Roots – Dun & Bradstreet 1/2

This article on Dun & Bradstreet – the credit scoring giant – marks the first of a monthly series exploring the origins of the different ways of doing what we do.

From the establishment of the Mercantile Agency in 1841, to the invention of the Data Universal Numbering System in 1963, Dun & Bradstreet has known a rich history that has led to the company’s ownership of the largest global commercial database spanning dozens of nations worldwide.

In an article by Bertram Wyatt Brown, we take a look at the very origins of Dun & Bradstreet which began with Lewis Tappan, a devout Christian and fervent abolitionist.

It was in fact these two qualities that had shaped a discourse and a tradition that the pious and successful entrepreneur – more often than not – was a hypocrite.

The Nineteenth century was the age of growing industrialism and the era of religious revival – the conflict between the two gave way to a certain stagnancy when it came to business relationships.

Despite facing the repercussions of this conflict, Lewis Tappan was the man to establish America’s largest business for investigating the moral and financial reliability of individuals and corporations.

Originally, Lewis Tappan began with the textile trade in Boston, making a fortune in the War of 1812.

Impatient as he was to increase profits, the entrepreneur invested heavily in textile mills and a dyeing enterprise which went bankrupt in the recession of the 1820s.

Luckily, Tappan’s brother Arthur was a successful businessman and paid off his debts.

Subsequently, Lewis joined his brother’s silk-jobbing house in New York where he sold mostly for cash and short-term credit but depended on a large volume in order to bring in a substantial return.


Along with his brother Arthur, the two established a reputation as they were notorious throughout the 1820s and 30s as the only brokers to reject the practice of haggling.

However, that wasn’t the only thing they were known for.

The brothers had strong Christian principles that they implemented in-house. They insisted all their young clerks be as evangelical as themselves, with obligatory Sunday church attendance and morning prayers in the makeshift chapel in the store loft. If apprentices were not yet married, they had to live in religious boarding houses, abstain from alcohol and retire to bed by 10pm.

Moreover, the brothers became further reputed for their fight for the abolition of slavery.

Arthur Tappan had added the cause to his charitable ventures and became the first president of the American Antislavery Society from 1833-40. Lewis was one of the most active functionaries in the group and the emancipation movement owed the brothers a great debt.


This is where the problems came in which would shape the future of Dun & Bradstreet.

Abolitionism was spreading widely through the North of the US, but not so much in South where the brothers were losing customers.

When the Panic of 1837 hit, they were unprepared to meet commitments of over 1 000 000 USD – the company was a victim of both depression and anti-abolitionist sentiment.

Their saving grace was that, among their Christian and abolitionist reputation, they were known for their unflinching rectitude and sheer determination which allowed them to stay in business, although work remained unstable.

The two had to make 100 000 dollars above expenses just to meet their debts. It was at this point where Lewis Tappan began to think of reasons to quit the trade and start something more profitable.

Faced with the continuing depression and the weakness of the firm, Tappan realised that his brother was in too deep to recover and competition was getting keener. Two employees of the brothers’ silk store had started a rival company which was overtaking other silk wholesalers in volume of trade.

Moreover, the two brothers weren’t as close as they used to be. Wracked with debts and uncertainties, Arthur Tappan began to lose control of business affairs. Lying to partners and maintaining that all bank commitments had been met when in fact they hadn’t, led to the demise of the relationship between the two brothers.

Arthur had also been keeping information from his brother and the rest of the partners which led to a complete mistrust inside the company.

Lewis warned that unless partners were advised properly he would have to dissolve their connection.

Historically, Lewis Tappan never mentioned how he came up with the credit-scoring scheme.

Thanks to their experience however, the two brothers had become experts on all methods of evasion and fraud that certain country traders used to escape their liabilities.

That’s why, when Panic of 1837 hit, the Tappans tried to screen each client even more thoroughly than before.

Notoriously, both brothers had remarkable memories and so placed their recommendations and statements on file. Their judgement had become so valuable to the community that jobbers would often come and ask the brothers about particular buyers.

The Tappans country clients were similar to their experience of other New York wholesalers. No info, no sale.

When unfamiliar customers appeared, New York store owners demanded detailed recommendations from letters from clergymen to affidavits of assets and liabilities.

The issue was that the structure of the company was delicate because it was made up of too many middlemen which meant that if one group failed to pay on time, the whole structure would crumble.

In order to keep this from happening, the firm employed its own travelling agents who would check up on clients.


The system was a way to ensure that there was less chance of collusion between credit applicants and the reporter, but it was expensive and hardly efficient given the travel time.

Given that the company’s clients were spread far and wide throughout the country, agents could not return frequently enough in order keep the information up to date.

In delicate times, a matter of weeks or months could change the complexion of the business which is why Dun & Bradstreet today uses a real-time data set. (And so do we!)

The Mercantile Agency, as Dun & Bradstreet was known back then, decided to establish a central agency in New York so they could establish a network of informers throughout the country.

Those informers would forward on the information to merchants in the area doing business in the city, so more subscribers meant better service.

Their New York is our internet. FiftyFor’s network is online, meaning that our information is constantly being updated and accumulated.

The more users we have the better your rating will be. So go on, tell your friends about it.

Tappan, of course, needed time to develop his network. He relied a lot on his religious and abolitionist colleagues, but realised that he needed the cooperation of anyone on the ground who could provide him with information.

This is one of the common misconceptions that people come to with regards to Africa.

Businesses in Africa are built heavily around a network, yet, people seem to think that this network is built uniquely through family ties or geographical distance. False. The reason why it works is because it is nothing more than an exchange of information. Lewis Tappan knew it, we know it, do you? Check in again next week to see how Lewis took it further and how Dun & Bradstreet became the leader in financial services that it is today.

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