Business History Review

BHR cover  
  • Winter 2014

A Fine Failure: Relationship Lending, Moses Taylor, and the Joliet Iron & Steel Company, 1869–1888

by Mary O'Sullivan

In this study of lending in the emergence of a modern steel industry in the United States, I analyze the evolving interaction between borrowers and lenders in historical context. I show how “relationship lending” (that is, credit allocation in which personal contacts play a major role) can go wrong, despite good intentions at the outset, and that institutional conditions exert an important influence on how lenders and borrowers negotiate conflicts. Particularly important in the case of Moses Taylor and Joliet Iron & Steel Company were the uncertain jurisdictions and political maneuvering that stemmed from structural peculiarities of the U.S. legal system, peculiarities that belie claims of its efficacy for protecting creditor interests. Although this failure of relationship lending might seem to imply negative consequences for economic development, I show that, at least in this case, the opposite interpretation is more compelling.

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Georges F. Doriot: Educating Leaders, Building Companies

During his forty-year tenure at Harvard Business School, the charismatic Doriot taught business and leadership in his celebrated Manufacturing course to nearly 7,000 students. Examine his career as a legendary educator, a founder of the modern venture capital industry, and a U.S. Army general during World War II.

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