National Banking's Role in U.S. Industrialization, 1850-1900
The passage of the National Banking Acts stabilized the existing financial system and encouraged the entry of 729 banks between 1863 and 1866. The national banks not only attracted more deposits than previous state banks, but also concentrated in the area that would eventually become the Manufacturing Belt. Using a new bank census, the paper shows that these changes to the financial system were a major determinant of the geographic distribution of manufacturing. The sudden entry not only resulted in more manufacturing capital and output at the county-level, but also more steam engines and value added at the establishment-level.
The author thanks Peter Rousseau, Jeremy Atack, Greg Niemesh, Robert Margo, Price Fishback, Richard Sylla, Eugene White, John James, Jon Moen, Paul Rhode, as well as participants at the NBER-DAE Summer Institute and the University of Arizona for their insightful comments and suggestions on various drafts. He also thanks the Economic History Association for financial support. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.
Jaremski, Matthew, 2014. "National Banking's Role in U.S. Industrialization, 1850–1900," The Journal of Economic History, Cambridge University Press, vol. 74(01), pages 109-140, March. citation courtesy of