Lewis Tappan is remembered as a strong-minded individual in the pursuit of abolitionism, but the early records of the Mercantile Agency of New York present a businessman who may have been just as self-righteous as he was righteous. Nonetheless, his ambition created the first systematic scheme for credit reporting.
Lewis Tappan was born in Northampton, Massachusetts in 1788, one of five brothers. Following in the commercial footsteps of his father, Tappan amassed a small fortune selling dry goods only to lose it in the 1820s through poor investments. He was saved by his brother, Arthur Tappan, who had amassed a small fortune in the silk wholesale business. Arthur assumed Lewis’ debts and offered his brother a position in his company in Lower Manhattan. The Tappan brothers were known for their ardent views on abolitionism, perhaps to the point of being notorious among the business community of New York.
The Panic of 1837, one of the worst economic recessions to hit the young American nation, sunk Arthur Tappan & Company into debt. The silk concern was able to keep its doors open, but it was evident to Lewis to find a more lucrative line of work. If there is one thing that economic depression will teach a businessperson about extending credit, it is the multitude of ways in which a debtor can escape repayment. In the 1830s, it would not be difficult to assume a false identity under which to obtain a loan of money or goods. Likewise, the burgeoning American frontier offered a safe haven to anyone who found themselves with limited prospects in the Eastern states.
Opening its doors in 1841, Tappan’s Mercantile Agency sought to rectify the issues with credit, making it more reliable. His plan was to find correspondents – attorneys, ministers, and fellow abolitionists – who would twice annually submit reports to his office in New York. The reports would track businessmen, their firms, and answer certain questions like:
“Is he a man of fair character and good business habits?”
“Was he educated to merchandise?”
“What is he worth, and has he able friends?”
“Is he engaged in any other business, and if so, what?”
“Is he a man of family, and has he ever failed in business?”
With subscription to the Mercantile Agency, firms could request information on prospective customers as to their honesty and reliability. Tappan was able to find willing correspondents in the Northern states and territories, but his known abhorrence to the institution of slavery made him much less popular with potential correspondents in the South. As such, subscribers could only inquire about firms and proprietors in the Free States.
When Lewis Tappan set out to sign up subscribers for his credit reporting agency, fellow members of the New York business community quite often met him with hesitation and sometimes outright rejection. Not only did his abolitionist reputation precede him, but the entire scheme seemed devious to some, akin to a confidential network of espions selling personal information to those willing to pay. Though in time, subscriptions increased and the Agency was successful enough to open branches in other major Northern cities.
Like any good business idea, it was quick to attract imitators. After a few years of growing success, subscribers began opting for rival, less pious firms that had access to Southern markets. Tappan’s management of the company, too, was becoming a secondary priority to abolitionist duties. As early as 1833, he helped found the American Antislavery Society. When the ship La Amistad was intercepted off the coast of Long Island in 1839, Tappan helped to form the Amistad Committee, and by 1846, he was helping to establish the American Missionary Association. By the end of the decade, Tappan left the Agency to fully devote his time to the Association.
The Mercantile Agency continued under the management of Benjamin Douglass, the chief clerk. Douglass later turned the company over to his brother-in-law, Robert Graham Dun, who changed the name from the Mercantile Agency to R.G. Dun & Company. During the Great Depression of the 1930s, almost 100 years after the Panic of 1837 inspired the establishment of the credit reporting agency, R.G. Dun merged with the Bradstreet Companies, a competitor, to form Dun & Bradstreet.
The early records of the Mercantile Agency came with the donation of the American Missionary Association Archives to the Amistad Research Center. The records consist of correspondence, printed circulars concerning the founding and operation of the Mercantile Agency, and a record book containing business transactions, news clippings, announcements related to the Agency, and some biographical information on agents who worked for the business.
Much of the background information on the Mercantile Agency comes from R.G. Dun & Co. 1841-1900: The Development of Credit-Reporting in the Nineteenth Century by James D. Norris (1978), God and Dun & Bradstreet, 1841-1851 by Bertram Wyatt-Brown (1966), and the Mercantile Agency records.
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