Progress and Poverty: An Economic and Social History of Britain, 1700-1850

By M. J. Daunton | Go to book overview

CHAPTER 13 Banks and Money

Britain developed two distinctive banking systems in the eighteenth and early nineteenth centuries, one in Scotland and the other in England and Wales, whose relative merits were debated by contemporaries and are contested by historians. Rondo Cameron, in his comparative analysis of banking and economic development, had no doubt which was the more efficient and conducive to economic growth. Scotland, he claimed, had 'the strongest, most competitive, most efficient banking system of the times', in contrast to England where there was a sorry tale of missed opportunities. 'At almost every point at which banking and monetary policy might have been used constructively to promote economic growth', he complains, 'the authorities either made the wrong decision or took no action at all.'1 The result, if Cameron is to be believed, was that banks assisted the process of rapid industrialization in Scotland, whereas in England and Wales economic growth took place almost despite the banks.

There is a long tradition of criticism of the English banking system for neglecting the needs of industry, which argues that the City of London and the Bank of England were more interested in the needs of overseas lending and public finance. A contrast is often drawn with Germany, where banks were closely involved in the finance of industrial concerns in the later nineteenth century. But there is a danger of reading this criticism of British, and especially English, banks into the past. After all, the needs of industry for fixed capital were much less in the eighteenth and early nineteenth centuries than at later stages of industrialization, and the provision of circulating capital or credit could be much more crucial. British banks had less need to provide fixed capital than German banks; their main function was to meet short-term credit needs, improving the means of remittance and increasing the supply of money through the issue of notes. Consequently, British banks were 'credit banks' rather than industrial banks such as characterized Germany in the later nineteenth century. Arguably, British banks were appropriate to the needs of the economy in general and

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Progress and Poverty: An Economic and Social History of Britain, 1700-1850
Table of contents

Table of contents

  • Title Page iii
  • Acknowledgements vii
  • Contents ix
  • List of Figures xi
  • List of Tables xiii
  • Chapter I - Introduction: the Possibilities of Growth 1
  • Notes 19
  • Further Reading 21
  • Part I - Agriculture and Rural Society 23
  • Chapter 2 - Agricultural Production: the Limits of Growth? 25
  • Conclusion 56
  • Notes 57
  • Further Reading 58
  • Chapter 3 - The Rise of the Great Estates and the Decline of the Yeoman 61
  • Notes 87
  • Further Reading 88
  • Chapter 4 - Open Fields and Enclosure: the Demise of Commonality 92
  • Notes 117
  • Further Reading 119
  • Part II - Industry and Urban Society 123
  • Chapter 5 - Diversities of Industrialization 125
  • Notes 145
  • Further Reading 146
  • Chapter 6 - The Domestic System of Manufactures 148
  • Conclusion 169
  • Notes 170
  • Further Reading 171
  • Chapter 7 - The Coming of the Factory 201
  • Chapter 8 - Furnaces, Forges, and Mines 206
  • Conclusion 232
  • Further Reading 234
  • Chapter 9 - Capital and Credit: Financing Industrialization 260
  • Further Reading 261
  • Part III - Integrating the Economy 265
  • Chapter 10 - Integration and Specialization 267
  • Notes 283
  • Further Reading 283
  • Chapter II - Transport 285
  • Conclusion 314
  • Notes 314
  • Chapter 12 - Merchants and Marketing 318
  • Conclusion 338
  • Notes 338
  • Further Reading 339
  • Chapter 13 - Banks and Money 342
  • Conclusion 357
  • Notes 358
  • Further Reading 359
  • Further Reading 361
  • Further Reading 382
  • Further Reading 383
  • Part IV - Poverty, Prosperity, and Population 385
  • Chapter 15 - Births, Marriages, and Deaths 387
  • Notes 415
  • Further Reading 416
  • Chapter 16 - The Standard of Living and the Social History of Wages 441
  • Chapter 17 - Poor Relief and Charity 447
  • Notes 471
  • Further Reading 472
  • Part V - Public Policy and the State 475
  • Chapter 18 - The Visible Hand: the State and the Economy 477
  • Notes 502
  • Further Reading 503
  • Chapter 19 - Taxation and Public Finance 507
  • Further Reading 530
  • Further Reading 530
  • Notes 557
  • Further Reading 558
  • Chapter 21 - Conclusion 565
  • Notes 566
  • Chronology 567
  • Statistical Appendix 573
  • Index 591
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