Otfgrrif bt by UUllm Jdarn Film I960 HISTORY OF RETAIL CREDIT COMPANY A Study In The Marketing of Information About Individuals DISSERTATION Presented in Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy in the Graduate School of The Ohio State University By WILLIAM AD\MS FLIKN, B S., M. B. A. The Ohio State University 1959 Approved by: Department of Business Organization TABLE OF CONTENTS Page LIST OF FIGURES....................................................................................................... lv INTRODUCTION................................................................................................................. 1 Purpose of the study; scope; I Imitations encountered; method employed; contributions made. CHAPTER I. ORIGIN OF THE RETAIL CREDIT COMPANY ........................................... II The Wool fords of Maryland; Conception of a Career; Selection of a Location; Financing the New Operation. It. CREDIT REPORTING IN THENINETEENTH CENTURY .............................. 29 Classes of Credit; The Heed for Credit Information; Credit Information Agencies; History of the Mercantile Credit Agency; History of the Consumer Credit Reporting Agency. III. A NEW BUSINESS ESTABLISHED........................................................... 65 The First Year; Beginning of the Third Year. IV. SOME FUNDAMENTAL INSURANCE CONCEPTS .......................................... 88 The Concept of Insurance; Significance of Personal Hazard to the Retail Credit Company; Development of the Standard Risk. V. THE EVOLUTION OF MODERN LIFE INSURANCE................................. 109 Early Forms of Insurance; Forerunners of Life Insur- ance; Non-sclentiftc Life Insurance; Introduction of the Scientific Method; Early History of American Life Insurance. VI. ADVENT OF THE INDEPENDENT INSPECTION AGENCY ....................... 135 Special Problems In the Field of Insurance; Internal Inspection Departments; Independent Inspection Agencies. VII. DEVELOPMENT OF LIFE INSURANCE REPORTING BY THE RETAIL CREDIT COMPANY 1901-1916 168 Development of a Sideline; The Branch Office System; Early Personnel; The Armstrong Investigation; Service Systems; Internal Operating Systems; Personnel De­ velopment; The First World War. 11 TABU OF CONTENTS CHAPTER Page VIII. GENERAL INSURANCE REPORTING - WORLD WARS I TO II . 236 Credit Reporting Activities; Reporting for the Automobile Industry; Auto Finance and Dealer Reports; Claim Reporting; Fire Insurance Reporting; Personnel and Loyalty Reports; HI seellaneous Services IX. THE MARKETING MANAGEMENT CONCEPT - POST WORLD WAR II . 303 The Fu11-Time Reporter; Employee Training and Develop­ ment ; Pricing Policy; The Marketing Concept; The Mar­ keting Posture of the Retail Credit Company APPENDIX...................................................................................................................... 350 BIBLIOGRAPHY............................................................................................................. 367 AUTOBIOGRAPHY......................................................................................................... 375 ill LIST OF FIGURES FIGURE Pag* 1. Clasaificatlon of Personal Information Sources ................... 3 2. Calhoun's Prediction for Atlanta .................................................. 23 3. Example of Interagency Insurance Report Made by a Credit Reporting Firm ................................... 36 4. Insurance Report Form with Attached Coupon............................ 38 3. Chronological Development of National Associations Con­ cerned with Consumer C r e d it ...................................................... 61 6. Excerpts from Original Book of Accounts of the Retail Credit Company ..................................................................................... 82 7. Facsimile of "Friend's Report" on Charles Dickens» with Clarification of Content ............................................................... 131 8. Early Inspection Report Hade for the New York Life Insurance Company ............................................................................ 161 9. Actual Insurance Inspection Report Made In 1886 .... 164 10. H ill's Eye-witness Account of the San Francisco Earthquake of 1906 .......................................................... 186 11. Location of Retail Credit Company Offices as of 1913 . 193 12. Life Insurance Report Blank Used by Retail Credit Company About 1901 ............................................ 197 13. Han's Life Report Form Used About 1911 ..................................... 199 14. Early Rider Forms Used by Retail Credit Company .... 200 13. Inquiry Ticket Used Prior to 1 9 1 3 ............................................... 203 iv LIST OF FIGURES FIGURE Pag* 16. Diagram of Inatructlona for Offlct System from First Inatructlon Manual ............................................................................ 212 17. T itle Page to "General Information S ection ,” Informa­ tion About Retail Credit Company ........... 215 18. Page 1 of "General Information Section," Information About R etail Credit Company ...................................................... 216 19. Library Reading Course Enrollment Card ......... 230 20. Excerpts from "Selected Library List" ..................................... 231 21. Relative Volume of Retail Credit Company Life Insurance Reports and ftirchases of Ordinary Life Insurance . • . 239 22. Percentages of Total Volume by Major Lines, 1899-1958 . 240 23. Relative Growth In Volume by Major Lines, 1915-1941 • • 243 24. Chronological Development of Retail Credit Company and Its Subsidiaries ........................... ............ 260 25. F irst Automobile L iab ility Report Blank - In Use, 1913 . 270 26. Curriculum for Home Office Educational Course, 1927 • . 317 27. Early Employee Appraisal Report Form.......................................... 321 28. Early Developmental Program for Younger Men ...... 322 29. Home Office Sales Department Organisation ............................ 344 30. Excerpts from Retail Credit Company Sales Manual .... 348 v INTRODUCTION PurpoM of the Study At the ou tset, the tnejor purpose of th is study was to examine In detsil the hlstorlcel development of the Retel 1 Credit Compeny. Bssed on this study, It ues Intended thst sn effort would be mede to define the firm's economic role end major service objective, end to discover the reasons for its unusual success in serving the infor- metlonal needs of certain specialised segments of our economy. As the study progressed, however. It became evident that the story of the Retail Credit Company was more than the history of a firm. It appeared that its development typified, and to a certain extent paralleled, the emergence of a new industry * an industry based on the recognition of an economic need for information about persons rsther than businessesi snd, moreover, about sp ecific Individuals rather than about people as classes or specified groups of persons. This led to speculation as to whether a firm could enjoy economic success simply by supplying any or all kinds of lnformstlon about Individuals, for what­ ever kind of customer that wanted It, or whether some degree of special­ isation was essential. For example, could a firm succeed If It under­ took to furnish any type of lnformstlon about any Individual, as de­ sired, or would It be forced to restrict Itself in some way either to the kind of lnformstlon furnished, the purpose for which the Infor­ mation was to be used, or the class of customers to be served? 1 A preliminary search of general directories and bibliographies of Information sources revealed few references to sources of current Information about Individuals as distinct personst although numerous references to sources of Information concerning Individuals as groups or classes of people were encountered. On the other hand, reference publications or handbooks provided for the use of certain professions or specialised lines of business frequently were found to contain listings of information sources available to serve their peculiar needs. Some Information sources were found to be listed in more than one such specialised directory, however, and this suggested the thought that a consolidated directory of sources of lnformstlon about indl- vlduals might be of some value to business as a whole, or to Indi­ viduals seeking types of Information as yet unclassified. Primarily for the convenience of the writer, an effort was made to classify sources of lnformstlon about individuals according to the kind of Information furnished and the purposes for which It Is used. The outline shown as Figure 1 represents what Is believed to be an initial effort in this direction. It should be noted that agencies of the type specified in Sections A and B of Figure 1 have been catalogued in some detail In various directories and bibliographies,^ and are not considered to fall within the scope of this study. Those agencies *Two excellent references on sources of business Information are Edwin T. Coman's Sources of Business Information (New York: Prentlce-Hall, Inc., 1949), and Marion C. Manley's Business Infor­ mation (New York: Harper & Brothers, 1955). 3 CLASSIFICATION OF PERSONAL INFORMATION SOURCES A. Agencies Supplying S tatistical Data - quantitative by nature (economic research in production, finance, marketing, etc.) B Professional and Trade Directory Services - quantitative and/or qualitative by nature (biographical and occupational data) C. Agencies