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Capital, Industriousness, and Private Banks in the Economic Imagination of a Nineteenth-Century Statesman

  • Susan P. McCaffray

Abstract

Between 1793 and 1815 the leading states of Europe found themselves almost constantly at war. Statesmen charged with keeping treasuries full confronted crushing challenges. Their task was complicated by a growing sensitivity to the importance of foreign trade in general, and the boom in British cotton exports, in particular. To such traditional government concerns as protecting the nation’s money and filling its treasury the emergence of political economy now added additional “economic” duties, which included encouraging commerce and the growth of capital. At the intersection of theoretical political economy and state policy, and the intersection of credit, money, and budgets, was the effort to understand and organize banking. The years of warfare straddling the eighteenth and nineteenth centuries witnessed banking innovation throughout Europe and produced fundamental economic works on the subject. English economist David Ricardo became famous by criticizing the Bank of England and demanding a return to the gold standard. Less well known, but occupied by similar concerns, was the Russian official and political economist, N.S. Mordvinov. A review of Ricardo’s and Mordvinov’s ideas from this period illuminates the ways in which Russian banking resembled and differed from the English system and demonstrates the common nature of the problems Russian and English political economists perceived.1

Keywords

Money Supply Private Bank National Wealth Teenth Century Bank Note 
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Notes

  1. 2.
    Charles F. Dunbar, The Theory and History of Banking (New York and London: G. P. Putnam’s Sons, 1929), 9.Google Scholar
  2. 3.
    Charles P. Kindleberger, A Financial History of Western Europe (New York: Oxford University Press, 1993), 49.Google Scholar
  3. 4.
    Ibid., 49–50; Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, R.H. Campbell and A.S. Skinner, eds. (Indianapolis: Liberty Fund, 1981), vol. 1, Book 4, 480–481.Google Scholar
  4. 6.
    Ian Blanchard, Russia’s “Age of Silver”: Precious Metal Production and Economic Growth in the Eighteenth Century (London: Routledge, 1989), 163–172.Google Scholar
  5. 11.
    S.Ia. Borovoi, Kredit i banki Rossii (Moscow: Gosfinizdat, 1958), 36–38; 44–45. A recent article that provides very rich detail about Russian banking practice is Sergei K. Lebedev, “European Business Culture and St. Petersburg Banks,”Google Scholar
  6. William Craft Brumfield et al., eds., Commerce in Russian Urban Culture, 1861–1914 (Washington, D. C.: Woodrow Wilson Center Press, 2001), 21–38.Google Scholar
  7. 13.
    I.F. Gindin, Gosudarstvennyi bank i ekonomicheskaia politika tsar’skogo pravitel’stva (1861–1892gg.) (Moscow: Gosfinizdat, 1960), 81.Google Scholar
  8. 14.
    A detailed discussion of the development of Russian corporate law, with its continued emphasis on government tutelage, is found in Thomas C. Owen, The Corporation Under Russian Law, 1800–1917 (Cambridge: Cambridge University Press, 1991). See pp. 97–111 for details on joint stock banking at mid-centuryGoogle Scholar
  9. 15.
    The first German joint stock bank appeared in Cologne in 1841. France also adopted joint stock banking in the wake of the 1848 financial crisis, the first such enterprises being chartered in the mid-1850s. See Rondo Cameron, Banking in the Early Stages of Industrialization: A Study in Comparative Economic History (New York: Oxford University Press, 1967), 162 and 107.Google Scholar
  10. 19.
    Mordvinov’s writings fill over nine of the ten volumes of VA. Bil’basov, Arkhiv Grafov Mordvinovykh (St. Petersburg: Skorokhodova, 1901–1903); his lichnyi fond at RGIA is f. 994.Google Scholar
  11. 20.
    Ian Blanchard summarizes Russia’s relative decline in the first half of the nineteenth century, noting that by 1788 “the average Russian was as rich as his English counterpart and only 15 per cent poorer than the average Frenchman,” placing the Russian “at the very top of the international national income league table.” However, thanks primarily to unfavorable climate conditions and harmful agricultural practices, Russian national income began a rapid and precipitous decline around 1807 that lasted until the early 1850s, so that per capita income fell to lower than it had been in the time of Peter the Great, and far lower than that of contemporary Britain. See Ian Blanchard, “Eighteenth-century Russian Economic Growth: State Enterprise or Peasant Endeavor?” Jahrbücher für Geschichte Osteuropas, Band 45, Heft 4 (1997): 543–544.Google Scholar
  12. 36.
    Vysochaishii manifest o sostave zaimov, May 27, 1810, RGIA, f. 1152 op. 1 d. 1, listy 170–172; a good discussion of the problem of redeeming the assignats is in Helma Repczuk, “Nicholas Mordvinov (1754–1845): Russia’s Would-be Reformer” Ph.D. diss. (Columbia University, 1962), 232–233, and in Walter Pintner, Russian Economic Policy under Nicholas I (Ithaca, NY: Cornell University Press, 1967), 185.Google Scholar
  13. 40.
    Elie Halévy, A History of the English People in the Nineteenth Century, vol. 1, England in 1815 (New York: Barnes and Noble, Inc., 1961), 338–339.Google Scholar
  14. 55.
    Cited in Robert Wohl, The Generation of 1914 (Cambridge: Harvard University Press, 1979D), 3.Google Scholar

Copyright information

© Susan P. McCaffray and Michael Melancon 2005

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  • Susan P. McCaffray

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