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The death blow to unlimited liability in Victorian Britain: The City of Glasgow failure

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  • Acheson, Graeme G.
  • Turner, John D.

Abstract

In 1878, one of Britain's largest banks, the City of Glasgow Bank, collapsed, leaving a huge deficit between its assets and liabilities. As this bank, similar to many other contemporary British banks, had unlimited liability, its failure was accompanied by the bankruptcy of the vast majority of its stockholders. It is generally believed that the collapse of this depository institution revealed the extent to which ownership in large joint-stock banks had been diffused to investors of very modest means. It is also believed that the failure resulted in bank shareholders dumping their shares unto the market. Our evidence, garnered from ownership records, trading data, and stock prices, offers no support for these widely held beliefs.

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Bibliographic Info

Article provided by Elsevier in its journal Explorations in Economic History.

Volume (Year): 45 (2008)
Issue (Month): 3 (July)
Pages: 235-253

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Handle: RePEc:eee:exehis:v:45:y:2008:i:3:p:235-253

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Web page: http://www.elsevier.com/locate/inca/622830

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References

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  8. Lindert, Peter H, 1986. "Unequal English Wealth since 1670," Journal of Political Economy, University of Chicago Press, vol. 94(6), pages 1127-62, December.
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Cited by:
  1. Paolo Maggioni, 2011. "Limited liability and shares’ pricing: sufficient but not necessary," Openloc Working Papers 1115, Public policies and local development.
  2. Ilgmann, Cordelius, 2011. "The advent of corporate limited liability in Prussia 1843," CAWM Discussion Papers 46, Center of Applied Economic Research Münster (CAWM), University of Münster.
  3. Rodríguez Braun, Carlos, 2014. "La banca y las crisis financieras en la literatura popular: Una fortuna peligrosa, de Ken Follett /Banking and Financial Crises in Popular Literature: A Dangerous Fortune, by Ken Follett," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 32, pages 201-222, Enero.
  4. Richard S. Grossman & Masami Imai, 2011. "Contingent Capital and Bank Risk-Taking among British Banks before World War I," Wesleyan Economics Working Papers 2011-003, Wesleyan University, Department of Economics.

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