| 1850-1914 |
Huge amounts of capital are exported from Britain |
| Huge amounts of British capital are invested abroad, especially after 1890, in the
United States, parts of the British Empire, and Argentina. The total reaches billions of
pounds. Britain's later economic problems may be partly due to the neglect of British
industry by the banks during this period. |
| p 348-352 |
|
| 1860-1921 |
Number of banks in the US increases by over 19 times |
| During the same period bank numbers fall in other advanced countries but in the US a
peak of nearly 30,000 is reached in 1921. |
| p 490-491 |
|
| 1865-1926 |
The Latin Monetary Union |
| This comprises France, Italy, Belgium, Switzerland, and later Greece. The gold and
silver coins of each country are legal tender throughout the union. The union has faded
away by the 1920s before its formal ending. |
| p 443,492-493,557 |
|
| 1873-1924 |
The Scandinavian Monetary Union |
| Denmark, Sweden and Norway form a monetary union similar to the Latin one but with
gold as the standard for their currency. |
| p 356,443 |
|
| 1891-1901 |
Number of Japanese savings banks increases twentyfold |
| By 1901 the total is 441. Up from a score ten years earlier. |
| p 583 |
|
| 1900 |
US Gold Standard or Currency Act |
| The great increase in America's stock of gold leads to abandonment of bimetallism. The
act also halves the minimum capital requirement for the smallest national banks, thus
stimulating an increase in their numbers, and raises the limitations on the issue of
notes. |
| p 497 |
|
| 1900 |
Bank of France has representation in 411 towns, including 120 full
branches |
| Owing to its very extensive network of branches and offices, commercial banks have not
developed as vigorously as their British and German counterparts. |
| p 556-557 |
|
| 1900 |
Industrial Bank of Japan founded |
| Its purpose is to provide long-term loans and debentures to assist the mining and
metallurgical industries in particular. |
| p 584 |
|
| 1901 |
Number of Japanese banks reaches a peak of 1,867 |
| Thereafter amalgamation and mergers reduce the number. |
| p 583 |
|
| 1902 |
Straits Settlement (Singapore) dollar introduced |
| This is intended as a replacement for the foreign coins which are demonetized two
years later. |
| p 626 |
|
| 1903 |
French coins and notes are still far more important than bank deposits |
| Bank deposits form only a tenth of the French money supply whereas coins account for
half. Bank note circulation is 8 times as high as the Bank of England's issues and the
Bank of France's gold reserves are even higher than its note issues. |
| p 557-558 |
|
| 1904 |
Foreign coins lose legal tender status in Singapore |
| The demonetization of Mexican and other foreign dollars simplifies cash transactions. |
| p 626 |
|
| 1906 |
Switzerland and Japan establish postal giro systems |
| They are the first countries to follow the example of Austria which established the
world's first postal giro system in 1883. |
| p 584 |
|
| 1907 |
International bank crisis starts in New York |
| Unlike earlier US panics which tended to start in weak country banks, this one starts
in the trust companies in New York. They are not members of the clearing system that might
have been able to prevent the crisis snowballing. Hundreds of American banks fail. In
contrast Britain weathers the storm with ease and this motivates proposals for a system of
central banks in the US. |
| p 361,498-502 |
|
| 1908 |
US Aldrich-Vreeland Act |
| As a response to the panic of the previous year this allows groups of a minimum of 10
national banks to form National Currency Associations to issue temporary currency. The act
also sets up a National Monetary Commission which authorizes 42 separate reports, most of
which contain studies of foreign banking systems. |
| p 501 |
|
| 1909-1911 |
Lloyd George anticipates the British welfare state |
| As chancellor of the exchequer Lloyd George introduces a revolutionary series of
budgets. In order to finance welfare benefits the taxation system is made much more
progressive, efficient and buoyant - just in time to finance the First World War. Warfare
engulfs welfare. |
| p 367 |
|
| c. 1910 |
Horses still used as money by the Kirghiz in the Russian Empire |
| The Kirghiz people in central Asia use horses as their main monetary unit and store of
value. Sheep are used as subsidiary units and small change is given in lambskins. |
| p 42 |
|
| 1911 |
US Postal Savings system established |
| Because of opposition from the commercial banks the postal savings system does not
develop in a substantial way. |
| p 501 |
|
| 1911 |
Issues of silver coins in British west Africa exceed those in Britain |
| The annual amount of silver issued increases from an average of £24,426 in the 5
years up to 1890 to £847,850 which exceeds the amount currently being issued for use in
the United Kingdom. |
| p 601 |
|
| 1912 |
West African Currency Board (WACB) established |
| The WACB is set up to be responsible for the issue of currency in the British colonies
of Nigeria, the Gold Coast (Ghana), Gambia, Togoland and the British Cameroons. The main
form of currency produced is silver coins. Gold coins quickly vanish from circulation to
be used as ornaments while bank notes are used mainly by traders and government agents. |
| p 602-603 |
|
| 1912 |
China ceases minting its traditional cash coins |
| After a couple of millennia use of these traditional Chinese base metal coins comes to
an end. |
| p 56 |
|
| 1913 |
Chamberlain Report on Indian Currency and Finance |
| The report includes a memorandum from one of its members, J.M. Keynes, arguing that
there is no need for the internal circulation of gold in India. He also points out that
India's strong habits of acting as a sink of the precious metals pose deflationary
dangers not only to India itself but also to Europe. |
| p 623 |
|
| 1913 |
Pujo Committee Report on the powers of the US money trust |
| The committee, established the previous year, reports that power over money and credit
is concentrated in just a few hands. It signals an end to laissez-faire in US banking. |
| p 501 |
|
| 1913 |
US Federal Reserve System established |
| Instead of a single central bank, like the First and Second Bank of the United States,
12 Federal Reserve districts are established each with its own reserve bank. All national
banks have to become members of the system and the state banks are given conditional
permission to join. Banks are also allowed to establish branches abroad. |
| p 501-502,524 |
|
| 1913 |
Number of German savings banks reaches 3,133 |
| Their total assets are more than double those of the commercial banks. |
| p 570 |
|
| 1913 |
Number of industrial credit co-operatives in Germany reaches 1,500 |
|
|
| 1914 |
Number of rural credit co-operatives in Germany reaches 17,000 |
|
|
| 1914 |
German Reichsbank has over 100 main branches |
| In addition it has 4,000 sub-offices. Thus the Reichsbank's regional representation is
far stronger than that of the Bank of England in Britain. |
| p 571 |
|
| 1914-1918 |
First World War |
| Despite the huge revenues raised from taxation the British national debt rises
tenfold. The government fails to use its bargaining power, as the only really massive
borrower in wartime, to get money at low rates of interest. |
| p 367-373 |
| The French national debt rises from 28 billion to 151 billion francs and the note
issue increases over 6-fold. |
| p 562 |
| Germany relies more on borrowing, particularly short-term, and less on taxation than
Britain. Consequently its policy is more inflationary. |
| p 572 |
| Japan's industry is greatly stimulated by the war. By 1918 Japan has passed from being
a debtor to a creditor country. |
| p 584 |
|
| 1914 |
New British notes issued and gold is withdrawn from circulation |
| New one pound and 10 shilling notes are issued by the Treasury, not the Bank of
England, and postal orders and Scottish and Irish banknotes are made legal tender. The
success of the new notes allows banks to withdraw gold gradually from internal
circulation, thus putting a quiet end to the gold standard. |
| p 369-370 |
|
| 1917 |
The world's first billion pound loan is raised |
| Within 6 weeks of the issue of the third War Loan by the British government the money
is raised. |
| p 372 |
|
| 1917 |
US enters 1st World War |
| As a result the national debt increases from about $1 billion in 1916 to $25 billion
in 1920. |
| p 504 |
|
| 1918 |
French Giro established |
| As France makes relatively small use of cheque payments at the time of the giro's
foundation, this system of money transfer fulfils unmet needs and grows rapidly. By the
time Britain's giro is established 50 years later the French one is the largest in the
world. |
| p 561 |
|
| 1919 |
US Edge Act to promote foreign banking indirectly permits bank branches |
| This amendment to the Federal Reserve Act allows the chartering of corporations for
the purpose of engaging in international or foreign banking. Despite the legal prohibition
of branch banking these corporations can be set up anywhere, including other states in the
US. |
| p 524,538 |
|
