EDUCATORS’ PERSPECTIVE
Memorandum from the Bradstreet Company, dated April 11, 1883.
Collection of the Museum of American Finance
Collection of the Museum of American Finance
The Mercantile Agency Daily Notification Sheet, issued by R. G. Dun & Co. on August 10, 1885.
interest, and an additional six months was allowed if storekeepers were willing to pay a moderate interest rate for the extension.”
To obtain such credit, a storekeeper was simply required to obtain a letter of reference from a respected storekeeper, a local lawyer or a minister vouching for the character and creditworthiness of the applicant. This system worked fairly well until economic downturns sent ripple effects through the entire credit system. Moreover, as the country continued to grow, it eventually became impossible for the New York wholesalers to develop the kind of personal relationship with their customers that the credit system required.
Large, well-established European firms, such as Baring Brothers, solved the problem by hiring full-time employees to travel around the United States and gather information on potential credit customers. Such a system was too expensive for most US businesses to emulate. In New York, some wholesalers organized the Merchants Vigilance Association and hired an individual to travel about and produce credit reports for the Association. The effort, however, was short-lived.
Lewis Tappan adroitly stepped into the gap and worked incessantly to get the new agency up and running. This involved going from door to door soliciting subscriptions from various New York businesses. He also worked hard to develop a national network of correspondents who would deliver timely and accurate credit reports to the company’ s New York headquarters. He took advantage of both his business network and his abolitionist network to find correspondents. When those avenues were exhausted, he worked to identify local lawyers to complete the task. One notable abolitionist who agreed to work for him was Salmon P. Chase, future Secretary of the Treasury, and one of the lawyers he recruited in Illinois was none other than Abraham Lincoln. In the early years, Tappan’ s correspondents worked in secret to uncover information on local businesses. This unnerved many businesses » continued on page 38
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