CREDIT: 6,000 YEARS Old - and STILL EVOLVING VIGOROUSLY^[1]

Introduction; Credit's Undoubted Longevity

Noah's Ark (if ever- built) was probably floated and provisioned on credit, for by the time of the traditional Biblical date of the Great Flood, 2349 B.C., sophisticated forms of credit had long been well established in the Middle East. The ancient doubting Thomases who may well have been induced to finance Noah were finally liquidated in a double victory for Noah and his extended ecological family. Be that as it may, there are sufficiently numerous, fully-authenticated facts to prove the common, everyday existence of credit instruments and transactions as old as recorded history itself, that is from roughly around 4,000 B.C. 'Money', said Keynes in his 'Treatise', like certain other essential elements in civilisation, is a far more ancient institution than we were taught to believe. Its origins are lost in the mists when the ice was melting, and may well stretch back into the paradisaic intervals in human history of the inter-glacial periods, when the weather was delightful and the mind free to be fertile of new ideas in some Eden of Central Asia.' ^[2]. It was from this lost Eden that money, recorded credit and banking, as well as writing and our duodecimal methods of counting time and space - and of financial accounting - originated. If one were to speculate as to how writing first appeared one might dreamingly imagine that romantic necessity or poetic inspiration were the causes rather than the prosaic need to record debts and credits - which in reality turns out to have been the actual source. 'Writing was invented in Mesopotamia as a method of book-keeping. The earliest known texts are lists of livestock and agricultural equipment. These come from the city of Uruk c. 3,100 B.C.' ^[3]. Literally hundreds of thousands of cuneiform blocks have been unearthed by archaeologists in sites along the Tigris and Euphrates, many of which were credit receipts and monetary contracts confirming the existence of banking and credit operations as everyday affairs, common and widespread throughout Babylonia. Categorical evidence is still available for our inspection regarding credit procedures, in the Code of Hammurabi, inscribed some 3,750 years ago, on a diorite block, over seven foot high, now in the Louvre in Paris.

Credit development in ancient Egypt, although similarly based at first on Royal Temples and Palaces, grew in time into a distinctive form of Giro-banking based on deposits of grain. Thus although some rudimentary elements of a giro system of payment had developed much earlier in Babylon, the honour for the first fully efficient giro system, enabling a nation-wide circulation and transfer of credit, belongs to the Egypt of the Ptolemies. The numerous scattered government granaries were transformed by the Ptolemies into a network of corn banks with what amounted to a central Bank in Alexandria, where the main accounts from all the state granaries were recorded. Seed corn, the capital base both of the banking system and of the economy in general, was directly under the control of the 'Oeconomus', whose official duty it was to see that the seed corn would not be used for any other purpose. Grain may have been considered a rather primitive form of money - but the world's first giro system transformed it into an efficient method of credit with many of the most desirable elements of modern finance. An expert on this period shows that these girobank accounts 'are especially interesting because they show how popular recourse to the banks became with the people of Egypt ... the system of paying one's debts through the bank had the additional advantage of officially recording transactions and thus providing important evidence in case of litigation' ^[4]. At this point it needs to be emphasised that ancient banking emerged a thousand years before the appearance of a viable system of coinage - whereas in the case of the Anglo-Saxon and northern European world coins preceded banking, by a similarly long period of time.

The Invention of Coins and the Development of Coin-based Credit

Economics is the logic of limited resource usage and money is the means by which that logic is put to work. Coins formed the basis on which most payment and credit systems have been built during the last 2,700 years. The matter of when coins were 'invented' depends very largely whether one is concerned, as is the economist, with function, or, as is the numismatist, with outward form, appearance and quality. Functionally speaking the early Chinese 'tool-money' currencies, miniature emblems of spades, hoes and knives, were in common use in China as early as the end of the second millennium B.C. Round coins, of poor quality, cast, and of base metal were produced in the next few centuries, by which time coinage of a far superior type, using precious metals and hammering techniques had developed in the Middle East. In quality, range of functions and influence on the rest of the world, Lydia as the birthplace and Ionian Greece as the nursery of coined money have undoubted priority over China.

Two interacting factors may account for Lydia's leadership, one on the supply side and the other relating to an unusually strong demand for media of exchange. Supplies of precious metals were locally available from alluvial deposits of 'electrum', a mixture of gold and silver. As for the demand for money, the Lydians were the first to open permanent retail shops. Coins, credit and shops henceforward became inseparable partners - until the recent closely connected rise of plastic cards and supermarkets similarly indicate a fundamental change in payment systems. Lydia's first true coins date from around 640 B.C., comfortably consistent with the literary tradition of Herodotus and Aristotle which gave 687 B.C. for the even earlier semi-coin electrum 'dumps'. From Lydia to the Greek islands and mainland was a short but important step. 'The extraordinary characteristic of Greek coinage is the speed with which it developed. In 550 B.C. the techniques were still primitive (yet) the fifth century saw the minting of the most beautiful coins ever made' ^[5]. Such beauty was not simply of numismatic importance: it was equally important in its economic effects in stimulating a wider role for both money and banking throughout the widespread Greek colonies.

Credit multiplies money by supplying flexible dimensions of time, space and convenience of form - but all these depend vitally on the quality and strength of the money base, whether in ancient or modern times. Thus the famous Athenian silver 'owls', first minted in 546 B.C. became by far the most widely used coins of that era and lasted almost unchanged in design and purity for 600 years. The supply of silver ore came conveniently from the Laurion mines, 25 miles south of Athens, where up to 30,000 miners were employed - another example of the economic importance of coinage. When the Spartans captured Laurion in 407 B.C. Athens suffered a sudden and severe shortage of coin. She reacted first by minting 84,000 golden drachma from the statue of Nike and similar treasures but when the shortage grew even worse she issued bronze coins with a thin coating of silver, giving rise to the world's first public statement of Gresham's Law, - in Aristophanes play 'The Frogs.' The base coins were demonetized in 393 B.C. and Athens regained its reputation for fine coins; but it took until 330 B.C. to replace the golden treasures of the Acropolis. By that time the centre of gravity of the military and monetary systems had moved north to the Macedonian empire of Philip and the even more spectacular empire of his son, Alexander.

The most important financial result of Alexander's imperial adventures was the monetization and diffusion of the vast, relatively dormant gold and silver reserves of the Persian empire. Alexander's armies, including many mercenaries were well paid. They were big spenders - or as the modern economist might put it, they had a high marginal propensity to consume. A large multiplier thus intensified the effect of the high velocity of circulation of previously relatively stagnant reserves. Another factor which improved, simplified and speeded up trade and payments was Alexander's insistence on a crystal-clear and easy 10:1 ratio of exchange between silver and gold, rather than the previously bewildering variety of ratios and the awkward 40:3 Persian system. (Chancellor Kohl's decisiveness in boldly choosing a 2:1 rate between the Ostmark and the Deutschemark, despite the opposition of the Bundesbank, bears the hallmark of Alexander). If the spread of Greek, Macedonian, Hellenistic and Roman money had depended solely on trade, the process would have been far slower and much more limited in extent. It was military conquest which forced the pace and range; but once the sword had initiated a novel or expanded need for coinage, commercial trade took over to become generally preponderant. Coins however have always been more than mere media of exchange. For long periods in Rome 'the primary function of coins was to record the messages which the emperor and his advisers desired to commend to the population' ^[6]. It may also be salutary to remind ourselves of the surprising degree of inflation suffered by the Romans for centuries, especially their hyper-inflation in the fifty years after A.D. 250. By 270 the silver coins were only 4% pure. Some order was brought into this chaotic situation by Diocletian, 284-305, whose monetary reforms, including minting pure gold and almost pure silver coins were supported by far reaching fiscal and incomes policies. He introduced the world's first annual budgets and, in the form of the Edict of Prices of 301, the world's first prices and incomes policy. In retrospect the Edict can be seen to display much of the wishful thinking exhibited by more recent examples of state price controls. These reforms did not eradicate inflation. What they did was to divide the rich and the public sector from the poor. The poor had to make do with 'pecunia', trashy, flake-like bits of coin. The rich could deal successfully in gold and were thus to a large extent isolated from the worst effects of inflation which devastated the poor, except where, as in Rome itself with its million inhabitants, they became increasingly dependent on state subsidies. Although it was the barbarian invasions that brought down Rome, the main underlying cause was the chronic financial chaos, the product of unproductive expenditure on defence and welfare. In the modern world, the corresponding division is a geographical one between the rich and poor nations, with the latter being usually the victims and perpetrators of hyperinflation. This glimpse at the origins and development of money in the ancient world should at least suggest that, although separated by a couple of millennia, our monetary problems are not all that different. Before turning to some of these modern problems a brief look at medieval and early modern developments must suffice.

Aspects of Medieval and Early Modern Money

If the historical progress of money had followed the logical steps too often assumed by economists, then Gutenberg's invention of moveable type in 1456 would quickly have brought about the triumph of printed over minted money. Historical progress, however, laughs at the locksmiths of arid academic logic and frequently demonstrates a fascinating perversity in apparently backing the wrong horses with the wrong money. Gutenberg's printing press was developed from the many different kinds of wine and olive presses used around his region of Germany and Italy. The improved presses were first used to produce better coins rather than to print notes - a later development. Leonardo da Vinci's drawings included designs for mechanical minting in patterns adopted by the goldsmiths of Augsburg and Nuremberg to produce remarkably fine coins called 'milled' money. The indentations made possible by such strong presses gave rise to milled-edged coinage which finally proved effective against clipping. The making of milled money spread, via Paris, to the Tower Mint in London by 1553 though not until the 1630s were substantial amounts of milled money minted.

By that time London's goldsmiths were about to emerge as bankers. With the founding of the Bank of England in 1694 and the early prominence it gave to note issue, then the total quantity of abstract paper money first overtook the quantity of commodity money. However, for the next two hundred years the true value of this inverted pyramid of paper money was deemed to rest upon a metallic foundation, the essential ingredient of which was the circulation of full-bodied gold coinage, supplemented by the bullion reserves of the Bank of England. The obligation to convert Bank of England notes into gold at a fixed rate played a significant part in producing a remarkable degree of price stability from 1826 to 1914, with sterling becoming the most useful currency ever seen hitherto in world trade, so much so that Britain's gold standard became widely regarded as the ideal to be emulated by Germany, Japan and the USA. But the world war of 1914-18 caused gold to be withdrawn from most countries' internal circulation. The long age of commodity money thus passed finally away, and by 1923, two years before Britain's abortive return to gold, the precious metal had prophetically and permanently been devalued by Keynes: 'In truth, the gold standard is already a barbarous relic' ^[7]. Sterling's world leadership slipped into the hands of the almighty Dollar.

The Dollar: From Wampum to World Power in 150 Years

Colonial America offered a clean slate where the immigrants repeated their age-old European habit of swinging from an initial shortage of money to reach eventual inflationary excess. The most popular of the indigenous types of money, eagerly accepted as legal tender was wampum. This was used not only for small retail trade but also for large credits such as the loan in wampum of over 5,000 guilders arranged by Stuyvesant in 1664 for paying the wages of the workers constructing the New York Citadel. Tobacco later became the most important 'countrypay money' for many states. However, much the most important result of the currency shortage was that it caused Americans to turn with the greatest enthusiasm to printing paper money, especially State-issued notes. As Galbraith inimitably puts it: 'If the history of commercial banking belongs to the Italians and of central banking to the British, that of paper money issued by a government belongs indubitably to the Americans' ^[8]. This propensity to resort to the printing press quickly showed itself with the outbreak of the War of Independence when the 'Continental' notes quickly became almost worthless.

Excessive issues were not confined to State notes, for the strong movement towards 'free banking' allowed banks, however small or weak to issue their own notes. By 1859, according to 'Hodges Genuine Bank Notes of America' - an essential stand-by for every banker and shopkeeper wishing to avoid being saddled with dud notes there were at least 9,916 different notes in circulation, mostly confined to their own localities. The Civil War naturally gave further reasons for excessive issues, particularly by the South, where Confederate notes repeated the sorry precedent of the 'Continentals', until some semblance of order and discipline followed the adoption of the 'Greenbacks' and the more uniform National Bank Note system.

No account of the development of the American monetary system, however brief, should ignore some reference to the climax of the Bimetallist campaign exactly 100 years ago - notably the same time that NACM was born. It was William Jennings Bryan, a gifted lawyer, journalist, orator and tireless political organiser, who stimulated, bullied, cajoled and inspired all the disparate factions interested in the cause of silver into fighting single-mindedly for the official preservation of Bimetallism. In his bid for the Presidency in 1896 he travelled over 18,000 miles in one of the first 'whistle-stop' tours, visiting 37 states and making 600 speeches, almost all of them included his famous declamation: 'You shall not press down upon the brow of labour this crown of thorns, you shall not crucify mankind upon a cross of gold'. Nevertheless his was a lost cause. World gold supplies rose rapidly, with the USA's gold stock doubling between 1890 and 1900 when, belatedly, with the Gold Standard Act of March 1900, the US legally reached this apparently ideal goal. The crisis of 1907 demonstrated all too clearly that the obvious need for an 'elastic currency' was not guaranteed merely by adherence to the Gold Standard. After studying the world monetary picture the Federal Reserve Banking system was introduced in 1913, and under Governor Benjamin Strong, grew to be of world importance by 1928. Nevertheless the boom and bust spectacular of the following five years again demonstrated the blatant weaknesses of the American financial system. Altogether some 13,366 banks failed between 1920 and the end of 1933, including 8,812 in the four years from 1930 to 1933 inclusive. After the reforms of 1934-5, bank failures dropped significantly. In the 32 years from 1943 to 1974 failures were always below ten annually. However, in the eight years following 1985 the annual failures equalled or exceeded 120, averaging 160 - and this despite many being certified by their auditors as 'no problem' or even 'excellent'. Similar concern has followed the enormous costs for the US taxpayer in bailing out failed and weak Savings and Loan Associations, reckoned by the Government General's Accounting Office at $1,000 per household. Partly as a result of such problems it is not unlikely that as the twentieth century comes to a close the USA will experience the biggest merger boom in banking history as its 11,000 banks furiously coalesce towards a few thousand or less in a nation at last without effective banking barriers. Although America has officially enjoyed a single currency since 1790 it has not yet achieved a single banking market. It is one of the ironies of history that Europe, or most of it, reached the goal of a single market by 1992, though a single currency by the year 2,000, as already planned on paper appears highly doubtful.

The End of Inflation?

Well over 90% of the world's current population have spent all their lives in an age of inflation, open or suppressed, unprecedented in degree, extent and duration. Even the advanced countries have experienced rates which in the previous century would have been a cause for concern rather than congratulation. Nevertheless the published statistics for twenty of the most advanced nations during the 1990s provide a basis for believing that, for most of the rich countries at least, the problems of inflation which have afflicted them for half a century look within sight of solution. Associated with and in part responsible for the marked reduction in inflation in recent years has been the greater degree of independence enjoyed by a number of central banks and a general consensus that they should concentrate single-mindedly on the supreme goal of price stability, which, since most price indexes tend to overstate inflation, in practice means low (rather than zero) inflation of around 2%. In this way true consumer sovereignty can be exercised without the distortions produced by inflation. However, the liberty conferred by stable money requires eternal vigilance by the monetary authorities, especially by the Federal Reserve System, the Bank of Japan and the new European Central Bank as they co-operate with the other 150 or so central bankers in ridding the advanced countries of the scourge of inflation and in providing a firm anchor to limit the slippage in the values of other currencies. Yet, in the near future billions of fingers, at the touch of a button in a borderless world, will keep the august monetary authorities on their toes, as new definitions of money, of monetary sovereignty, and control will be dictated by the as yet unknown demands of the electronic age. For the computer chip with its phenomenal memory enables us practically to turn Blake's poetic vision into virtual reality:

To see a World in a Grain of Sand ...
Hold Infinity in the palm of your hand
And Eternity in an hour.

Notes

1. I wish to thank the University of Wales Press for permission to include extracts from my 'History of Money'.
2. Keynes, J.M. (1930) 'A Treatise on Money' , i, 13.
3. Oates, J. (1979) 'Babylon', 15.
4. Rostovtzeff, M. (1941) 'The Social and Economic History of the Hellenistic World'.
5. Porteous, J. (1980) 'The Nature of Coinage'.
6. Grant, M. (1968) 'Roman History from Coins', 69.
7. Keynes, J.M. (1931) 'Essays in Persuasion', 208.
8. Galbraith, K. (1975) 'Money: Whence it Came and Where it Went', 45.
9. Finally, in case any readers wish to follow up these brief notes, please see the Paperback edition of 'A History of Money from Ancient Times to the Present Day. Cardiff: University of Wales Press, 1996 ISBN 0 7083 1351 5' - listed by the American Library Association as an 'Outstanding Academic Book' - now available at $29-95 from Paul & Company, P.O. Box 442, Concord, MA 01742; tel. 508 369 3049; fax. 508 369 2385.

Glyn Davies, April 23 1996.

100 Years of Legislative History

The roots of the National Association of Credit Management are deeply embedded in the legislative process. They go back to the turn of the century.

In the early 1890s a few years before the NACM was established, our country had moved more rapidly than our resources at the time justified. We suffered from economic astigmatism. We had become a nation of egotists. Rugged individualism had been the characteristic of American business up to that point.

In 1893 it all came to a head. Commercial failures that year and in the aftermath of 1894 were the largest in number, and in dollar amount, that had ever befallen the nation. Failures rose by 40 percent in the one year from 1892 to 1893.

When the curtain fell on this era of over exhilaration, we had registered one of the most disastrous depressions that had ever before come upon this country. Out of the flurries and terrors of the Panic of 1893, as it was called, there arose the realization that rules and principles had to be laid down to guide American business toward orderly and permanent development.

The Great Exposition in Chicago in 1893 was supposedly aimed at resurrecting the morale of the people. They too were celebrating a centennial in those days. In fact, they were celebrating a quatro centennial, recognizing the anniversary of the discovery of America 400 years before. A number of conferences were held in conjunction with the exposition. One of these was a Congress of Credit, Collections, and Failures. We don't have any record of that congress. We don't know what was said or done. But we know that the proceedings brought about the realization that something more had to be done.

We do know that one person who was invited to address that Chicago Congress of Credit, Collections and Failures became nationally identified with the idea and with the organizational movement that led to the establishment of the National Association of Credit Management in 1896. He was Mr. W. H. Preston of Sioux City, who became the first national president of NACM. He is sort of like the George Washington of business credit. After the Chicago conference, he took a lead in calling the meeting in Toledo in the summer of 1896 to unify the various local associations which were cropping up across the country, an effort that led to the formation of NACM.

The young NACM got off to a rolling start in the legislative field. The first piece of legislation it got its teeth into perhaps I should say, got its gums into, because it was still in its infancy was the national bankruptcy act.

The country has never really had an effective bankruptcy law. The first one had been passed in 1800, but it was repealed in 1803. It didn't permit voluntary bankruptcy, and it applied only to traders. Each state had treated insolvencies as it pleased. A second National Bankruptcy Law was adopted in 1841. It lasted two years. A third act, passed in 1867, was repealed in 1878. So, despite this traditional antagonism, the chaotic conditions existing in the 1890s led many credit minds to realize that a uniform insolvency statute for the nation was absolutely imperative.

The National Association of Credit Men, through its Legislative Committee, endorsed and worked for a bankruptcy law drafted by Judge Jay L. Torrey of Missouri. There was considerable difference of opinion, both in NACM and out, but the Torrey bill in reconciled form was passed by Congress on July 1, 1896.

NACM had gotten its legislative feet wet. It had made its influence felt in Congress. It had taken part in the leadership of framing and securing passage of a National Bankruptcy Act that was to stand for 40 years. And in so doing, NACM had begun to create the realization that a new business body had been undertaken to protect the interests of debtor and creditor alike.

With this legislative accomplishment under its belt, NACM turned with a determination to curb one of the favorite practices for defrauding creditors selling stocks of goods in bulk by debtors, who flitted away after the sale had been consummated and could seldom be reached or heard from again. From this agitation there arose the Bulk Sales Laws that are now in control in all states and territories of the nation. This particular piece of legislative work, started nationwide by NACM, has saved creditors a vast fortune over the years.

At the turn of the century, NACM began a program for the adoption of fictitious names laws, now on the statute books of the great majority of the states.

There were, of course, other things that had to be done before credit could circulate throughout the nation and greatly broaden the production and movement of commodities. Financial statements needed to be made popular and useful as a form of information in the extension and management of credit. Thus, in 1904, NACM began efforts to improve False Financial Statement Laws. NACMs Model Act is now in effect in most states.

Time passed, and in 1913 NACM took an active part in legislation that led to the establishment of the Federal Reserve Board. In 1918, NACM framed recommendations for Uniform Conditional Sales Laws. The organization was active in initiating legislation to provide for arbitration of commercial disputes. In 1926, our organization secured amendments to the National Bankruptcy Act to meet the evils of collusion, fraudulent compositions, and discharge of dishonest debtors. At the same time, the NACM Fraud Prevention Department was established as a separate body within NACM to concentrate on fraud detection and prevention.

In 1935, NACM sponsored the Federal Miller Act. This required separate performance and payment bonds on Federal public works projects. In 1938, six years of intensive study by NACM led to the modernization of the National Bankruptcy Act, known of course as the Chandler Act. For the last five years or so, we have once more been closely involved in the development of a new National Bankruptcy Act to replace the 40 year old Chandler Act.

In the 1940s and 1950s, NACMs legislative achievements were prominent in the field of bankruptcy, the machinery of the bankruptcy process was improving, and the function of the Federal Reserve System was refined. In the sixties, NACM successfully supported federal legislation to exempt company retained copies of Census Bureau reports from legal process by other government agencies. It helped to gain improvements in lien laws. It won restoration of contractual lien priorities over unrecorded tax liens. It worked for bills to fight organized crime all the while, advancing legislative efforts to protect the interest of creditors in bankruptcy proceedings.

More recently, NACM was instrumental in the Equal Credit Opportunity Act. In 1986, NACM submitted testimony to the House Banking Subcommittee in opposition to amendments to the Equal Credit Opportunity Act which could create new notification and record keeping burdens for credit departments. Again in 1988, NACM worked with the staffs of the House Small Business Committee and the Federal Reserve Board to ensure that proposed amendments to the Equal Credit Opportunity Act retained the exemption granted to trade credit under Regulation B.

In the present decade, NACM provided the House Judiciary Committee with testimony regarding provisions in the Omnibus Bankruptcy bill pertaining to reclamation rights, the DePrizio decision, creditor committee reimbursement language, and limitations on the debtor's period of exclusivity. NACM also testified before the House Small Business Committee to amend and implement the Federal Prompt Pay Act, provided testimony to the House and Senate Judiciary Committees regarding passage of the Bankruptcy Act Amendments of 1993, and helped draft legislation to correct the Motor Freight Undercharge crisis.

Perhaps the greatest NACM legislative accomplishment occurred in 1972. NACM brought a cross section of its members and executive vice presidents face to face with federal legislators and other Washington decision makers for an NACM Washington Legislative Conference. This was another first for NACM, and a fulfillment of a commitment of the membership. This undertaking was a success and has become an annual event. Each one has been an improvement on the last. These Washington Legislative Conferences give members a chance to hear informal, first hand reports by spokesmen from the legislative arena on matters affecting the role and contribution of business credit in the business life of the country.

Members see the dynamic legislative process in action. They speak directly to influential government officials and decision makers and make their own positions known on vital issues. They come away with a new awareness of the process of government. For their part, the government participants in the conference, as well as individual members of Congress, gain a new awareness of the existence of NACM and of its ability and intention to speak with a loud and concerted voice on issues in Washington that affect our members.

As 1977 Legislative Committee Chairman George Wolz put it, It is incumbent upon the membership of NACM that we become more aware, better known to our lawmakers, and that we fulfill to a great degree, our role as the voice of business credit.

The NACM Legislative Conference just celebrated its silver anniversary with another successful session in March. The Conferences show no signs of slowing down and neither does NACM's legislative affairs strategy. If the past 100 years are an indication, NACM will continue to make its presence felt on Capitol Hill for years to come.

CFDD 75th Anniversary

The Credit and Financial Development Division is an educational division of NACM devoted to the advancement of credit professionals.

Some might be surprised to learn that CFDD will celebrate its 75th anniversary in the year 2000.

The birth of the Division came about for the familiar reason of... necessity. At the time the necessity needed was some type of forum or organization to unite and support female credit executives.

In 1923, female credit executives met at the Annual Credit Congress of the National Association of Credit Men, but on their own, not as part of the congress. It was not until 1925, at the Credit Congress in Washington, D.C., that NACM officially recognized the activities of the credit women's groups. The following year, three credit women's executive committees were appointed to represent the groups in the Eastern, Central, and Western Divisions.

In 1931, the committee unified into one National Credit Women's Executive Committee (NCWEC), and was chaired by Lilliam Guth of New York City. It was at this time that NACM recognized this governing body for all the credit women's groups throughout the country.

As early as the 1920's, female credit executives were making great strides in the activities of the National Association of Credit Men. In 1920, the Los Angeles Credit Men's Association began inviting female credit executives to their monthly meetings, and within months over 35 women were attending the meeting.

In 1942, Annie Porter of Santa Fe, New Mexico was elected as the first woman to serve on the NACM National Board of Directors. Shortly thereafter, numerous female credit executives began serving their local associations, and such NACM National as well, as officers and directors. In 1979, Ellen Coulam of Dallas, Texas, a former NCWEC chairman, became the first woman president of NACM. Other CFDD members who have served as NACM president/chairman are; Giulio Boeri, San Francisco; Donald Lewis, CCE, Detroit; Alice McGregor, CCE, Seattle; Ronald Helms, CCE, Richmond; and Betty McDonald, CCE, Phoenix.

In the 1970's the structure of many of the credit women's groups began to change with the interest of men in the organization. To accommodate the professional needs of all, several groups changed their names from credit women's groups to credit career or credit education groups.

With the number of male members increasing in the organization, the National Credit Women's Executive Committee began a process that would completely restructure, unify, and strengthen the organization. In 1988, the NCWEC sent a proposal, to the NACM board of directors, requesting the recognition of NACM credit women's, credit career, and credit education groups as a new division of NACM. This new division to be named the NACM Credit and Financial Development Division (CFDD) would be united under one name, common bylaws, goals and objectives.

In May of 1988, the NACM board of directors approved the proposal and CFDD was established. The division is lead by a national board of directors comprised of a chairman, 3 vice chairman, and up to 14 area directors. The daily operation of CFDD is provided by the executive director, an employee of NACM.

From the birth of this organization to the present, the main objective of CFDD has never changed, and that is the education and advancement of the credit professional. CFDD continues to be a leader in providing educational opportunities for its membership. Over the past six years, CFDD national and the local chapters have awarded over $500,000.00 in scholarships (approximately 3000 in number). CFDD's mission statement reflects the membership's commitment to promote active interest in the credit and financial profession, to develop and market educational programs that are vital to the development of the effective professional, and to be a viable force within the NACM network.

The 53 chapters of CFDD provide monthly educational meetings for the membership, as well as numerous seminars and workshops throughout the year. Regional conferences are presented each year for the CFDD membership offering additional opportunities for educational advancement and networking. The national CFDD officers also present special leadership workshops during these regional conferences to aid present and future chapter leaders. Educational opportunities, personal and professional growth, mentoring, and networking are but a few of the endless benefits of this division.

While the membership of CFDD is proud of their past and proud to where the Division is today, they are equally excited to be a part of NACM's future.

CRF: Research in Review

By Eugene Waters

Recognizing the need for research, education, and training in the field of credit, forward looking members of the National Association of Credit Management launched the Credit Research Foundation as its educational and research arm on March 17, 1947 in Cleveland, OH. Paul W. Miller of the Marlborough Company, Atlanta, GA served as the organizing chairman of the approximately 525 member organization.

CRF represents a body of knowledge emphasizing the impact and contribution of the credit function on individual businesses and the national economy. Its forums, reports, surveys, and other publications provide valuable information on new techniques and trends in credit and accounts receivable administration and practices, along with information technology applications to support credit, accounts receivable, and cash management functions. Many of NACM's educational programs grew from the framework set forth by the CRF.

At the November 1952 meeting of the board of directors of the National Association of Credit Management, it was duly passed that all phases of the educational activity heretofore carried out under the auspices of the NACM henceforth be carried out under the auspices of the Credit Research Foundation. In addition, the sponsorship of the Graduate School was automatically placed under the Foundation. Recognizing that education and research were so closely correlated, all NACM educational functions would be in the capable hands of Dr. Carl D. Smith, managing director of CRF and NACM's director of education.

One such function was the Graduate School of Credit and Financial Management (GSCFM). Its first session was held at the Babson Institute, Boston, MA in 1941. This program was begun in order for companies to develop key credit and financial personnel for new and greater responsibilities. During the war years, the school was discontinued. In the 1940s, the school GSCFM joined the begun at the University of Wisconsin with the first graduating class taking place in 1949. In 1950, the school began what would become its long tenure at Dartmouth College under the sponsorship of the Amos Tuck School of Business. Among the school's first graduating class was a young energetic gentlemen, O.E. (Barney) Barnum of U. S. Steel Corporation. He became one of the school's greatest supporters, serving in later years as an assistant director of the school at Dartmouth College, member of its Administrative Committee, its Admissions Committee and chairman of the joint NACM/CRF Education Committee and president of the Foundation 1965-68.

A second session of the Graduate School of Credit and Financial Management was opened at Stanford University on the West Coast in 1952 under the sponsorship of the Graduate School of Business at Stanford. The Graduate School continued its growth under the direction of Dr. Smith and Mr. William J. Dickson. In 1961, Dr. Peter C. Peasley became executive director of the school. Enrollment continued to grow to a high of 579 students in 1979. The school became one of the top educational training programs for commercial credit men as well as bankers interested in business credit. Graduates of the GSCFM earned the Executive Award.

Over the years, sessions were held across the United States and Europe: Harvard University, 1967; Tulane University, 1968; London Business School, 1973; Williams College, 1974; and Tufts European Centre, Tollories, France, 1983.

Envisioning the need for corporate training at the mid-level, the Credit Research Foundation began its Mid-Career School in 1972. Initially, two sessions of this program were conducted annually until demand required that a third session be added. At the senior level, the Foundation conducted the Advanced Credit Executives Program, as well as Credit Management Workshops and its Senior Credit Executives Forum.

Today's CCEs, CBFs, and CBAs can trace their origin back to CRF. A method of certifying credit executives was a long-range plan for NACM. Following several studies by various sub-committees of the NACM/CRF, it certification was decided in 1959 to be premature and that a society might be formed to be known as the "American Society of Credit Officers."

In 1972, the task force in certification suggested an International Society of Credit and Financial Executives. Suggested membership credentials would include an elite group for holders of the Executive Award of the GSCFM. Associate memberships would stem from CRF's Middle Management Program. The national office of NACM took over and completed the certification process.

In November 1969, CRF announced a competition program for doctoral candidates who complete dissertations dealing with business credit. A number of publications have been distributed to members of the Foundation as a result of this program.

One of the very early long-range projects of the CRF and the NACM was the preparation and publication of a credit handbook. This project is designed to bring together all pertinent and useful information of value to credit executives and their staffs. The development of such a publication would require several years to accomplish. Finally, this goal was achieved in August of 1958 when the Credit Executives Handbook, a publication of the NACM, prepared and edited by the CRF, was released. In the first two years, 7,000 copies of the book had been sold. The Credit Executives Handbook was revised in 1965 and is set for another revision in 1997.

Today, the CRF has several key research and educational projects currently in place. The CRF Benchmarking Survey: Credit, Collections, and Accounts Receivable was accepted by the International Benchmarking Clearinghouse in their Directory of Metrics Sources. Likewise, the National Summary of Domestic Trade Receivables is well received in the credit community. With additional reports, surveys, and other publications, the CRF continues as the foremost non-profit, member supported education and research organization dedicated to the credit and financial management community.