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Debtor NationThe History of America in Red Ink$
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Louis Hyman

Print publication date: 2011

Print ISBN-13: 9780691140681

Published to Princeton Scholarship Online: October 2017

DOI: 10.23943/princeton/9780691140681.001.0001

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Making Credit Modern

Making Credit Modern

The Origins of the Debt Infrastructure in the 1920s

(p.10) Chapter One Making Credit Modern
Debtor Nation

Louis Hyman

Princeton University Press

This chapter examines the modern credit system that took shape after World War I. Modern debt after World War I was defined through two new debt practices—installment credit and legalized personal loans—which reflected the social and economic order that emerged out of the new industrial economy. Installment credit allowed consumers to buy more, retailers to sell more, and manufacturers to make more, all at lower prices. Meanwhile, personal loans enabled those industrial workers who made all those goods weather the uncertainties of capitalism's labor market. Together, the two debt practices developed for two distinct purposes inaugurated a new relationship between credit and capitalism, connecting personal lending to the larger circulation of investment capital in the American economy.

Keywords:   modern credit system, modern debt, installment credit, legalized personal loans, industrial economy, capitalism, personal lending, investment capital, American economy

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