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Why was America's First Bank Aborted?


  • Goldberg, Dror


In 1686 the leadership of Massachusetts became involved in the first operational bank scheme in America. In 1688 this note-issuing bank was mysteriously aborted at an advanced stage. I suggest a new, simple explanation for the bank's demise. The bank's notes were supposed to be backed mostly by private land in Massachusetts, but a new royal governor invalidated all the land titles. This episode demonstrates the importance of clearly defined and enforced property rights for the development of financial institutions.

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  • Goldberg, Dror, 2011. "Why was America's First Bank Aborted?," The Journal of Economic History, Cambridge University Press, vol. 71(01), pages 211-222, March.
  • Handle: RePEc:cup:jechis:v:71:y:2011:i:01:p:211-222_00

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    References listed on IDEAS

    1. Murray, John E. & Nilsson, Lars, 2007. "Accident risk compensation in late imperial Austria: Wage differentials and social insurance," Explorations in Economic History, Elsevier, vol. 44(4), pages 568-587, October.
    2. Emery, J. C. Herbert, 1996. "Risky Business? Nonactuarial Pricing Practices and the Financial Viability of Fraternal Sickness Insurers," Explorations in Economic History, Elsevier, vol. 33(2), pages 195-226, April.
    3. Gerhard Bry, 1960. "Wages in Germany, 1871-1945," NBER Books, National Bureau of Economic Research, Inc, number bry_60-1, January.
    4. Dhaval Dave & Robert Kaestner, 2009. "Health insurance and ex ante moral hazard: evidence from Medicare," International Journal of Health Economics and Management, Springer, vol. 9(4), pages 367-390, December.
    5. Gerhard Bry, 1960. "Introduction to "Wages in Germany, 1871-1945"," NBER Chapters,in: Wages in Germany, 1871-1945, pages 1-13 National Bureau of Economic Research, Inc.
    6. Bentley B. Gilbert, 1965. "The Decay of Nineteenth-Century Provident Institutions and the Coming of Old Age Pensions in Great Britain," Economic History Review, Economic History Society, vol. 17(3), pages 551-563, April.
    7. Gottlieb, Daniel, 2007. "Asymmetric information in late 19th century cooperative insurance societies," Explorations in Economic History, Elsevier, vol. 44(2), pages 270-292, April.
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    Cited by:

    1. Rousseau, Peter L. & Stroup, Caleb, 2011. "Monetization and growth in colonial New England, 1703–1749," Explorations in Economic History, Elsevier, vol. 48(4), pages 600-613.

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