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Installment Credit Before 1870

Published online by Cambridge University Press:  24 July 2012

Robert A. Lynn
Robert A. Lynn
Affiliation:
Instructor in Business Administration at Maryville College, Maryville, Tennessee
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Abstract

Neither cash sale nor barter were adequate means for bringing a growing number of high-priced durable goods to the American consumer. The employment of installment credit facilitated the growth of a mass market for such products and provides an example of the utilization of an old commercial technique for a new purpose.

Type
Research Article
Information
Business History Review , Volume 31 , Issue 4 , Winter 1957 , pp. 414 - 424
Copyright
Copyright © The President and Fellows of Harvard College 1957

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References

1 Plummer, Wilbur C., “Social and Economic Consequences of Buying on the Installment Plan,” Supplement to Volume CXXIX of the Annals of the American Academy of Political and Social Sciences (1927), p. 1Google Scholar.

2 Estrich, Willis A., The Law of Installment Sales (Rochester, New York, 1926), preface and pp. 105–143Google Scholar. Cases involving slaves and horses in the early 1800's are cited.

3 Ibid., pp. 3, 77, 78.

4 Commager, Henry Steele (ed.), Documents of American History (New York, 1938), pp. 185, 186, 227Google Scholar.

5 Cummings, A. Jr., Building and Loan Associations Their History and Design (Boston, 1854), pp. iii, 7–11Google Scholar.

6 The Prairie Farmer (April, 1852), p. 204.

7 Ibid. (May, 1854).

8 Ibid. (June 16, 1859), p. 382.

9 Ibid. (Sept., 1854).

10 The Prairie Farmer in May, 1854, for example, has three reaper ads without credit alongside the Manny offer cited above.

11 Ibid. (May, 1853).

12 Casson, Herbert N., Cyrus Hall McCormick His Life and Work (Chicago, 1909), p. 79Google Scholar.

13 McCormick, Cyrus, The Century of the Reaper (New York, 1931), pp. 50–52Google Scholar. The author is the industrialist's grandson. Hutchinson, William T., Cyrus Hall McCormick (New York, 1930), pp. 362, 363Google Scholar.

14 The Prairie Farmer (June 2,1859).

15 Ibid. (June 16,1859).

16 An interesting discussion of the machine's many uses appears in “The Results of the Invention of the Sewing Machine,” The Living Age (July, Aug., Sept., 1877), pp. 187–190. For a full description of early Singer marketing see Jack, Andrew B., “The Channels of Distribution for an Innovation: The Sewing-Machine Industry in America, 1860–1865,” Explorations in Entrepreneurial History, Vol. IX (Feb., 1957), pp. 113–141Google Scholar.

17 Bishop, J. Leander, A History of American Manufactures 1608–1860 (Philadelphia, 1866), p. 175Google Scholar.

18 Ibid., p. 175.

19 In the Peoria Daily National Democrat of Dec. 11, 1867, the Star Shuttle Sewing Machine was offered for $20, $35 and $40. In Springfield, Illinois, a cabinet model Wheeler and Wilson machine is shown at a price of $55 in the Daily Illinois State Journal, May 22, 1860.

20 Bourne, Frederick G., “American Sewing Machines,” in One Hundred Years of American Commerce, Depew, Chauncey M., ed. (New York, 1895), Vol. II, p. 529Google Scholar. Bourne was president of the Singer firm in 1895; he describes the system as the “renting or installment plan.”

21 The Journal (Springfield, Illinois), July 25, 1856Google Scholar.

22 G. B. Brown of Peoria, Illinois, “Shirt Manufacturer and Machine Agent,” has such an advertisement in the Peoria Daily National Democrat, Sept. 3, 1867. It appears that these agents were explicitly permitted to offer customers any inducements they chose. (Jack, op. cit., p. 130.)

23 Bourne, “Sewing Machines,” p. 529.

24 James Parton, “The Piano in the United States,” Atlantic Monthly (July, 1867), p. 82.

25 Horace Waters, an aggressive New York piano dealer, offered a piano for $275 in the Illinois State Register (Springfield, Illinois), June 10, 1873Google Scholar. Prices in 1867 ranged from $450 to $1500 at retail according to Parton, “Piano,” p. 82.

26 Manufactures of the United States in 1860; Compiled from the Original Return of the Eighth Census (Washington, D.C.: Government Printing Office, 1865), p. cliiGoogle Scholar.

27 Ibid., p. cxlvi.

28 Bolles, Albert S., Industrial History of the United States (Norwich, Conn., 1879), p. 538Google Scholar.

29 Dolge, Alfred, Pianos and Their Makers (Covina, California, 1911), pp. 174, 175Google Scholar.

30 Bishop, Manufactures, p. 171.

31 Dolge, Pianos, pp. 180, 181.

32 Bolles, History, p. 538. Bolles here estimates that total piano output (1879) was about 50,000 per year, or almost 1,000 a week; on this basis Hale had a significant share of the market.

33 New York Times, Sept. 5, 1853.

34 Ibid., May 16, 1854.

35 Ibid., March 26, 1855.

36 Ibid., Jan. 30, 1855.

37 Ibid., May 1, 1856.

38 Ibid., Jan. 15, 1855.

39 Ibid., Feb. 2, 1857.

40 Peoria Daily National Democrat, July 1, 1866.

41 Ibid., May 14, 1868. This was the advertisement's fast insertion; it appeared regularly in later issues.

42 Illinois State Journal, Jan. 6, 1870, p. 4.

43 Illinois State Register, June 10, 1873.

44 Ibid., June 18, 1873.

45 New York Times, May 8, 1856.

46 Fifth biennial Report of the Bureau of Labor Statistics of Illinois (Springfield, Illinois, 1888), pp. xxv, xlviii, xcviii, xcixGoogle Scholar.

47 Illinois Intelligencer (Vandalia, Illinois), Nov. 11, 1826Google Scholar.

48 Illinois State Journal, Jan. 4, 1870, p. 1.

49 Pressure of fixed costs in the presence of unused productive capacity helped cause the rapid growth in installment sales of automobiles in the 1920's according to Plummer, “Installment Plan,” p. 7.

50 The Journal (Springfield, Illinois), July 25, 1856Google Scholar.

51 New York Times, March 26, 1855.