English Banks and Business Cycles, 1848–80

  • Michael Collins


In their seminal article on ‘Money and Business Cycles’ Milton Friedman and Anna J. Schwartz emphasised the need for historical studies of the relationships between monetary time series and cyclical change in the level of economic activity.1 This present chapter uses recently collated commercial bank balance sheet data to examine the behaviour of English banks over the course of mid-nineteenthcentury cyclical fluctuations. It concentrates on one sector of the money market, namely commercial banks, although the investigation is carried beyond the definitional confines of the money stock, as both bank assets and liabilities are examined.


Business Cycle Current Account Balance Sheet Commercial Bank Money Market 
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Notes and References

  1. 1.
    M. Friedman and A. J. Schwartz, ‘Money and Business Cycles’, Review of Economics and Statistics XLV (1963) Supplement, pp. 32–64.CrossRefGoogle Scholar
  2. 5.
    The series of C. H. Feinstein, National Income, Expenditure and Output of the United Kingdom 1855–1965 (Cambridge, 1972) do not provide the same coverage of the period.Google Scholar
  3. 10.
    E. V. Morgan, The Theory and Practice of Central Banking, 1797–1913 (London, 2nd impression, 1965, first published 1943) pp. 168; 193.Google Scholar
  4. 12.
    L. S. Pressnell, ‘Gold Reserves, Banking Reserves and the Baring Crisis of 1890’, in C. R. Whittlesey and J. S. G. Wilson (eds), Essays in Money and Banking in Honour of R. S. Sayers (Oxford, 1968) pp. 181–2; and J. E. Wadsworth, ‘Banking Ratios Past and Present’ in Whittlesey and Wilson, Essays, pp. 230–1.Google Scholar
  5. 20.
    Friedman and Schwartz, ‘Money and Business Cycles’, p. 51; and P. Cagan, Determinants and Effects of Changes in the Stock of Money 1875–1960 (New York, 1965) p. 30.Google Scholar
  6. 23.
    L. S. Pressnell, ‘The Liquidity Ratio’, Journal of the Institute of Bankers, LXXX (June 1959) pp. 186–92 provides an historical survey of bankers’ views of the ratio.Google Scholar
  7. 24.
    W. T. C. King, History of the London Discount Market (London, 1936, reprinted 1972) Chapters 1–6.Google Scholar
  8. 25.
    S. Nishimura, The Decline of Inland Bills of Exchange in the London Money Market, 1855–1913 (Cambridge, 1971) Chapter 5, and pp. 63–4; 79.Google Scholar
  9. 29.
    J. R. T. Hughes, Fluctuations in Trade, Industry and Finance. A Study in British Economic Development, 1850–1860 (Oxford, 1960) Chapter 2.Google Scholar
  10. 34.
    W. F. Crick and J. E. Wadsworth, A Hundred Years of Joint Stock Banking (London, 1936) pp. 32–3.Google Scholar
  11. 51.
    W. P. Kennedy, ‘Institutional response to Economic Growth: Capital Markets in Britain to 1914’, in L. Hannah (ed.), Management Strategy and Business Development (London, 1976) pp. 158–60.Google Scholar

Copyright information

© P. L. Cottrell and D. E. Moggridge 1988

Authors and Affiliations

  • Michael Collins

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