The liquidity of the London capital markets, 1825–70†

This article examines the liquidity of the London capital markets in the decades following the liberalization of UK incorporation law. Using comprehensive stock and bond data, we calculate a measure of market liquidity for the period 1825–70. We find that stock market liquidity trended upwards but bond market liquidity did not increase over the sample period. Stock market liquidity during our sample period was partially influenced by the bond market, rather than fluctuations in economic output. In our analysis of the cross‐sectional determinants of individual stock liquidity, we find that firm size and the number of issued shares were important determinants of liquidity.  Finally, we find little evidence of an illiquidity premium, which is consistent with the view that investors did not price liquidity in this nascent market.     

Slave prices from succession and bankruptcy sales in Mauritius, 1825–1827

We construct a unique data set from succession and bankruptcy sales in Mauritius to investigate the determinants of slave prices between 1825 and 1827. We find that males, females sold with children, skilled slaves and slaves sold during the peak sugar cane harvest season all fetched higher prices. In comparison, handicapped and non-native slaves were sold at a discount. Moreover, the young child premium increased over the period. This may indicate that slave owners did not anticipate that slavery would be abolished in the near future or thought that they would be compensated in such an event.     

Integration between the London and New York Stock Exchanges, 1825–1925

In this article the integration between the London and New York Stock Exchanges is analysed during the era when they were still developing as asset markets. The domestic securities on both exchanges showed little sustained integration, even when controlling for the different characteristics of stocks, which implies that the pricing of securities in the US and UK was still being driven by local factors. These results place a limit on the view that the pre‐First World War period was the first era of globalization in terms of capital markets. However, there was considerable integration between New York and those listings on London that operated internationally. This suggests that the listing of foreign securities may be one of the primary mechanisms driving asset market integration.     

Private borrowing during the financial revolution: Hoare's Bank and its customers, 1702–241

The financial revolution improved the British government's ability to borrow, and thus its ability to wage war. North and Weingast argued that it also permitted private parties to borrow more cheaply and widely. We test these inferences with evidence from a London bank. We confirm that private bank credit was cheap in the early eighteenth century, but we argue that it was not available widely. Importantly, the government reduced the usury rate in 1714, sharply reducing the circle of private clients that could be served profitably.     

Infant mortality decline in rural and urban Bavaria: fertility,economic transformation,infant care,and inequality in Bavaria and Munich, 1825–1910†

During most of the nineteenth century, Bavaria was notorious for infant mortality rates that were among the highest in Europe. After 1870, infant mortality in Bavaria began a sustained decline. This decline, which was impressive in urban areas, was even more dramatic in Bavaria's capital, Munich. From a peak of 40 deaths per 100 births in the 1860s, infant mortality had fallen two‐thirds by 1914. This article examines the causes of infant mortality in rural and urban districts of Bavaria from 1880 to 1910 and in Munich from 1825 up to shortly before the First World War. In rural Bavaria, structural change in agriculture lowered infant mortality, even as stark differences in infant survival driven by income gaps and deficient infant care remained. In urban areas, high fertility was strongly associated with high infant mortality. Individual‐level data from Munich reveal that infant care, fertility, and incomes mattered. Even prior to industrialization, occupational status influenced infant survival. Munich's growth into a leading industrial centre after 1875 apparently widened the gap between rich and poor. Families at the top of the occupational distribution and couples able to acquire real property saw the steepest declines in infant mortality. The poorest one‐third without property saw little improvement.     

Adjustment to External Shocks: Kenya 1986–95

This paper analyses the process of stabilization and adjustment in Kenya during the period 1986–95, using a variant of the dependent economy model. The country’s adjustment experience has not been smooth, with terms of trade shocks, unfavourable movements in aid flows and policy reversals contributing to an uneven performance. It is argued that the tight monetary policy regime succeeded to stabilize the economy although the process was prolonged as fiscal adjustment was delayed. Finally, when the budget deficit was reduced the choice of higher protection as a means of raising revenue had a negative impact on export performance. L’article analyse le processus de stabilisation et d’ajustement au Kenya sur la période 1986–95. Les résultats de l’ajustement ont connu des mouvements en dents de scie, sous l’effet de la détérioration des termes de l’échange, à l’évolution heurtée des apports d’aide et aux dérapages des politiques. En utilisant une variante du modèle de l’économie dépendante, nous analysons le processus de stabilisation et d’ajustement durant cette période. Nous avançons que l’austérité monétaire a permis de stabiliser l’économie, même si cela a pris beaucoup de temps à cause de l’ajustement budgétaire tardif. Enfin, lorsque le déficit budgétaire a été réduit, le renforcement des mesures de protection institué en vue d’augmenter les recettes a eu une incidence négative sur la tenue des exportations.     

External economies of scale in the Lancashire cotton industry, 1900–1950

This article provides three types of evidence for external economies of scale in the Lancashire cotton industry. Anglo‐American productivity differences are used to demon‐strate external economies at the industry level. Econometric evidence of dynamic (Marshall‐Arrow‐Romer) external economies of localization in spinning and weaving is provided using individual earnings data. A case study of a merchant firm demonstrates the build‐up of dynamic (Jacobs) externalities of urbanization. It is argued that the persistence of a large merchant community generating external economies of scale helped to delay Britain's loss of comparative advantage to low wage producers.     

The rate of return on equity across industrial sectors on the British stock market, 1825–701

This article assesses the contribution of the various industrial sectors to the growth of the British equity market in the 1825–70 period. It also provides estimates of the rates of return on these industrial sectors in this period. The article then proceeds to examine whether differences in rates of return across the various sectors can be explained by risk or other financial factors. One of the main findings is that the relatively high rates of return in the banking, insurance, and miscellaneous sectors appear to be in some measure explained by the presence of extended liability and uncalled capital.