Advanced Search
MyIDEAS: Login

From a “normal recession” to the “Great Depression”: finding the turning point in Chicago bank portfolios, 1923-1933

Contents:

Author Info

  • Natacha Postel-Vinay
Registered author(s):

    Abstract

    This dissertation analyses the long-term behaviour of bank financial ratios from 1923 to 1933, focusing on a population of 193 Chicago state banks. These banks are divided into earlier and later failure cohorts. The main conclusion is that a turning point in banks’ vulnerability is identifiable before the first banking crises, between the end of 1928 and June 1930. A second, related conclusion is that this upsurge in vulnerability (as expressed by such variables as retained earnings and other real estate) is made even more significant when considering banks’ behaviour in the preceding decade. In almost all cases earlier failures behaved more riskily in the 1920s, which explains their earlier and higher vulnerability at the start of the depression.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://eprints.lse.ac.uk/35518/
    Download Restriction: no

    Bibliographic Info

    Paper provided by London School of Economics and Political Science, Department of Economic History in its series Economic History Working Papers with number 35518.

    as in new window
    Length: 64 pages
    Date of creation: Mar 2011
    Date of revision:
    Handle: RePEc:ehl:wpaper:35518

    Contact details of provider:
    Postal: LSE, Dept. of Economic History Houghton Street London, WC2A 2AE, U.K.
    Phone: +44 (0) 20 7955 7084
    Web page: http://www.lse.ac.uk/economicHistory/
    More information through EDIRC

    Related research

    Keywords:

    Find related papers by JEL classification:

    This paper has been announced in the following NEP Reports:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Lucia, Joseph L., 1985. "The failure of the bank of United States: A reappraisal," Explorations in Economic History, Elsevier, vol. 22(4), pages 402-416, October.
    2. Charles W. Calomiris & Berry Wilson, 2004. "Bank Capital and Portfolio Management: The 1930s "Capital Crunch" and the Scramble to Shed Risk," The Journal of Business, University of Chicago Press, vol. 77(3), pages 421-456, July.
    3. Chang-Tai Hsieh & Christina D. Romer, 2001. "Was the Federal Reserve Fettered? Devaluation Expectations in the 1932 Monetary Expansion," NBER Working Papers 8113, National Bureau of Economic Research, Inc.
    4. Monique Ebell & Albrecht Ritschl, 2007. "Real Origins of the Great Depression: Monopolistic Competition, Union Power, and the American Business Cycle in the 1920s," SFB 649 Discussion Papers SFB649DP2007-006, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    5. Barry Eichengreen & Kris Mitchener, 2003. "The Great Depression as a credit boom gone wrong," BIS Working Papers 137, Bank for International Settlements.
    6. Mishkin, Frederic S, 1992. "Anatomy of a Financial Crisis," Journal of Evolutionary Economics, Springer, vol. 2(2), pages 115-30, August.
    7. Charles W. Calomiris, 1993. "Financial Factors in the Great Depression," Journal of Economic Perspectives, American Economic Association, vol. 7(2), pages 61-85, Spring.
    8. Carlson, Mark & Mitchener, Kris James, 2006. "Branch Banking, Bank Competition, and Financial Stability," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 38(5), pages 1293-1328, August.
    9. Barry Eichengreen, 2004. "Viewpoint: Understanding the Great Depression," Canadian Journal of Economics, Canadian Economics Association, vol. 37(1), pages 1-27, February.
    10. Alston Lee J. & Grove Wayne A. & Wheelock David C., 1994. "Why Do Banks Fail? Evidence from the 1920s," Explorations in Economic History, Elsevier, vol. 31(4), pages 409-431, October.
    11. Mark Carlson, 2004. "Are Branch Banks Better Survivors? Evidence from the Depression Era," Economic Inquiry, Western Economic Association International, vol. 42(1), pages 111-126, January.
    12. Richardson, Gary, 2007. "Categories and causes of bank distress during the great depression, 1929-1933: The illiquidity versus insolvency debate revisited," Explorations in Economic History, Elsevier, vol. 44(4), pages 588-607, October.
    13. Wheelock, David C, 1990. "Member Bank Borrowing and the Fed's Contractionary Monetary Policy during the Great Depression," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 22(4), pages 409-26, November.
    14. anonymous, 1990. "The Federal Reserve in the payments system," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue May, pages 293-298.
    15. R. G. Thomas, 1935. "Bank Failures-Causes and Remedies," The Journal of Business, University of Chicago Press, vol. 8, pages 297.
    16. Douglas W. Diamond & Raghuram G. Rajan, 2003. "Liquidity Shortages and Banking Crises," NBER Working Papers 10071, National Bureau of Economic Research, Inc.
    17. Field, Alexander James, 1992. "Uncontrolled Land Development and the Duration of the Depression in the United States," The Journal of Economic History, Cambridge University Press, vol. 52(04), pages 785-805, December.
    18. Alston, Lee J., 1983. "Farm Foreclosures in the United States During the Interwar Period," The Journal of Economic History, Cambridge University Press, vol. 43(04), pages 885-903, December.
    19. Ogura, Yoshiaki, 2006. "Learning from a rival bank and lending boom," Journal of Financial Intermediation, Elsevier, vol. 15(4), pages 535-555, October.
    20. Richardson, Gary, 2006. "Records of the Federal Reserve Board of Governors in Record Group 82 at the National Archives of the United States," Financial History Review, Cambridge University Press, vol. 13(01), pages 123-134, April.
    21. Mitchener, Kris James, 2005. "Bank Supervision, Regulation, and Instability During the Great Depression," The Journal of Economic History, Cambridge University Press, vol. 65(01), pages 152-185, March.
    22. Gary Richardson & William Troost, 2006. "Monetary Intervention Mitigated Banking Panics During the Great Depression: Quasi-Experimental Evidence from the Federal Reserve District Border in Mississippi, 1929 to 1933," NBER Working Papers 12591, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:ehl:wpaper:35518. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lucy Ayre on behalf of EH Dept.).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.