Bringing "Honest Capital" to Poor Borrowers: The Passage of the Uniform Small Loan Law, 1907-1930

Bruce G. Caruthers, Timothy Guinnane and Yoonseok Lee
Additional contact information
Bruce G. Caruthers: Northwestern University

Working Papers from Yale University, Department of Economics

Abstract: The Uniform Small Loan Law (USLL) was the Russell Sage Foundation's primary device for fighting what it viewed as the scourge of high-rate lending to poor people in the first half of the twentieth century. The USLL created a new class of lenders who could make small loans at interest rates exceeding those allowed for banks under the normal usury laws. About two-thirds of the states had passed the USLL by 1930. This paper describes the USLL and then uses econometric models to investigate the state characteristics that influenced the law's passage. We find that urbanization and state-level economic characteristics played significant roles. So did measures of the state's banking system. We find no evidence that party-political affiliations had any effect, which is consistent with the USLL's "progressive" character. Finally, we find little evidence that the passage of the USLL in one state made passage more likely in neighboring or similar states. If anything, the cross-state influences were negative. Our findings suggest that the Russell Sage Foundation only imperfectly understood the political economy of the USLL, and that a different overall approach might have produced a result closer to their aims.

JEL-codes: G21 G28 I38 K23 N21 N22 (search for similar items in EconPapers)
Date: 2009-05
New Economics Papers: this item is included in nep-his
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://economics.yale.edu/sites/default/files/file ... rs/wp000/ddp0063.pdf
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://economics.yale.edu/sites/default/files/files/Working-Papers/wp000/ddp0063.pdf [301 Moved Permanently]--> https://economics.yale.edu/sites/default/files/files/Working-Papers/wp000/ddp0063.pdf)

Related works:
Working Paper: Bringing "Honest Capital" to Poor Borrowers: The Passage of the Uniform Small Loan Law, 1907-1930 (2009)
Working Paper: Bringing "Honest Capital" to Poor Borrowers: The Passage of the Uniform Small Loan Law, 1907-1930 (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecl:yaleco:63

Access Statistics for this paper

More papers in Working Papers from Yale University, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by ().