The National Bank Note Controversy Reexamined

Michael Kuehlwein

Journal of Money, Credit and Banking, 1992, vol. 24, issue 1, 111-26

Abstract: During the period 1888-1907, national banks proved reluctant to devote the maximum allowable fraction of their capital to the issue of national bank notes. John A. James (1976) attributes this to note issue being less profitable than direct loans. This paper demonstrates note issue was the more profitable investment. Their scarcity is instead attributed to the riskiness of the government bonds required to back them. Tests of a mean-variance model of bank note determination indicate national banks were concerned with both risk and return. Further tests reveal the variance of government bond returns significantly eclipsed that of direct loans. Copyright 1992 by Ohio State University Press.

Date: 1992
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://links.jstor.org/sici?sici=0022-2879%2819920 ... 0.CO%3B2-B&origin=bc full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mcb:jmoncb:v:24:y:1992:i:1:p:111-26

Access Statistics for this article

Journal of Money, Credit and Banking is currently edited by Robert deYoung, Paul Evans, Pok-Sang Lam and Kenneth D. West

More articles in Journal of Money, Credit and Banking from Blackwell Publishing
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing () and Christopher F. Baum ().