Arthur J. Morris was born in North Carolina in 1881, but grew up in Norfolk, Virginia.  His father, a strict Presbyterian, ran a general store for farmers.  At sixteen, Arthur suffered an Achilles tendon injury during football practice and spent the next 29 months in a wheelchair, despite numerous operations on his heel.  Through much trial and error, he invented a brace which enabled him to walk.In the fall of 1898 Morris entered the University of Virginia where he studied English literature, moral philosophy, and economics.  Having done previous work at a preparatory school, he received his B.A. degree in June, 1899.  That school year he was awarded a handsome gold medal for his debating skills and the Phi Beta Kappa key for academic excellence.

For the next two years he studied law.  In his final year at the University, his father paid an unannounced visit to Charlottesville, caught the son playing poker, and withdrew further financial assistance for the young man's education.  Morris found odd jobs in order to stay in school until his mother stepped in and agreed to support him through his law graduation in June, 1901.  He returned to his hometown to begin practicing law.

Early in his career Morris encountered a number of clients who lacked the collateral they needed to borrow money from banks. If these wage earners could not borrow from family members, they were at the mercy of pawnbrokers or loan sharks. Morris, a firm believer in the solid character and dignity of the working class, loaned his own money to the clients. The experience made him cognizant of the need for a lending institution for middle and lower income workers.  He applied to the Virginia Corporation Commission for a charter for such a bank, and received the following reply from its chairman, Judge Robert R. Prentiss:

Dear Arthur: I have carefully considered your application for a charter for your hybrid and mongrel institution.  Frankly, I don't know what it is.  It isn't a savings bank; it isn't a state or national bank; it isn't a charity. It isn't anything I ever heard of before.  Its principles seem sound however, and its purpose admirable.  But the real reason that I am going to grant a charter is because I believe in you.

On April 1, 1910, with $20,000 of his own and a few associates' funds, Morris opened the Morris Plan Bank.  Soon there were eleven of these banks enabling the average American, with the "collateral" of earning power and good character, to borrow in order to buy a house, finance a car, or carry the family through a catastrophic illness.  Morris found that there were few defaults because most borrowers were thrifty and eager to be debt-free.

It took some effort to convince the big financiers in New York to allow the Morris Plan to go nationwide.  Morris later recalled the arguments he employed:

I told them simply that America's strength was in mass production and the only way to insure mass production was mass consumption.  And, like night follows day, we can't have mass consumption without mass credit.  And, what's more, mass credit guarantees mass employment.  That got them!  The only thing I left out, but since have learned was that mass credit would create a standard of living among Americans unequaled anywhere in the world.