We have been getting great feedback from our recent posts on the Great Depression, so today’s is in the same vein.
The Household Finance Corporation was started in 1878 by Frank J. Mackey to offer loans. They were one of the first companies to offer installment repayments, rather than owing the entire balance at the end of a loan period. The company went public on the NYSE in the 1920s and made many loans throughout the Great Depression.
This film from 1935 shows that the answer to a family in debt was to borrow money from HFC. After a home inspection deems them worthy, they received the $300 loan. The loan officer, when asked what might happen if they are unable to make a payment, explains that HFC wouldn’t expect them to do the impossible as long as they were paying whatever they could. Jump ahead to the 8 minute mark to see the loan approval scene.
Given our current banking and mortgage crises we thought this video might highlight the deep roots of our cycle of borrowing.
Does history repeat itself? You decide.