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Exchange rate crises with domestic bank runs: Evidence from the 1890S

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Le Sherman Silver Purchase Act de 1890 a causé des craintes d'inflation et une série d'attaques sur les réserves du Trésor Américain. Malgré ces attaques, le dollar s'est maintenu durant cette période. On peut se demander pourquoi. Un argument (Fels (1959)) est que les spéculateurs rationnels ne doutaient pas vraiment que le Trésor s'était engagé envers l'étalon-or. Un autre argument, proposé par Grilli (1990), est que la capacité du Trésor à emprunter a permis au dollar de se maintenir. Ce papier offre une troisième explication. Ici, on propose que l'étalon-or a survécu pendant l'automne 1893 parce qu'une attaque contre le système bancaire a frustré l'attaque contre le dollar. The Sherman Silver Purchase Act of 1890 led to inflation fears and a series of attacks on the United States Treasury's gold reserves. In spite of these runs, the dollar never devalued during the time. The question remains: why? One argument (Fels (1959)) is that rational speculators dis not really distrust the United States commitment to the gold standard. Another argument proposed by Grilli (1990) is that the Treasury's ability to borrow prevented collapse. This paper offers a third explanation which complements the second. It is argued that the gold standard endured in the fall of 1893 because an internal drain of commercial bank funds stopped and/or prevented the external drain on the central bank's gold tranche.

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Paper provided by Université du Québec à Montréal, Département des sciences économiques in its series Cahiers de recherche du Département des sciences économiques, UQAM with number 9315.

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Date of creation: Dec 1993
Handle: RePEc:cre:uqamwp:9315
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