Central Banking before 1914

Abstract

In this chapter we address questions relating to the evolution of central banks during the period 1850–1913. While the operation of the gold standard gets the most attention in the literature, there was considerably more to central bank behaviour than merely adhering to the gold standard. As we show below, the monetary authorities of individual countries sometimes pursued what might be characterized as domestic monetary objectives from time to time. They also supervised their domestic banking systems, at least in some cases. It will be the main task of this chapter to discuss the institutional details of the financial sectors of the major European economies, keeping one eye on the operation of the gold standard (or its failure to operate as designed) and one eye on the evolving nature of central banking itself.