"Money has to be sold the same way that suits and dresses are." Today that slogan is a banker's commonplace. Yet when young Lewis Douglas Meredith argued the point in his Ph.D. thesis at Yale in 1933, it was far from accepted doctrine. Bankers sat on their funds, lent only on the highest-grade collateral. Meredith began developing the idea that, instead of looking mainly to collateral, the loanmakers should consider a man's job and his ability to repay. A mortgage, he argued, is not just a lien on property, but "instead is a means of raising the standard of...
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