Hostname: page-component-cd9895bd7-q99xh Total loading time: 0 Render date: 2024-12-26T22:38:09.307Z Has data issue: false hasContentIssue false
  • English
  • Français

Networks and financial war: the brothers Warburg in the first age of globalization

Published online by Cambridge University Press:  05 November 2020

Harold James
Harold James*
Affiliation:
Princeton University
*
H. James, Claude and Lore Kelly Professor in European Studies and Professor of History and International Affairs, Princeton School of Public and International Affairs, Princeton University, 218 Dickinson Hall, Princeton, NJ08544-1013, USA; email: [email protected].
Get access Rights & Permissions [Opens in a new window]

Abstract

This article examines the geo-economic consequences of the financial panic of October 1907. The vulnerability of the United States, but also of Germany, contrasted with the absence of a crisis in Great Britain. The experience showed the fast-growing industrial powers the desirability of mobilizing financial power, and the article examines the contributions of two influential brothers, Max and Paul Warburg, on different sides of the Atlantic. The discussion led to the establishment of a central bank in the United States and institutional improvements in German central banking: in both cases security as well as economic considerations played a substantial role.

Keywords

globalizationfinancial crisiscentral banksacceptance market

JEL classification

N41: U.S. • Canada: Pre-1913 N21: U.S. • Canada: Pre-1913 N43: Europe: Pre-1913 N23: Europe: Pre-1913
Type
Articles
Information
Financial History Review , Volume 27 , Special Issue 3: Finance, financiers and financial centres: a special issue in honour of Youssef Cassis , December 2020 , pp. 303 - 318
Check for updates
Copyright
Copyright © The Author(s), 2020. Published by Cambridge University Press on behalf of the European Association for Banking and Financial History

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

I should like to thank Martin Daunton for helpful comments.

References

Sources

Bankers’ MagazineGoogle Scholar
The EconomistGoogle Scholar
The New York TimesGoogle Scholar
Warburg, M. M., Geschäftsbericht 1909Google Scholar
Stiftung Warburg ArchiveGoogle Scholar

References

Bagehot, W. (1873). Lombard Street: A Description of the Money Market. London: H. S. King & Co.Google Scholar
Berghahn, V. (2014). American Big Business in Britain and Germany: A Comparative History of Two ‘Special Relationships’ in the 20th Century. Princeton, NJ: Princeton University Press.Google Scholar
Borchardt, K. (1976). Währung und Wirtschaft. In Bundesbank, Deutsche (ed.), Währung und Wirtschaft in Deutschland 1876–1975. Frankfurt am Main: Knapp.Google Scholar
Bordo, M. D. and Wheelock, D. C. (2011). The promise and performance of the Federal Reserve as lender of last resort 1914–1933. NBER Working Paper 16763.CrossRefGoogle Scholar
Bresciani-Turroni, C. (1937). The Economics of Inflation: A Study of Currency Depreciation in Post-War Germany. London: Allen & Unwin.Google Scholar
Broz, J. L. (1997). The International Origins of the Federal Reserve System. Ithaca, NY: Cornell University Press.Google Scholar
Buchheim, B. (1984). Deutsche Gewerbeexporte nach England in der zweiten Hälfte des 19. Jahrhunderts: zur Wettbewerbsfähighkeit Deutschlands in seiner Industrialisierungsphase: gleichzeitig eine Studie über die deutsche Seidenweberei und Spielzeugindustrie, sowie über Buntdruck und Klavierbau. Ostfildern: Scripta Mercaturae.Google Scholar
Cassis, Y. (1994). City Bankers, 1890–1914, trans. M. Rocques. Cambridge: Cambridge University Press.Google Scholar
Cassis, Y. (2012). Capitals of Capital: A History of International Financial Centres 1780–2009. 9, trans J. Collier, 2nd edn. Cambridge: Cambridge University Press.Google Scholar
Chernow, R. (1993). The Warburgs: The Twentieth-Century Odyssey of a Remarkable Jewish Family. New York: Random House.Google Scholar
Eichengreen, B. and Flandreau, M. (2010). The Federal Reserve, the Bank of England and the rise of the dollar as an international currency, 1914–39. BIS Working Paper 328.CrossRefGoogle Scholar
Fischer, F. (1969). Krieg der Illusionen: Die deutsche Politik von 1911 bis 1914. Düsseldorf: Droste.Google Scholar
Gerhardt, J. (2010). Albert Ballin. Hamburg: Hamburgische Wissenschaftliche Stiftung.Google Scholar
Glass, C. (1927). An Adventure in Constructive Finance. Garden City, NY: Doubleday Page.Google Scholar
Havenstein, R. and NATIONAL MONETARY COMMISSION (1908). German bank inquiry of 1908. 61st Congress 2d Session, Senate Document no. 407.Google Scholar
Lambert, N. (2012). Planning Armageddon: British Economic Warfare and the First World War. Cambridge, MA: Harvard University Press.CrossRefGoogle Scholar
Meltzer, A. H. (2003). A History of the Federal Reserve. Chicago: Chicago University Press.Google Scholar
Riesser, J. (1911). The German Great Banks and Their Concentration in Connection with the Economic Development of Germany. Washington, DC: G.P.O.Google Scholar
Rosenbaum, E. and Sherman, A. J. (1979). M. M. Warburg & Co., 1798–1938, Merchant Bankers of Hamburg. London: C. Hurst & Co.Google Scholar
Rosenberg, E. S. (1999). Financial Missionaries to the World: The Politics and Culture of Dollar Diplomacy, 1900–1930. Cambridge, MA: Harvard University Press.Google Scholar
Seymour, C. (1926). The Intimate Papers of Colonel House: Behind the Political Curtain 1912–1915. Boston, MA: Houghton Mifflin.Google Scholar
Skidelsky, R. (1983). John Maynard Keynes, vol. i: Hopes Betrayed 1883–1920. London: Macmillan.Google Scholar
Subramanian, A. and Kessler, M. (2013). The hyperglobalization of trade and its future. Institute of International Economics, Working Paper 13–6.CrossRefGoogle Scholar
Taft, W. (1912). Fourth Annual Message to Congress. 3 December 1912.Google Scholar
Taylor, A. M. (2012). The great leveraging. BIS Conference Paper.CrossRefGoogle Scholar
Verhandlungen des III. Allgemeinen Bankiertages zu Hamburg am 5. und 6. September 1907. (1907). Berlin: J. Guttentag.Google Scholar
Warburg, P. M. (1907a). Defects and needs of our banking system. Proceedings of the Academy of Political Science in the City of New York, 4. Essays on Banking Reform in the United States, July 1914, pp. 7–22.Google Scholar
Warburg, P. M. (1907b). A plan for a modified central bank. Proceedings of the Academy of Political Science in the City of New York, 4. Essays on Banking Reform in the United States, July 1914, pp. 23–9.Google Scholar
Warburg, P. M. (1915). Address of Hon. Paul M. Warburg of the Federal Reserve Board before the Twin City Bankers’ Club of St Paul and Minneapolis at the Minnesota Club, St Paul, 22 Oct. 1915.Google Scholar
Warburg, P. M. (1916). The reserve problem and the future of the Federal Reserve System. Address of Hon. Paul M. Warburg before the Convention of the American Bankers Association, Kansas City, MO, 29 Sept. 1916.Google Scholar
Warburg, P. M. (1930). The Federal Reserve System, Its Origin and Growth: Reflections and Recollections. New York: Macmillan.Google Scholar
Warburg, P. M. and NATIONAL MONETARY COMMISSION (1910). Discount System in Europe. Washington, DC: G.P.O.Google Scholar
Weidman, J. (2013). Who calls the shots? The problem of fiscal dominance. Speech at the 4th Bank of France–Deutsche Bundesbank Macroeconomics and Finance Conference, Paris, 24 May 2013.Google Scholar
Whitehouse, M. A. (1989). Paul Warburg's crusade to establish a central bank in the United States. In Federal Reserve Bank of Minneapolis, The Region: Banking and Policy Issues Magazine, May.Google Scholar