Case Study: America’s Second Great Awakening
The religious revival that swept America in the years before our Revolution—known as the Great Awakening—deepened our belief in human sovereignty and equality before God, and was thereby a crucial factor, historians agree, in fueling our struggle for independence.
A full generation later there followed a Second Great Awakening. It was even more influential in forming our national character and changing the direction of our society. While the first awakening produced political change, the second awakening yielded social reform—shifting American culture in ways both broad and deep.
The bloom was off the rose of politics for Americans as the Second Great Awakening began at the end of the 1700s and accelerated in the early decades of the 1800s. This was when the Articles of Confederation imploded, partisan hatreds broke out for the first time, the nation became embroiled again in war, and passionate Jacksonian populism smashed all sorts of national customs and forms. The social changes of the day were drastic, and politics was chaotic. “No period” of U.S. history “was more concerned with ideological issues than the age of Jackson,” notes historian Bertram Wyatt-Brown. This produced not only bitter electoral contention but also struggles over the staffing of government, spurts of corruption, and periodic violence in our streets and town squares. Many Americans felt unsettled and uneasy.
Not only our politics but our culture seemed debased. Per capita alcohol use was three to four times current levels. (See Temperance case study.) Public spaces were often slimy with tobacco spit. Popular pastimes included dogfights, cockfights, rats-versus-dog battles, and bull-baiting. A fighting style called “gouging” was a problem during these decades. Street brawlers grew their fingernails long to make it easier to pop the eyeball out of an opponent’s head; some filed their teeth to assist in biting off appendages during frequent imbroglios.
Disgust with ugly politics and culture didn’t drive solid citizens into retreat, though. To the contrary, philanthropists—and especially the surging ranks of reborn evangelical Christians—decided that they had a duty to help create a better and more orderly nation. And this was history’s first religious revival that aimed to simultaneously serve God and soften Caesar. Believers were urged to be active on two distinct fronts: soul-saving and good citizenship; personal character and neighborhood decency; abstaining from evil and rooting out evils in society; salvation and reform; religion and humanitarianism; individual regeneration and cultural improvement. It was not an otherworldly religion that swept America in the first half of the nineteenth century. Leaders like Charles Finney argued that the Gospel had been given to us by God not only to rescue souls but to clean up our collective life.
Change was happening in Britain at the same time. English philanthropist and politician William Wilberforce, who led his nation’s crusade to abolish the slave trade, emblemized the evangelical enthusiasm for spreading religious and moral truths to all people, regardless of station, while also emphasizing the vital need for “a reformation of manners” in collective life. But the evangelical wave swept further into the countryside in America than it did in Britain, creating a surge of social energy that left deep marks on secular life.
Protestant church membership in the U.S. grew twice as fast as population over the multidecade course of the Second Great Awakening. In areas where the revival fires burned brightest, like upstate New York, religious activity was rampant. Even more impressive than the packed church pews, remarked newspapers like the Rochester Observer, was the “spirit of zeal and boldness” and “increased energy infused into Christian character and exertion.”
The 1853 report of a traveler from Sweden named Fredrika Bremer gives a flavor of the passion in evidence at revival peaks. She describes an immense crowd of mingled white and black Americans at a nighttime Georgia camp meeting. Eight large altars had been built in a forest. Scores of campfires roared, with rings of burbling people gathered around each. She records wails from the penitent as a lightning storm approaches, and describes joyful singing by thousands of believers. It was, she writes, a night “never to be forgotten.”
Mass inner transformation connected to outward action
One of the remarkable things about the Second Great Awakening is how democratic it was. It was sparked and initially peopled by Methodist, Baptist, and Presbyterian farmers, artisans, and laborers. Only after small-town residents and frontier families had built it into a mighty force did it eventually become a gravitational influence on wealthier classes. The theology of the awakening centered around the equal value and wide opportunity enjoyed by every person. It rejected all conceptions of an anointed elect, an aristocratic church, or an elitist view of the good life.
One of the leaders who imbued the movement with this accessible spirit was Charles Finney. An upstate New York attorney prior to his conversion, he brought a democratic spirit and host of effective courtroom techniques to his second career of lifting up Americans from the pulpit. The effect was powerful.
Finney’s preaching was not only exciting and impassioned, but direct, logical, and sincere. He urged all pastors to speak in simple cogent sentences and clear colloquial language. He always used the first-person “you,” not some fuzzy third-person reference. His precise, logical arguments delivered with energy, verve, and informal wit resembled a great “lawyer arguing to a jury,” in the words of one impressed observer. Businessmen, practical artisans, and students loved his messages.
The first aim of his frank, dramatic preaching was to convince the listener to take the Christian message to heart and change his or her own life in intimate, lasting ways. His immediate second priority was to build a sense of what he called “present obligation” among his listeners. He wanted the farmers and merchants, mechanics and mothers in his audience to recognize their responsibilities to others, and enter into service of their fellow man. This marriage of inner personal change to humanitarian action was the great contribution of evangelical activists during this era.
In a series of camp meetings conducted from 1825 to 1835, Finney drew vast crowds, particularly in central and western New York. To build on the following he stirred up in small towns, fast-growing new cities, and frontier regions, philanthropists like Arthur Tappan, William Dodge, Anson Phelps, and Jonas Platt provided funding to bring his revival message to big Eastern cities including Manhattan. They rented churches for him, hired assistants, provided publicity, and offered funds to eliminate the pew fees that made it hard for people of modest income to attend services in major sanctuaries.
“No more impressive revival has occurred in American history,” writes historian Whitney Cross in assessing Finney’s work. Charles Finney was “one of those rare individuals who of their own unaided force may on occasion significantly transform the destinies of masses of people.”
Finney had lots of company in wedding revivalism to social reform. His fellow preacher and reformer Lyman Beecher spent much of his career working to convince fellow Americans that Christianity was more about what they should do than about what they could think. The linking of religious belief to constructive social behavior was such a strong emphasis that by the end of the Second Great Awakening it had become a truism even of Senate speeches. “I believe man can be elevated; man can become…more God-like in his character, and capable of governing himself. Let us go on elevating our people, perfecting our institutions,” urged Senator Andrew Johnson in 1858.
Bringing morality to politics
The new reforming religion that surged across America in the first half of the nineteenth century had a fascinating relationship to politics. As the Second Great Awakening arrived, many secular reformers were ready for help from religious leaders. They were finding it difficult to improve our tumultuous country through policy alone.
Benjamin Rush is a perfect example. A physician and signer of the Declaration of Independence, he was a reform philanthropist who did vast good in areas like improved medical care, humane treatment of the insane, prison reform, and education of the poor and neglected. He was also one of the first prominent Americans to warn that heavy drinking was damaging our society and that alcohol consumption patterns needed to change. He wrote a book on the physiological and social damage done by bingeing, and worked with other humanitarians like Pennsylvania philanthropist Anthony Benezet to try to make headway against this problem. Rush eventually concluded that churches were best positioned to bring lasting reductions in drinking, writing that,
from the influence of the Quakers and Methodists in checking this evil, I am disposed to believe that the business must be effected finally by religion alone. Human reason has been employed in vain…. We have nothing to hope from the influence of law in making men wise and sober.
As the Second Great Awakening was unfolding, American politics, like much of the rest of the country, was in the midst of turmoil and far-reaching change. Many members of the possessing classes were turning away from the Federalists in frustration. A raw new populist streak was unfolding across public life, including in the presidency of Andrew Jackson and the party machines that took over many major cities. Mass political parties were being born for the first time in human history. Dramatically different strategies for winning office and governing were taking root, and Americans were having to learn whole new ways of thinking about political action.
Evangelical Christians were most concerned with individual behavior and reinforcing the moral rules that yield success in both personal life and public affairs. Many Christian reformers were wary of political contamination of religious causes, and political corruption of well-meant reforms. But they did not turn their backs on the new politics. They knew that the political arena was one of the necessary forums where personal behavior and community morals had to be discussed and regulated. Though their consciences often tempted them to opt out of politics, the vast majority resisted and instead tried to fashion principled codes of public action that would sometimes include political activity.
Yet they were clear on which form of activity was the higher and subsumed the other. Instead of arguing that “religion has a legitimate role in politics,” as is often said today, Charles Finney put the horse before the cart, saying that “politics are a part of religion in such a country as this.” Philanthropist and leading New York financier Thomas Eddy insisted that people saying “we take no interest in politics” were really saying “we take no interest in human progress.” They were also, he warned, abandoning the freedoms of religious conscience and practice that were so hard-won by America’s founders. Other leaders called an anti-political temper “un-Christian,” castigated “the piety that is too ethereal for the duties of citizenship,” and urged that “Christians must do their duty to the country as part of their duty to God.” Editor and Methodist pastor James Watson suggested that true religion “sanctifies the citizen and sends him to the ballot-box to…bless his fellow man.”
Historian Richard Carwardine concludes that this insistence on bringing religious conscience to the creation of public policy shaped our politics “every bit as much as appeals to natural law and natural rights had molded the politics of the Revolutionary era.” The Second Great Awakening pushed the political emphasis away from naked interests and the idea that “to the victor belongs the spoils,” which dominated the early 1800s, toward a more morally principled approach.
This shift is nicely illustrated in one concrete bit of evidence. The very first time that Lewis Tappan—the leading reform-philanthropist of the Second Great Awakening—ever saw a win by the candidate he supported for President was in 1864. Abraham Lincoln became the greatest moralist ever elected to our top political office just as the social reforms spurred by the Awakening reached a high-water mark.
Much more than politics, though, civil society was the place where leaders and funders of the Second Great Awakening put their energy and resources. They created hundreds of charities, associations, and action groups to fan out across the country and make conditions healthier, happier, and more wholesome. The products of this grassroots effort included orphanages, old-age homes, houses for delinquent children, hospitals, residences and job-training programs for former prostitutes, new or expanded churches, shelters for the poor, legal defense for Native Americans facing removal from their lands, anti-alcohol self-help groups, Sunday schools, seminaries, new colleges, schools catering to girls and blacks and Native Americans, advocacy for the rights of wives whose husbands had abandoned them, clubs that discouraged profanity among children, and groups that pushed businesses to close on Sunday and let their workers rest and worship with their families. These creations were crucial in bringing cohesion, order, decency, fairness, and stability to jam-packed cities and rough frontiers where many virtues had leaked away.
Awakened citizens gave money and raised it from their friends, and they volunteered their time and labor in vast quantities. “Members were not to attempt to do good merely by pecuniary contributions, but especially by personal exertions and labors. Every member of the Society was to be ‘a working man,’” wrote the organizer of one charity created to teach children.
This approach characterized the Second Great Awakening’s style of Protestantism—which emphasized “personal exertions” and the need to work for the salvation and success of others. One important sociological benefit of this was that it got millions of middle-class businessmen and housewives and college students into direct contact with the poor, slaves, drunkards, lonely seamen, abandoned widows, and disenfranchised minorities. The helpers thus developed real understanding and expertise in what was going on in our tenements and docks and servants’ quarters.
This led the evangelical activists to try a vast range of new palliatives—visiting nurses, milk stations for children, hostels to protect new arrivals from the country from urban corruptions, you name it. Many individuals and groups found themselves offering multiple kinds of help at the same time: Women visiting elderly people in need of company also brought food. At church services in poor neighborhoods, clothing, coal, bread, and jobs were distributed along with Bibles and tracts. Missionaries who moved into slums to proselytize also ended up teaching the ABCs to young and old neighbors. Reformers developed a vast arsenal of weapons for battling irreligion, ignorance, and want. “Early nineteenth-century evangelicals did not possess extraordinary vision or wisdom; they merely experimented with various solutions to the problems they saw and then focused their energies on those that seemed to work best,” reports historian Anne Boylan.
Many talented organizers and leaders rose to the top of the reform groups working to clean up our society: people like the gifted polemicist Theodore Weld, the poet John Greenleaf Whittier, and journalist-provocateur William Lloyd Garrison. Though the mores of their era kept most out of the limelight, many top charitable efforts depended heavily on impressive women as the foot soldiers and line officers of their battalions, and nearly all of the eventual leaders of the later suffrage and women’s rights movements were alumni of these evangelical reform groups.
The burst of cooperative and transformative energy that poured out in communities all across our land also produced larger alliances that either coordinated the local groups or operated as national or international charities in their own right. Look beneath their sometimes ornate nineteenth-century titles and you will get a sense of the breathtaking ambition of these associations, which quickly numbered in the thousands: the Society for Bettering the Condition of the Poor, Provident Society for Employing the Poor, Society for the Promotion of Industry Among the Poor, American Education Society, Society for Establishment and Support of Charity Schools, American Temperance Society, Sons and Daughters of Temperance, American Bible Society, American Tract Society, Prison Discipline Society, Orphan Asylum Society, American Female Guardian Society, American Seamen’s Friend Society, American Home Missionary Society, Board of Commissioners for Foreign Missions, American Sunday School Union, American Anti-Slavery Society.
Collectively, this remarkable ecosystem of volunteer societies became known as the Benevolent Empire. And empire is not too strong a word. By 1834, when the voluntary wave was still in its early days, the total annual income donated to the major Benevolent Empire groups rivaled the size of the entire federal budget of that year. Most of the charities had broad bases and were sustained by hundreds of thousands of modest donations from contributors all across small-town America. “The real dependence of the movement,” reports Wyatt-Brown, “was upon the middle-class farmers and townsmen near the Erie Canal and along the rivers of New England.”
Wealthy philanthropists also played important roles. Ground Zero for the interlocking reform groups was Nassau Street in lower Manhattan—where many of the evangelical charities were headquartered. Nassau Street begins directly in front of today’s New York Stock Exchange. Then as now, the merchants and financiers whose places of business packed that region included many nationally important philanthropists. Generous givers among the lower-Manhattan capitalists, plus other major donors like Stephen Van Rensselaer, Gerrit Smith, Theodore Frelinghuysen, Elias Boudinot, William Jay, Richard Varick, James Milnor, John Pintard, and Thomas Eddy, were important seed funders for many charitable efforts.
Foremost among the spark-plug philanthropists supporting the Benevolent Empire were the Tappans. Their large family included two prosperous and philanthropic brothers in Boston, another brother who became a U.S. Senator, plus additional siblings. But it was New York City merchants Arthur and Lewis who became the most famous of the Tappans. I suggest that from the Wrights to the Kennedys to the Kochs, no other pair of brothers even came close to having as big a transformative effect on America as these two philanthrocapitalists.
Arthur and Lewis Tappan grew up in a very pious home in small-town New England. Their village of Northampton, Massachusetts, “was neither rich and sophisticated, nor backward and poor,” records one chronicler. Their modestly successful family likewise adopted the classic middle-American perspective and avoided being either haughty or submissive. Mrs. Tappan was a grandniece of Benjamin Franklin, but the family “put on no airs, envied no one’s superior status, and did not snub those below them,” according to Wyatt-Brown.
Their community was stitched together by the threads of numerous voluntary associations of the sort that Tocqueville marveled over during his American tours at the height of our Second Great Awakening. For instance, Northampton’s solid citizens would gather before the fireplace of the town inn once every month and convene their Society for Detecting Thieves and Robbers and Bringing Them to Punishment. Their Hampton Musical Society met in the same building—but weekly rather than monthly, putting the lie to the idea that Puritans were all grim duty and no melodious fun.From the Wrights to the Kennedys to the Kochs, no other pair of brothers came close to having as big a transformative effect on America as these two philanthro-capitalists.
There’s no doubting the Tappans were Puritans. In her youth, Mrs. Tappan attended revivals with George Whitefield and other leading preachers of the original Great Awakening. And the home where she and Mr. Tappan reared their flock for a period of years was the former residence of fire-and-brimstone preacher Jonathan Edwards. Many notes and tones of America’s previous spiritual crescendo echoed around Arthur and Lewis as they grew to adulthood.
The boys had an uncle David who was a professor at Harvard. In a letter where he mourned the political disruptions and personal “infidelity, impiety, and vice” of the early 1800s, Dr. David Tappan recommended the writings of the British philanthropist and politician William Wilberforce. The ideas and example of Wilberforce were a perfect guide, he suggested, to “ardent piety and patriotism and philanthropy.”
In his marriage, Arthur tapped into another public-spirited American family with a tradition of service. His bride grew up in the New York City home of Alexander Hamilton. Her father had been one of Hamilton’s closest friends during the Revolution, so when both of her parents died by the time she was two, Hamilton stepped in as surrogate father and raised her like one of his own offspring.
As young men, both Arthur and Lewis pitched in on a variety of charitable causes. In his early working years Lewis became secretary of the local benevolent society, served as a church treasurer, helped edit a magazine called the Christian Register, and volunteered as a counselor with a temperance group. He donated money, and raised it from others, to support the Deaf and Dumb Asylum, the Hospital for the Sick, the Asylum for the Insane, and the Asylum for Indigent Boys. He supported the American Bible Society, and helped start the Boston Provident Institution—one of the very first banks created to make it easier for the poor to accumulate wealth.
After the textile business Lewis had built to success became overextended and went bankrupt, he went to work in Arthur’s silk-selling firm as a partner. The two labored hand-in-glove for much of the rest of their lives. When he saw up close the life Arthur had created as a Christian businessman and philanthropist in Manhattan, Lewis was deeply impressed. His brother was already making a remarkably wide array of deep charitable gifts. He built libraries where young apprentices newly relocated from countryside to city could go to educate themselves and socialize off the corrupting streets. He was a director of the Seaman’s Friend Society that offered aid and companionship to elderly sailors. He supported many churches in lower Manhattan. Looking over his brother’s profoundly ambitious experiment in Christian living, Lewis marveled that “this is enjoying riches in a high degree…in the good he achieves while living.”
The power of a few good men
Though they labored in close parallel for decades, and agreed on nearly all matters of principle and practice, Arthur and Lewis Tappan had very different personalities, and achieved their good works in quite different fashions. Arthur was taciturn, sensitive, and a bit forbidding. He kept no guest chairs in his small office because he believed they only encouraged visitors to tarry, distracting him from getting things done.
Lewis was much more social, indeed a tireless extrovert, and a powerful public speaker. He “performed the muscular work” that allowed both the brothers’ business ventures and the scores of philanthropic projects they jointly supported to thrive. He was a master strategist and natural leader, and showed repeated brilliance at capitalizing on current events, turning them into object lessons for the American public—as in the case of the Amistad trial that he orchestrated into a turning point on national opinion toward slavery. (See the abolition case study.)
Yet even at the peak of his fame, Lewis always made time to join small prayer meetings, visit the sick, and hand out Bibles in the sterile countinghouses lining Wall Street or the dank taverns that sprouted like mushrooms along the East River wharves. There were occasions where he and several compatriots charged into grim brothels “to pluck fallen women from roaring lions who seek to devour them,” placing their rescues in homes run by clergy that supplied food and clothing, Bible studies, and occupational training to allow the women to support themselves in respectable employment.
For most of their lives, Arthur was much wealthier than Lewis, and a far heavier donor. (But then, he was a heavier donor than perhaps anyone else in his half century.) Arthur was abstemious and frugal, spending almost nothing on himself, and modestly on his family. He viewed his money as a resource entrusted to him by Providence, to be used accountably to improve life on earth and lift men’s eyes to higher goals. In typical seasons he gave away the lion’s share of his yearly income.
Arthur Tappan had a razor-sharp philanthropic vision and the courage to put down large sums for difficult or unpopular work. He was one of the first American philanthropists to act on a “comprehensive” scale—founding organizations where he found them wanting, sticking with recipient groups through thick and thin over decades, making huge investments in particular charities as they hit a crossroads, pursuing long-term goals.
Almost without exception, Arthur left speaking and writing to others. He made his contributions by volunteering his managerial expertise behind the scenes, soliciting fellow members of his New York City merchant class to pitch in for charitable causes, and making heavy gifts of his own (even when his business and income were tottering). Arthur Tappan’s main means of expressing himself, as one biographer put it, was “the metallic eloquence of his money.”
And that was a huge contribution. “Our great benevolent system owes its expansion and power to his influence,” observed one contemporary. “His example inspired the merchants of New York…leading them to give hundreds and thousands where before they gave tens and fifteens.”
Because Arthur committed very little to print, never made a public address, and often gave in secret, it is hard to be concrete in totaling his donations. But by the 1820s he was known as the most generous donor in New York City. Lewis, his business and charitable partner, estimated that Arthur gave away roughly $50,000 every year for decades. John Pintard, a formidable businessman and Christian philanthropist in his own right, marveled in 1830 that “he is truly a wonderful benefactor and…his benefactions may amount in a few years to half a million…. I wish we had more Arthur Tappans.”
His renown was international. After he was chosen to head the American Anti-Slavery Society (to which he was the lead donor), British philanthropists sent the society a note. “Your officers, with that indefatigably devoted, great and good man, Arthur Tappan as your president,” they wrote, “give assurance that you must conquer.”
Purifying business and enriching the nation
Along with painter, inventor, and Morse-code developer Samuel Morse, Arthur founded the New York Journal of Commerce in 1827. He showed additional inventiveness here. The newspaper, for instance, operated two fast ocean-going schooners that intercepted ships returning to New York so that overseas business and political news collected from the crew could be published in the Journal a day or two before everyone else got it.
Arthur’s deepest motivation for starting another newspaper was his frustration that there was no available business publication free of “immoral advertisements” for liquor, tobacco, Sunday theater entertainments, and such. Arthur lost $30,000 in the first few years of running the paper, yet continued to turn down easy ad money from sources he considered unwholesome. Eventually, his journal grew into one of the era’s leading financial and political papers, demonstrating that righteous commerce was not an unpractical dream. (An offshoot is still published today, 190 years later.)Arthur Tappan had a razor-sharp philanthropic vision, and the courage to put down large sums for difficult or unpopular work.
Both Tappan brothers were watchdog capitalists throughout their lives. After retiring, Lewis wrote a book titled Is it Right to be Rich? It was an indictment of the quick-money schemes and materialism that erupted after our Civil War.
Arthur brought his benevolence right into his workplace. He tried to assist and shelter his young apprentices and clerks—steering them to respectable rooming houses and active churches, setting aside a room in the company headquarters for prayer and Bible study, and maintaining contact with the small-town parents who entrusted their sons to him to be trained. He was generous in setting up his successful employees in independent careers, and eventually many of his biggest business competitors were former associates whom he had launched into trade with his own money.
Arthur and Lewis became known as honest and fair dealers. They set prices low, depending on heavy volume for their profits. They both hated loans and usurious credit—due to Biblical injunctions, and because they believed that borrowing money often corrupted the good habits and character of merchants. As much as possible they did business in cash, or used quickly redeemed promissory notes at low or no interest.
Commerce in the Tappans’ day was often conducted on the honor system. With the country growing rapidly and morals changing, this was becoming less tenable. The brothers had seen firsthand that borrowing money, buying goods on credit, and accumulating debt could tempt people to lie, exploit others, or walk away from responsibilities. A store owner from St. Louis or New Orleans could come to New York, fill a boat with wholesale goods purchased on credit, then never be seen again. There were few mechanisms for discouraging this.
Disquiet over the ways that easy money could warp men eventually led the Tappans into a world-changing business venture. Lewis launched an entirely new industry—credit reporting—that married their dual interests in personal character and private enterprise. His Mercantile Agency recruited correspondents in cities and towns all across the country—700 of them by 1846—to compile confidential reports on the reliability, honesty, and stability of merchants in their area. Arthur joined him in expanding this venture.
As information sources, Lewis drew heavily on people of high ethics he knew through his philanthropic work in abolition, Sunday schooling, temperance, and other causes. He particularly favored local pastors and small-town lawyers as correspondents. Abraham Lincoln became one of his agency’s Midwestern reporters; storekeeper Ulysses Grant another. (Grover Cleveland and William McKinley also filed reports for a time, making Tappan’s firm perhaps the only one in U.S. history to have employed four future Presidents while they were young men.)
The Mercantile Agency built, and constantly updated, an archive with brief dossiers on the economic record, personal character, and trustworthiness of thousands of traders. Merchants considering extending credit to a provincial buyer would ask the agency for a report on their potential partner. By rewarding honest merchants and punishing those who neglected responsibilities, Tappan’s commercial creation thus filled a moral gap. As Lewis himself put it, this mechanism “checks knavery, and purifies the mercantile air.”
In the words of Lewis’s biographer Bertram Wyatt-Brown,
His Agency was answering a specific need that those institutions which he so much appreciated himself—the church, the family, and the small-town community—were no longer capable of supplying. At one time, the local minister, a relative, or a neighbor could furnish the appraisal of an applicant that a creditor needed. By the 1840s, the country had grown too large and too populated and its people were too mobile for the old sources of information to function efficiently.
Subscribers soon found the service indispensable, and business mushroomed. The Tappan company eventually evolved into today’s Dun & Bradstreet.Disgust with ugly politics and culture didn’t drive solid citizens into retreat. It instead drove them to create a remarkable ecosystem of charitable organizations that transformed America.
Credit reporting put a rational basis beneath the distribution of capital (which is the lifeblood of commerce). By reducing loan defaults, it allowed lenders to lower interest rates, fueling American expansion. In reducing the uncertainties of business transactions, credit reporting “played a vital role in building the twentieth-century American economic system,” concludes Wyatt-Brown, who compares it to the telegraph, the railroad, and the free press in setting the stage for modern prosperity.
This Tappan innovation was thus able to simultaneously clean up American business, supercharge the economy, and create new incentives for ethical behavior—the kind of trifecta every reformer dreams of.