Fetters of Debt, Deposit, or Gold During the Great Depression? The International Propagation of the Banking Crisis of 1931
Gary Richardson
University of California at Irvine; National Bureau of Economic Research
Patrick Van Horn
New College of Florida
March 2007
NBER Working Paper No. w12983
Abstract:
A banking crisis began in Austria in May 1931 and intensified in July, when runs struck banks throughout Germany. In September, the crisis compelled Britain to quit the gold standard. Newly discovered data shows that failure rates rose for banks in New York City, at the center of the United States money market, in July and August 1931, before Britain abandoned the gold standard and before financial outflows compelled the Federal Reserve to raise interest rates. Banks in New York City had large exposures to foreign deposits and German debt. This paper tests to see whether the foreign exposure of money center banks linked the financial crises on the two sides of the Atlantic.
Number of Pages in PDF File: 47
working papers series
Suggested Citation
Richardson, Gary and Van Horn, Patrick, Fetters of Debt, Deposit, or Gold During the Great Depression? The International Propagation of the Banking Crisis of 1931 (March 2007). NBER Working Paper No. w12983. Available at SSRN: http://ssrn.com/abstract=975924
