Commercial Associations and the Creation of a National Economy: The Demand for Federal Bankruptcy Law

Abstract

Throughout the nineteenth century, merchants and manufacturers involved in interstate commerce sought federal bankruptcy legislation to overcome diverse and discriminatory state laws that raised the cost of credit and impeded interstate trade. In the last two decades of the nineteenth century, they formed a national organization to lobby for bankruptcy legislation. While many scholars have seen the passage of federal bankruptcy legislation as a response to the economic depression of the 1890s, this article shows that it was the formation of this national organization, rather than the economic crisis, that was the primary force behind the Bankruptcy Act of 1898.

Bankruptcy "Reform" in Congress: Creditors, Committees, Ideology, and Floor Voting in the Legislative Process

“…17 That the major lobbyists for change were from the banking sector emphasizes the transformation of credit in the American economy during the twentieth century. Hansen (1998) provides compelling descriptive evidence that trade creditors were the major lobby for the nation's modern bankruptcy legislation, the 1898 Act. On the other hand, Berglöf and Rosenthal (2000) present evidence that representatives from banking centers were especially likely to support the 1898 Act whereas a trade association variable was not significant.…”

Cross-ideological coordination by private interests: Evidence from mortgage market regulation under Dodd-Frank

“…Hansen (1991), for example, describes the role of the American Farm Bureau Federation in coordinating agricultural interests in the first half of the twentieth century. Hansen (1998) describes the role of commercial associations in shaping federal bankruptcy law, most importantly the Bankruptcy Act of 1898. And Schattschneider's (1935) account of tariff policy stresses oligarchic hierarchies of interest groups, often subsidized by their wealthiest members.…”

Social capital and trade associations in America, c. 1860-1914: a microhistory approach1

“…5 5 Report of the Internal Commerce of the United States , 51st Congress, 1st session, 1890, House Document 6, serial 2738, quoted in Hansen, ‘Demand for federal bankruptcy law’, pp. 110–11. …”

“…13–14. For an overview of the role of commercial organizations in lobbying the government for a national law, see Hansen, ‘Commercial associations’.…”