A Financial History of Western Europe

by Kindleberger,Charles P.

• ISBN13: 9780415378673
• ISBN10: 0415378672
• Edition: 1st
• Format: Hardcover
• Copyright: 2006-04-17
• Publisher: Routledge

Summary

Revised and updated throughout, this brilliant survey of European financial history from the earliest times to the present by internationally renowned scholar and author Charles P. Kindleberger offers a comprehensive account of the evolution of money in Western Europe, bimetallism and theemergence of the gold standard, the banking systems of the Continent and the British Isles, and overviews of foreign investment, regional and global financial integration, and private and public finance in Western Europe. The new edition features expanded coverage of the sixteenth and seventeenthcenturies and important new material on recent developments in European monetary integration.

Table of Contents

Illustrations	p. xv
Tables	p. xvi
Apologies and Acknowledgements	p. xvii
Introduction	p. 1
Comparative Financial History	p. 1
Finance	p. 2
War Finance	p. 4
Issues of Relevance	p. 5
Old Controversies	p. 8
Chronologies, Glossary, Rates of Exchange	p. 8
Chronologies	p. 9
Wars	p. 9
Monetary Events	p. 9
Banking Landmarks	p. 11
Financial Events	p. 12
Money	p. 15
Introduction to Part One	p. 17
The Evolution of Money in Western Europe	p. 19
The Functions of Money	p. 19
Monetary Evolution	p. 21
Coin	p. 21
Output of Precious Metals	p. 24
The Age of Discovery	p. 25
The Quantity Theory of Money	p. 27
Debasement	p. 28
The Price Revolution?	p. 28
Seignorage	p. 30
Mercantilism	p. 31
Bullionism	p. 33
Suggested Supplementary Reading	p. 34
Bank Money	p. 35
Trade and Finance	p. 35
Fairs	p. 36
The Bill of Exchange	p. 39
Usury	p. 41
Italian Banking	p. 42
The Hanseatic League	p. 44
South Germany	p. 44
Public Banks	p. 46
The Riksbank (Bank of Sweden)	p. 49
Goldsmiths	p. 50
Early Banks in England	p. 52
Suggested Supplementary Reading	p. 54
Bimetallism and the Emergence of the Gold Standard	p. 55
More than One Money	p. 55
Theory of Bimetallism	p. 56
Gresham's Law	p. 56
Beginnings of the Gold Standard in Britain	p. 57
Bimetallism in France	p. 60
Suspension of Convertibility in Britain, 1797	p. 60
The Bullion Report, 1810	p. 61
Resumption, 1819	p. 62
Central Bank Cooperation	p. 63
California, 1849; Australia, 1851	p. 64
The Latin Monetary Union	p. 65
Universal Money	p. 66
International Monetary Conference, 1878	p. 67
The Gold Standard from 1880 to 1914	p. 68
Suggested Supplementary Reading	p. 70
Banking	p. 71
Introduction to Part Two	p. 73
English and Scottish Banking	p. 75
The Eighteenth Century	p. 75
London Banks	p. 77
Clearing	p. 78
Country Banks	p. 79
Merchant Banking	p. 81
Scottish Banks	p. 82
Bank of England Branches	p. 83
Joint-Stock Banking	p. 84
Building a Network	p. 85
Bank of England Discount Policy	p. 89
The Lender of Last Resort	p. 90
Loans to Industry	p. 92
Suggested Supplementary Reading	p. 94
French Banking	p. 95
The Switch from Lyons to Paris	p. 95
John Law	p. 96
Caisse d'Escompte	p. 98
Assignats	p. 99
The Bank of France	p. 100
Saint-Simonism	p. 102
Jacques Laffitte	p. 103
Caisse Generale du Commerce et de l'Industrie	p. 104
Regional Banks of Issue	p. 104
The Bank of France at Mid-Century	p. 107
The Pereires and the Credit Mobilier	p. 108
The Bank of France as Stimulator of French Growth in the 1850s	p. 109
Credit Foncier and Credit Agricole	p. 110
Deposit Banks	p. 111
Banque d'affaires	p. 112
Union Generale	p. 112
Money and Banking in France	p. 113
Suggested Supplementary Reading	p. 115
German Banking	p. 117
Mosaic Germany	p. 117
Prussia	p. 117
Integrating the Coinage	p. 119
Private Banks	p. 121
Great Banks	p. 122
The Construction Boom	p. 125
The Reichsbank	p. 126
Construction of the Banking Network	p. 127
'D' Banks	p. 128
Relations with Industry	p. 128
Other Banks	p. 129
Notes on Neighboring Countries	p. 130
Austria	p. 130
Sweden	p. 131
Switzerland	p. 134
Suggested Supplementary Reading	p. 135
Italian and Spanish Banking	p. 136
Italy	p. 136
Italy before Unification	p. 136
The First Wave of Foreign Banks	p. 138
Il Corso Forzoso (forced circulation)	p. 140
Evaluating the Success of Franco-Italian Banks	p. 140
The Crisis of 1885-93	p. 141
German Banking in Italy	p. 142
1907	p. 143
Spain	p. 146
Bank of St Charles	p. 146
The Bank of San Fernando	p. 147
The Boom of 1856-66	p. 148
Modernising the Monetary System	p. 150
Lessons of the Italian and Spanish Cases	p. 150
Suggested Supplementary Reading	p. 151
Finance	p. 153
Introduction to Part Three	p. 155
Government Finance	p. 158
Financial Revolution	p. 158
Dutch Finance	p. 159
The Power to Tax in England	p. 160
Offices and Honors in England	p. 160
Tax Farming	p. 161
Funding English Debt	p. 163
The Total Funded Debt	p. 165
Sinking Fund	p. 166
Debt Conversion	p. 166
French Rentes	p. 167
Offices and Tax Farming in France	p. 168
Chambers of Justice	p. 170
Reforming the System	p. 171
Prussia	p. 173
The Nineteenth Century	p. 173
Taxation, Borrowing, Selling Assets	p. 175
Financial Institutions and the Socio-Political Matrix	p. 175
Suggested Supplementary Reading	p. 176
Private Finance, Individuals and Families	p. 177
Sources and Forms of Private Wealth	p. 177
Land	p. 177
Gambling	p. 179
Land as Investment	p. 179
Merchants	p. 180
The Family	p. 182
Insurance	p. 183
Taking Care of Old Age and of Posterity	p. 186
Trustee Securities	p. 187
Wealth	p. 188
Nabobs	p. 190
Capital Needs of the Industrial Revolution	p. 191
The Family Firm	p. 193
Suggested Supplementary Reading	p. 193
Private Finance-The Corporation	p. 195
Partnership and Commenda	p. 195
Joint-Stock Company	p. 196
Canal Mania	p. 197
Companies Prior to the Railroad	p. 198
Provincial Stock Exchanges	p. 199
Railway Booms	p. 199
General Incorporation	p. 202
Swedish Incorporation	p. 204
British Experience with Incorporation	p. 204
The Macmillan Gap	p. 205
Did the London Capital Market Handicap British Industry?	p. 206
French Joint-Stock Enterprise	p. 206
French Railroads	p. 207
The Venal Press	p. 209
Germany	p. 210
Suggested Supplementary Reading	p. 212
Foreign Investment-Dutch, British, French and German Experience to 1914	p. 213
Foreign Lending	p. 213
Dutch Foreign Lending	p. 214
The Seventeenth Century	p. 214
The Eighteenth Century	p. 215
The Switch from English to French Securities	p. 217
Horizons and Channels	p. 219
English Foreign Lending	p. 219
The Baring Indemnity Loans	p. 219
The 1820s	p. 221
The 1830s	p. 221
The 1840s	p. 221
The 1850s and 1860s	p. 222
1873 to 1896	p. 224
French Foreign Lending	p. 225
Lending to Czarist Russia	p. 226
German Foreign Lending	p. 228
Suggested Supplementary Reading	p. 230
Transfer Cases	p. 232
Redeeming the Fortress of Alvsborg	p. 233
Palavicino and the 50,000 ecu subsidy	p. 233
Bringing a Fortune Home from India	p. 234
The Spanish Indemnity of Napoleon	p. 236
British Subsidies for the Peninsular Campaign	p. 238
The Franco-Prussian Indemnity	p. 239
Background	p. 239
Setting the Indemnity	p. 240
Mode of Payment	p. 241
The Paris Indemnity	p. 242
Paying the 5 Billion	p. 242
The First Thiers Rente	p. 243
The Second Thiers Rente	p. 245
Effects	p. 248
Real Transfer	p. 249
Automatic Functioning of Markets	p. 250
US Purchase of Panama Canal Company for $40 million	p. 250
Suggested Supplementary Reading	p. 251
Foreign Lending-Political and Analytical Aspects	p. 252
Channels and their Shifts	p. 252
Political Rivalry	p. 253
Imperialism	p. 253
Bankers and War	p. 255
Push or Pull?	p. 256
The Outlier	p. 259
Small, Significant, Analytical Points	p. 259
Foreign Lending without Money	p. 259
Trade in Existing Securities	p. 260
The Gibson Paradox (Fisher Effect)	p. 260
Lending Abroad Interest Earned Abroad	p. 261
Stock-Adjustment v. Flow Models	p. 262
Beginnings of Direct Investment in Manufacturing	p. 262
Strength of National Currencies	p. 263
Paris v. London as the Leading European and World Financial Center	p. 265
Suggested Supplementary Reading	p. 268
Financial Crises	p. 269
The Model	p. 270
Displacement	p. 270
Objects of Speculation	p. 271
Diffusion of Euphoria	p. 273
Distress	p. 274
Dealing with Crisis	p. 276
Lender of Last Resort in Crisis	p. 277
The International Lender of Last Resort	p. 280
Absence of a Lender of Last Resort	p. 282
Did the Periodic Financial Crisis Go Away?	p. 283
Suggested Supplementary Reading	p. 284
The Interwar Period	p. 287
Introduction to Part Four	p. 289
War Finance, Reparations, War Debts	p. 291
The Crisis of August 1914	p. 291
How to Pay for the War	p. 292
Germany's Theory of War Finance	p. 292
Financing the Outbreak of War	p. 294
Financing War through Foreign Assets and Borrowing	p. 296
Reparations	p. 297
Versailles	p. 298
Economic Consequences of the Peace	p. 298
Occupation of the Ruhr	p. 300
The Dawes Plan	p. 302
The Young Plan	p. 304
Reparations Paid	p. 305
Economics and Politics of Reparations	p. 306
War Debts	p. 306
The Moratorium of June 1931	p. 308
Suggested Supplementary Reading	p. 308
German Postwar Inflation	p. 310
The Schools	p. 310
The Facts	p. 311
A Single Model?	p. 314
The Course and Control of Inflation after World War I	p. 314
Foreign Holders of Marks	p. 319
Other Countries	p. 320
Social Aspects of German Inflation	p. 322
Structural Inflation	p. 325
The Rentenmark	p. 325
The Golddiskontobank	p. 327
Collective Memory	p. 327
Suggested Supplementary Reading	p. 328
The Restoration of the Pound to Par	p. 329
Getting British Finance under Control	p. 329
The 1919-20 Boom	p. 329
The Cunliffe Report	p. 332
Brussels Conference, 1920	p. 333
Genoa Conference, 1922	p. 334
The Gold-Exchange Standard	p. 335
The Chamberlain - Bradbury Committee	p. 336
Down to the Wire	p. 339
The Role of the City	p. 341
Comparison with 1819	p. 341
Prices and Wages	p. 342
Central Bank Cooperation	p. 343
Suggested Supplementary Reading	p. 345
Stabilization of the Franc	p. 346
The Exchange Rate	p. 348
The 1924 Panic	p. 350
Counterattack	p. 352
Conditionality	p. 352
The Squeeze	p. 354
German and Austrian Losses	p. 354
More Conditionality	p. 355
The Crisis of 1926	p. 356
Stabilizing the Franc	p. 357
Lessons of the French Experience	p. 360
Italy in the 1920s	p. 361
Quota novanta (90 to the pound for the lire)	p. 361
Suggested Supplementary Reading	p. 363
The 1929 Depression	p. 364
Europe and the United States	p. 364
The Setting	p. 365
The 1929 Crash	p. 366
Response to the Crash in the United States	p. 369
The Position in Europe	p. 369
The Salvaging of Italian Banks	p. 371
The Creditanstalt	p. 371
The Run on Germany	p. 372
The Run on Sterling	p. 378
Sterling Depreciation	p. 380
The Exchange Equalization Account (EEA)	p. 382
The Japanese Yen and the Dollar	p. 384
Suggested Supplementary Reading	p. 384
The 1930s	p. 385
The World Economic Conference, 1933	p. 385
Sterling Bloc	p. 387
Swedish Monetary Policy	p. 389
German Foreign-Exchange Control	p. 390
Bilateralism	p. 391
The German Disequilibrium System	p. 392
Italy	p. 394
The Gold Bloc	p. 395
The Tripartite Monetary Agreement	p. 397
The Gold Scare	p. 398
The van Zeeland Report	p. 399
Suggested Supplementary Reading	p. 400
After World War II	p. 401
Introduction to Part Five	p. 403
German Finance In and After World War II	p. 404
German Strategy	p. 404
Occupation Finance	p. 405
Allied Military Exchange Rates	p. 407
Postwar Monetary Reform	p. 409
Belgian Monetary Reform	p. 410
German Monetary Reform	p. 412
Four-Power Agreement	p. 413
Black Market and Private Compensation	p. 414
The Reform	p. 416
Social Bases of Inflation and Monetary Reform	p. 418
German Banking Decentralization	p. 419
Reparations in Capital Assets	p. 420
Suggested Supplementary Reading	p. 423
Lend-Lease, the British Loan, the Marshall Plan	p. 424
Lend-Lease	p. 424
The Overall Postwar Plan	p. 427
United Nations Relief and Rehabilitation Administration (UNRRA)	p. 428
British Loan	p. 429
The Truman Doctrine	p. 432
The Marshall Plan	p. 433
Marshall Plan Issues	p. 435
Planning v. Markets	p. 435
Amount of Aid	p. 435
Allocation of Aid	p. 436
Financing Overall Deficits or Deficits with the United States	p. 437
Counterpart Funds	p. 442
Structural v. Keynesian Unemployment	p. 444
Devaluation of the Pound	p. 445
Suggested Supplementary Reading	p. 446
European Financial Integration	p. 447
Economic Integration	p. 447
European Capital Markets	p. 449
The Eurodollar Market	p. 450
The Eurobond Market	p. 452
Common Agricultural Policy (CAP) and the Support Price	p. 453
European Monetary Unification	p. 454
Optimum Currency Areas	p. 455
Economic and Monetary Union (EMU)	p. 456
The Snake	p. 458
The All Saints' Day Manifesto	p. 458
European Monetary System (EMS)	p. 459
European Monetary Fund (EMF)	p. 461
Credit Facilities	p. 462
The Outcome	p. 462
Suggested Supplementary Reading	p. 463
Glossary	p. 465
Conversion Tables-Equivalences and Exchange Rates for Specified Coins and Currencies at Specified Dates	p. 474
Bibliography	p. 477
Index	p. 513
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