In the Eye of a Storm: Manhattan's Money Center Banks During the International Financial Crisis of 1931

53 Pages Posted: 7 Jul 2016

See all articles by Gary Richardson

Gary Richardson

University of California at Irvine; National Bureau of Economic Research

Patrick Van Horn

Scripps College

Date Written: 2016-07-06

Abstract

In 1931, a financial crisis began in Austria, spread to Germany, forced Britain to abandon the gold standard, crossed the Atlantic, and afflicted financial institutions in the United States. This article describes how banks in New York City, the central money market of the United States, reacted to this trans-Atlantic financial disturbance. An array of sources tells a consistent tale. Banks in New York anticipated events in Europe, prepared for them by accumulating substantial reserves, and during the crisis, continued business as usual. New York's leading bankers deliberately and collectively decided on the business-as-usual policy in order to minimize the impact of the panic in the United States.

JEL Classification: E51, E52, E58, G21, G28, N12, N22

Suggested Citation

Richardson, Gary and Van Horn, Patrick, In the Eye of a Storm: Manhattan's Money Center Banks During the International Financial Crisis of 1931 (2016-07-06). FRB Richmond Working Paper No. 16-7, Available at SSRN: https://ssrn.com/abstract=2805860

Gary Richardson (Contact Author)

University of California at Irvine ( email )

3151 Social Science Plaza
Irvine, CA 92697-5100
United States

HOME PAGE: http://www.socsci.uci.edu/~garyr/welcome.html

National Bureau of Economic Research ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

HOME PAGE: http://www.nber.org

Patrick Van Horn

Scripps College ( email )

Claremont, CA 91711
United States

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