Supporting trust: credit assessment and debt recovery through Trade Protection Societies in Britain and Ireland, 1776–1992

Abstract

From an initial foundation in London in 1776, Trade Protection Societies grew in numbers to reach a peak of about 120 in 1910. They provided inter-business and some consumer credit assessment, debt management and recovery. From the 1850s they coordinated activities through a national association that covered Britain and Ireland. The societies were processing millions of credit assessments for thousands of members in the 1960s, reaching over 100,000 assessments per day in the 1980s. They provided a voluntary institutional base drawing on networks of mutuality, supplying information between members and societies that was judged privileged by the Courts. This offered transaction costs advantages for the high frequency, short duration activity provided, and hedged against the risks of complex Court actions. They became a large-scale mechanism to encourage honouring of commitments, thus underpinning the trust necessary across an increasingly geographically integrated economy. Their evolution demonstrates the importance of city size and regional centres, with diffusion down the city rank-size distribution. However, some smaller centres, mainly in resorts, also developed TPSs. The spatial process linked individual traders and the smallest places into a national system of credit management. By the 1920s smaller TPSs became difficult to sustain and were taken over or became branches of the larger societies; but overall membership continued to increase. True consolidation occurred after 1971 when demand exploded after the removal of credit controls, with unit costs pressed down, leading to de-mutualisation.