Book contents
- Frontmatter
- Contents
- Acknowledgments
- 1 Introduction
- 2 Finance from Britain to the American Colonies
- 3 The Financial Dynamics of Antebellum America
- 4 Contours of American Finance
- 5 Contradictions of Early Twentieth-Century Financial Expansion
- 6 The United States and International Finance in the Interwar Period
- 7 New Foundations for Financial Expansion
- 8 Contradictions of The Dollar
- 9 The Domestic Expansion of American Finance
- 10 Contradictions of Late Twentieth-Century Financial Expansion
- 11 The Neoliberal Consolidation of American Financial Power
- 12 Contradictions of The Present
- Bibliography
- Index
5 - Contradictions of Early Twentieth-Century Financial Expansion
Published online by Cambridge University Press: 07 October 2011
- Frontmatter
- Contents
- Acknowledgments
- 1 Introduction
- 2 Finance from Britain to the American Colonies
- 3 The Financial Dynamics of Antebellum America
- 4 Contours of American Finance
- 5 Contradictions of Early Twentieth-Century Financial Expansion
- 6 The United States and International Finance in the Interwar Period
- 7 New Foundations for Financial Expansion
- 8 Contradictions of The Dollar
- 9 The Domestic Expansion of American Finance
- 10 Contradictions of Late Twentieth-Century Financial Expansion
- 11 The Neoliberal Consolidation of American Financial Power
- 12 Contradictions of The Present
- Bibliography
- Index
Summary
Introduction
The IPE narrative of financial development tends to portray the early twentieth century as the classic age of high finance, when states were committed to a liberal financial regime based on the gold standard. Although this picture captures some aspects of the international financial relations that pivoted on London, it does little to clarify the development of early-twentieth-century American finance – which was driven precisely by mechanisms of financial intermediation that were very different from those that underpinned the rise of British finance. This is especially clear when it comes to the significance of the American gold standard. The victory of gold was hardly an expression of financial discipline and was in no meaningful way allied to an institutional commitment to external financial openness. Instead, it served to consolidate the organization of liquidity creation around the institutional axis of New York banks, the call loan market, and the stock market, thereby withholding public sanction and social validity from other potential bases of credit creation. Even if advocates of the gold standard presented their case in terms of the “discipline of gold,” there was nothing contained or disciplined about the pace at which credit creation and financial innovation accelerated after the turn of the century. The transformation of financial intermediation that had begun in the late nineteenth century made available to American banks an unprecedented capacity for the creation of liquidity and they exploited this to open up new lines of business. The start of the twentieth century consequently witnessed the growing penetration of financial principles and relations into American life.
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- Information
- The Development of American Finance , pp. 54 - 68Publisher: Cambridge University PressPrint publication year: 2011