No full-text available
To read the full-text of this research,
you can request a copy directly from the author.
Comment on "Immigrant Entrepreneurs in U.S. Financial History, 1775-1914" (by Thomas K. McCraw)
Abstract
This paper is a comment on Immigrant Entrepreneurs in U.S. Financial History, 1775-1914 by Thomas K. McCraw which can be found at: http://ssrn.com/abstract=2208682.
ResearchGate has not been able to resolve any citations for this publication.
This paper studies the evolution of the constitutional arrangements in 17th century England following the Glorious Revolution of 1688, focusing on the relationship between institutions and the behavior of the government. The paper interprets the institutional changes following the Revolution on the basis of the goals of the winners – secure property rights and the protection of their wealth – and the problem they sought to eliminate – confiscatory government. We argue that the new institutions allowed the government to credibly commit to upholding property rights. The success of the originators of the Revolution is nothing short of remarkable, as the evidence from capital markets shows.
The article studies the evolution of the constitutional arrangements in seventeenth-century England following the Glorious Revolution of 1688. It focuses on the relationship between institutions and the behavior of the government and interprets the institutional changes on the basis of the goals of the winners—secure property rights, protection of their wealth, and the elimination of confiscatory government. We argue that the new institutions allowed the government to commit credibly to upholding property rights. Their success was remarkable, as the evidence from capital markets shows.
In Banking on Global Markets, Kobrak, presents a detailed business history of the investments and dealings of Deutsche Bank, Germany’s leading financial institution, in the United States. The book is divided into three distinct parts, following chronological order. The first part covers the years 1870 to 1914; the second focuses largely on the period of the two world wars, 1914 to 1957; and the third discusses the most recent period from 1957 to 2000.
The author consulted an impressive list of primary sources for the years before 1970, mostly from the Deutsche Bank archives, supplemented with documents from the New York Federal Reserve Bank, the National Archives in Washington, and the Bundesarchiv in Berlin. Based on these rich sources, especially for the first part of the book, Kobrak gives a detailed account of Deutsche Bank’s activities in the U.S. market. In the second half of the nineteenth century, investment strategies of the bank primarily focused on manufacturing, railroads, and utilities. For example, Deutsche Bank was involved in the creation of Edison General Electric and the financing of the Northern Pacific Railroad. Kobrak also delves persuasively into the management of the bank at the time, discussing the differences in leadership style between Georg von Siemens—the speaker of the management board of Deutsche Bank—and Henry Villard—the German-born American entrepreneur who headed Deutsche Bank’s affairs in the United States for about a decade starting in the mid-1880s. In this narrative, Kobrak highlights differences between Deutsche Bank as the prototype of the German universal bank and the less-regulated American financial market.
During World War I and into the interwar years, Deutsche Bank was mostly occupied with the repatriation of German funds, but it also worked to facilitate U.S. investments in Germany. In the post-World War II period, the bank emerged again as a leading financial institution, struggling to find its place in the changing international environment and adapting to fast-moving technologies. Unfortunately, since Kobrak did not have access to primary sources for the most recent twenty years of Deutsche Bank’s history, the last section of the book is based on secondary sources and interviews with senior executives. This more recent history of the bank is of great importance, because Deutsche Bank’s relationship with the United States during this time became cemented through the merger with Banker’s Trust. Unfortunately, Kobrak has little more to say about this period in Deutsche Bank’s history than what is already known from the financial press.
Business-history scholars interested in management styles and personnel matters related to international finance will comprise the primary audience for the book. The book unfortunately holds little appeal for general readers. Even though the author claims in his introduction that by juxtaposing Deutsche Bank with the United States, he “proposes to make a contribution to our understanding of these great transformations in financial institutions and capital markets,” the book does not live up to this aim (3). A macroeconomic leitmotiv that linked the various microeconomic stories that the author gleans from the extremely rich archival materials would have made the book more accessible.
The first printing of the book contained numerous typographical errors and infelicitous phrasing, but these shortcomings have since been corrected.
John Law's System was a radical restructuring of French public finances, carried out from 1716 to 1720. It involved on the one hand a conversion of the existing French public debt into something like government equity, on the other hand the replacement of commodity money with fiat money. For strategic reasons, Law supported the equity at too high a level, resulting in uncontrolled money creation. The System ended with the recreation of a public debt at, surprisingly, the same level as before.
John Law (1671-1729) left a remarkable legacy of economic concepts from a time when economic conceptualization was very much at an embryonic stage. Yet he is best known--and generally dismissed--today as a rake, duellist, and gambler. This intellectual biography offers a new approach to Law, one that shows him to have been a significant economic theorist with a vision that he attempted to implement as policy in early-eighteenth-century Europe. Law's style, marked by a clarity and use of modern terminology, stands out starkly against the turgid prose of many of his contemporaries. His vision of a monetary and financial system was certainly one of a later age, for Law believed in an economy of banknotes and credit where specie had no role to play. Ultimately Law failed as a policy-maker, in part because of the entrenchment of the financiers and their aristocratic backers and in part because of theoretical flaws in his vision. His struggle for power took place against the background of Europe's first major stock boom and collapse. The collapse of the Mississippi System, which he had conceived, and the South Sea Bubble led to a lasting impression of Law as a failure. It is this impression that Antoin Murphy seeks to dispel. Available in OSO: http://www.oxfordscholarship.com/oso/public/content/economicsfinance/019828649X/toc.html
Money doctors: the experience of international financial advising
- Marc Flandreau
Flandreau, Marc (ed.) (2003), Money doctors: the experience of international
financial advising, 1850-2000, London: Routledge.
The House of Rothschild: Volume 1: Money's Prophets
- Niall Ferguson
Ferguson, Niall (1999), The House of Rothschild: Volume 1: Money's Prophets:
1798-1848, New York: Penguin.
Banking on Global Markets: Deutsche Bank and the United States, 1870 to the Present
- Christopher Kobrak
Kobrak, Christopher (2007), Banking on Global Markets: Deutsche Bank and the
United States, 1870 to the Present, New York: Cambridge University
Press.