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

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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.
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Editorial Reviews

From the Publisher
"...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 current values." E. L. Whalen, Choice

" this creative and well-crafted book, Naomi R. Lamoreaux shows that insider lending actually worked well....Insider Lending explores an important aspect of banking history that has been largely neglected. Not only will it be cited repeatedly, but it will generate further studies of insider lending in other times and places, and by other financial intermediaries. This book, I predict, will become a classic." Hugh Rockoff, Journal of American History

"This thin volume packs a powerful message....Because banking issues so often intersect with politics in this era, every scholar who delves into U.S. history during the nineteenth century should become familiar with the broad outline of Lamoreaux's revisionist thesis." Edwin Perkins, American Historical Review

"Lamoreaux effectively challenges modernization theorists and those who claimed kinship ties had lost their economic importance in the first half of the century. She also demonstrates that pre-Civil War banks did play a major role in economic development....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. Lamoreaux establishes a tight argument that sheds important lights on changing bank practices and contributes significantly to several scholarly debates." James Borchert, The Historian

"Lamoreaux's book demonstrates that banking history does not have to be dull. Hers is a lively essay that should be read by all students of banking history or early industrialization." Journal of Interdisciplinary History

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Product Details

Table of Contents

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.
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