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National Banking's Role in U.S. Industrialization, 1850–1900

Published online by Cambridge University Press:  24 February 2014

Matthew Jaremski*
Assistant Professor, Department of Economics, Colgate University, 13 Oak Drive, Hamilton, NY 13346. E-mail:


The passage of the National Banking Acts stabilized the existing financial system and encouraged the entry of 729 banks between 1863 and 1866. These new banks concentrated in the area that would eventually become the Manufacturing Belt. Using a new bank census, the article shows that these changes to the financial system were a major determinant of the geographic distribution of manufacturing and the nation's sudden capital deepening. The entry not only resulted in more manufacturing capital and output at the county level, but also more steam engines and value added at the establishment level.

Copyright © The Economic History Association 2014 

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I would like to thank Peter Rousseau, Jeremy Atack, Richard Sylla, Robert Margo, Jon Moen, Greg Niemesh, and Hugh Rockoff for their comments on various drafts, as well as Paul Rhode and the two referees for their insightful and detailed suggestions. The article has also greatly benefited from seminar participants at the NBER Development of the American Economy and NYU-Stern, and financial support from the Economic History Association.



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