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Bedlam

A lunatic asylum or madhouse; a contraction for Bethlehem, the name of a religious house in London, converted into a hospital for lunatics.

Tom o' Bedlam.
(See Tom.) St. Mary of Bethlehem, London, was founded as a priory in 1247, and in 1547 it was given to the mayor and corporation of London, and incorporated as a royal foundation for lunatics.

Source: Dictionary of Phrase and Fable, E. Cobham Brewer, 1894
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