Economic History

A Culture of Credit: Embedding Trust and Transparency in by Rowena Olegario

By Rowena Olegario

In the becoming and dynamic economic climate of nineteenth-century the USA, companies bought tremendous amounts of products to each other, totally on credits. This ebook explains how company humans solved the matter of whom to trust--how they made up our minds who was once deserving of credits, and for the way a lot. within the strategy, a company method established mostly on info circulating via own networks grew to become depending on extra formalized tools and associations. First to seem within the 1830s used to be the credits reporting organisation, whose pioneers integrated the abolitionist Lewis Tappan, and businessmen John Bradstreet and Robert G. Dun (whose businesses merged in 1933 to shape Dun & Bradstreet). Later, teams of industrial collectors shaped interchanges and bureaus to percentage info on their clients' cost files. In 1896, the nationwide organization of credits males was once confirmed, and by means of 1920, credits males had confirmed either a countrywide credits details clearinghouse and a bureau for American exporters.

These advancements pressured American companies, huge and small, to make their monetary events extra obvious to collectors and credits reporting businesses. Rowena Olegario lines the best way resistance, mutual suspicion, skepticism, and criminal demanding situations have been conquer within the relentless quest to make details on company debtors extra exact and available.

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Additional info for A Culture of Credit: Embedding Trust and Transparency in American Business (Harvard Studies in Business History)

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The vast majority of credit assessments depended almost exclusively on oral or written recommendations by people who could vouch for potential borrowers. Recommenders could be local or distant suppliers with whom the buyer had previously done business, or respectable acquaintances such as lawyers, bankers, and even ministers in the community. A note written by a mercantile house vouching for New York City wholesalers P. G. Berry and Company was typical of this kind of personal recommendation. The note, handwritten on one of P.

104 Historian Edward Balleisen has outlined the complex and time-consuming procedure: In the most common action, a creditor would file papers with a local court . . If the creditor proved the existence and legality of the debt, he received a judgment . . After judgment, he had the common-law right to an “execution” on the debtor’s property. This process called for a sheriff to take possession of as much of a debtor’s goods and real estate as necessary in order to satisfy the creditor’s claim, to sell that property, and to transfer the resulting proceeds to the creditor, up to the amount owed plus court costs.

17 In short, British merchants opted to take on the attendant risks of using mercantile credit rather than forgo opportunities. 18 During the eighteenth century, British merchants came to rely on long credits to a greater extent than the French or even the Dutch. In Holland, almost all goods were sold on six weeks’ credit, with buyers responsible for their own financing. 19 The British, in contrast, extended long credits to help solve the problem of an inadequate money supply. Interest rates in Britain indicate that money was scarce relative to the growth of trade.

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