"Undesirable Subjects for Credit:" Schenectady's Confidential Reference Book for Merchants' Protective Union Subscribers

Page from Confidential Reference Book, 1884. From Grems-Doolittle Library Collection. 

Many researchers are familiar with city directories, which provide a person's name, occupation, and address. There is one directory in our collection that is a bit unusual; it includes a list of local residents, their occupation, and address, and brief notes regarding the person's credit. It is entitled Confidential Reference Book and was created for the use of local subscribers to the Merchants' Protective Union. It was considered the property of the Merchants' Protective Union and was loaned to member merchants for one year.

The Merchants' Protective Union's national organization was established in 1868 "to promote and protect trade, by enabling its subscribers to attain facility and safety in the granting of credits, and the recovery of claims at all points." Taking the slogan "For the Continent from New York to San Francisco," the Union established branches in a number of American cities during the 1870s and 1880s. It is unclear when the Schenectady branch was founded; the copy of the credit rating book in our collection is dated October 1884. It is also unclear how many local merchants belonged to the Merchants' Protective Union; a notice in an 1885 issue of the Albany Evening Times numbers the participating merchants in Albany at 200.

The introduction to the volume reinforces the confidential nature of the information contained in the book, and merchants are exhorted to "always consider the RATING in connection with the name, otherwise you will do injustice to the individual, and injustice to the register. If it was the purpose to present a list of intentional dead-beats, simply, there would be no rating -- only a roll of names." The volume instead lists all types of "undesirable subjects for credit," including those who are honest but poor, those who pay their debts but pay them so slowly that low-margin credit extended to them may result in a loss, or those who are careless.

The books was used not only for merchants to make decisions in whether to extend credit to individuals, but also to refer claims to an attorney authorized by the Merchants' Protective Union's local branch to sue debtors. "About the first move made in a new locality," wrote the Syracuse Sunday Times of the Merchants' Protective Union, "is the appointment of a respectable attorney who is to have charge of all collections and the legal business connected therewith." It appears that in Schenectady this attorney was Horatio G. Glen.

The explanatory key from the last page of the Confidential Reference Book. From Grems-Doolittle Library Collection. 

The explanatory key at the back of the volume lists a guide to the ratings contained in the book, which are as follows:
A. Considered honest, but unable to pay.
B. Careless and neglects to pay.
C. Too slow for desirable credit.
D. ______ ______ ______ ______ (a 1886 San Francisco volume designates this category as "send for special report")
E. Changes residence often.
F. Has attachable property.
G. Property in wife's name.
H. Extravagant and poor calculation.
I. Assignment of wages.
*. Special report in office.
K. Has paid bills formerly reported.
L. Is paying on bills formerly reported.
V. Insolvent.

The listings also include the number of merchants that a debtor owes, along with a notation that indicates the type of business the debtor owes (a guide to which is also included in the explanatory key at the back of the volume). While these categories are illuminating to those looking at the volume today, it may be a frustration to researchers that the majority of entries are classified under the "D" label; we have no further information about these cases.

The methods of the Merchants' Protective Union were met with sometimes fierce opposition. Many were concerned that, through the credit books, an unscrupulous or vindictive shop owner could ruin the reputation of a person, or that an honest person who happened to fall in to debt to just one or two creditors could have his credit and reputation ruined to all others. Some business owners refused to join the Merchants' Protective Union, despite having customers in debt, because they felt that the ill will bred by such a system would harm relations with customers over the long run. In addition to maintaining the yearly reference book, the Merchants' Protective Union also advertised the names of debtors in local newspapers and on posters put up for public display. Local branches did this in Utica, Watertown, Rochester, and Syracuse, among other cities. The Syracuse Sunday Times noted that the method of publicizing debtors "called down on the Union, in this city and elsewhere, very severe condemnation." The Elmira Telegram called the Confidential Reference Book a "black-mailing book" and remarked that if a branch were to be established there, "the printing office that will print such a contemptible piece of work out to be sacked within twenty-four hours and the proprietors treated to a coat of tar and feathers."