President Declares Bankruptcy?

President Declares Bankruptcy?

That’s right, Abraham Lincoln. The Great Emancipator and 16th president of the United States once had to file for bankruptcy on a business that did not work out in his favor. Interesting to think that the man whose face appears on the penny didn’t have a cent to his name at one point in his life.

New Salem, Illinois, 1838. Lincoln and a business partner invested in that town’s general store, and for a time, profits were well in the black. Everything looked promising.

In fact, things were so promising, that the partners decided to expand their business into a franchise. They began purchasing general stores in nearby towns and rearranging the inventory to match that in the Salem General Store. This is actually one of the earliest examples of an American franchise, in which stores in different communities could be relied on to carry the same products as stores in other towns, thus making it convenient for the customer who then does not have to travel to buy specifically desired goods.

The idea was a good one, and a century after the Civil War, Sam Walton would perfect the process in his chain of Wal-Mart stores which now operate on a global basis, offering many of the same goods and products, while still catering to local desires.

But what worked for Sam Walton and not Abraham Lincoln was the fact that the original Salem General Store itself no longer carried certain items that were unique to that location. Customers no longer needed to travel to that store, and sales began to falter.

When the numbers in the ledger began to turn from black to red, Lincoln offered to sell his share of the company to his partner at a discounted rate. The partner took the deal, but died later that same year. Having no family to speak of, he left everything to his former partner, and Abraham Lincoln was on the hook for well over a thousand dollars in debt. In today’s dollars, that would equal almost 30,000 in debt.

So, the man who was born in a log cabin in Illinois filed for bankruptcy protection while he got himself out of debt by borrowing from friends and family members to pay off his creditors. Lincoln was still paying off these debts well into the 1840’s, and he would be president less than 20 year later.

As it turns out, he’s not the only president to experience financial hard times. Ulysses S. Grant, Thomas Jefferson and William McKinley all had to file for bankruptcy protection. Jefferson had to file after he was president, thanks to some shaky real estate investments that didn’t pay off.

So there you have it. If you think less of yourself because you’ve run into financial difficulties, please stop. No less than four United States Presidents have had similar troubles, including – as we’ve seen – the great Abraham Lincoln.

At CASH 1, we believe there are a lot of lessons that can be learned from history, and one of them is that financial troubles can happen at any time, and literally to anyone. If you’re dealing with financial hardship, come see us for no FICO credit check title loans or auto equity loans. It could be the financial shot in the arm you need to get back on your feet, and perhaps one day run for president.  

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