The History of Anglo-American Banking Relationships at the Turn of the Twentieth Century

Date Presented:

Abstract:

From the end of the American Civil War through the beginning of the First World War, US financial institutions grew increasingly transatlantic in form. Flows of capital across the Atlantic were greater in 1900 than they would be at any time for the next hundred years. While historians have written on foreign investments in the United States, however, few have focused on the role of financial institutions per se. Nonetheless, financial firms were more than passive conduits for money; they were active in the formation of a broad-reaching transatlantic economic system.

Using letters of correspondence, financial statements, ledger books, and other archival records, I demonstrate that the connections between British and American firms proved substantial and significant. Benefiting from newly available material, I write the evolution of transatlantic finance: from letters of correspondence, to agency agreements, to increasingly sophisticated forms of partnerships. I show the significant quantitative benefits of these relationships to both European and American firms, as well as more qualitative advantages. I demonstrate how firms reacted—and averted—market crises, and I illustrate the growing intellectual conception of financial markets as transatlantic, rather than national in form.

This project comes at a time when capital markets across the globe suffer many of the same difficulties that the nineteenth-century firms sought to avert. By examining the creation and workings of the history’s longest-lasting international financial system, we gain insight into the challenges of the present day.