Abstract: Profit and 'Reputable Capital' in the Usury Reform Movement, 1909-1925
In the first decades of the twentieth century, many American progressives linked wage-earners’ dependence on high-interest moneylenders to industrial discord and the breakdown of the family. The usury prohibition appeared demonstrably incapable of preventing the commercialization of want, yet an august aversion to open lending markets, often articulated through a discourse Jewish commercial and moral difference, dissuaded reformers from advocating outright liberalization, leading them to instead promote the creation of philanthropic financial agencies whose ethical character would be assured by the forswearing of profit. This paper analyzes how reformers overcame that aversion and, between 1909 and 1925, came to embrace commercial small-sum banking as both economical and moral. They lynchpin of this consequential accord was the concept of “reputable capital,” a racialized notion of commercial character that vested business ethics in the non-Jewish makeup of the industrial lending industry. Markets could be governed by laws, reformers argued, or by the tendencies and capacities of the people who populated them. Drawing on the records of the Russell Sage Foundation, the central organization in the usury reform movement, as well as trade journals and popular and social-scientific literature, this paper unpacks the construction of “reputable capital,” considers its relationship to the substantial loosening of usury laws in the Progressive Era, and draws new connections between legal history, ethnic history, and the history of capitalism.