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Local Lending Practice: Borrowers in a Small Northeastern Industrial City, 1832–1915

Published online by Cambridge University Press:  03 March 2009

Andrew A. Beveridge
Andrew A. Beveridge
Affiliation:
The author is Associate Professor of Sociology, Queens College, City University of New York, Flushing, New York 11367.
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Abstract

An analysis of over 10,000 loans made by a major credit source in Keene, New Hampshire, from 1832 to 1897 is presented. The data sources are unique and include information on property ownership and wealth, occupation, involvement in businesses, age, and connections with the credit source. As time passed more funds were lent to borrowers out of the city and county, lending was used to support many new industrial and other enterprises, as well as for infrastructural and social capital investments. Many loans were made to individuals and businesses with close ties to the source of credit.

Type
Papers Presented at the Forty-fourth Annual Meeting of the Economic History Association
Information
The Journal of Economic History , Volume 45 , Issue 2 , June 1985 , pp. 393 - 403
Copyright
Copyright © The Economic History Association 1985

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References

1 Keyes, Emerson W., History of Savings Banks in the United States (New York, 1878)Google Scholar and Welfing, Weldon, Mutual Savings Banks: The Evolution of a Financial Intermediary (Cleveland, 1968), provide descriptive background about savings banks.Google Scholar

2 Two classic studies of savings banks are Payne, Peter L. and Davis, Lance E., The Savings Bank of Baltimore, 1818–1866: A Historical and Analytical Study (Baltimore, 1956);Google Scholar and Davis, Lance E. and Payne, Peter L., “From Benevolence to Business: The Story of Two Savings Banks,” Business History Review, 32 (Winter 1958), pp. 388–406.CrossRefGoogle Scholar In neither is any analysis attempted of insider lending. In a response to Vatter, Barbara, “Industrial Borrowing by the New England Textile Mills, 1840–1860: A Comment,” this JOURNAL, 21 (06 1961), pp. 216–21Google Scholar, Davis, Lance, “Mrs. Vatter on Industrial Borrowing—A Reply,” this JOURNAL, 21 (06 1961), pp. 222–26, asserts that little discrimination was in evidence.Google ScholarOlmstead, Alan, “New York City Mutual Savings Bank Portfolio Management and Trustee Objectives,” this JOURNAL, 34 (12 1974), pp. 815–34Google Scholar, and Olmstead, Alan, New York City Mutual Savings Banks, 1819–1861, (Chapel Hill, N.C., 1976) does not analyze the extent of insider lending.Google Scholar

3 Griffin, S. G., A History of Keene (Keene, N.H., 1904), pp. 433–34.Google ScholarKeene History Committee, Upper Ashuelot: A History of Keene (Keene, N.H., 1968), p. 621;Google ScholarU.S. Bureau of the Census, “Manufacturers in New Hampshire,” (November 1921).Google Scholar

4 See Beveridge, Andrew A., “Studying Community, Credit and Change by Using ‘Running’ Records from Historical Sources,” Historical Methods, 14 (Fall 1981), pp. 153–62.CrossRefGoogle Scholar

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6 This issue is raised in Olmstead, Alan L., “Investment Constraints and New York City Mutual Savings Banks Financing of Antebellum Development,” this JOURNAL, 32 (12 1972), pp. 811–40.Google Scholar

7 According to property rights theorists, one would expect more shirking and nepotism in such a situation. See Alchian, A. A. and Demsetz, H., “Production, Information Cost and Economic Organization,” American Economic Review, 62 (12 1972), pp. 777–95.Google Scholar

8 Further analyses are underway which make use of more of the materials in the data base, which at this point is composed of 469,000 card image records, about 2.1 million with relational data included.Google Scholar

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11 All analyses reported here are based on a record matched file which includes a number of different data sources, including R. G. Dun ledgers and ratings from reporting books; population, agriculture, and manufacturing census schedules; bank records; family records; town histories; and other materials. For more details see Beveridge, “Studying Community, Credit and Change by Using ‘Running’ Records from Historical Sources.”Google Scholar

12 Vatter, Barbara, “Industrial Borrowing by the New England Textile Mills, 1840–1860: A Comment,” p. 216.Google Scholar

13 Davis, Lance E., “Mrs. Vatter on Industrial Borrowing–A Reply,” pp. 222–27.Google Scholar

14 Olmstead, Alan, New York City Mutual Savings Banks, 1819–1861, pp. 97–116.Google Scholar