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⁹ Author's calculation from Peter Wardley (“The Top 100 Global Firms by Employment and Equity Capitalisation in 1912,” paper at Tokyo Global Stock Markets Conference, July 2006) and listing details in Stock Exchange Official Intelligence and Commercial and Financial Chronicle Bank and Quotation Section.

¹⁰ Rajan, R. J. and Zingales, L. (“The Great Reversals: The Politics of Financial Development in the Twentieth Century,” Journal of Finance 69, no. 1, July 2003) report a ratio of domestic corporate securities (including bonds) capitalization to GDP of 109 percent for the LSE alone in 1913, against only 39 percent for equities only on the NYSE plus several other U.S. exchanges. The correct figures for all domestic corporate securities are 192 percent for the LSE and 66 percent for the NYSE (Hannah, “London as the Global Market”).Google Scholar

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¹⁷ Michie, The London and New York Stock Exchanges, 132–64.

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²¹ Cheffins, Brian and Bank, Steven (“Is Berle and Means Really a Myth?” Business History Review 83, 2009, 443–74) attempt to reassert the old view, but, James Foreman-Peck and Leslie Hannah (“U.K. Corporate Governance in 1911,” paper delivered to the Eurhistock conference, Cambridge, April 2010) examine the data for hundreds of U.K. firms that were obliged to report their boards' shareholdings annually, finding that ownership was more divorced from control there in 1911 than in the U.S. or U.K. in the 1990s. Berle and Means was not a myth, but what they diagnosed in 1930s America emerged decades earlier in the U.K.CrossRefGoogle Scholar

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²³ Ibid., 12, 77–78, 224, 249, 290, 354, 390.

²⁴ Ibid., 294, 352, 647.

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²⁷ Ibid., 615–16; Burk, Kathy, Morgan Grenfell, 1838–1988 (Oxford, 1989), 265.Google Scholar

²⁸ Carosso, The Morgans, 436, 459.

²⁹ Ibid., 273, 276, 644, 745n124.

³⁰ These figures exclude interest paid to the partners, so they are a measure of economic rent (monopoly profit in excess of normal capital charges).

³¹ Dunlavy, Colleen, “Corporate Governance in Nineteenth Century Europe and the United States: The Case of Shareholder Voting Rights,” in Corporate Governance: The State of the Art of Emerging Research, ed. Hopt, Klaus et al. (Oxford, 1998)Google Scholar; Hannah, Leslie, “The ‘Divorce’ of Ownership from Control from 1900 Onwards: Recalibrating Imagined Global Trends,” Business History 49, no. 4 (2007): 404–38CrossRefGoogle Scholar. It became less common during the first decade of the new century; see Moody, John, Moody's Analyses…by a Method Based on Scientific Principles Properly Applied to Facts (New York, 1909), 12.Google Scholar

³² At that time, the Berlin, London, and Tokyo corporate markets were largely equity, while the NYSE was dominated by corporate bonds.

³³ Pratt, The Work of Wall Street, 81, shows that as late as 1902, 70 percent of NYSE corporate securities were railroads. The default rate on all U.S. corporate bonds in 1892–94 was 19 percent, more than the 16 percent of 1883–85, but less than the 36 percent in 1873–75 (Giesecke, Kay et al. , “Corporate Bond Default Risk: A 150-Year Perspective,” NBER Working Paper no. 15848, Mar. 2010, 18).Google Scholar

³⁴ Flandreau, Marc and Zumer, Frédéric, The Making of Global Finance, 1880–1913 (Paris, 2004), 126Google Scholar; Edelstein, Michael, “Foreign Investment: Accumulation and Empire, 1860–1914,” in The Cambridge Economic History of Modern Britain, vol. 2: 1860–1939, ed. Floud, Roderick and Johnson, Paul (Cambridge, U.K., 2003), 198.Google Scholar

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³⁶ One can, of course, debate whether a fluid market in corporate control is better than entrenching stable management teams in self-perpetuating corporate boards.

³⁷ Committee, Pujo, Money Trust Investigation: Hearings (Washington, D.C., 1913), 1058–60, 1970–72.Google Scholar

³⁸ Tufano, “Business Failure,” 22–23.

³⁹ Cowles, A. and Associates, Common-Stock Indexes (Bloomington, 1939), 48.Google Scholar

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⁴¹ Carosso, The Morgans, 358–61. Kuhn Loeb had a higher share of this business than did Morgan.

⁴² Ibid., 382–83.

⁴³ Cowles, Common-Stock Indexes, 44; S. F. Van Oss, “The ‘Limited Company’ Craze,” Nineteenth Century (May 1898): 733; Fear, Jeffrey and Kobrak, Christopher, “Diverging Paths: Accounting for Corporate Governance in America and Germany,” Business History Review 80 (Spring 2006): 14.CrossRefGoogle Scholar

⁴⁴ O'Hagan, Henry Osborne, Leaves from My Life, 2 vols. (London, 1927), for the effects of competition on eroding early windfalls.Google Scholar

⁴⁵ Bureau of Corporations, The Steel Industry (Washington, D.C., 1911), 125–26.Google Scholar

⁴⁶ The 5 percent bonds were worth $349 million, on the basis of infrequent trades averaging 115 in the first year, as the Carnegie partners trickled their bonds to the market (Ibid., 174, 242).

⁴⁷ In 1899, the top 100 U.S. industrials had, at par, only 8 percent bonds, 23 percent preferred and 69 percent common (Bunting, David, The Rise of Large American Corporations, 1889–1919 (New York, 1986), 118; and the previously quoted merging steel companies also had only 8 percent bonds. By contrast, U.S. Steel at par had 27 percent bonds, 36 percent preferred and 36 percent common (Bureau of Corporations, The Steel Industry, 170, 242). At average first-year market prices, the leverage was even higher: 34 percent bonds, 42 percent preferred, and only 20 percent common.Google Scholar

⁴⁸ Bureau of Corporations, Steel Industry, 243–49; Carosso, The Morgans, 466–74; Wilgus, H. A., A Study of the U.S. Steel Corporation (Chicago, 1901), 115–19Google Scholar; Commercial and Financial Chronicle 72 (9 Mar. 1901): ix–x. The fact that some directors or large shareholders were members of the underwriting syndicate was, however, noted in some circulars.Google Scholar

⁴⁹ Pujo, Hearings, 1088.

⁵⁰ Goldsmith, R. W., A Study of Saving in the United States, vol. 1 (Princeton, 1955), 489, 503, 505. The much higher figures routinely quoted do not allow for issues below par, exchanges, stock retained by vendors, etc.Google Scholar

⁵¹ Davis, Lance and Huttenback, R. A., Mammon and the Pursuit of Empire (New York, 1986), 41. By 1914, 25 percent of U.S. Steel common was, in fact, held in Europe.Google Scholar

⁵² Its securities were worth $1.1 billion (Bureau of Corporations, The Steel Industry, 242), but it was not the world's first billion-dollar corporation. The Paris-Lyon-Méditerranée Railway had already exceeded that in the nineteenth century.

⁵³ Warren, Kenneth, Big Steel: The First Century of the United States Steel Corporation, 1901–2001 (Pittsburgh, 2001), 16. For a European engineer's contemporary assessment of the costs and efficiency of the various works, see file DEEF/11836/2, Crédit Agricole archives, Paris.CrossRefGoogle Scholar

⁵⁴ Vanderlip, F. A., From Farmboy to Financier (New York, 1935), 193.Google Scholar

⁵⁵ Bureau of Corporations, Steel Industry, 38. $12.5 million of this was Morgan's intermediation fee; it is not clear what proportion of the $50 million underwriting syndicate profit was also retained.

⁵⁶ I percent on the cash subscribed, 3 percent for underwriting. See below for competitive London fee rates and Calomiris, Christopher W. and Raff, Daniel M. G., “The Evolution of Market Structure, Information and Spreads in American Investment Banking,” in AngloAmerican Financial Systems, ed. Bordo, and Sylla, , 111, for similarly low German issue costs.Google Scholar

⁵⁷ Ibid., 103–04, 117–19, 122, show a few higher percentages for “underwriting” small U.S. issues, but their figures combine all three elements in issue costs. See also discussions of the cases of IMM, in the section “Exporting American Finance,” and of Amalgamated Copper, in the section “Market Competition and Banking Performance.”

⁵⁸ Nohria, Nitin, Dyer, Davis, and Dalzell, Frederick, Changing Fortunes: Remaking the Industrial Corporation (New York, 2002), 166.Google Scholar

⁵⁹ The market in 1899–1900 valued the constituent firms’ equity and bonds at $793 million, 17 percent above their asset value; after the merger they were valued (at average first year prices) at $1.133 billion, 94 percent above asset value (Bureau, Steel Industry, 20–21, 37, 170). The difference between the two suggests the capitalized value of expected future increased profits was $287 million. The value of the common stock then was $223m, implying that, absent these expectations, the common would have been worthless.

⁶⁰ Bureau of Corporations, Steel Industry, 265; Stigler, George, “The Dominant Firm and the Inverted Umbrella,” in his Organization of Industry (Homewood, 1968), 108–12.Google Scholar

⁶¹ Redlich, Fritz, The Molding of American Banking (New York, 1968), 384Google Scholar; Chandler, Alfred D. Jr., The Visible Hand: The Managerial Revolution in American Business (Cambridge, Mass., 1977), 131–40, also found little to admire in U.S. Steel.Google Scholar

⁶² Carosso, The Morgans, 376, 380–81, 383.

⁶³ The only steelmakers of remotely similar scale in Europe—Armstrong-Whitworth and Vickers in the U.K. and Krupp in Germany—had 1900 capitalizations in the $47–$67 million range.

⁶⁴ Economist, 28 June 1902, 1007–8; Carosso, The Morgans, 497.

⁶⁵ Economist, 1 Nov. 1902, 1674–75; Barker, Theodore C. and Robbins, Michael, A History of London Transport, vol. 2 (London, 1974), 70–74, 77–84. Morgan was wise (or lucky) to lose this contest: by 1907 Speyer had accumulated large losses on Underground Electric Railways.Google Scholar

⁶⁶ Among the all-time least cited articles are those on IMM on which the following narrative draws: Navin, Thomas R. and Sears, Marian V., “A Study in Merger: Formation of International Mercantile Marine Company,” Business History Review 28 (Dec. 1954): 291–328CrossRefGoogle Scholar; Saliers, E. J., “Some Financial Aspects of the International Mercantile Marine Company,” Journal of Political Economy 23 (Nov. 1919): 910–25CrossRefGoogle Scholar; and Fields, M. J., “The International Mercantile Marine Company: An Ill-Conceived Trust,” Journal of Business (Jul. and Oct. 1932): 268–82, 362–79Google Scholar. See also, for parts of the story, file DEEF/29237/1, Crédit Agricole archives, Paris; Carosso, The Morgans, 481–86, 491–93; Macrosty, H. W., The Trust Movement in British Industry (London, 1907), 301–7Google Scholar; Moss, Michael and Hume, John R., Shipbuilders to the World: 125 Years of Harland & Wolff (Belfast, 1986) 96–174Google Scholar; O'Hagan, Leaves, 384–85; Taylor, James, Ellermans: A Wealth of Shipping (London, 1976)Google Scholar; Huldermann, Bernhard, Albert Ballin (London, 1922), 40–130Google Scholar; Dalkmann, H. A. and Schoonderbeek, Albert. J., 125 Years of the Holland-America Line (Durham, 1998)Google Scholar; Vale, Vivian, The American Peril: Challenge to Britain on the North Atlantic, 1901–04 (Manchester, 1984)Google Scholar; Yui, Tsunehiko and Nakagawa, Keiichiro, eds., Business History of Shipping (Tokyo, 1985)Google Scholar. This massive failure is substantially airbrushed out of the standard narratives of U.S. multinational success(Wilkins, Mira, The Emergence of Multinational Enterprise [Cambridge, Mass., 1970], 71; Chandler, Visible Hand, 192, 337).Google Scholar

⁶⁷ For recent judicial condemnation of a breach of trust by vendor directors in the (different) Olympia case, see the Economist, 7 Apr. 1900, 496. American businessmen at this time still spoke of the U.K., with some distaste, as an exceptionally litigious society. The risk of judicial condemnation arose because there were already some signs of British corporate law veering to a principles-based (and the U.S. to a rules-based) regime.

⁶⁸ Economist, 3 May 1902, 690, 10 May 1902, 733, 17 May 1902, 778; Statist, 3 May 1902, 893. Such contemporary opinion implies that financial economists, anachronistically using modern shareholder protection checklists to conclude that all countries then had equal (very low) shareholder protections, may be missing something.

⁶⁹ In 1900 the largest European quoted industrial, J. & P. Coats, had a market capitalization of $120 million, though some railways, banks, and the Suez Canal were larger.

⁷⁰ Ellerman left the largest-ever British fortune in 1933 ($179 million, or $161 million adjusted to 1914 prices by the S & P 500 common stock index). Morgan left $68 million in 1914.

⁷¹ Later, IMM obtained a listing on the less fussy Liverpool Stock Exchange.

⁷² The White Star line was sold to the Royal Mail shipping group in 1927, which itself was liquidated five years later.

⁷³ Boyce, Gordon, “Sixty-Fourthers, Syndicates and Stock Promoters: Information Flows and Fund-Raising Techniques of British Shipowners before 1914,” Journal of Economic History 52 (Mar. 1992): 181–205.CrossRefGoogle Scholar

⁷⁴ Vale, American Peril, 191. It is sometimes forgotten that the American Economic Association was founded, more than a century ago, explicitly to combat the allegedly pernicious doctrines of Manchester, now known as the “Washington consensus.”

⁷⁵ Kircaldy, A. W., British Shipping (London, 1919)Google Scholar, appendix; Wardley, “Top 100;” Maizels, Alfred, Industrial Growth and World Trade (Cambridge, U.K., 1963), 220Google Scholar; Maddison, Angus, The World Economy: Historical Statistics (Paris, 2003), 259.CrossRefGoogle Scholar

⁷⁶ Ellis, Charles D., The Partnership: The Making of Goldman Sachs (London, 2009), 12–13.Google Scholar

⁷⁷ Baring family letter of 1905, quoted in Ziegler, Philip, The Sixth Great Power: Barings, 1762–1929 (London, 1988), 298.Google Scholar

⁷⁸ In London, entry to banking was completely free and there was no nationality qualification for stock exchange membership. The NYSE barred foreigners from membership and New York state law prohibited many banking operations by foreign banks.

⁷⁹ Abe De Jong, Steven Ongena, and Marieka van der Poel, “The International Diversification of Banks and the Value of Their Cross-Border M&A Advice,” CEPR Discussion Paper, no. 7735, Mar. 2010; J. Bradford De Long, “Stockholder Gains from Focusing versus Diversifying Mergers,” Journal of Financial Economics 59 (2001): 221–52.CrossRefGoogle Scholar

⁸⁰ Ferguson, Niall, The World's Banker: A History of the House of Rothschild (London, 1998), 1039.Google Scholar

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⁸³ O'Hagan, Leaves; Taylor, Ellermans, 11–15; CLCC, Annual Reports, 1895–1910. Its profits fell from $100,000 a year before 1900 to around $40,000 afterwards, though it is unclear how much O'Hagan also took out in salary (“a very high one,” Leaves, vol. 1, 456).Google Scholar

⁸⁴ Clapham, J. H., Economic History of Modern Britain, vol. 3 (Cambridge, U.K., 1938), 366–68.Google Scholar

⁸⁵ Ibid., 218–19. Clapham points out that even well-advertised and underwritten issues could cost only $125,000: 2.5 percent on a $5 million issue, but much more on smaller issues (though for them expenses could be kept to only a few thousand).

⁸⁶ Marc Flandreau, Norbert Gaillard, and Sebastian Nieto-Parra, “The End of Gatekeeping: Underwriters and the Quality of Sovereign Bond Markets, 1815–2007,” Centre Emile Bernheim working paper 10/017, Solvay, Brussels, July 2009. Despite the generally competitive nature of London financial services, there was higher (NYSE-style) concentration in this specialist market: two merchant banks (Rothschild and Baring) and one British joint-stock bank (Hongkong & Shanghai) underwrote nearly two-thirds of London's overseas government bond issues.

⁸⁷ Ziegler, Sixth Great Power, 199–200.

⁸⁸ Boyce, Gordon and Ville, Simon, The Development of Modern Business (Houndmills, 2002), 106CrossRefGoogle Scholar. The favored contemporary term for the alleged problem was “water:” capital which could not be adequately remunerated and whose market price would thus fall below par. Armstrong, John, “Hooley and the Bovril Company,” Business History 28 (Jan. 1986): 31, suggests it was about a third of Hooley issues. The post-issue stock prices of U.S. Steel suggest a similar amount of overcapitalization in that Morgan issue. The logic of comparing a rogue in one market with a paragon in another is also unclear.CrossRefGoogle Scholar

⁸⁹ Carosso, Vincent P., Investment Banking in America: A History (Cambridge, Mass., 1970), 75Google Scholar; Dewing, A. S., Corporate Promotions and Reorganizations (Cambridge, Mass., 1914), 542.Google Scholar

⁹⁰ Leslie Hannah, “The Maturing of the U.K. Market for Corporate Securities, 1884–1914,” forthcoming.

⁹¹ Issues of less than $5 million were rarely underwritten in New York: a banker would usually buy the stock outright and place it privately (Carosso, Investment Banking, 43).

⁹² Rutterford, Janette, “The Merchant Banker, the Broker and the Company Chairman,” Accounting, Business and Financial History 16 (Mar. 2006): 45–68CrossRefGoogle Scholar; Ziegler, Sixth Great Power, 288; Harvey, Charles, The Rio Tinto Company, 1873–1954 (Penzance, 1981), 107. O'Hagan (Leaves) is largely silent about his fees, and his few disclosures, ranging from 2.5 percent for Stanhope Main Colliery (a small company formation without underwriting) to 12.5 percent for Plymouth Breweries (in which he bought several companies outright, merged them and distributed all securities), are for very different services. Scott Lings, the Manchester promoter, charged only 2.5 percent for the complex negotiation of a multifirm merger and $22 million IPO, in which the vendors (unwisely as it turned out) eschewed underwriting (Macrosty, Trust Movement, 162).Google Scholar

⁹³ Marchildon, Gregory P., “ ‘Hands across the Water’: Canadian Industrial Financiers in the City of London, 1905–20,” Business History 34 (July 1992): 87CrossRefGoogle Scholar; Wilkins, Mira, The History of Foreign Investment in the United States to 1914 (Cambridge, Mass., 1989), 493–94, 877n25Google Scholar. Dewing (Corporate Promotions, 419) shows O'Hagan charging 3.75 percent plus 10 percent underwriting on an overseas issue, though O'Hagan claimed he was cheated and not paid (eaves, vol. 1, 514–18).Google Scholar

⁹⁴ Franks, Julian, Mayer, Colin, and Rossi, Stefano, “Ownership: Evolution and Regulation,” Review of Financial Studies 22, no. 10 (2009): 4009–56. The London offices of some north American firms like the Canadian Pacific, the Pennsylvania Railroad and Kodak, did, however, manage to reduce the psychological distance and costs.CrossRefGoogle Scholar

⁹⁵ De Long, “Did J. P. Morgan's Men.” This article is one of the most frequently cited in economic history, because of its appealingly inventive ratiocination on the fashionable subject of information asymmetries.

⁹⁶ Ibid., 210.

⁹⁷ Ramirez (“Did J. P. Morgan's Men,” 669) points out that, after allowing for leverage, the correct figure for De Long's population is a 14 percent outperformance. Both calculations are compromised by biased sampling (see note 101 below). Using a different research strategy—assessing the effects of Morgan directors' sudden resignation from many corporate boards in response to public criticism in 1914—dash;M. S. Simon (“The Rise and Fall of Bank Control in the United States, 1890–1939,” American Economic Review 88 [Dec. 1998]: 1077–93) suggests outperformance of 6 to 7 percent. Such low figures raise stronger questions about the net benefit of high intermediation fees.

The logic of evaluating an equal-weighted rate of return for only fifteen Morgan stocks over various years within the period 1895–1913, against the size-weighted NYSE index for the different 1890–1914 period is obscure. Even if the arrays of component annual returns were identical, this test would pronounce them different. Moreover some of the investor returns he calculates were only available to insiders or syndicate members. For example, he calculates the stockholder return on International Harvester from 1902 (when it was formed as an unquoted company) not from 1908 (when it was first listed on the NYSE and available to public investors).

⁹⁸ Flandreau, Marc and Flores, Juan H., “Bonds and Brands: Foundations of Sovereign Debt Markets, 1820–1830,” Journal of Economic History 69 (Sept. 2009): 646–84.CrossRefGoogle Scholar

⁹⁹ Ratios of market value to book assets were calculated for 2 January 1900 from stock prices in the Stock Exchange Daily Official List and balance sheets in the Guildhall Library collection. The control group was a random sample of thirty other London-listed firms. The top issuers “outperformed” the control group by 12 percent. I included all securities in the numerator, so these figures are comparable to Ramirez's leverage-corrected Morgan outperformance figure of 14 percent.

¹⁰⁰ For parallel cases today see Rüdiger Fahlenbrach, Angie Low, and René M. Stulz, “The Dark Side of Outside Directors: Do They Quit When They Are Most Needed?” NBER Working Paper no. 15917, Apr. 2010.

¹⁰¹ Author's calculations from Audit Company, Directory of Directors in the City of New York (New York, 1899)Google Scholar, and Anon., The Financiers of Philadelphia: A Practical Directory of Directors (Philadelphia, 1900) for 1899/1900 directorshipsGoogle Scholar. De Long states his population is twenty companies that the Pujo Committee identified as having Morgan directors in 1913. In fact, it is a nonrandom sample of such firms (Pujo Committee, Report, Washington, D.C., 1913, exhibits 197 and 1011). He suggests that “satisfactory data” were “unavailable” for two firms. For one acknowledged omission—Pere Marquette—its common stocks were near worthless and Morgan's involvement resulted from his buying it in 1905 without due diligence (Hungerford, Edward, Men of Erie [New York, 1946], 220). The omission of banks with Morgan directors also biases the results: they had a slightly worse market-to-par ratio than the nearest size-matched pairs in the same cities (author's calculation from data in Commercial and Financial Chronicle Bank and Quotation Section 94 [Jan. 1912]: 60, 62).Google Scholar

¹⁰² De Long, “Did J. P. Morgan's Men,” 210; Carosso, Investment Banking, 112.

¹⁰³ Miwa, Yoshiro and Ramseyer, Mark, The Fable of the Keiretsu: Urban Legends of the Japanese (Chicago, 2006)CrossRefGoogle Scholar; and Fohlin, Caroline, Finance Capitalism and Germany's Rise to Industrial Power (New York, 2006).Google Scholar

¹⁰⁴ Industrial Commission, Preliminary Report on Trusts and Combinations (Washington, D.C., 1900), 122; see also Vanderlip, From Farmboy, 208–9.Google Scholar

¹⁰⁵ Bunting, Rise, 155–56. U.S. “backwardness” in this respect was in industrials, not utilities and banks, where institutions like the Interstate Commerce Commission and the Comptroller of Currency did at least as good a job of accounting regulation as the general British disclosure laws, sector-specific regulation and LSE listing rules.

¹⁰⁶ Schisgall, Oscar, Eyes on Tomorrow: The Evolution of Procter & Gamble (Chicago, 1981), 51.Google Scholar

¹⁰⁷ Historical American company accounts are now available on line at www.il.proquest. com.

¹⁰⁸ Jones, Edgar, True and Fair: A History of Price Waterhouse (London, 1995), 75–78, 90–97Google Scholar; DeMond, Chester W., Price, Waterhouse & Co. in America (New York, 1951), 32–36, 58–66.Google Scholar

¹⁰⁹ Moody, Analyses. Post-1909 editions extended the system to many more bonds and stocks.

¹¹⁰ For example, the Bureau of Corporations (Steel Industry, 16), in its careful forensic accounting assessment of the constituents of U.S. Steel, noted that Morgan's flagship Federal Steel promotion was not as overcapitalized as the four steel companies promoted by Moore.

¹¹¹ Dealing costs were also relatively high in New York, prompting some American millionaires like Rockefeller to buy NYSE seats (and others to trade U.S. stocks over the counter, on the rival New York Consolidated Exchange or in London) purely to avoid them.

¹¹² Brayer, Elisabeth, George Eastman: A Biography (Baltimore, 1996), 168–78; LSE listing files (MS 18001, Guildhall Library); Commercial and Financial Chronicle and Stock Exchange Official Intelligence.Google Scholar

¹¹³ Author's calculations from the lists in Payne, Peter L., “The Emergence of the LargeScale Company in Great Britain, 1870–1914,” Economic History Review, 2nd ser., 20 (1967): 539–40; and Bunting, Rise, 163–64. Twelve percent of the British firms were provincially listed but these were also traded by LSE brokers. In the U.S., by contrast, many large American companies were unlisted or only listed on Philadelphia, Boston, Pittsburgh, Chicago, Baltimore, London and/or the (still informal) New York curb.CrossRefGoogle Scholar

¹¹⁴ Davis and Cull, International Financial Markets, 63. It is sometimes forgotten by those who cite the classic article in this journal by Navin, T. R. and Sears, M. V., “The Rise of a Market for Industrial Securities, 1887–1902,” Business History Review 24 (June 1955): 105– 38, that it describes a market developing later than European equivalents, that remained half empty. Michie (London and New York Stock Exchanges, 230) estimates that the share of the NYSE in U.S. corporate securities declined from 60 percent in 1902 to 45 percent by 1914.CrossRefGoogle Scholar

¹¹⁵ Lamoreaux, Naomi, Levenstein, Margaret, and Sokoloff, Kenneth, “Financing Innovation in the Second Industrial Revolution: Cleveland, Ohio, 1870–1920,” in Financing Innovation in the United States, 1870 to Present, ed. Lamoreaux, Naomi, Sokoloff, Kenneth, and Janeway, W. H. (New York, 2007).CrossRefGoogle Scholar

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¹¹⁷ Richard Sylla, “Wall Street Transitions,” in Financial Centres, ed. Cassis and Quennouëlle-Corre.

¹¹⁸ In 1913, the Paris Bourse and the NYSE were the same size (Cassis, Capitals, 106), at a time when French real GDP was about a third of the United States'. The five hundred investment analysts who then worked in the research department of the Crédit Lyonnais were arguably the largest and most technically competent team of “information signalers” in the world.

¹¹⁹ This is not to deny the extensive literature (Rousseau, Paul L. and Wachtel, Peter, “What Is Happening to the Impact of Financial Deepening on Economic Growth?” Economic Inquiry 49 [Jan. 2011]: 276–88) showing positive, if weakening, correlations between stock exchange development and growth. However, a general model of stock exchange development that fits Rwanda in 2000 but not the U.S. in 1900 may benefit from further elaboration.CrossRefGoogle Scholar

¹²⁰ However, U.S. costs of financial intermediation (7 percent for IPOs) have remained stubbornly above Europe's (4 percent) (Mark Abrahamson, Tim Jenkinson, and Howard Jones, “Why Don't U.S. Issuers Demand European Fees for IPOs?” Oxford Saïd Business School Working Paper, Nov. 2009).