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Title: Gilded or gold? National banks and development in the United States 1870-1900

Citation Type: Dissertation/Thesis

Publication Year: 2010

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Abstract: How does banking affect development, and does banking affect all sectors equally, or change the structure of the economy? Since banking tends to grow with the rest of the economy, these questions are difficult to answer. This paper examines the growth of the national banking system from 1870-1900 during an important period in the financialand economic development of the United States. I create a new data set on individual banks and place them geographically. Minimum capital requirements limited the expansion of banks, and I use these requirements to identify the effects of additional banking. Banking was very important: the opening of a bank with the minimum capital increased total production by 12% for counties close to the dividing line between getting a bank and not. Both manufacturing and farming benefited, suggesting that the commercial, as opposed to investment, activities of banks were very important. Banks increased the inequality in farm size after a decade, largely through the expansion of larger farms, but had no affect on yields. Although the literature on banking often focuses on investment, commercial banking, either through direct currency creation or bills of exchange to facilitate the movement of goods, appears to be an important part of banking activities during development.

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Authors: Fulford, Scott

Institution: Boston College

Department: Department of Economics

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Degree: Doctor of Philosophy

Publisher Location: Chestnut Hill, MA

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Data Collections: IPUMS NHGIS

Topics: Poverty and Welfare

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