A Financial History of the United States

A Financial History of the United States

A Financial History of the United States

A Financial History of the United States

Excerpt

This book departs from the narrow definition of financial history which limits the field to public finance. This is not to deny that the state, in a modern industrial society, is the most important financial unit--the largest income receiver, the largest borrower, and the largest spender. But its activities bind it closely to the institutions of the money market, and it can never operate as a separate entity, however much it might like to do so.

Nor can the financial community be independent of the government. Although the United States is very self-conscious about its role as exponent of the free enterprise system, the amount of government regulation in many areas of the economy is greater than in nations which give less lip service to laissez-faire principles. In earlier years there was very little government control, and the unhappy results in the fields of banking, stock trading, and corporate organization inevitably led to one legal restriction after another, backed up by court interpretations and enforcement procedures.

Federal finance has increased in importance as the result of the increasing size and population of the country. State and local units are unable to cope with such large-scale interstate problems as highways, health, welfare, and education. Even the most ardent advocates of states' rights have been obliged to turn to the central government for assistance in solving these problems.

Public and private finance affect each other so intimately that financial history must include the history of the principal financial institutions-- their origin, their development, and perhaps their decline. Some of them arose by specialization in one activity of an existing institution, others out of a need to fill a gap or to provide a more efficient mechanism. Changes in technology and in forms of business organization have affected the kinds of credit needed for production.

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