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

By Rowena Olegario

within the transforming into and dynamic economic climate of nineteenth-century the US, companies offered huge amounts of products to each other, totally on credits. This booklet explains how company humans solved the matter of whom to trust--how they decided who was once deserving of credits, and for the way a lot. within the approach, a company approach established principally on info circulating via own networks grew to become depending on extra formalized equipment and associations. First to seem within the 1830s was once the credits reporting organization, whose pioneers integrated the abolitionist Lewis Tappan, and businessmen John Bradstreet and Robert G. Dun (whose agencies merged in 1933 to shape Dun & Bradstreet). Later, teams of industrial collectors shaped interchanges and bureaus to percentage info on their buyers' money documents. In 1896, the nationwide organization of credits males used to be proven, and via 1920, credits males had confirmed either a countrywide credits info clearinghouse and a bureau for American exporters.

those advancements compelled American companies, huge and small, to make their monetary occasions extra obvious to collectors and credits reporting organisations. Rowena Olegario strains the way in which resistance, mutual suspicion, skepticism, and criminal demanding situations have been triumph over within the relentless quest to make details on company debtors extra exact and on hand.

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Additional resources for A Culture of Credit: Embedding Trust and Transparency in American Business

Sample text

Wholesalers and other suppliers knew that good information on customers could mitigate the high risks involved in trade. Obtaining it, however, was expensive. One way to overcome the problem was for suppliers to band together into trade protection societies, where members agreed to alert one another regularly about bad debtors. The arrangement had emerged in Great Britain beginning in the late eighteenth century (see Chapter 1). Another way to obtain information on potential buyers was to hire an agent to procure it.

Reliable statistics on the scale of mercantile credit extended throughout the United States do not exist for this period. 3 billion. The amount of trade done on credit could be several times the capital resources of a business. Some jobbers advanced to country stores goods worth “three or four or even five times the amount of his [the jobber’s] capital,” the agency reported. 77 He failed to consider the liberality with which northeastern suppliers extended credit. ”78 In the mid- to late 1850s, in particular, northeastern wholesalers extended large amounts of credit to southern storekeepers based on the region’s booming economy.

R. Wiley invited “country merchants and retail dealers in Ready Made Clothing” to call at his store. “I can make it in their interest to buy of me rather than in the St. ”93 In this competitive atmosphere, suppliers extended credit to encourage larger purchases and cultivate what they hoped would become a lasting relationship. Northeastern suppliers felt the competition from new inland rivals so keenly that many relaxed their standards and began extending larger amounts of credit, prompting boosters of the newer areas to make disparaging remarks about eastern commercial standards.

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