Surging Demand For Capital in The Gilded Age
The rise of the commercial banking sector coincided with the growth of early factories, since entrepreneurs had to rely on commercial banks in order to fund their own projects. Because of this need for capital, many banks began to arise by the late 19th century. By 1880, New England became one of the most heavily banked areas in the world.
Lance Davis has demonstrated that the process of capital formation in the nineteenth century was markedly different between the British capital market and the American capital market. British industrialists were readily able to satisfy their need for capital by tapping a vast source of international capital through British banks such as Westminster's, Lloyds and Barclays. In contrast, the dramatic growth of the United States created capital requirements that far outstripped the limited capital resources of American banks. Investment banking in the United States emerged to serve the expansion of railroads, mining companies, and heavy industry. Unlike commercial banks, investment banks were not authorized to issue notes or accept deposits. Instead, they served as brokers or intermediaries, bringing together investors with capital and the firms that needed that capital.
Read more about this topic: Banking In The United States
Famous quotes containing the words demand, capital, gilded and/or age:
“We now demand the light artillery of the intellect; we need the curt, the condensed, the pointed, the readily diffusedin place of the verbose, the detailed, the voluminous, the inaccessible. On the other hand, the lightness of the artillery should not degenerate into pop-gunneryby which term we may designate the character of the greater portion of the newspaper presstheir sole legitimate object being the discussion of ephemeral matters in an ephemeral manner.”
—Edgar Allan Poe (18091845)
“The capital is become an overgrown monster; which like a dropsical head, will in time leave the body and extremities without nourishment and support.”
—Tobias Smollett (17211771)
“Holland is a dream, Monsieur, a dream of gold and smokesmokier by day, more gilded by night. And night and day that dream is peopled with Lohengrins like these, dreamily riding their black bicycles with high handle-bars, funereal swans constantly drifting throughout the whole country, around the seas, along the canals.”
—Albert Camus (19131960)
“But to most of us society shows not its face and eye, but its side and back. To stand in true relations with men in a false age is worth a fit of insanity, is it not?”
—Ralph Waldo Emerson (18031882)