Development of the American Economy. (Conferences)
Members of the NBER's Program on the Development of the American Economy met in Cambridge on March 2. Program Director Claudia Goldin, NBER and Harvard University, organized the meeting at which these papers were discussed:
Richard Sylla, NBER and New York University; Jack W. Wilson, North Carolina State University; and Robert E. Wright, University of Virginia, "Trans-Atlantic Capital Market Integration, 1790-1845"
John J. Wallis, NBER and University of Maryland, "The Property Tax as a Coordinating Device: Financing Indiana's Mammoth Internal Improvement System, 1835 to 1842" (NBER Historical Working Paper No. 136)
Lee J. Alston, NBER and University of Illinois, and Andres Gallo, University of Illinois, "The Erosion of Legitimate Government: Argentina, 1930-1947"
Joseph P. Ferrie, NBER and Northwestern University, "The Rich and the Dead: Mortality in the United States, 1850-60"
Marc D. Weidenmier, NBER and Claremont-McKenna College, and Kerry Odell, Scripps College, "Real Shock, Monetary Aftershocks: The San Francisco Earthquake and the Panic of 1907"
Donald R. Davis and David Weinstein, NBER and Columbia University, "Bombs, Bones, and Break Points: The Geography of Economic Activity" (NBER Working Paper No. 8517. For a description of this paper, see page 33.)
During the 1790s, European investors began to purchase substantial quantities of U.S. government debt securities and the equity securities issued by American corporations. A number of these securities were listed and traded in markets on both sides of the Atlantic. Based on market price quotations compiled for the same American securities in London and New York markets, Sylla, Wilson, and Wright ask if these early trans-Atlantic securities markets were integrated, and, if so, when they became integrated. They find little evidence of market integration before 1816, and substantial evidence of it thereafter. Studying information-flow times, the authors suggest that the advent and expansion of regularly scheduled packet shipping services increased and regularized information flowing from one market to the other, promoting integration. Evidence on lagged market responses to the arrival of information suggests that London prices were more affected by New York prices than vice versa. These findings suggest that th e Federalist financial revolution of the 1790s was instrumental in making the United States a successful emerging market, and that financial globalization began by at least the second decade of the nineteenth century, quite a bit earlier than most people suspected, despite the slowness of trans-Atlantic communications.
The state of Indiana set out to build a mammoth system of canals, railroads, and turnpikes in 1836, after a decade of intense debate in which sectional rivalries prevented any state action. Waffis investigates the role played by the adoption of an ad valorem property tax in ameliorating the sectional rivalries and coordinating the costs of financing the transportation system with the taxes levied to finance it. He also traces the rise and fall of land values in the state between 1835 and 1842, estimating the effect of internal improvement projects on land values. …