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Cotton manufacturers as bankers: the textile trade and credit in spain (1840-1913)

Author

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  • Marc Prat Sabartes

    (Universitat de Barcelona)

Abstract

Historians claim that in the nineteenth century Catalan cotton manufacturers were giving informal credit to their clients, and were therefore unable to transfer this credit to the banking system. Such circumstances would have had a detrimental effect on the profitability of the cotton firms. Based on an analysis of the archives of several firms, as well as judicial and notary sources, we can confirm this state of affairs, but present a more optimistic interpretation of the system. Manufacturers were, in fact, acting as their customers bankers because they were in the best position to perform this function. They built up a good information structure, managed the credit risk efficiently and earned money from this activity.

Suggested Citation

  • Marc Prat Sabartes, 2008. "Cotton manufacturers as bankers: the textile trade and credit in spain (1840-1913)," Working Papers in Economics 189, Universitat de Barcelona. Espai de Recerca en Economia.
  • Handle: RePEc:bar:bedcje:2008189
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    References listed on IDEAS

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    1. Hollis, Aidan & Sweetman, Arthur, 1998. "Microcredit in Prefamine Ireland," Explorations in Economic History, Elsevier, vol. 35(4), pages 347-380, October.
    2. Ville, Simon & Fleming, Grant, 2000. "Financial intermediaries and the design of loan contracts within the Australasian pastoral sector before the Second World War," Financial History Review, Cambridge University Press, vol. 7(02), pages 201-218, October.
    3. Cuadras-Morató, Xavier & Rosés, Joan R., 1998. "Bills of exchange as money: sources of monetary supply during the industrialisation of Catalonia, 1844–74," Financial History Review, Cambridge University Press, vol. 5(01), pages 27-47, April.
    4. Xavier Cuadras & Joan R. Roses, 1995. "Bills of exchange as money: Sources of monetary supply during the industrialization in Catalonia (1844-74)," Economics Working Papers 111, Department of Economics and Business, Universitat Pompeu Fabra.
    5. Baskes, Jeremy, 2005. "Colonial Institutions and Cross-Cultural Trade: Repartimiento Credit and Indigenous Production of Cochineal in Eighteenth-Century Oaxaca, Mexico," The Journal of Economic History, Cambridge University Press, vol. 65(01), pages 186-210, March.
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    More about this item

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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