Words-worth: Bailout

One minute the banks have been given a bailout, the next it's whole countries. But where did the term come from?

by John Morrish
Last Updated: 09 Oct 2013
 A bailout is an act of rescue for a failing business or economy, taking the form, usually, of huge sums of money. But where did 'bailout' come from? Is it an emergency parachute jump from a crashing aircraft? Or the act of ladling out water from a sinking boat? Well, both ideas have their supporters, but it's more likely to have come from criminal law. 'Bail' is an Old French word meaning 'power' or 'jurisdiction'. By the 15th century it had come to mean a sum of money used as security to get someone released from prison who was awaiting trial. Later on, to 'bail out' was to get someone freed in that way. But, by the early 20th century, in the US, it had come to mean releasing someone from a different sort of difficulty: a financial crisis. The noun 'bailout' or 'bail-out' is also American, being first recorded in Time magazine in 1939 in an article about a handout to tobacco companies designed to keep prices high for farmers. It was for $40m, a shocking sum then, but small change by today's standards.

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