the Receiver’s payment to the Exchequer was extremely unfortunate timing, which could have led to a disaster for Spencer and Henry and his banking partners.  Fortunately, with great foresight on Henry’s part, Austen & Co. had obtained security from Boldero & Co. in the form of Exchequer Bills, although the Boldero & Co. partners included Sir Henry Lushington, the first cousin of Henry’s partner James Tilson and Tilson’s aunt’s brother Charles Boldero.  The circumstances of Henry’s obtaining security are not mentioned in the case or in the National Archives.  Had Henry heard rumors that Boldero & Co. was in trouble?  Austen & Co. was able to transfer these Exchequer Bills to the Crown as security for the tax money that they could not pay over because of Bolderos’ failure.  The Exchequer was willing to accept these Exchequer Bills as they were fully secured by government paper on which they earned interest.10  If Austen & Co. had not taken this security, they could have expected the Crown to arrive on the due date, armed with a Writ of Extent seizing all their assets—as indeed happened four years later. 

A Writ of Extent was a legal device available to the Crown for collecting debts under a statute of Henry VIII (33 Hen 8 c 39) under which the Crown could seize the whole of the land, goods, and chattels of the debtor, including debts due to the debtor, and imprison him in the Fleet prison, and then, by issuing further Extents, seize the assets (including the debts due) of a debtor of the Crown debtor, and also imprison that debtor in the Fleet prison, and so on without limit.  The Extent overrode everything else—even the bankruptcy laws—so long as it was issued before or on the same day as the bankruptcy.  A variation was the Extent in Aid.  A person such as a Receiver owing money to the Crown would procure the issue of an Extent against himself, limited to the seizure of a debt due to him.  The Receiver then applied for an Extent in Aid against his insolvent debtor, which gave him all the Crown’s remedies, including imprisonment and the seizure of all the debtor’s assets by the Sheriff.11  The process could be repeated for up to three degrees.  The Crown would then consent to the Sheriff’s paying the Receiver, thus demonstrating that the Crown’s involvement, necessary to give the Court jurisdiction, was a legal fiction.  The procedure was capable of being misused by Receivers, particularly bankers, who used it to collect ordinary banking debts on the basis that without payment they could not pay the Crown—although the debt being collected by the Receiver could be much larger than his debt to the Crown. 

Boldero & Co.’s bankruptcy caused a serious problem for the Crown.  Not only did Henry have £29,000 of tax collected deposited with them, but another Receiver had deposited £57,235.12  On 2 January 1812, the same day as Boldero & Co.’s bankruptcy, two applications were made to the Court of Exchequer.  The first application was by Henry for an Extent in Aid against himself and his banking partners for the Crown to seize the debt from Boldero & Co; it was granted, together with a second-degree Extent against Boldero & Co. against all its assets.  The second application was by the Crown acting through Matthew Winter, the Secretary to the Commissioners for the Affairs of Taxes, the chief executive of the department, who (unusually) personally applied for an Extent against all the assets of Austen & Co.  His affidavit explained that because of Boldero & Co.’s bankruptcy, they could not pay the tax they were expecting to pay the following day.13  Oddly the second application was not granted until the following day after an Inquisition determining the amount of the debt.  If an Extent had followed immediately, it would have led to the collapse of Austen & Co. and the bankruptcy of Henry and his banking partners.  There is, however, no issued Extent in the National Archives resulting from the second application, suggesting that the Crown agreed to the day’s delay to enable Austen & Co. to provide the Exchequer Bills to secure the part owed by Boldero & Co. and to pay the balance.  When Austen & Co. had done so, the Crown did not need to pursue the Extent as they had effectively been paid. 

A few days later, on 6 January 1812, Lushington & Co. was bankrupted and an Extent was issued against them for the £258,225 they owed to Boldero & Co.14  For some reason the Crown must have decided, in respect of Boldero & Co.’s debt to Austen & Co., to seize £19,000 from Boldero & Co. and the balance of £10,000 from Lushington & Co.  We do not know why they split these amounts between the two banks, but they probably thought it gave them the greatest chance of collecting the £29,000 quickly.15  They seem to have been mistaken.  Although the outstanding debt from Austen & Co. (see Table above) fell by about £17,500 between 5 April 1812 and 1813, suggesting that £19,000 must have been collected from Boldero & Co. (with other receipts and payments accounting for the difference), it looks as if the remaining £10,000 could not be recovered from Lushington & Co. until the year ended 5 January 1816.  It would surely have been quicker to go against Boldero & Co. for the whole £29,000. 

Meetings of the creditors of both Lushington & Co. and Boldero & Co. were called to decide whether to contest the Extents;16 only Lushington & Co. decided to do so.  The case was heard by the Court of Exchequer on 25 June 1814.  The only issue in the case that concerns us is the Exchequer Bills.  Lushington & Co. argued that as Austen & Co. had the Exchequer Bills for £29,000 as security from Boldero & Co., there was no debt between Boldero & Co. and Austen & Co.  Thus, there was no need for the Crown to claim £10,000 from Lushington & Co. to the detriment of Lushington & Co’s own creditors in its bankruptcy.17  They applied for a writ that the Crown’s hands be taken off (amoveas manus) this debt.  During the proceedings, however, it transpired that Boldero & Co. was not in fact the owner of the Exchequer Bills; the Exchequer Bills (except for £3,000) belonged to their customers, and therefore it was a breach of trust to use them to secure their debt to Austen & Co.  But Austen & Co. and, through them, the Crown were protected because they had no notice of the breach of trust; thus, their security overrode the customers’ rights.18  As the court said:  “if the original proprietors of those bills which were negotiable securities, chose to intrust them to Boldero & Co. they carrying upon the face of them the character of being negotiable securities, and appearing to be the property of Boldero & Co., they must abide by the consequence” (see n6; Price 99; Eng. Rep. 1343).  The owners of the bills could, however, reclaim them (or their proceeds) from Austen & Co. if the debt to Austen & Co. could be paid by Boldero & Co. out of other funds.  It could not therefore be said that the debt from Boldero & Co. to Austen & Co. no longer existed, in spite of the fact that it could be paid by realizing the security of the Exchequer Bills.  Lushington & Co. therefore lost on this point. 

The situation, then, was that the Crown held the Exchequer Bills as security that they would only realize when it was proved that they could not be paid the debts from Boldero & Co. and Lushington & Co. in their bankruptcies.  From the notes quoted in the table above, it seems that between 5 January 1812 and 1813 the holding of the Bills was reduced from the original £29,000 to £11,000,19 a reduction of £18,000, suggesting that the £19,000 seized had been recovered from Boldero & Co.  The Crown, however, retained £1,000 of their security so as to give them an extra margin (if they had recovered nothing they would have needed to realize the full £19,000 of their security in order to pay themselves in full).20  Similarly, between 5 January 1813 and 1816 the £10,000 was either recovered from Lushington & Co., and the security released to Austen & Co.; or it could not be recovered, and the Crown realized the security.  Since the Crown had priority over the other creditors of Lushington & Co., the former is more likely.21  On this basis, all the Exchequer Bills would have been released to Austen & Co. and thence to Boldero & Co., who would be able to give them back to their customers despite the bankruptcy as the Bills did not belong to them but were held on trust for the customers. 

Thus, Henry’s greatly increased indebtedness to the Crown in the year to 5 January 1812 was his responsibility—although not his fault and although Spencer was still the Receiver.  It is interesting that he must have foreseen that Boldero & Co., one of the most prestigious banks, was in financial difficulties.  He had the foresight to obtain security in the form of the Exchequer bills from Boldero & Co.  He was thus able on this occasion to walk away without any repercussions.  He was not so fortunate on the next occasion. 

By 5 January 1816 the position was back to normal (see Table) for the first time since 1811, with Henry, now the Receiver, owing only £6,453, an amount within the permitted permanent balance of £6,500.  By 15 March 1816 the situation was very different.  As Receiver Henry would have gone to Oxfordshire shortly after the end of the grace period of twenty-one days for paying taxes after 5 January when half a year’s income tax was due.  The amount collected was about £51,215 (comprising various taxes for various years representing current tax and arrears that had been paid to the Collectors22), which he was due to pay over to the Exchequer by 5 April.  We do not know why the Exchequer called on Henry and his bank on 15 March 1816.  Perhaps they were merely asking how much he was expecting to pay on 5 April.  But what happened was that they came away with only £13,270, all his bank could pay immediately, leaving £22,743 of tax deposited in the bank that it could not pay and only part of the amount Henry owed.  As a result, the bank stopped payments, thus precipitating the collapse, including the bankruptcy of all the bank partners (who as partners had unlimited liability)23 and the issue of writs of Extent against the bank partnership and, separately, Henry.  Unlike the 1812 Extents against Austen & Co., Boldero & Co., and Lushington & Co., which merely seized some debts due to them, these Extents seized all Henry’s and the bank’s (and the bank’s partners’) assets and provided for their imprisonment in the Fleet prison (although this did not happen).24  After the bank’s payment of £13,270, Henry owed £44,445 (including the permanent balance).  That is another, rather longer, story told elsewhere (Avery Jones), but there, too, Henry’s financial expertise is shown to be greater than is usually asserted.

ACKNOWLEDGMENT

I am grateful to Professor Peter Sabor, Professor Jan Fergus, and Azar Hussain for their helpful comments on a draft of this article.

NOTES

1As can be seen from the table, where the balance at the end of the previous quarter, 5 January 1816, was just under the permitted £6,500, it should be emphasized that, contrary to some commentators, this tax was all collected from the various Collectors in that quarter (and the figure was only part of the total collected as some had been paid over). 

2These were 5 January, 5 April, 5 July, 10 October; income tax was due on 5 January and 5 July, and the assessed taxes on 5 April and 10 October.  These are the traditional quarter days of 25 March, 24 June, 29 September (Michaelmas), and 25 December, adjusted for the eleven-day calendar change in 1752.  The land tax payment dates did not change, perhaps because the amount was constant and more like rent, which was also not affected by the calendar change. 

3The obituary of John Spencer notes that his character degenerated after the death of his wife (the second daughter of the 4th Duke of Marlborough) in 1812 (“Spencer”).  On 16 February 1798 Henry’s wife, Eliza, wrote of John Spencer’s father, “as to my Colonel Lord Charles Spencer if I was married to my third husband instead of my second I should still be in love with him—He is a most charming creature so mild, so well bred, so good, but Alas he is married as well as myself” (Le Faye 154). 

Jane Austen gives Henry’s address in Oxford to Cassandra in a letter of 30 April 1811.  Since Henry would have been in Oxfordshire collecting the assessed taxes due within twenty-one days after 5 April 1811, he must have been appointed earlier.  The appointment had to be made by deed and the General Commissioners notified ([1803] 43 Geo. 3c 99 s 48); they would have to inform all the Collectors that paying over taxes to him was in order.  It seems probable that Cassandra wanted to write to him for a reason other than to congratulate him on his appointment.  If Henry’s loan of £2,000 on 9 March 1810 to Lord Charles Spencer was made in recognition of this appointment, it would suggest that the appointment was made earlier than April 1811. 

4The references to the Finance Accounts of Great Britain are for the year to 5 January 1810 (two page references are given:  first to the balances, second to arrears):  HC 162, 1810, 24; 1811: HC 88, 1810–11, 24, 88; 1812: HC 125, 1812, 24, 111; 1813: HC 100, 1812–13, 24, 86; 1814: HC 77, 1813–14, 20, 86; 1815: HC 159, 1814–15, 35, 98; 1816: HC 135, 35, 96; 1817: HC 98, 1817, 33, 95; 1818: HC 147 1818, 33; 1819: HC 147, 1818, 55, 146; 1820: HC 178, 1819, 61.  Shillings and pence have been omitted. 

5Following its abolition, the last income tax receipts would have been in 1817.  It is interesting that Tilson made up the amount outstanding on 5 January to the usual figure with assessed and land taxes instead. 

6The King v Blackett ([1814] Price 1: 94).  Blackett was an Assignee (i.e., a trustee in bankruptcy) of Lushingtons in The King v Lushington (Eng. Rep. 1342; TNA E 144/57). 

7Bolderos’ bankruptcy files give 2 January 1812 as the date of the bankruptcy (TNA B31/144–303).  Lushingtons’ date is taken from the affidavit of 6 January 1812 of Andrew Freeman, clerk to the solicitors for the affairs of taxes, applying for an Extent against Lushingtons (TNA E 144/57). 

8Henry Tilson’s father, John Tilson, married Maria Lushington, the daughter of the Rev. Henry Lushington. 

The partners in Bolderos were Charles Boldero, Edward Gale Boldero, Sir Henry Lushington, 2nd Baronet, and Henry Boldero, bankers and copartners, dealers, and chapmen (London Gazette 4 Jan. 1812 [No. 16557]: 17).  Charles Boldero was Hester’s brother; Sir Henry Lushington, 2nd Bart., was the son of Sir Stephen Lushington, 1st Bart. (director and chairman of the East India Company), and Hester Boldero.  Edward Gale Boldero’s father was Henry Gale Boldero, the brother of John Boldero, the father of Charles and Hester; Henry Boldero was his son.  Although the bank was known as Bolderos and Lushingtons, to avoid confusion I am following the Court’s naming of this partnership as Boldero. 

The partners in Lushingtons were William Lushington the Elder and William Lushington the Younger, merchants, dealers, chapmen, and partners (London Gazette 11 Jan. 1812 [No. 16561]: 77).  William Lushington the Elder was the brother of Sir Stephen Lushington, 1st Bart.; William Lushington the Younger was his son.  Other Lushington family members of interest were Stephen Rumbold Lushington, MP (for Canterbury)—very favorably described by Jane Austen (14–15 October 1813)—and Sir Stephen’s first cousin once removed.  Sir Stephen’s father, the Rev. Henry Lushington, was the brother of Stephen Rumbold Lushington’s grandfather, Thomas Godfrey Lushington; Louisa Lushington, author of The Journal of Louisa Lushington (1821–1822), was the daughter of Sir Henry Lushington 2nd Bart. 

9Henry’s affidavit applying for an Extent in Aid (TNA E 144/57) does not give the reason for the deposit with Bolderos, merely describing it as money lent and advanced.  It seems unlikely that the funds were deposited with Bolderos “for payment into the Exchequer” (as the Notes to the Table state) as Austens could have paid them directly.  Tilson may have requested the deposit because of his close family connection with the Bolderos partners. 

10Austens owed £48,000 (all figures in the judgment are round figures, the actual figure being £48,700) on 2 January 1812 according to the court case.  The balance in the Table on 5 January 1812 was £34,597, so they must have paid about £14,100 out of funds not deposited with Bolderos between those dates.  As stated in the notes in the Table the interest on the bills went to the benefit of the Exchequer, which would not otherwise be the case until the Receiver’s accounts were passed by the Court of Exchequer two years after the year end.  There is a receipt from Winter (Secretary of the Board of Taxes) of £2,167 0s 7d in the Finance Accounts for 1815, “being interest on Exchequer Bills deposited during proceedings in the Court of Exchequer on a question of liability to answer a Balance of accounts to the Amount of the said Bills” (HC 1816 135, 45 and 62).  It likely relates to the interest on the Bills for the whole period. 

11Insolvency needed to be pleaded in the affidavit, but it was often done in vague terms, such as that the applicant “hath heard, and verily believes, that the same defendant has become insolvent and has stopped payment.” 

12Mr. Creyke, Receiver-General of part of York, owed tax of £57,235 on 5 January 1812, which was secured by a deposit of stock in the public funds (likely to have been provided by Bolderos).  He also used the Extent in Aid procedure described below (TNA E 144/57). 

13The backsheet of Henry’s affidavit (TNA E 144/57) shows that Henry’s affidavit was prepared by Booth & Leggatt, Mr. Leggatt being the Solicitor for the Affairs of Taxes, thus demonstrating that the Crown took the proceedings to protect their position. 

14Both Extents granted on the first application are in TNA E 144/57.  The £5,000 debt from Miss Dehany to Lushingtons was also seized and was another aspect of the case.  She claimed unsuccessfully that this debt was too far removed from Austens’ debt to the Crown to be seized.  The Court held that the three degrees did not include the Crown debtor.  West demonstrates that the court’s contention is wrong by reference to a detailed examination of earlier cases that had not been cited to the court, with the result that the Crown’s debtor should be included in the three degrees limit (303). 

15It was said in the case that after £19,000 of the debt from Austens had been claimed from Bolderos, their Assignees (trustees in bankruptcy) deposited £10,000 with the Crown as an encouragement for the Crown to proceed against Lushingtons (see n6; Price 100; Eng. Rep. 1344).  Thus, Bolderos could have paid. 

16London Gazette 28 Apr. 1812 (No. 16598): 819; London Gazette 23 Nov. 1813 (No. 16813): 2349. 

17This was the second issue in the case that the court did not accept.  If it had accepted Lushingtons’ argument that seizing £10,000 from them was to the detriment of their creditors, it would have merely meant that Bolderos’ creditors were equally disadvantaged, as the court pointed out 101 (see n6; Price 101; Eng. Rep. 1344).  The Crown had just as much right in an Extent against Bolderos to seize the debt from Lushingtons as it did so seize Bolderos’ tables and chairs. 

18A court of equity will not allow a claim against a bona fide purchaser for value (here Austens as lender to Bolderos would be regarded as purchasers of the security) who does not have notice of the breach of trust. 

19Although the £11,000 is first mentioned in the note to the Finance Accounts to 5 January 1814, given the reduced balance due on 5 January 1813, the reduction must have taken place in the year to 1813. 

20The report of the Blackett case (n6; Price 98; Eng. Rep. 1343) notes that Lushingtons contended that Austens turned the bills into money, which, assuming it to be true, in view of the hearing date could relate only to these bills 

21This is confirmed by a later statement to the Court by the Attorney General on 3 June 1823 (TNA E 144/57) that Lushingtons had paid to Bolderos its two debts of £215,425 and £41,600 and that the Crown was not proceeding further against Lushingtons. 

22I cannot give the breakdown because of the problems caused by the bankruptcy, but, for illustration, in the previous quarter to 5 January 1816 Henry paid £59,903 to the Exchequer, comprising income tax for 1814, assessed taxes for 1814 and 1815, and land tax for 1813–1815. 

23The Times 16 Mar. 1816: 4; London Gazette 16 Mar. 1816 (No. 17119): 519.  Stopping payment was not, as such, an act of bankruptcy. 

24Since the Extent was directed to a particular Sheriff or Sheriffs, individuals could absent themselves from the bailiwicks concerned.  It was possible to obtain further Extents directed to other Sheriffs, but doing so required a further application to the Court.