Bank Ownership and Lending Patterns in New York and Pennsylvania, 1781–1831

Abstract

Unlike most contemporary New England banks, early commercial banks of the Middle Atlantic region were widely owned and frequently traded corporations. They lent to a broad segment of the business community, including artisans, farmers, and women. Banks lent widely, first, because their large capitalization made it difficult for a few privileged insiders to control a substantial percentage of loanable funds and, second, because banks were able to acquire reliable credit information on a variety of customers in an efficient manner. As a result, small enterprises had access to bank credit.