Honest Abe: don’t take on unnecessary debt

Abraham Lincoln is such a revered individual, a self-made man who is now considered one of America’s greatest presidents.

Lincoln’s honesty and integrity are well-celebrated. He made sure to repay his debts, and he also avoided taking on debts he could not pay off.

I came across an interesting story that demonstrates just how far Lincoln took this belief. I’ll warn you this is not something you would read in a classroom, so this is not a story for the faint of heart.

Before Lincoln married, he lived in Springfield with his friend Joshua F. Speed. The bachelor Lincoln was curious to explore the town of Springfield.

His hulking bedfellow, Speed, was quite the womanizer, “and kept a pretty woman in the city.” One day Lincoln asked Speed, “Do you know where I can get some?” According to Speed, he sent Lincoln with a note to this woman, who appears to have been something of a prostitute. Lincoln and the girl stripped and were in bed before Lincoln remembered to ask about the price. The girl told him five dollars. Lincoln declared he could afford to pay here only three dollars, and the girl said she would trust him for the rest, but Lincoln declared he had other debts to meet, and rose up and clothed himself again. As he left, according to Speed’s secondhand telling of the encounter, the girl said, “You are the most conscientious man I ever saw.”

Via Abraham Lincoln, Thomas Keneally (better known for his book that inspired the film Shindler’s List)

The story is interesting for a couple of reasons.

First, it demonstrates a level of restraint that most consumers simply do not have. There are people who cannot resist buying the latest gadgets and go into credit card debt. Lincoln was going against a primal urge.

Second, it gives some idea about how much prostitutes were charging. Using a currency deflator, I found out that a dollar in 1837 is the equivalent of $23.50 today. The girl was asking for roughly $117 while Lincoln was only able to offer about $70. These prices are strangely in line with current prices, if you’re wondering–a streetwalker in New York City might charge $75, according to an interesting economic study on sex.

So follow the example of honest Abe and only take on debt that is within your means.

(If the story is too unsavory for your tastes, you may take comfort that it was told second-hand by his friend and the details are unverified)