Credit and Deception in Transatlantic Finance, 1784-1792

Tom Cutterham

Credit is a relation of knowledge, a form of information that helps business actors make judgments about potential partners. But of course, that knowledge is always partial and asymmetric—information is liable to being hidden, manipulated, and even forged. This paper uses the correspondence of revolutionary-era merchant Daniel Parker, who traded in United States public debt in the years either side of the Constitutional Convention, to catalogue the methods by which deception shaped relations of credit in this emerging market. It argues that historians are overly sanguine when they see credit as an efficient mechanism for judging commercial risk in the eighteenth century. More than that, it suggests that deception—and the manipulation of credit relations—was crucial to the formation of such high-risk, long-distance markets. Men like Parker were both con-artists and classic entrepreneurs. Without them, the early public finance of the United States would have turned out quite differently.