Growth and Downturns in the 19th century
Britain's ascendent
The railway adventure
The banking revolution
The business cycle
Victorians Britain
in terms of anteriority
first industrial and urban society
in terms of suoeriority
mid-nineteenth century
only real superpower
comparable to the United States in 20th century
long term advance
Catching up process only started after 1815
France, Switzerland, Belgium, Germany, US
Gap with Britain until the last third of the 19th century
the impact of the railway on the economic growth
the role of the railway should not be underestimated
technologically superior mode of transport
promotion and construction had important linkage effects with the coal and steel industries and financial institutions
major industry in its own right
railway boom 1840s
A 'new bank' appeared in Europe in the second third of the 19th century (the situation in the US was different)
New bank is different in three aspects:
deposit banks (those who collects its deposits through a network of branches)
an investment bank
a joint-stock bank
these characteristics did not coincide in all institutions
a joint-stock is common to all of them
investment bak usually combined with the deposit banks in the universal banks
the degree of presence of the deposit bank depended to the banking system
amalgamation movement
English banking system
deposit banks
deposits on liabilities' side
short term loans
discount on assets' side
other specialized banking and financial institutions
financial market
merchant banks and capital market
U.S banking system
early joint stock bank Citibank 1812
Opening branches in another state is prohibited by law
state banks and national banks and investment banks
Belgium
universal banking from 1832
decision forced on it by the freeze on its short-term claims on companies
policy of acquiring stakes in manufacturing companies
Deposit and investment banks in france
separation of two functions
big banks
credit lyonnais, societe generale, Paribas
recurrence of economic crises
19th and first part of 20th century and again in late 20th
typical pre-industrial crisis
new type of economic crisis appeared because of the industrial capitalism not dependent on the fluctuations of the agricultural productions
bad harvest leading to food shortage
rise of wheat prices in cities
loss of disposable income and famine
extension of the crisis to all sectors
fall in the production and demand
crisis affecting industrial economies in the 19th century
regular intervals from 7 to 10 years
followed a peak of expansion which was followed by recession (three to five years)
described as crisis of overproduction
unemployment
falling prices and profits
lower industrial and agricultural output
7 crises affected the industrialized countries from mid-19th century to the WW1
often triggered by a financial shock
collapse of a bank or stock market crash, leading to full blown financial crisis
soon became global affecting all countries
Crisis 1900
Crisis 1907
Crisis 1890-93
Crisis 1882
Crisis 1873
Crisis 1866
Crisis 1857
failure of the Ohio life insurance and trust company
banking panic spread to other countries
collapse of Britain's largest bank
followed the railway construction boom in the US and the speculative boom of the Grunderjahre
triggered by stock market crash in Vienna
closure of the stock exchange
collapse of the banque de l'union generale (lyon) followed by other bank failures
originated by the collapse of Baring Brothers and CO.
panic avoided through the swift intervention of the bank of england
financial panic originated in Russia
started in the US in the ake of financial panic because of the collapse of the Trust company after a failed attempt to corner a stock of a copper company
Economic crises that followed the financial shock
indicators of crisis
outputs
prices
business failures
exports
GDP
controversies over business cycle
Bankruptcies and stock market crashes did not lead necessarily to deep or prolonged recession
Crisis 1873
Crisis 1882
Crisis 1866
Crisis 1890-93
Crisis 1857
Crisis 1900
Crisis 1907
fall in GDP primarily due to agriculture
world trade declined in value not in volume and the output decreased only in France
widespread bankruptcies
falling stock prices
only US had a depression , while France, Germany and Belgium had slowdown only
limited international impact ..only in Britain
followed by a recession
crisis most severe in Us
capital exports fell drastically from both Britain and France
fall in demand because of the completion of Russian railway network
fall in production of steel, coal and machinery
unemployment in france, Germany and Britain
economic downturn especially in Britain and Germany
one of the biggest recessions in the US accompanied with high unemployment rate