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California Banking in the Nineteenth Century: The Art and Method of the Bank of A. Levy


  • Eugene White

    () (Rutgers University and NBER)


An 1890s loan book of the Bank A. Levy permits a detailed examination of the lending operations of a private bank in California during the National Banking Era (1864-1914). This period has been intensively analyzed at the macroeconomic level, but there are few microeconomic studies of banks. This unregulated bank was well integrated into national money markets and lent to a broad cross section of the community. Although the bank appeared to adhere to the real bills doctrine, it provided medium term uncollateralized financing to business. The bank priced risk carefully, offering rates equal to the lowest in the country to its best customers while charging extraordinarily high rates to borrowers deemed risky. In the absence of modern accounting, close scrutiny of borrowers' businesses and personal lives overcame the asymmetry of information between borrower and lender, enabling the bank to fulfill a special intermediary role.

Suggested Citation

  • Eugene White, 1999. "California Banking in the Nineteenth Century: The Art and Method of the Bank of A. Levy," Departmental Working Papers 199905, Rutgers University, Department of Economics.
  • Handle: RePEc:rut:rutres:199905

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    References listed on IDEAS

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    Cited by:

    1. Hugh Rockoff, 2003. "Prodigals and Projecture: An Economic History of Usury Laws in the United States from Colonial Times to 1900," NBER Working Papers 9742, National Bureau of Economic Research, Inc.
    2. Wang, Ta-Chen, 2008. "Paying back to borrow more: Reputation and bank credit access in early America," Explorations in Economic History, Elsevier, vol. 45(4), pages 477-488, September.

    More about this item


    banking; National Banking System; real bills;

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • N2 - Economic History - - Financial Markets and Institutions


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