A Theoretical Basis for 19th Century Changes to the Port of New York Imported Goods Auction

Abstract:     
The completion of the Erie Canal traditionally receives primary credit for the rapid growth of trade through the Port of New York relative to other East Coast ports. This credit ignores the dramatic increase in imports through New York prior to the completion of the canal. We examine an alternate explanation for this earlier growth. Specifically, in 1817, the New York legislature changed the law regarding auctions of imports. In developing a theory to demonstrate the benefits of the new auction design, we give credence to the claims that the change in the auction law contributed to New York?s rapid growth.

JEL Classification: N71

working papers series