Abstract: Development Credit Corporations: Not-for-Profit Development Finance Institutions in the Postwar United States

David Koistinen

Abstract

The development credit corporation (DCC) was an institutional innovation of the postwar period. DCCs were publicly chartered but privately run not-for-profit institutions that provided long-term loans to small companies that could not qualify for such financing on conventional terms. DCCs extended this support to small manufacturers and others firms selling to out-of-state customers, thereby creating additional jobs in the DCC's home state. DCCs were popular in areas of the country where the decline of established industries led to efforts to create new sources of employment. Maine set up the first DCC in 1949, and other northeastern states quickly followed suit. Downsizing in textiles and other long-established manufacturing sectors created a need for new jobs in the Northeast. DCCs were popular as well in the traditionally agricultural states of the South, which campaigned in the postwar years to build up their industrial base. States of the Midwest experiencing population declines in rural, farm-based locales also established DCCs. Companies dependent on the overall level of activity in the local economy organized and supported the DCCs. These firms included commercial banks, utility providers, and retailers. In seeking to promote the growth of the local economy, rather than generating profits, DCCs resembled other types of not-for-profit development institutions in earlier eras of American history.