The Rise and Fall of Bank Control in the United States: 1890-1939

Miguel Cantillo Simon
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Miguel Cantillo Simon: University of California, Berkeley

Finance from University Library of Munich, Germany

Abstract: This article studies how equity ownership and corporate control were separated in the United States. Initially, railroads and industrial firms were tightly controlled by a few shareholders; this situation was altered in the 1890s by massive mergers and reorganizations, which allowed private banks to control railroads and industrial firms. Between 1912 and 1939, bank control faded away as a result of a political reaction against financial institutions. Using stock market data from 1914, I show that the eviction of banks from corporate boards depressed firm values by about 7 percent, and that part of this value came from cartelization.

JEL-codes: G21 G24 G3 K21 L41 N21 (search for similar items in EconPapers)
Date: 1998-03-23
Note: Sent pdf file in binary Revised January 1997.
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpfi:9803005

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