Failing at Innovation? Bank on It

At the turn of the 20th century, the board of directors of the Cleveland Trust Co. met weekly to go over the bank’s loans. The minutes show the directors carefully scrutinizing loan applications, especially from local entrepreneurs. Yet toward the end of the 1920s, the minutes start reflecting a board less interested in local business lending and more absorbed with sending money to New York to play the stock market. “There was none of the careful oversight of before,” says Margaret Levenstein, executive director of the Michigan Census Research Data Center at the University of Michigan, who examined the minutes as part of an ongoing research project. “They wanted to speculate.”

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