Explorations in

Economic History
Explorations in Economic History 43 (2006) 39–63
www.elsevier.com/locate/eeh

q
Did banks cause the German industrialization?
Carsten Burhop
University of Münster, Institute for Economic and Social History, Domplatz 20-22, 48143 Munster, Germany

Received 29 July 2003

Available online 16 June 2005

Abstract

In this paper, we discuss the causal relationship between growth of bank assets and eco-
nomic performance (economic growth, capital accumulation, productivity). We analyze new
data for German banking (Burhop, C., 2002. Die Entwicklung der deutschen Aktienkredit-
banken von 1848 bis 1913: Quantifizierungsversuche. Bankhistorisches Archiv 28, 103–128.)
and improved national accounting data (Burhop, C., Wolff, G.B., 2005. A compromise esti-
mate of GermanyÕs Net National Product 1851–1913 and its relevance for economic growth
and cycles. forthcoming, Journal of Economic History.) with several recent VAR/VEC based
causality tests. Only weak evidence for a causal influence of banks on economic performance
on a nation-wide level is detected. On the other hand, the results support the bank-led growth
hypothesis for the modern sector of the German economy. In particular, joint-stock credit
banks positively influenced capital formation during the early decades of GermanyÕs
industrialization.
Ó 2005 Elsevier Inc. All rights reserved.

JEL classifications: N 13; N 23; C 32

Keywords: Economic History; Germany; Pre-1913; Financial intermediation; Growth

q
I thank Maja Micevska, Christian Bayer, Matthias Paustian, Richard Tilly, Guntram Wolff, Seminar
participants at the Center for Development Research, and two anonymous referees for many helpful
comments and suggestions. All remaining errors are mine. An earlier version of this paper was written
while I was a research fellow at the Center for Development Research, Bonn University. Financial support
of this institute is gratefully acknowledged.
E-mail address: [email protected]

0014-4983/$ - see front matter Ó 2005 Elsevier Inc. All rights reserved.
doi:10.1016/j.eeh.2005.04.005
40 C. Burhop / Explorations in Economic History 43 (2006) 39–63

1. Introduction

The investigation of the banking-growth-nexus is an evergreen in German

economic history, in development economics, and in general economics alike. This
paper contributes to the ongoing debate by combining a new data set for German
banking (Burhop, 2002), improved national accounting data (Burhop and Wolff,
2005), and recent econometric methods (Sims et al., 1990; Toda and Phillips,
1993; Toda and Yamamoto, 1995).
Nineteenth-century Germany is one of the most intensely studied cases of the bank-
ing-growth-nexus in economic history (see Fohlin, 1999a; Guinnane, 2002). The idea
of a positive impact of large German joint-stock credit banks on economic growth
dates back to the writings of Jeidels (1905), Riesser (1910), and Hilferding (1910). It
was reintroduced into the debate by Gerschenkron (1962), who hypothesizes that
moderately backwarded economies—like Germany during the 19th century—can
accelerate their growth by setting-up modern institutions such as joint-stock banks.
This idea was formalized by Da Rin and Hellmann (2002). In their model, banks
may act as catalyst for industrialization if they are sufficiently large to provide cap-
ital for a critical mass of firms, and if banks possess sufficient market power to make
a profit from coordination of industrial activities. In this framework, banks can pro-
pel an economy from a self-perpetuating low equilibrium to a sustainable high equi-
librium: banks thus can become the driving force in a big push towards
industrialization. Banks, for example, can finance a critical mass of firms at be-
low-market interest rates. Firms outside that critical mass are financed at market
rates. Banks are interested in financing some firms at lower rates, since profits will
be higher after industrialization. They are able to finance some firms at below market
interest rates if they have sufficient market power for price discrimination and cost
advantages. Such costs advantages are most likely for large banks, since they can
realize economies of scale and scope.
Microeconomic theory of banking identifies several ways in which financial inter-
mediaries operate within a world involving information and transaction costs (see
Levine, 1997 for an overview). Basically, banks and other financial intermediaries
have five fundamental functions: they mobilize savings, allocate resources, exert cor-
porate control, facilitate risk management, and ease the trading of goods, services,
and contracts. In addition, banks can successfully screen credit applications, allocat-
ing credits only to the most promising investment opportunities, and thereby, foster-
ing technological innovation (King and Levine, 1993a,b). Cost advantages of large
banks can emerge from these functions. Large banks may have more screening
and monitoring experience since they have more customers and credit applications.
They have more power in exerting corporate control since their credits are important
for firms. In addition, risk diversification is easier using a large portfolio.
On the other hand, a number of endogenous growth models do not show a causal
relationship between financial development and economic growth, e.g., Greenwood
and Jovanovic (1990) and Pagano (1993). Pagano, for example, argues that financial
development can influence growth by altering the saving rate. Financial development
may reduce the saving rate, since consumers have better protection against liquidity
 C. Burhop / Explorations in Economic History 43 (2006) 39–63 41

risk and better access to consumer credit. On the other hand, financial development
can increase the saving rate, since institutions collecting savings are available to con-
sumers. Furthermore, some authors claim that financial liberalization and financial
development can increase the volatility of finance and thereby influence economic
growth negatively (Singh, 1997).
Empirically, correlation and causation within the finance-growth nexus is investi-
gated by three types of studies. Time series studies employ the Granger non-causality
test (Demetriades and Hussain, 1996) or a modified causality test (Rousseau and
Wachtel, 1998; Rousseau and Sylla, 2005; Luintel and Khan, 1999). These studies
report mixed results, e.g., a bi-directional causality between indicators of financial
development and economic performance. Rousseau and Sylla (2005), employing a
tri-variate time-series model, present evidence for a causal link running from financial
intermediation to economic growth in the United States between 1790 and 1850. In
another paper, Rousseau and Wachtel (1998, p. 672), after investigating the finance-
growth nexus for the United States, the United Kingdom, Canada, Sweden, and Nor-
way between 1870 and 1929, concluded that ‘‘In particular, the application of recent time
series techniques that use information embedded in the levels of the data indicate clearly
that financial development was a driving, causal force behind the rapid industrial transfor-
mation experienced by five leading economies prior to the Great Depression.’’ Further-
more, cross-country studies report positive effects of financial development on
economic growth, even after accounting for other factors influencing growth (King
and Levine, 1993a,b; Levine and Zervos, 1998; Levine et al., 2000). Finally, studies
investigating the financial structure of companies and their sources for finance con-
clude that the financial system facilitates company growth (Rajan and Zingales,
1998). In a historical context, Becht and Ramirez (2003) show that German mining
and steel firms with a close link to joint-stock banks were not liquidity constrained
in the early 20th century, whereas firms without such a link were constrained.1
For many economic historians, Germany is the pre-eminent example for a bank-
led industrialization. Kindleberger (1993, p. 130), concludes that ‘‘the great banks
constituted less than a tenth of the total assets of financial institutions of the country
but were found at the critical margin affecting economic growth.’’ Tilly (1986) argues
that banks promoted growth through portfolio diversification and the resulting
expansion of risk capital. This risk capital could have been used to set up new, large,
and innovative enterprises. On the other hand, in a classical and controversially
debated paper, Neuburger and Stokes (1974) argue that banks current-account lend-
ing negatively influenced German growth.2 Edwards and Ogilivie (1996) hypothesize
that in comparison to the national product joint-stock credit banks were too small to
influence the economic development of Germany significantly. Finally, Fohlin
(1999b) presents evidence for a modest impact of joint-stock credit banks in Germa-
ny on capital formation, capital allocation, and economic growth.

1
This result contrasts to those of Fohlin (1998), who concluded that credit-bank affiliation did not
reduce firmsÕ liquidity constraints.
2
Debates over their econometric approach ended without a clear-cut result regarding the growth-
distortion hypothesis (Fremdling and Tilly, 1976; Komlos, 1978).
42 C. Burhop / Explorations in Economic History 43 (2006) 39–63

A major shortcoming of nearly all quantitative investigations is the focus on the

period 1883–1913. So far, data for earlier phases were unavailable. This study em-
ploys a new data set for joint-stock credit banking in Germany and thereby quanti-
fies the impact of banks during the early phases of industrialization. Studies
employing modern data focus on economy-wide measures of financial intermedia-
tion and economic performance, whereas the overwhelming part of the economic-
historical literature concerning Germany employs industrial sector and joint-stock
credit bank data. We will investigate the two relationships, a economy-wide and a
modern-sector link. The data are described in Section 2. The hypotheses are tested
using recent econometric methods, which are briefly described in Section 3. Section
4 presents the empirical results, the final Section 5 concludes.

2. Data

The empirical literature, notwithstanding its diverging conclusions regarding the

banking-growth nexus, is relatively clear about the variables to be included into
the investigation. A standard AK-endogenous growth model includes output per
employee, physical capital stock per employee, and the productivity level of the
economy. Since we want to evaluate the impact of banks on economic growth, an
indicator of financial depth must be included. Thus, monetary capital is added as
an additional factor into the production technology.
We investigate two specifications, an economy-wide and a modern-sector specifi-
cation. In both, we employ three performance and one financial depth series. For the
nation-wide data set, the compromise estimate of the German net national product
(NNP) is used (Burhop and Wolff, 2005). The nation-wide capital stock data are tak-
en from Hoffmann (1965, p. 253), with corrections for the industrial capital stock
(Burhop and Wolff, 2005). The data were transformed to 1913 constant prices using
a NDP deflator (Hoffmann, 1965, p. 825) and to per-employee figures (Hoffmann,
1965, p. 205). The productivity level was calculated using the Solow-residuals from
a growth accounting exercise, normalizing the productivity level to 1913 = 1.3
Growth is accounted for by using the compromise NNP figures, total employment,
and the average share of capital income between 1860 and 1913.4 The financial sector
includes joint-stock credit banks, saving banks, credit co-operatives, and private
mortgage banks. Data for joint-stock credit banks are from Burhop (2002), data
for saving banks from Hoffmann (1965, p. 733), the other data are taken from Deut-
sche Bundesbank (1976, p. 60). The measure of financial depth employed for the na-
tion-wide specification is total assets of all banks divided by the net national product.
The starting point for the nation-wide investigation—the year 1860—is determined
by availability of financial intermediation data.

3
The year of normalization does not influence the results.
4
The share of capital income was 24.3 percent.
 C. Burhop / Explorations in Economic History 43 (2006) 39–63 43

We do not use the traditional national accounting data of Hoffmann (1965) for
several reasons. First, the four national accounting series compiled by Hoffmann
(1965) and Hoffmann and Müller (1959) have different levels and different cyclical
properties. Second, Hoffmann underestimates the industrial capital stock. Third,
Hoffmann underestimates capital income in the industrial sector.5
The modern sector includes two parts: industry and railways. The three per-
formance measures for the modern-sector study, which starts 1851, are: (1) the
value of industrial production (Burhop and Wolff, 2005) and the value of rail-
way production (Hoffmann, 1965, p. 424) in 1913-prices and per employee
(Hoffmann, 1965, p. 196); (2) the industrial and railway capital stock (Burhop
and Wolff, 2005; Hoffmann, 1965, p. 253) in 1913-prices and per employee;
and (3) productivity within the modern sector, calculated from the Solow-resid-
uals from a growth accounting, normalized to 1913 = 1. Basic data for the
growth accounting are the value of industrial and railway production, the indus-
trial and railway employment, the industrial and railway capital stock, and the
average capital income share between 1851 and 1913.6 We measure financial
intermediation within the modern sector by the total assets of joint-stock credit
banks divided by industrial and railway production. The 1851 starting date for
the modern-sector investigation is determined by the availability of national
accounting data.
Figs. 1–4 show the evolution of net national product per employee (Y), modern-
sector production per employee (YM), total capital stock per employee (K), mod-
ern-sector capital stock per employee (KM), nation-wide productivity level (P),
modern-sector productivity (PM), total financial depth (FD), and modern-sector
financial depth (FDM). All of the series show a sustained upward trend. Fig. 1 dis-
plays output per employed in the whole economy and for the modern sector. La-
bor productivity was higher in the modern sector throughout, giving an incentive
to move from agricultural to industry.7 Between 1860 and 1913, labor productivity
growth was equal in both sectors.
Fig. 2 shows the capital stock per employed in the total economy and in the mod-
ern sector. Until 1875, capital intensity in the modern sector was below the national
average. This resulted from a high share of capital in the agricultural sector, especial-
ly land and buildings. Between 1860 and 1871, the growth rate of capital stock per
employed was slightly higher in the modern sector. Then, up to 1876, capital forma-
tion in the modern sector accelerated substantially. This is the well-known Gründer-
zeit. During these years, total output, output per employed, and productivity
significantly increased in the modern sector. From the mid-1870s until the turn of
the century, capital intensity growth rates were equal in the modern sector and in
the total economy. Thereafter, the growth rate in the modern sector was much faster.

5
See Burhop and Wolff (2005) for an extensive discussion.
6
The share of capital income in the modern sector was 16.9 percent.
7
The traditional data of Hoffmann, in contrast, show an industrial labor productivity below net
national product per employed until 1907.
44 C. Burhop / Explorations in Economic History 43 (2006) 39–63

Fig. 1. Development of labor productivity, 1851–1913.

Fig. 2. Capital stock per employed, 1851–1913.

Fig. 3. Development of total factor productivity, 1851–1913. Normalized to 1913 = 1.

 C. Burhop / Explorations in Economic History 43 (2006) 39–63 45

Fig. 4. Financial sector development, 1851–1913.

Fig. 3 presents the development of total factor productivity. From mid-19th cen-
tury until the late 1880s, total factor productivity growth was stronger in the whole
economy than in the modern sector. This is mainly due to the shift of production
factors (labor) out of agriculture into high-productivity industry (Broadberry,
1997). The strong upturn of total factor productivity in the modern sector between
1870 and 1874, and the following downturn until 1880 might not be related to in-
creased productivity, but to increased capacity utilization, since the Solow-residual
also includes fluctuations of capacity utilization. From the late 1880s until World
War I, total factor productivity growth rates were equal in the modern sector and
in the whole economy.
Fig. 4 displays financial sector development. The level of financial depth steadily
increased, from about 5 percent of NNP (1860) to nearly 100 percent on the eve of
World War I. Financial depth related to joint-stock credit banks also rose, namely
from 1.3 percent of modern sector output in 1851, to 7.7 percent in 1860. and finally
to nearly 65 percent in 1913. Financial intermediation in the whole German economy
was greater than within the modern sector. In particular, deregulation brought about
by the joint-stock companies act of 1870 led to a sustained increase of joint-stock
credit bank and joint-stock mortgage bank activity. This important phase of German
economic policy is analyzed in this paper.
There are, however, some shortcomings of financial intermediation data. First of
all, private banking houses—like Rothschild, Oppenheim, Bethmann and Bleichrö-
der—are not included into the data set, which leads to an underestimation of finan-
cial depth. In particular during the early decades of GermanyÕs industrialization,
private credit banks were of outstanding importance. Unfortunately, the quantita-
tive relevance of these banks is uncertain. Tilly (1966) estimates the total assets of
private banks in the Rhineland to be around 220 million Marks (1845), 570 million
Marks (1855), and 940 million Marks (1865). Goldsmith (1969) estimates the total
assets of all German private banks to be around 1.5 billion Marks in 1860 and 2.5
billion Marks in 1880. Private credit banks were thus more important in terms of
assets than joint-stock credit banks, at least until around 1890. Thereafter, many
46 C. Burhop / Explorations in Economic History 43 (2006) 39–63

private banks were taken over by joint-stock banks, which led to an extensive growth
of the latter.8 Since the business of the large private banks was quite similar to that of
joint-stock credit banks until the turn of the century—in fact many joint-stock credit
banks, e.g., Bank für Handel und Industrie, Berliner Handels-Gesellschaft, Deutsche
Bank, Dresdner Bank, were founded by private bankers to reduce the personal risk
of the fully liable private bankers—we can reasonably assume that our joint-stock
credit bank data underestimate the influence of credit banks (joint-stock and private)
during the whole period.9 If we find a positive influence of joint-stock credit banks
on economic development, this effect might be stronger if we could have included
private banks into our investigation.
Second, the data are aggregated by simply adding up total assets, thereby double
counting inter-bank lending, which leads to an overestimation of financial depth.
The underestimation of total assets due to leaving out private bankers seems, how-
ever, to be far more important than double counting. Finally, up to 1880 the total
assets of private mortgage banks were estimated using information about long-term
credits of these institutions and the share of long term credits of total assets between
1881 and 1913. This seems reasonable, but it is an assumption.
A further problem could be the sub-sectoral separation. We assume that only
joint-stock credit banks supply finance to modern industrial companies, and that
these firms are exclusively financed by joint-stock credit banks. This is, off course,
a simplification. It is well known that the large joint-stock credit banks were active
in other fields. For example, they sold government and foreign bonds on the German
capital market, sometimes accompanied by credits. We have no data about the dis-
tribution of credits, however, and that is the main reason for our simplification.
What we do know is the distribution of joint-stock credit banks assets, which is sur-
prisingly stable over time (Burhop, 2002). Almost in every single year between 1851
and 1913, 40–50 percent of total assets were devoted to current account lending, and
about 20 percent to bill discounting. These two activities, which are clearly related to
private business, comprise about two thirds of all assets.10 Until the late 1870s, about
20 percent of all assets were invested in stocks and bonds; thereafter that share fell to
about 10 percent. Until the 1870s, almost all bonds were issued by governments and
railway companies; the first industrial bond was issued by Krupp in 1874. Stocks
were issued by railway companies, banks, and industrial firms. Furthermore, at least
until the 1870s, many joint-stock banks had large and long-term investments in some
industrial companies.
Another assumption is that savings banks and credit co-operatives supply no
finance to the modern sector. This assumption is problematic for the years after

8
One should note that total assets of private bankers remained stable after 1890, and that the total
number of private banks increased.
9
The similarity of business and sharing of large investment projects is well documented, e.g., by
Feldenkirchen (1979, 1982), and Burhop (2004a, Chapter 4).
10
We do not have much microeconomic evidence on credit distribution. It could be possible to
investigate that issues using the general ledgers of banks. This is, however, far beyond the scope of this
paper.
 C. Burhop / Explorations in Economic History 43 (2006) 39–63 47

about 1890, since by then the saving banks might have started to supply industrial
finance. This might be of minor importance, however, since saving banks during
the period 1851–1913 invested a relatively constant share—about 55 percent—
of their assets in mortgages and about 10 percent of total assets in personal credits.
Mortgages were used to finance buildings and distribution of estates (Erba-
useinandersetzung), neither of which is included in modern-sector investment. Fur-
ther, saving banks invested around one-third of their assets in government bonds
and communal finance. Some of these funds were reinvested in infrastructure
construction, which again is not included into industrial investment. Therefore, only
a small part of saving banks assets was directed to industrial finance.11 Yet, if saving
banks financed local governments or firms, and these entities bought industrial
goods (e.g., for the electrification of cities), savings banks might have had an indirect
effect on industrialization. Since total assets of saving banks were larger than those
of joint-stock credit banks for most years under consideration—only during 1871–
1874 did the reverse hold—we explicitly investigate here the role of saving banks.

3. Econometric methodology

Engle and Granger (1987) show that if two series are individually integrated and
cointegrated, a causal relationship will exist in at least one direction. The concept of
causality is a statistical one, and it is not related to causality concepts of economic
theory. In our context, a time series causes another time series if the former improves
the predictive power of a time series model forecasting the second series.
A general test for causality in VARs is the method proposed by Toda and
Yamamoto (1995). This test is independent of two properties that macroeconomic
time series often have: unit-roots and cointegration. This is of special relevance, since
tests for unit-roots and cointegration generally have low power in small samples.
Thus, causality tests, depending on unit-root and cointegration properties can well
have serious pre-test biases. Moreover, the causality test itself has low power and
tends to reject the non-causality hypothesis too often: Zapata and Rambaldi
(1997) suggest a rejection rate of about 8 percent on a 5 percent significance level
in bi-variate VARs with about 60 observations. Reducing the number of observa-
tions or increasing the number of variables reduces the statistical reliability of the
results further.
The results of the Toda–Yamamoto causality test can be checked using two addi-
tional tests: the traditional Granger-test and the VAR-based test of Sims et al.
(1990), which is generalized by Toda and Phillips (1993). The Granger-test is only
possible with non-cointegrated, stationary data. On the other hand, the Sims et al.
test is only possible with cointegrated data. The test uses the fact that a causal rela-
tionship between cointegrated series must exist. Furthermore, the test developed by

11
Wysocki (1993) discusses the role of saving banks for industrialization and summarizes the relevant
data.
48 C. Burhop / Explorations in Economic History 43 (2006) 39–63

Toda and Yamamoto cannot be used if the maximum number of unit-roots in the
VAR is larger than the optimal lag-length. Thus, in some cases, it might not be pos-
sible to conduct causality tests.
Some pre-tests are therefore necessary to choose the correct types of non-causality
tests. First, the order of integration must be tested. For this part, we employ the aug-
mented Dickey–Fuller (ADF) and the Phillips–Perron unit-root tests. Then bi-vari-
ate cointegration tests using JohansenÕs approach are conducted for all integrated
variables. If bi-variate cointegration exists, then uni- or bi-directional causality will
exist, although in finite samples there is no guarantee that causality tests will identify
it. In a third step, multivariate cointegration tests are performed to examine interac-
tion effects. Finally, causality tests can be performed.
The starting point is the Toda–Yamamoto test. To perform this test, we need to
know the maximum order of integration involved in the model, dmax, and the opti-
mal lag-length for a VAR.12 We can then estimate a VAR in levels with a lag length
of optimal lag length plus dmax. Causality is inferred only from the optimal lag-length
VAR coefficients using standard Wald- or t-tests. In the bi-variate case:
X
mþd max X
nþd max

Xt ¼ a þ bi X t
i þ cj Y t
j þ ut ; ð1Þ

i¼1 j

X
qþd max X
rþd max

Yt ¼ a þ bi Y t
i þ cj X t
j þ vt ; ð2Þ

i¼1 j

where ut and vt are zero-mean, serially uncorrelated, random disturbances and m, n,

q, and r are the optimal lag-lengths.
In case of sufficiently cointegrated data, we may also use the level-series and esti-
mate a VAR, using only the optimal lag-lengths m, n, q, r. This method is proposed
by Sims et al. (1990) and generalized by Toda and Phillips (1993). Finally, if the data
are I (1) but not cointegrated, we employ the first differences of the original series and
the standard Granger-test. We can formulate the non-causality hypothesis
H 0 : Y does not cause X if cj ¼ 0 8 j is not rejected.

4. Empirical results

4.1. Results of causality tests for joint-stock banks and all banks

To perform causality-tests in time series models, it is crucial to know, whether the

data are integrated and cointegrated. The ADF unit-root test with trend and inter-
cept and the corresponding Phillips–Perron unit-root test indicate that all time series
are I (1).

12
The optimal lag-length is calculated using the Hannan–Quinn criteria.
 C. Burhop / Explorations in Economic History 43 (2006) 39–63 49

JohansenÕs cointegration test with intercept and trend is employed to estimate the
number of cointegration relationships. In all cases, the trace test and the maximum
eigenvalue test indicate the same number of cointegration relationships. The follow-
ing series combinations were not cointegrated in either the country-wide or the mod-
ern-sector specifications: the tri-variate system including financial intermediation,
income per employed, and productivity level, and the two bi-variate systems with
financial intermediation combined with income per employed or productivity. The
classical Granger-causality test thus is only possible for this three combinations of
series; in all other cases the test developed by Sims, Stock, and Watson can be used.
In all cases, the optimal lag-length was at least as large as the maximum number
of unit-roots in the system. Therefore, the test developed by Toda and Yamamoto
can be applied to all combinations. One should note that this test has a lower statis-
tical power than the classical Granger-test and the Sims–Stock–Watson test since
more parameters are estimated.
Table 1 shows the p-values of the non-causality tests for two periods, 1860–1913
and 1883–1913. Table 2 displays the results for the modern sector. Here three periods
(1851–1913, 1851–1882, and 1883–1913) are distinguished.
There is no historical reason to split the sample in 1883. The underlying nation-
wide time-series do not have a structural break. The modern sector series might have
structural breaks in 1870–1871 and around 1880. Earlier macroeconomic studies,
however, rely on a data set starting in 1883; taking 1883 as a break-year therefore

Table 1
Non-causality test results for the nation-wide specification
Included variables Toda–Yamamoto Granger Sims et al.
H0: FD did H0: FD is H0: FD H0: FD H0: FD did H0: FD
not cause not caused did not cause is not caused not cause is not
p-value by p-value p-value by p-value p-value caused by
p-value
Sample period: 1860–1913
Y 0.152 0.813 0.810 0.828
K 0.305 0.918 0.427 0.660
P 0.398 0.906 0.029 0.876
K 0.364 0.934 0.653 0.291
P 0.616 0.751 0.072 0.973
Y 0.131 0.653 0.430 0.875
K 0.453 0.926 0.558 0.527
Y 0.137 0.783 0.132 0.710
P 0.376 0.875 0.724 0.998
Y 0.104 0.659 0.134 0.635
P 0.633 0.799 0.748 0.773
K 0.424 0.987 0.426 0.257
Sample period: 1883–1913
Y 0.460 0.193 0.763 0.110
P 0.005 0.573 0.771 0.373
K 0.000 0.013 0.057 0.665
Bold fonts indicate significance on 5 percent level, italic fonts indicate significance on 10 percent level.
50 C. Burhop / Explorations in Economic History 43 (2006) 39–63

Table 2
Non-causality test results for the modern sector specification
Included variables Toda–Yamamoto Granger Sims et al.
M M M M
H0: FD did H0: FD H0: FD did H0: FD H0: FDM H0: FDM
not cause is not caused not cause is not caused did not is not
p-value by p-value p-value by p-value cause caused by
p-value p-value
Sample period: 1851–1913
YM 0.117 0.024 0.015 0.217
KM 0.631 0.304 0.018 0.504
PM 0.110 0.033 0.033 0.206
KM 0.641 0.790 0.016 0.104
PM 0.212 0.447 0.037 0.719
YM 0.192 0.272 0.015 0.807
KM 0.629 0.854 0.016 0.125
YM 0.130 0.026 0.249 0.329
PM 0.231 0.040 0.282 0.397
YM 0.158 0.382 0.281 0.727
PM 0.211 0.703 0.265 0.861
KM 0.002 0.128 0.003 0.007
Sample period: 1851–1882
YM 0.013 0.481 0.060 0.511
PM 0.023 0.727 0.046 0.541
KM 0.000 0.368 0.000 0.554
Sample period: 1883–1913
YM 0.769 0.184 0.481 0.308
PM 0.765 0.269 0.460 0.442
KM 0.317 0.729
Bold fonts indicate significance on 5 percent level.

makes our results directly comparable to previous research. Furthermore, taking

1883 as a breakpoint leaves 31 observations in the latter sample and 32 observations
in the earlier sample. This is an advantage, since estimation results are certainly unre-
liable with fewer than 30 observations.
Financial sector developments were not a causal force for output, productivity,
and capital formation in the whole German economy between 1860 and 1913. The
Toda–Yamamoto test fails to reject the non-causality hypothesis in all investigated
cases. This result is largely confirmed by the classical Granger and the Sims–
Stock–Watson test. There is only weak evidence that financial sector development
caused aggregate productivity during these decades. One should note that aggregate
productivity on the nation-wide level was not mainly driven by technological pro-
gress, but by structural change. Thus, financial intermediaries might have had causal
influence on structural change.
During the later period, 1883–1913, the results are more favorable to a causal role
for the financial sector. The Granger test rejects the null hypothesis of no causal
influence of the growth of the financial sector on net investment at a 10 percent sig-
nificance level. The Toda–Yamamoto test, however, indicated that the levels of
 C. Burhop / Explorations in Economic History 43 (2006) 39–63 51

financial sector development and the capital stock are endogenous. But this test re-
jects the null hypothesis of no causal relationship between the level of financial inter-
mediation and the productivity level of the whole economy.
Jointly and severally, the impact of the level of financial-sector development and
financial-sector growth does not appear to have had a causal influence on GermanyÕs
economic development during the second half of the 19th and the early 20th century.
Turning to the joint-stock credit banks, the econometric results are more favor-
able to a causal role for finance (see Table 2).
For the whole period 1851–1913, the evidence is somewhat ambiguous: the Sims–
Stock–Watson test supports the hypothesis of a leading role of the joint-stock credit
banks, whereas the less efficient Toda–Yamamoto test gives some support for the re-
verse case. However, the efficiency of causality tests in small samples with more than
two variables is rather low. If we focus on the results of the bi-variate VARs, the
Toda–Yamamoto test rejects the null hypothesis of no causal relationship between
the level of financial intermediation and the level of capital stock per employed in
the modern sector, whereas the test by Sims, Stock, and Watson supports a bi-direc-
tional causality.
Interpretation of results is more straightforward after the sample is split. For the
later period 1883–1913, no causal relationship between joint-stock credit banks and
economic performance is detected. In contrast, joint-stock credit banks were a causal
force for economic development during the early phase 1851–1882. The Toda–
Yamamoto test rejects the hypothesis of no causal relationship between the level
of financial intermediation by the joint-stock credit banks and the level of output
per employed, capital stock per employed, and productivity. This result is confirmed
by the traditional Granger test, which rejects the null hypothesis of no causal rela-
tionship between the change of financial intermediation via the joint-stock credit
banks and the growth of output, capital stock, and productivity.
The joint-stock credit banks seemingly lost their special influence after 1882: the
non-causality hypothesis cannot be rejected. This evidence might support Da Rin
and HellmannÕs model, which concludes that banks can induce a shift from a low-
to a high-equilibrium growth path. Our results indicate that German joint-stock
credit banks were causal forces in the transition phase, but not a causal force when
the economy had already reached a high-equilibrium growth path. One can thus ar-
gue that the German economy was on a sustained industrial growth path after the
1870s. Our results also support recent research by Edwards and Ogilivie (1996)
and Fohlin (1999b), who contend that the influence of joint-stock credit banks dur-
ing the period 1883–1913 was small at best. They can be taken as well to support
GerschenkronÕs argument that the role of credit banks was particularly important
in the early stages of German industrialization when the economy was relatively
backward.
Having established an early causal relationship between banks and modern-sector
growth, we can investigate the importance of joint-stock credit banks for capital
formation, output and productivity growth in the modern sector. We address this
question by employing impulse–response techniques in VARs covering the years
1851–1882. This impulse–response analysis shows how the components of a VAR
52 C. Burhop / Explorations in Economic History 43 (2006) 39–63

dynamically react to a one-standard-deviation shock to modern sector financial inter-

mediation. Figs. 5–7 show the responses of the first difference of output per employee,
capital stock per employee, and productivity in the modern sector during 1851–1882
on a shock to financial intermediation by the joint-stock credit banks. The figures in-
clude the point-estimate and a one standard deviation confidence interval.
In all three cases, a financial intermediation shock has a positive influence on the
performance measures. The cumulated effects over 10 years are (in percent of the
sample mean of the variable) 320 percent for output per employee, 389 percent for
productivity, and 204 percent for capital per employee. Another measure of the influ-
ence of a shock is the share of explained variance. The financial intermediation series
explains 13 percent of the variance of the productivity series after a financial shock.
The corresponding figure for labor productivity is 14 percent, and finally for capital
intensity, 40–60 percent from the third year onwards. Thus, fluctuations of financial
intermediation strongly influence fluctuations of net investment. Analyzing the
response over time yields the interesting result that output and productivity quickly

Fig. 5. Response of D(YM) on one standard deviation D(FDM) shock, 1851–1882.

Fig. 6. Response of D(KM) on one standard deviation D(FDM) shock, 1851–1882.

 C. Burhop / Explorations in Economic History 43 (2006) 39–63 53

Fig. 7. Response of D(PM) on one standard deviation D(FDM) shock, 1851–1882.

react to a financial shock, whereas capital formation reacts with some delay. Output
and productivity both react in the first period after the shock. They then return to
their equilibrium growth path. Since it is unlikely that new technologies, which were
financed by the banks, would have an immediate influence on productivity, it seems
that the measured influence is related to capacity utilization. Variations in capacity
utilization are included into the Solow-residual. An assumption of growth account-
ing is full employment of all production factors. In practice, however, factor utiliza-
tion is less than 100 percent. The time structure of the response of net investment
(first difference of the capital stock) is more complicated. Net investment increased
in the second year after the financial shock, and it remained above its equilibrium
level until the fifth period after the shock. Thus, a financial shock positively influ-
enced capital formation for about 4 years.

4.2. Influence of other types of banks

One can question a special role for joint-stock credit banks if other types of finan-
cial intermediaries were also a causal force for income growth and capital formation.
Candidates for such a role are private bankers and saving banks. Unfortunately, we
cannot further investigate the role of private bankers on a macroeconomic level since
time series of total assets or asset structure are not available.13 However, a qualita-
tive assessment of private bankerÕs role is possible.14 Private bankers were the first
financing large-scale private investment, especially railway construction during the
1830s and 1840s. Important in this regard were bankers from Cologne and the sur-

13
It would be possible to construct such a series employing GoldsmithÕs point estimates for 1860, 1880,
1900, and 1913, linking them with a log-linear trend, and adding a business cycle component using trend-
cycle decomposition of other banks assets. However, the historical base of such a time series would be
rather thin.
14
Reitmayer (2002) and Wixforth and Ziegler (1994) discuss the role and influence of private bankers
during the late 19th and early 20th century.
54 C. Burhop / Explorations in Economic History 43 (2006) 39–63

rounding Rhineland, since they actively started railway finance. Their fellow private
bankers from Frankfurt and Berlin were mostly active in government finance, a busi-
ness not important in Cologne, since there was no seat of government and no close
link to foreign governments. Private bankers involved in railway finance realized the
high risk involved, and intended to found joint-stock banks to reduce personal risk.
The Prussian government for political reasons refused to found a joint-stock bank
until 1848. From 1848 until the mid-1850s, several large credit banks were created,
e.g., Schaaffhausen (1848), Bank für Handel und Industrie (1853), Disconto-Gesell-
schaft (1853), and Berliner Handels-Gesellschaft (1856). Three of them were created
with large capital shares from CologneÕs bankers and the fourth (Disconto) was
managed by a Rhenisch businessman. Private bankers with experience in financing
large-scale private investment thus founded joint-stock banks to reduce their person-
al risk and to institutionalize financing consortia. Until the 1870s, these joint-stock
credit banks were not independent of their private-bank founders, who took up posi-
tions in management and whose own firms participated in most projects. After the
liberalization of the joint-stock companies act in 1870, many new banks were
formed. Again, private bankers played a leading role in this process. Until the
mid-1870s, private bankers controlled the joint-stock banks, and the banking busi-
ness was highly personalized: private bankers, bank managers, and businessmen
from industry knew each other and were well informed about business.15 After the
1873 stock market crisis, conflicts of interest became obvious for managers and
shareholders of joint-stock banks: private bankers had an incentive to transfer risks
from their private business to joint-stock banks, thereby reducing the return for
shareholders and the income of managers.16 During the late 1870s and 1880s, man-
agers of joint-stock banks separated their businesses from private bankersÕ influence.
At the same time, personalized information networks became insufficient within a
complex economic-industrial environment. Thus, private bankers lost much of their
information advantage over the formalized organization of large joint-stock banks.
Private bankers remained an influential group within Germany, however, especially
for government finance and as independent consultants for industrial firms.
Saving banks were another important type of bank. For savings banks, time series
of total assets and asset structure are readily available. They have higher total assets
than joint-stock credit banks for most years between 1851 and 1913 (see Fig. 8). To-
tal assets of these two types of banks closely co-moved until the mid 1870s, and then
again from the mid 1890s until World War I. During the two decades from about
1875 to 1895, total assets of joint-stock credit banks stagnated, perhaps as a result
of the aftermath of the 1873 stock market crises.
For the econometric evaluation, total assets of savings banks were related to
developments in the whole economy and in the modern sector. Relating savings bank
assets to performance measures for the whole economy leads to no clear-cut results.

15
Da Rin (1996) describes the different phases of bank information collection during the period 1850–
1913.
16
Burhop (2004b) shows that about three quarters of bank managers income were profit shares.
 C. Burhop / Explorations in Economic History 43 (2006) 39–63 55

Fig. 8. Total assets of saving banks and joint-stock credit banks, in 1913 billion Mark.

All variables were endogenous between 1851 and 1913, as well as during the two sub-
periods 1851–1882 and 1883–1913.
More interesting are the findings for the modern-sector specification. Between
1851 and 1913, a causal influence of the saving banks on capital formation is detect-
ed. This finding is supported by the Toda–Yamamoto test for a causal relationship
between the level of financial intermediation and capital intensity, and by the classi-
cal Granger-test for the causal relationship between the first differences of financial
intermediation and capital intensity.
The causal relationship is confined to the second sub-period only. Between 1883
and 1913, both tests—the Granger-test and the Toda–Yamamoto test—reject the
null hypothesis of no causal relationship between savings bank financial intermedi-
ation and capital formation. But for the earlier sub-sample covering the years 1851–
1882, the null hypothesis of no causal relationship is not rejected.17 Therefore, the
savings banks had a causal influence on capital formation in Germany during the
later stages of economic development, but not during the ‘‘take-off’’ phase.

4.3. Historical and theoretical interpretation

In this section, we connect our empirical results to the model of Da Rin and Hell-
mann (2002) and we support our statistical results with historical evidence. Da Rin
and Hellmann (2002, Proposition 2) show that an economy can move from a low-
equilibrium (no industrialization) to a high equilibrium (industrialization) with the
help of banks if some banks have sufficient market power to supply finance to a crit-
ical mass of firms at below-market interest rates. By financing some firms at low
costs, these firms become willing to invest in new, high-risk projects, irrespective
of whether firms outside the critical mass also invest. By definition, the critical mass

17
It that case, only the Toda–Yamamoto test is possible. For the Granger-test, the optimal lag-length is
so large that the VAR is not identified. Furthermore, the Sims–Stock–Watson test is in no case applicable
since the data are not cointegrated.
56 C. Burhop / Explorations in Economic History 43 (2006) 39–63

is large enough to induce a shift to the high equilibrium. In the high equilibrium, all
firms are willing to invest and interest rate discrimination by large banks is not nec-
essary anymore.
In this regard, market power has two dimensions: powerful banks must have a
cost advantage over other banks to supply some firms with low-cost capital. In addi-
tion, powerful banks must be large enough to supply the critical mass of firms with
capital. Quantitative evidence for Germany fits well with these two dimensions: the
Herfindahl-Index for the joint-stock credit banks was around 0.1 between the late
1850s and the early 1870s. After the liberalization of the joint-stock companies act
in 1870, it falls to 0.02. The market share of the three largest joint-stock credit banks
in the joint-stock credit bank market was larger than 50 percent until 1870; thereaf-
ter, this share fell to less than 30 percent (Burhop, 2002). Furthermore, we have evi-
dence for a concentration of joint-stock credit bank activity: these banks relied
heavily on business relations with few large customers, at least during the 1870s
(Burhop, 2004a). Thus, we can expect low monitoring costs for bank managers.
There are several reasons for finding a stronger link between modern-sector cap-
ital formation and joint-stock credit banks than for the nation-wide specification.
First, many of the Kreditbanken were explicitly founded to finance industrial devel-
opment, e.g., the Bank für Handel und Industrie in 1853, and the Berliner Handels-
Gesellschaft in 1856. Already in the 1830s, private bankers financed the first German
railroads. They organized the initial public offerings (IPOs), they supplied current ac-
count credits to the newly established companies, and they supervised the develop-
ment of the business by taking up board memberships. These actions were not
done by single private bankers, but by syndicates of private bankers. Thereby, they
allocated the risk over several private banking houses and collected capital from all
over Germany. These IPO syndicates were the starting point for the later joint-stock
credit banks, since many of these were founded by private bankers. Initially, the
joint-stock banks were seen as a way to reduce the personal risk of large IPOs.18
From the early 1850s onwards, a division of labor between short- and long-term
investments was in fact effective. Short-term credits, bill discounting or issuing of
bank notes for example, were arranged by banks of issue. In Prussia, the Prussian
Bank fulfilled this role beginning in late 1840s. Sometimes, the division of labor
was made explicit by the founding of separate institutes for short- and long-term
credits. The first example in this regard is the founding of the Bank für Handel
und Industrie (for long-term investments) and of the Süddeutsche Bank (a private
bank of issue for short-term credits) by the same founders in 1853 and 1856. The
two banks were located in the same building and they were managed by the same
board. Thus, the joint-stock credit banks could focus their business on long-term
industrial finance.
Banks with long-term commitments to some industrial firms could successfully
screen companies and investment projects, and finance only those firms and projects
using the most promising new or imported technologies. In this regard interlocking

18
See Burhop (2004a) for an overview of joint-stock credit banking in Germany.
 C. Burhop / Explorations in Economic History 43 (2006) 39–63 57

directorates between the large banks and industrial companies could be important.19
Fohlin (1999c) showed that this relationship became important on a nation-wide le-
vel only after 1895. Nevertheless, before that date, we have evidence for interlocking
directorates between banks and industrial firms, at least for those firms doing stock-
exchange business with the banks (Burhop, 2004a; Feldenkirchen, 1979, 1982).
Moreover, the joint-stock credit banks were large banks with (at least after 1890)
nationwide operations. This facilitated risk-pooling, since many firms and many re-
gions were debtors (and creditors) of these banks. Since the banks operated in differ-
ent sectors of the economy and worked on a national basis, they successfully
exploited differences in risk preferences between sectors and regions. They reduced
diversifiable risks by allocating their credits over a larger geographic area and over
customers from different sectors.
Joint-stock credit banks did not accomplish all functions from the beginning. The
main reason for their foundation was risk reduction. From the outset, they screened
credit applications and built up long-term relationships with industrial customers.
National and international payment systems were established during the 1850s, for
example, by the Bank für Handel und Industrie via a large network of Kommanditb-
eteiligungen. The large credit banks spread their credits over many regions and sec-
tors, during the early years mostly via credit or IPO syndicates. Later on, branches in
other cities were established; e.g, the Bank für Handel und Industrie expanded from
Darmstadt to Frankfurt during the mid 1860s, and to Berlin in 1871. The Deutsche
Bank, founded 1870 in Berlin, expanded to Bremen in 1871 and Hamburg in 1872.
A major early weakness of the joint-stock credit banks was the collection of sav-
ings. This activity accelerated during the 1890s after the systematic set-up of deposit
offices by the large joint-stock banks. Savings collection was much better achieved by
the savings banks and credit co-operatives. But for them, the allocation of this cap-
ital was tightly restricted; for example, stock-market business was prohibited for sav-
ing banks. Moreover, savings banks had to invest their funds in safe investments
such as government or communal bonds. Furthermore, the interregional allocation
of capital was suboptimal, since the funds of credit co-operatives and saving banks
were to a large extent locally bounded. This localization of credits and deposits also
increased the risk for these banks, since regional and sectoral economic shocks could
not be balanced by developments in other regions or sectors. On the other hand, the
co-operatives and saving banks were quite successful in screening credit applications
and monitoring creditors, since bankers and creditors belonged to the same commu-
nity (Guinnane, 2001, 2003). Altogether, the joint-stock credit banks fulfilled four of
five fundamental functions of financial intermediaries—allocation of credits, exer-
tion of corporate control, facilitation of risk management, and transfer of pay-
ments—better than other financial intermediaries. Other financial intermediaries,
especially saving banks, had advantages in collecting savings.
For the later decades of the 19th and the early 20th century, however, a causal
influence of joint-stock credit banks on income growth, productivity, and capital

19
See Fohlin (1999b,c) regarding interlocking directorates.
58 C. Burhop / Explorations in Economic History 43 (2006) 39–63

formation is not supported by our statistical analysis. A possible reason for this
could be higher monitoring costs as the German economy grew. Baliga and Polak
(2004) argue that in economies with strong bargaining power of banks against other
firms and with relatively low private wealth, monitored bank loans are superior to
non-monitored tradable debt contracts like bonds. When the monitoring costs are
high because there are many firms, a market based financial system Pareto-domi-
nates a bank-based one. But when monitoring costs are low, for example, when
banks make loans to a few big customers, a Pareto-ranking of market based vs. bank
based financial systems is not possible. Problematic is the stability of a bank-based
financial system regardless of its efficiency: thick financial markets must be developed
to give industrial firms alternative finance opportunities. This can be done by banks
via securitization of loans, for example, or by industrial firms, but only if banks and
firms coordinate participation in financial markets. Banks could impede the develop-
ment of thick financial markets if they do not securitize their loan portfolios. Thus, a
once-efficient financial system, which had been a driving force in economic develop-
ment, could become inefficient within a different information and economic
environment.

5. Conclusion

In this paper, we analyze the causal influence of financial sector development on

economic performance in 19th century Germany. We use a comprehensive data set
for Germany, covering the years 1860–1913, and a new data set for joint-stock credit
banks covering the years 1851–1913 (Burhop, 2002). These long time series make use
of recent econometric causality tests possible.
Our main result supports the hypothesis of a vital role of joint-stock credit
banks for the early industrial development of 19th-century Germany. Total assets
of credit banks positively influenced capital formation in the industrial sector be-
tween 1851 and 1882. On the other hand, using economy-wide data for financial
depth, national income, capital stock, and productivity, we detect no leading role
of the financial sector during 1860–1913. During the later stages (1883–1913), sav-
ings banks rather than credit banks were more of a causal force for capital for-
mation. The results can be taken as evidence in favor of GerschenkronÕs
contention that the modernizing role of credit banks was greatest in the early
phases of GermanyÕs industrialization when its economy may have been relatively
backward.
Future research could focus on three areas: First, since the power of causal-
ity tests significantly increases with the number of observations, a forward
extension of the data series could yield better results. Furthermore, an interna-
tional comparative study could investigate whether banks played a special role
in the German industrialization, or whether the role of banks was identical in
different countries. Finally, a microeconomic study using the general ledgers of
banks could yield important insights into asset distribution of joint-stock
banks.
Appendix A
Nation-wide Modern-sector
Year Financial Income per Capital stock Productivity Financial Income per Capital stock Productivity
depth employee, in per employee, level depth employee, per employee, level
Mark, in Mark, in Mark, in Mark,
1913-prices 1913-prices 1913-prices 1913-prices

C. Burhop / Explorations in Economic History 43 (2006) 39–63

1851 0.013 1161 2506 0.63
1852 0.013 1099 2523 0.60
1853 0.020 1116 2533 0.61
1854 0.019 1090 2610 0.59
1855 0.018 1101 2636 0.59
1856 0.074 1154 2575 0.63
1857 0.082 1172 2565 0.64
1858 0.089 1146 2663 0.62
1859 0.087 1127 2658 0.61
1860 0.048 928 3.505 0.49 0.077 1235 2730 0.66
1861 0.052 911 3.524 0.48 0.076 1268 2752 0.68
1862 0.056 926 3.615 0.50 0.086 1186 2807 0.63
1863 0.059 975 3.724 0.52 0.084 1244 2892 0.66
1864 0.073 1.012 3.821 0.54 0.087 1234 2962 0.65
1865 0.081 1.028 3.912 0.53 0.085 1288 3036 0.68
1866 0.081 1.024 3.999 0.54 0.081 1299 3135 0.68
1867 0.084 993 4.058 0.53 0.079 1316 3100 0.69
1868 0.097 1.011 4.116 0.56 0.108 1303 3182 0.68
1869 0.127 1.026 4.113 0.56 0.103 1352 3252 0.71
1870 0.124 1.014 4.129 0.55 0.108 1315 3395 0.68
1871 0.187 1.007 4.108 0.58 0.221 1445 3430 0.75
1872 0.257 1.010 4.176 0.59 0.320 1529 3639 0.78
(continued on next page)

59
 60
C. Burhop / Explorations in Economic History 43 (2006) 39–63
Appendix A (continued)
Nation-wide Modern-sector
Year Financial Income per Capital stock Productivity Financial Income per Capital stock Productivity
depth employee, in per employee, level depth employee, per employee, level
Mark, in Mark, in Mark, in Mark,
1913-prices 1913-prices 1913-prices 1913-prices
1873 0.274 1.017 4.234 0.61 0.287 1631 3835 0.83
1874 0.277 1.020 4.336 0.60 0.238 1689 4030 0.85
1875 0.306 1.042 4.425 0.59 0.223 1646 4263 0.82
1876 0.317 1.044 4.535 0.60 0.207 1655 4534 0.82
1877 0.329 1.042 4.602 0.59 0.194 1576 4620 0.78
1878 0.336 1.078 4.682 0.60 0.191 1582 4627 0.78
1879 0.365 1.087 4.708 0.61 0.227 1564 4750 0.77
1880 0.377 1.056 4.761 0.61 0.227 1467 4778 0.72
1881 0.412 1.088 4.829 0.63 0.246 1507 4850 0.74
1882 0.422 1.093 4.873 0.63 0.251 1494 4966 0.73
1883 0.442 1.126 4.930 0.66 0.273 1535 4941 0.75
1884 0.462 1.165 4.991 0.68 0.292 1574 5064 0.76
1885 0.479 1.193 5.086 0.68 0.311 1552 5184 0.75
1886 0.500 1.199 5.110 0.69 0.316 1499 5131 0.72
1887 0.511 1.215 5.160 0.71 0.305 1541 5151 0.74
1888 0.518 1.245 5.203 0.74 0.298 1555 5146 0.75
1889 0.557 1.243 5.248 0.75 0.342 1610 5129 0.78
1890 0.554 1.237 5.349 0.77 0.326 1573 5174 0.76
1891 0.572 1.241 5.467 0.75 0.315 1610 5386 0.77
1892 0.584 1.258 5.648 0.74 0.306 1655 5585 0.79
1893 0.612 1.336 5.764 0.79 0.323 1704 5796 0.81
1894 0.662 1.362 5.822 0.80 0.352 1793 5943 0.85
1895 0.693 1.381 5.898 0.80 0.357 1879 6059 0.89
1896 0.710 1.399 5.940 0.83 0.374 1815 6030 0.85

C. Burhop / Explorations in Economic History 43 (2006) 39–63

1897 0.725 1.424 6.043 0.86 0.402 1781 6160 0.83
1898 0.748 1.472 6.173 0.90 0.448 1843 6324 0.86
1899 0.765 1.454 6.321 0.88 0.479 1820 6548 0.84
1900 0.770 1.437 6.430 0.86 0.508 1746 6738 0.81
1901 0.796 1.448 6.644 0.83 0.487 1798 7240 0.82
1902 0.830 1.466 6.804 0.85 0.511 1837 7569 0.83
1903 0.849 1.503 6.921 0.87 0.503 1940 7696 0.88
1904 0.882 1.530 7.017 0.90 0.548 1927 7762 0.87
1905 0.909 1.578 7.153 0.94 0.610 1929 7864 0.87
1906 0.913 1.562 7.316 0.92 0.640 1936 8138 0.87
1907 0.913 1.574 7.414 0.93 0.609 2060 8178 0.92
1908 0.938 1.638 7.659 0.93 0.655 2101 8857 0.93
1909 0.967 1.641 7.821 0.93 0.678 2149 9308 0.94
1910 0.989 1.634 7.868 0.94 0.696 2155 9325 0.94
1911 0.988 1.682 8.018 0.97 0.683 2201 9519 0.96
1912 0.970 1.688 8.111 0.99 0.633 2289 9579 1,00
1913 0.964 1.734 8.265 1,00 0.641 2306 9892 1,00

61
62 C. Burhop / Explorations in Economic History 43 (2006) 39–63

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