In life, Benjamin Franklin sought to manage debt, organize credit, build capital and promote virtue. After death, he continued this work by leaving a codicil to his last will and testament, bequeathing GBP2,000 to Boston and Philadelphia and to the commonwealths of Massachusetts and Pennsylvania with explicit instructions on how they should utilize the money over the course of the following two hundred years. Franklin intended that the money be used to provide loans to young married artisans to enable them to start small businesses and thereby promote a higher standard of living and a strong moral community. Although the managers put in charge of the endowment did not lend as effectively as Franklin had hoped, the loans did aid numerous small businessmen. Without fully realizing it, Franklin invented an idea that would come to fruition some two centuries later in the global microfinance movement. This study traces the development of that idea and simultaneously enlightens a neglected aspect of American financial history. Advocates of microfinance today will find much of interest in this study, including pitfalls to avoid and old ideas that may bear resuscitation.
