City of debtors: Law, loan sharks, and the shadow economy of urban poverty, 1900-1970

Anne Fleming, University of Pennsylvania


This dissertation explores the growth and regulation of small-sum lending to the poor in the United States, from the Progressive Era through the War on Poverty in the 1960s. It looks beyond familiar accounts of middle-class borrowing and federal regulation to borrowing by working-class people and the state-level laws and institutions that governed their loans. It draws on archival material from a variety of sources, including the records of courts, legislative and executive branch officials, social service agencies, philanthropic organizations, legal aid providers, and lenders' trade associations. ^ This perspective reveals another dimension of American political economy. Much scholarship shows how in the twentieth century federal power displaced older forms of governance rooted in state and local law. In contrast, "City of Debtors" shows the continued importance of economic regulation at the state level. Dozens of separate (and sometimes competing) state sovereigns governed small-sum lending with little interference from federal authorities. Yet, the economy was national in scope, meaning that money and ideas flowed easily across state boundaries. This created opportunities for lenders to engage in regulatory arbitrage, as well as obstacles for state officials trying to police the lending industry. ^ This dissertation also shows how the problems of small-sum borrowers tested the limits of state regulatory power and muddied the boundary between the "public" and the "private" spheres. Most histories of poverty law focus on the rules governing welfare provision, a matter of public law. By exploring poor people's interactions with the law of the marketplace, "City of Debtors" shows how judges and policymakers came to see a public interest in the rules governing poor people's private contracts. Because a bad bargain could turn a poor debtor into a pauper, the public had a legitimate interest in regulating small-sum loans, state officials concluded. Concerns about poverty and avoiding "dependence" thus offered new and powerful justifications for increased state intervention in the marketplace.^

Subject Area

Business Administration, General|History, United States|Law

Recommended Citation

Fleming, Anne, "City of debtors: Law, loan sharks, and the shadow economy of urban poverty, 1900-1970" (2014). Dissertations available from ProQuest. AAI3670898.