A Financial History of Western Europe

by Kindleberger, Charles P.

• ISBN13: 9780195077377
• ISBN10: 0195077377
• Edition: 2nd
• Format: Hardcover
• Copyright: 1993-06-03
• Publisher: Oxford University Press

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

Introduction	3	(10)
Comparative Financial History	3	(1)
Finance	4	(2)
War Finance	6	(1)
Issues of Relevance	7	(3)
Old Controversies	10	(1)
Chronologies, Glossary, Rates of Exchange	10	(1)
Chronologies	10	(7)
Wars	10	(1)
Monetary Events	11	(2)
Banking Landmarks	13	(2)
Financial Events	15	(2)
I Money	17	(58)
The Evolution of Money in Western Europe	19	(18)
The Functions of Money	19	(2)
Monetary Evolution	21	(1)
Coin	21	(3)
Output and Use of Precious Metals before Columbus	24	(2)
The Age of Discovery	26	(1)
The Quantity Theory of Money	27	(1)
Debasement	28	(2)
The Price Revolution?	30	(1)
Seignorage	31	(2)
Mercantilism	33	(2)
Bullionism	35	(1)
Suggested Supplementary Reading	36	(1)
Bank Money	37	(20)
Trade and Finance	37	(1)
State Versus Private Money	38	(1)
Fairs	39	(1)
The Bill of Exchange	40	(3)
Usury	43	(1)
Italian Banking	44	(2)
The Hanseatic League	46	(1)
South Germany	46	(2)
Public Banks	48	(4)
The Riksbank (Bank of Sweden)	52	(1)
Goldsmiths	53	(1)
Early Banks in England	54	(2)
Suggested Supplementary Reading	56	(1)
Bimetallism and the Emergence of the Gold Standard	57	(18)
More Than One Money	57	(1)
Theory of Bimetallism	58	(1)
Gresham's Law	58	(2)
Beginnings of the Gold Standard in Britain	60	(3)
Bimetallism in France	63	(1)
Suspension of Convertibility in Britain 1797	63	(1)
The Bullion Report 1810	64	(1)
Resumption 1819	65	(1)
Central Bank Cooperation	66	(1)
California 1849; Australia 1851	67	(1)
The Latin Monetary Union	68	(1)
Universal Money	69	(1)
International Monetary Conference 1878	70	(1)
The Gold Standard from 1880 to 1914	71	(2)
Suggested Supplementary Reading	73	(2)
II Banking	75	(78)
English and Scottish Banking	77	(20)
The Eighteenth Century	77	(2)
London Banks	79	(1)
Clearing	79	(2)
Country Banks	81	(1)
Merchant Banking	82	(2)
Scottish Banks	84	(2)
Bank of England Branches	86	(1)
Joint Stock Banking	86	(1)
Building a Network	87	(4)
Bank of England Discount Policy	91	(1)
The Lender of Last Resort	92	(2)
Loans to Industry	94	(2)
Suggested Supplementary Reading	96	(1)
French Banking	97	(21)
The Switch from Lyons to Paris	97	(1)
John Law	98	(2)
Caisse d'Escompte	100	(1)
Assignats	101	(1)
The Bank of France	102	(2)
Saint-Simonism	104	(1)
Jacques Laffitte	105	(1)
Caisse Generale du Commerce et de l'Industrie	106	(1)
Regional Banks of Issue	106	(3)
The Bank of France at Mid-Century	109	(1)
The Pereires and the Credit Mobilier	110	(1)
The Bank of France as Stimulator of French Growth in the 1850s	111	(1)
Credit Foncier and Credit Agricole	112	(1)
Deposit Banks	113	(1)
Banque d'affaires	114	(1)
Union Generale	114	(1)
Money and Banking in France	115	(2)
Suggested Supplementary Reading	117	(1)
German Banking	118	(19)
Mosaic Germany	118	(1)
Prussia	119	(1)
Integrating the Coinage	120	(2)
Private Banks	122	(1)
Great Banks	123	(3)
The Construction Boom	126	(1)
The Reichsbank	127	(1)
Construction of the Banking Network	127	(1)
``D'' Banks	128	(1)
Relations with Industry	129	(1)
Other Banks	130	(1)
Notes on Neighboring Countries	130	(6)
Austria	130	(2)
Sweden	132	(3)
Switzerland	135	(1)
Suggested Supplementary Reading	136	(1)
Italian and Spanish Banking	137	(16)
Italy	137	(10)
Italy Before Unification	137	(2)
The First Wave of Foreign Banks	139	(2)
Il Corso Forzoso (Forced Circulation)	141	(1)
Evaluating the Success of Franco-Italian Banks	141	(1)
The Crisis of 1885-93	142	(1)
German Banking in Italy	143	(1)
1907	144	(3)
Spain	147	(4)
Bank of St. Charles	147	(1)
The Bank of San Fernando	148	(1)
The Boom of 1856-66	149	(1)
Modernizing the Monetary System	150	(1)
Lessons of the Italian and Spanish Cases	151	(1)
Suggested Supplementary Reading	151	(2)
III Finance	153	(128)
Government Finance	155	(18)
Financial Revolution	155	(1)
Dutch Finance	156	(1)
The Power to Tax in England	156	(1)
Offices and Honors in England	157	(1)
Tax Farming	158	(2)
Funding English Debt	160	(1)
The Total Funded Debt	161	(1)
Sinking Fund	162	(1)
Debt Conversion	163	(1)
French Rentes	164	(1)
Offices and Tax Farming in France	165	(1)
Chambers of Justice	166	(1)
Reforming the System	167	(2)
Prussia	169	(1)
The Nineteenth Century	170	(1)
Taxation, Borrowing, Selling Assets	171	(1)
Financial Institutions and the Sociopolitical Matrix	172	(1)
Suggested Supplementary Reading	172	(1)
Private Finance---Individuals and Families	173	(17)
Sources and Forms of Private Wealth	173	(1)
Land	173	(2)
Gambling	175	(1)
Land as Investment	175	(1)
Merchants	176	(2)
The Family	178	(1)
Insurance	178	(4)
Taking Care of Old Age and of Posterity	182	(1)
Trustee Securities	183	(1)
Wealth	183	(2)
Nabobs	185	(2)
Capital Needs of the Industrial Revolution	187	(1)
The Family Firm	188	(1)
Suggested Supplementary Reading	189	(1)
Private Finance---The Corporation	190	(18)
Partnership and Commenda	190	(1)
Joint Stock Company	191	(1)
Canal Mania	192	(1)
Companies Prior to the Railroad	193	(1)
Provincial Stock Exchanges	193	(1)
Railway Booms	194	(2)
General Incorporation	196	(2)
Swedish Incorporation	198	(1)
British Experience with Incorporation	199	(1)
The Macmillan Gap	200	(1)
Did the London Capital Market Handicap British Industry?	201	(1)
French Joint Stock Enterprise	201	(1)
French Railroads	202	(2)
The Venal Press	204	(1)
Germany	205	(2)
Suggested Supplementary Reading	207	(1)
Foreign Investment---Dutch, British, French, and German Experience to 1914	208	(18)
Foreign Lending	208	(1)
Dutch Foreign Lending	208	(6)
The Seventeenth Century	209	(1)
The Eighteenth Century	210	(2)
The Switch from English to French Securities	212	(1)
Horizons and Channels	213	(1)
English Foreign Lending	214	(6)
The Baring Indemnity Loans	214	(1)
The 1820s	215	(1)
The 1830s	216	(1)
The 1840s	216	(1)
The 1850s and 1860s	217	(2)
1873 to 1896	219	(1)
French Foreign Lending	220	(3)
Lending to Czarist Russia	221	(2)
German Foreign Lending	223	(1)
Suggested Supplementary Reading	224	(2)
Transfer Cases	226	(21)
Redeeming the Fortress of Alvsborg	227	(1)
Palavicino and the 50,227 ecu Subsidy	227	(1)
Asientos	228	(2)
Bringing a Fortune Home from India	230	(2)
The Spanish Indemnity of Napoleon	232	(1)
British Subsidies for the Peninsular Campaign	233	(2)
The Franco-Prussian Indemnity	235	(10)
Background	235	(1)
Setting the Indemnity	235	(1)
Mode of Payment	236	(1)
The Paris Indemnity	237	(1)
Paying the 5 Billion	237	(1)
The First Thiers Rente	238	(3)
The Second Thiers Rente	241	(2)
Effects	243	(1)
Real Transfer	244	(1)
Automatic Functioning of Markets	245	(1)
U.S. Purchase of Panama Canal Company for $40 Million	245	(1)
Suggested Supplementary Reading	246	(1)
Foreign Lending---Political and Analytical Aspects	247	(17)
Channels and Their Shifts	247	(1)
Political Rivalry	247	(1)
Imperialism	248	(2)
Bankers and War	250	(1)
Push or Pull?	251	(2)
The Outlier	253	(1)
Did Foreign Lending Starve Domestic Industry?	254	(1)
Small, Significant, Analytical Points	254	(6)
Foreign Lending Without Money	255	(1)
Trade in Existing Securities	255	(1)
The Gibson Paradox (Fisher Effect)	256	(1)
Lending Abroad Interest Earned Abroad	257	(1)
Stock Adjustment Versus Flow Models	257	(1)
Beginnings of Direct Investment in Manufacturing	257	(2)
Strength of National Currencies	259	(1)
Paris Versus London as the Leading European and World Financial Center	260	(3)
Suggested Supplementary Reading	263	(1)
Financial Crises	264	(17)
The Model	264	(1)
Displacement	265	(1)
Objects of Speculation	266	(2)
The Propagation (and Collapse) of Euphoria	268	(1)
Distress	269	(2)
Dealing with Crisis	271	(1)
Lender of Last Resort in Crisis	272	(3)
The International Lender of Last Resort	275	(2)
Absence of a Lender of Last Resort	277	(1)
Did the Periodic Financial Crisis Go Away?	278	(1)
Suggested Supplementary Reading	279	(2)
IV The Interwar Period	281	(110)
War Finance, Reparations, War Debts	283	(18)
The Crisis of August 1914	283	(1)
Now to Pay for the War	284	(1)
Germany's Theory of War Finance	284	(2)
Financing the Outbreak of War	286	(1)
Financing War Through Foreign Assets and Borrowing	287	(2)
Reparations	289	(1)
Versailles	289	(1)
Economic Consequences of the Peace	290	(2)
Occupation of the Ruhr	292	(1)
The Dawes Plan	293	(2)
The Young Plan	295	(1)
Reparations Paid	296	(1)
Economics and Politics of Reparations	297	(1)
War Debts	298	(1)
The Moratorium of June 1931	299	(1)
Suggested Supplementary Reading	300	(1)
German Postwar Inflation	301	(18)
The Schools	301	(1)
The Facts	302	(2)
A Single Model?	304	(1)
The Course and Control of Inflation After World War I	305	(4)
Foreign Holders of Marks	309	(2)
Other Countries	311	(1)
Social Aspects of German Inflation	312	(2)
Structural Inflation	314	(2)
The Rentenmark	316	(1)
The Golddiskontobank	317	(1)
Collective Memory	317	(1)
Suggested Supplementary Reading	318	(1)
The Restoration of the Pound to Per	319	(16)
Getting British Finance Under Control	319	(1)
The 1919-20 Boom	319	(3)
The Cunliffe Report	322	(1)
Brussels Conference 1920	323	(1)
Genoa Conference 1922	324	(1)
The Gold Exchange Standard	324	(2)
The Chamberlain-Bradbury Committee	326	(2)
Down to the Wire	328	(2)
The Role of the City	330	(1)
Comparison with 1819	331	(1)
Prices and Wages	331	(1)
Central Bank Cooperation;	332	(2)
Suggested Supplementary Reading	334	(1)
Stabilization of the Franc	335	(18)
The Exchange Rate	337	(2)
The 1924 Panic	339	(1)
Counterattack	340	(1)
Conditionality	341	(1)
The Squeeze	341	(2)
German and Austrian Losses	343	(1)
More Conditionality	344	(1)
The Crisis of 1926	344	(2)
Stabilizing the Franc	346	(3)
Lessons of the French Experience	349	(1)
Italy in the 1920s	349	(1)
Quota novanta (90 to the Pound for the Lire)	350	(2)
Suggested Supplementary Reading	352	(1)
The 1929 Depression	353	(22)
Europe and the United States	353	(1)
The Setting	354	(1)
The 1929 Crash	355	(3)
Response to the Crash in the United States	358	(1)
The Position in Europe	358	(2)
The Salvaging of Italian Banks	360	(1)
The Creditanstalt	360	(1)
The Run on Germany	361	(4)
Heroic Action to Break Through Constraints	365	(3)
The Run on Sterling	368	(2)
Sterling Depreciation	370	(2)
The Exchange Equalization Account (EEA)	372	(1)
The Japanese Yen and the Dollar	373	(1)
Suggested Supplementary Reading	374	(1)
The 1930s	375	(16)
The World Economic Conference 1933	375	(2)
Sterling Bloc	377	(2)
Swedish Monetary Policy	379	(1)
German Foreign Exchange Control	379	(2)
Bilateralism	381	(1)
The German Disequilibrium System	382	(1)
Italy	383	(2)
The Gold Bloc	385	(1)
The Tripartite Monetary Agreement	386	(1)
The Gold Scare	387	(2)
The van Zeeland Report	389	(1)
Suggested Supplementary Reading	389	(2)
V After World War II	391	(68)
German Finance in and After World War II	393	(20)
German Strategy	393	(1)
Occupation Finance	394	(1)
Allied Military Exchange Rates	395	(3)
Postwar Monetary Reform	398	(1)
Belgian Monetary Reform	399	(2)
German Monetary Reform	401	(1)
Four-Power Agreement	402	(1)
Black Market and Private Compensation	403	(1)
The Reform	404	(3)
Social Bases of Inflation and Monetary Reform	407	(1)
German Banking Decentralization	408	(1)
Reparations in Capital Assets	409	(3)
Suggested Supplementary Reading	412	(1)
Lend-Lease, the British Loan, the Marshall Plan	413	(23)
Lend-Lease	413	(3)
The Overall Postwar Plan	416	(1)
United Nations Relief and Rehabilitation Administration (UNRRA)	417	(1)
British Loan	418	(3)
The Truman Doctrine	421	(1)
The Marshall Plan	422	(1)
Marshall Plan Issues	423	(11)
Planning Versus Markets	423	(1)
Amount of Aid	424	(1)
Allocation of Aid	425	(1)
Financing Overall Deficits or Deficits with the United States	426	(5)
Counterpart Funds	431	(2)
Structural Versus Keynesian Unemployment	433	(1)
Devaluation of the Pound	434	(1)
Suggested Supplementary Reading	434	(2)
European Financial Integration	436	(15)
Economic Integration	436	(2)
European Capital Markets	438	(1)
The Eurodollar Market	439	(2)
The Eurobond Market	441	(1)
European Monetary Unification	442	(1)
Optimum Currency Areas	442	(1)
Economic and Monetary Union (EMU)	443	(2)
European Monetary System (EMS)	445	(1)
Banking Regulation	446	(1)
The European Central Bank	447	(3)
Eastern Europe	450	(1)
Suggested Supplementary Reading	450	(1)
Europe in the World Financial System	451	(8)
International Money	451	(1)
The Sterling Standard	452	(1)
The Decline of the Dollar	452	(2)
The Blunder of 1970-71	454	(1)
After the Fall	454	(2)
The Ecu	456	(3)
Glossary	459	(8)
Conversion Tables--Equivalences and Exchange Rates for Specified Coins and Currencies at Specified Dates	467	(3)
Bibliography	470	(33)
Index	503