The connections between financial development and economic growth are drawing increased attention on many fronts. This dissertation studies ways in which the American financial system functioned to aid in the accumulation and mobilization of capital in the second half of the nineteenth century. The evolution of the banking system, by far the dominant nineteenth-century financial intermediary, is emphasized, but the role of Federal government finance is of scarcely less importance. The interrelated actions of the banks and the Treasury did much to set the tone in various financial markets during most of the period. While considerable study has been devoted to these actions and their short-run effects, much less has been written about their long-run implications. A major contention of the work is that financial strains caused by the Civil War and the various responses to these strains were accompanied by significant changes in the banking system—in its structure, the types of assets in which it dealt, and in its relations with the Treasury—all of which increased its potential for satisfying the demands placed upon it by a rapidly expanding economy. These changes helped to make capital, which may well have been the relatively scarce factor in the antebellum era, more abundant in the postwar Gilded Age, and they therefore abetted the rapid industrialization of those decades.

The dissertation is a study of the service industries in the United States during the period 1839 through 1899. The primary purpose of the study is to provide three series relating to the quantitative development of the sector. These series—value-added, gainful workers, and capital stock—provide benchmark estimates at decade intervals centered on census years. Series are presented for the aggregate sector; the major components, final and intermediate services; and eight industries. These eight industries, defined as the service sector, are trade, transportation and public utilities, finance and insurance, professional services, personal services, government, education, and the independent hand trades.