Insider Lending: Banks, Personal Connections, and Economic Development in Industrial New England [Hardcover]

This book, first published in 1994, explores the important role that insider lending played in the economic development of early nineteenth-century New England.Insider lending was an integral aspect of the banking system in early nineteenth century New England. Not only was the practice an accepted fact of economic life, but as this text argues, it enabled banks to play an important role in financing economic development.Insider lending was an integral aspect of the banking system in early nineteenth century New England. Not only was the practice an accepted fact of economic life, but as this text argues, it enabled banks to play an important role in financing economic development.Today the term insider lending conveys an aura of abuse and corruption, of unethical, if not illegal, behavior. In early nineteenth century New England, however, insider lending was an integral aspect of the banking system. Not only was the practice an accepted fact of economic life, but, as Naomi R. Lamoreaux argues, it enabled banks (at least in this particular historical context) to play an important role in financing economic development. As the banking system evolved over the course of the century, however, lending practices became more impersonal and professional.Acknowledgements; Introduction; 1. Vehicles for accumulating capital; 2. Insider lending and Jacksonian hostility towards banks; 3. Engines of economic development; 4. The decline of insider lending and the problem of determining creditworthiness; 5. Professionalization and specialization; 6. The merger movement in banking; Conclusion. ...this is an excellent and important book. It is based on extensive analysis of individual bank records, diaries, correspondence, industry literature, public records, and reports; and it is very well written. James Borchert, The Historian Readers will gain insights into the evolution of financial institutions in the US but also into the hazards of judging past practices according to currlcÉ