Working Paper: NBER ID: w21503
Authors: Matthew Jaremski; Peter L. Rousseau
Abstract: U.S. Bank deposits by individuals grew from 4% of GDP at the time of the National Banking Acts in 1863-64 to 23% by the time of the Federal Reserve’s founding. A comprehensive collection of bank- level data shows that most gains occurred immediately after the Acts, Specie Resumption in 1879, and the Election of 1896, and occurred across banks of all ages and types. Checking accounts, clearinghouses, rising incomes, and urbanization contributed to the increasing preference for deposits, but greater confidence in banks also seems to have been central, with highly capitalized banks from earlier entry cohorts seeing the largest gains.
Keywords: bank deposits; national banking; financial history
JEL Codes: E21; G21; N21
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| bank longevity (G21) | depositor confidence (G21) |
| election of 1896 (N11) | increase in deposits (G21) |
| economic growth (O49) | increase in deposits (G21) |
| National Banking Acts (E42) | increase in individual deposits (D14) |
| resumption of specie payments (E42) | increase in deposits (G21) |
| presence of clearinghouses (D53) | increase in deposits (G21) |