¹ See Kocka, J., “Theoretical Approaches to Social and Economic History of Modern Germany: Some Recent Trends, Concepts, and Problems in Western and Eastern Germany,” Journal of Modern History, 47 (March, 1975), 101–119CrossRefGoogle Scholar; also Tilly, R., review of Fogel, R. and Engerman, S. (eds.), The Reinterpretation of American Economic History, in Vierteljahrschrift für Sozial- und Wirtschaftsgeschichte, 61 (1974), 387–390Google Scholar.

² Neuburger, Hugh and Stokes, Houston, “German Banks and German Growth, 1883–1913: An Empirical View,” Journal of Economic History, 34 (Sept. 1974), 710–731CrossRefGoogle Scholar. The argument is drawn on for comparative purposes again in “German Banking and Japanese Banking: A Comparative Analysis,” Journal of Economic History, 35 (March, 1975), 238–252CrossRefGoogle Scholar.

³ Neuburger and Stokes, “German Banks,” p. 711.

⁴ Kommanditgesellschaften auf Aktien were a kind of limited partnership with transferable shares. The shares themselves bore limited liability, but the companies (or their chief executives or Komplementäre) had unlimited liability. Their use in Prussia represented a borrowing from French practice and a response to the Prussian government's unwillingness to grant incorporation rights to banking institutions before 1870. See Cameron, R. et al. , Banking in the Early Stages of Industrialization (New York, London, and Toronto, 1967), pp. 106, 124, 162–165.Google Scholar

⁵ For further facts, see besides the works by Jeidels and Riesser cited by Neuburger and Stokes, Cameron et al., Banking in the Early Stages; also Tilly, R., Financial Institutions and Industrialization in the Rhineland, 1815–70 (Madison, 1966)Google Scholar; Hübner, O., Die Banken (Leipzig, 1854; reprint, Frankfurt/M., 1968)Google Scholar; von Poschinger, Heinrich, Bankwesen und Bankpolitik in Preussen (Berlin, 1878/1879; reprint Glashiitten/Ts., 1971)Google Scholar; Hecht, Felix, Bankwesen und Bankpolitik in den Siiddeutschen Staaten, 1819–1875 (Jena, 1880)Google Scholar; Whale, J. B., Joint-Stock Banking in Germany (London, 1930)Google Scholar. Neuburger and Stokes draw on the Münster dissertation by Eistert, Ekkehard, Die Beeinflussung des Wirtschaftswachttums in Deutschland von 1883–1913 durch das Bankensystem (Berlin, 1970)Google Scholar for their data on current account credit.

⁶ We use neo-classical economics in the broad sense of analysis dominated by market equilibrium and maximizers, not the particular species of aggregate production function theory known under that name. Since Neuburger and Stokes do not weight the inputs of their production function by their share in income, they are not “neoclassical” in the latter sense.

⁷ Neuburger and Stokes, “German Banks,” p. 717; Gerschenkron, Alexander, Economic Backwardness in Historical Perspective (Cambridge, 1962), p. 14Google Scholar.

⁸ Neuburger and Stokes, “German Banks,” pp. 711, 717, 718. A number resembling “negative social savings” appears in note 34, p. 730.

⁹ Their “variable” is actually the share of current account credit in total new bank credit, 1883–1913.

¹⁰ Buff, Siegfried, Das Kontokorrentgeschäft im deutschen Bankgewerbe (Stuttgart, 1904), pp. 66 ff.Google Scholar

¹¹ For private bankers—who pioneered in the development of the current account credit—there is direct documentation of this expectation. See Tilly, Financial Institutions, pp. 88–92.

¹² E. Eistert, Die Beeinflussung des Wirtschaftswachstums, pp. 94–98. In 1907 the arithmetic mean multiplier for 12 banks was 18.1 with a standard deviation of 8.5. Eistert's data basis is quite thin here; for example, the multipliers for 1883–1897 are based on reports for two provincial banks.

¹³ Hecht, Felix, Die Mannheimer Banken, 1870 his 1900 (Leipzig, 1902), pp. 96–144Google Scholar.

¹⁴ Buff, Kontokorrentgeschäft, p. 49. The German text reads: “1st so, wie wir gesehen, der Kredit in Kontokorrent seiner ganzen Natur nach ein Kurzfristiger, so muss auch sein Anwendungsgebiet dementsprechend gestaltet sein.” See also ibid., pp. 37 and 59.

¹⁵ And apart from the fact that the daily rates mentioned were the cheapest form of bank deposits. See the minutes of the official investigation into German banking of 1908–1909, Bankenenquète, 1908–09. Stenographische Berichte. Die Verhandlungen der Gesamtkotnmision zu Punkt VI des Fragebogens (Depositenwesen), (Berlin, 1910), for example, the statement by von Kanitz on p. 36.

¹⁶ See Riesser, J., Die deutschen Grossbanken und ihre Konzentration (Jena, 1910), pp. 156–58Google Scholar; Jeidels, Otto, Das Verhältnis der deutschen Grossbanken zur Industrie mit besonderer Berücksichtigung der Eisenindustrie (Leipzig, 1905), p. 230 ff.Google Scholar; Tilly, Financial Institutions, p. 90; for a reason, Whale, Banking in Germany, pp. 55–57.

¹⁷ For the stock exchange restrictions, see Pfleger, “Borsenrecht,” Handworterbuch der Staatswissenschaften, Bd. 3, 3. Aufl., (Jena, 1909), p. 146; also Dauschek, Karl-Günther, Entwicklung der Börse als Teilaspekt der Entwicklung des Kapitalmarktes in Deutschland, 1830–1913 (unpubl. dipl. thesis, Münster, 1973), pp. 78–94Google Scholar. For one example of a large industrial enterprise with many bank connections (Thyssen), see the Festschrift, Deutsche Bank, 1870–1970, p. 193. For further relevant references to these links, also Nussbaum, H., Unternehmer gegen Monopole (Berlin, 1966), pp. 30–31Google Scholar; Riesser, Grossbanken, p. 463; and Whale, Banking in Germany, pp. 55–57.

¹⁸ Hoffmann, W., Grumbach, F. and Hesse, H., Das Wachstum der deutschen Wirtschaft seit der Mitte des 19. Jahrhunderts (Berlin, Heidelberg, and New York, 1965)CrossRefGoogle Scholar. The Hoffmann data were modified for capacity utilization by means of Phillips curve relationships (taken from British data), Kuczynski's unemployment series, and Meinert's data on hours worked, all cited by Neuburger and Stokes, p. 721 and 731; Eistert, Die Beeinflussung des Wirtschaftswachstums, as cited above.

¹⁹ The appropriate data are in Hoffmann et al., Das Wachstum, pp. 253–54. We also say “may” here because Neuburger and Stokes' calculations can hardly be reproduced from the information their article contains. One table with the basic data would have sufficed.

²⁰ Eistert, Die Beeinflussung, pp. 97, 117, 138.

²¹ Ibid., pp. 93–98. It is true that current account relationships normally ran at least six months, but there was nevertheless considerable scope for implicitly altering their tenor.

²² There are some indications that in the inflationary half of the period observed from 1895–1913, current account credits increasingly financed stock exchange activities. Whale, Banking in Germany, p. 159, and Buff, Kontokorrentgeschäft, pp. 59–62. One is therefore astonished to read in a footnote (Neuburger and Stokes, p. 714, n. 10) that those authors had satisfactorily answered the allocation question. In fact, their authority for their answer is Eistert's assertion that “the main application of current account credit was for industrial circulating and fixed capital needs"-an assertion based on one annual report by one provincial bank. Eistert, Die Beeinflussung, p. 91. Also p. 93, for treatment of acceptances, etc.

²³ This might not be so. See the Bankenenquéte of 1908–9, cited in R. H. Tilly, “Zeitreihen zum Geldumlauf in Deutschland, 1870–1913,” Jahrbücher für Nationalökonomie und Statistik, 187 (May 1973), 330–363; also Buff, Kontokorrentgeschäft, pp. 37, 55–56.

²⁴ See, e.g., Gahlen, B., Die Überprüfung produktionstheoretischer Hypothesen für Deutschland (1850–1913), (Tübingen, 1968)Google Scholar.

²⁵ W. Hoffmann, Introduction to B. Gahlen, Die Überprüfung, pp. v, vii.

²⁶ Since, to quote a prominent “new economic historian”: “the most critical issue in the work of the new economic historians is the logical and empirical validity of the theories on which their measurements are based.” (Fogel, Robert W., “Reappraisals in American Economic History. Discussion,” American Economic Review, 54 (May 1964), 381Google Scholar.

²⁷ Neuburger and Stokes, German Banks, p. 719. For doubts, see Gahlen, B., Der Informationsgehdt der neoklassischen Wachstumstheorie für die Wirtschaftspolitik (Tübingen, 1972)Google Scholar.

²⁸ For Kmenta's, J. technique, “On Estimation of the CES Production Function,” International Economic Review, 8 (June 1967), 180–84CrossRefGoogle Scholar. For criticism of this approach, see Gahlen, Der Informationsgehalt, pp. 250–59.

²⁹ Ibid., pp. 211, 257, 273, 301. What was shown by Kmenta was that there is no reason to prefer the more general CES to the Cobb-Douglas specification (using the ACMS data), not that the elasticity of substitution tends to unity.

³⁰ Cahlen shows that varying the elasticity of substitution from −0.4 to +3.4 has no measurable influence upon the relations between output, capital and labor using time series with only small variations of capital intensity; ibid., pp. 385–389. Neuburger and Stokes, “German Banking,” p. 718 ff., do not just describe output and production factors, but assert causal relationships, so the Popperian strictures on falsification of hypotheses apply to their venture.

³¹ It is rather ironical to observe that Neuburger and Stokes draw their data from a work (Eistert's) which juxtaposes bank credit and business activity and sees in the more rapid growth of the former a positive contribution to the latter. This is ironical since Neuburger and Stokes could represent the coup de grace to that (particularly unhelpful) juxtaposition approach, for their results suggest how little it can actually explain. We say “could represent” since the authors' statistical tests may not mean anything.

³² It also has the advantage of by-passing the extremely reticent bank source materials. For a discussion of this approach see R. H. Tilly, “Das Wachstum industrieller Grossunternehmen in Deutschland, 1870–1913,” to appear in a collection of papers presented at the meeting of the German Gesellschaft fur Sozial- und Wirtschaftsgeschichte in Tübingen, April, 1975, to be edited by Hermann Kellenbenz (1976?).

³³ Friedman, M. and Schwartz, A. J., A Monetary History of the United States (Princeton, 1963)Google Scholar; Clapham, J. H., The Bank of England, 2 vols. (Cambridge, 1944)Google Scholar; Morgan, E. V., The Theory and Practice of Central Banking, 1797–1913 (Cambridge, 1943)CrossRefGoogle Scholar; Sayers, R. S., Central Banking After Bagehot (Oxford, 1957)Google Scholar. For preliminary investigations of the German monetary system see Seeger, M., Die Politik der Reichsbank von 1876–1914 im Lichte der Spielregeln der Goldwährung (Berlin, 1968)CrossRefGoogle Scholar; Fechter, U., Schutzzoll und Goldstandard im Deutschen Reich (1879–1914), (Köln, Wien, 1974)CrossRefGoogle Scholar; Tilly, R. H., “Zeitreihen zum Geldumlauf in Deutschland, 1870–1913,” Jahrbücher für Nationalökonomie und Statistik, 187 (May 1973)CrossRefGoogle Scholar, (building on Hoffmann et al., Das Wachstum, Tables 207 and 240).