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SUMMARY:Bankers with different 'golden dreams': bank business models and t
 he British money supply in the early Industrial Revolution. - Dr John Gent
 \, KCL
DTSTART:20190225T170000Z
DTEND:20190225T183000Z
UID:TALK116512@talks.cam.ac.uk
CONTACT:Dr Duncan Needham
DESCRIPTION:This paper examines the emergence of two competing London bank
  business models during the last quarter of the eighteenth-century\, and d
 raws out some implications for how the banking system manufactured additio
 nal supplies of money during the early stages of the Industrial Revolution
 .\n\nTo the best of my knowledge this is the first time such forensic acco
 unting analysis has been done for continuous years across a complete sampl
 e of London banks with surviving records for the period 1780 to 1832. Usin
 g this data\, I extract a taxonomy of the balance sheet compositions of th
 eir assets and liabilities. I use this to infer a vertical typology of two
  contrasting business models labelled the ‘Goldsmith’ and the ‘Disco
 unter’\; and analyse their respective revenue and cost dynamics. I use t
 he business model typology to examine the different incentive effects driv
 ing the banks' response to Britain's decision to come off the gold standar
 d in 1797 (the ‘Restriction’).   While I do not claim the sample is st
 ratified\, triangulation with a vital Bank of England document strongly su
 pports the sample's robustness.\n\nThe findings stand in contrast to the p
 revious understanding of what was the typical London bank in this period. 
  This paper can be viewed as both a sequel to Temin and Voth's (2013) acco
 unt of the emergence of the goldsmith banks during the earlier eighteenth-
 century\, and a refutation of Temin and Voth (2005) that proposed Hoares &
  Co.'s goldsmith bank business model as sufficient for evaluating the micr
 o-economic evidence of the role of banking and credit in the early Industr
 ial Revolution. The findings have a bearing upon the debates over credit r
 ationing and the "crowding out" of private sector investment during the Na
 poleonic Wars\, but can also help situate the institutional context surrou
 nding the intellectual history of monetary theory as it evolved from the c
 lassical writings of Hume and Smith (both topics being the subject of furt
 her papers).\n
LOCATION:Darwin College\, Old Library
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