Merchant Account Books, Credit Sales, and Financial Development

Jeremy T. Schwartz, David T. Flynn, Gokhan Karahan


Credit in colonial New England, including the credit practices used by merchants, invites study beyond that in the existing literature which largely limits investigation to an individual merchant.  Textual analysis of 56 merchant account books from Connecticut and Massachusetts across a breadth of the eighteenth century and conversion to Lawful Money allows a common quantification of the financial extent of merchant transactions throughout the century.  Through some descriptive statistics and non-parametric tests, we find that use of book credit is ubiquitous and in amounts that imply that merchants were de facto financial intermediaries essential for the development of the economy.

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Accounting and Finance Research
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