Article

Going Dutch: monetary policy in the Netherlands during the interwar gold standard, 1925–1936

Philip T. Fliers and Christopher L. Colvin

Pages 121-151

DOI: https://doi.org/10.1017/S096856502200004X

Our study of the day-to-day management of monetary policy in the Netherlands between 1925 and 1936 reveals that policy leaders and central bankers were both willing and able to deviate from the monetary policy paths set by other countries, all while remaining firmly within the gold bloc. The Netherlands wielded an independent monetary policy while remaining on gold thanks to its central bank's plentiful gold reserves. Central bankers quelled any speculation against the guilder by exploiting their domestic policy influence and international reputation to restrict capital mobility. However, maintaining pre-war parity until the collapse of the gold standard in September 1936 came at a cost. Our international comparisons and counterfactual analysis suggest that Dutch officials would have avoided a deepening of the Great Depression by leaving gold alongside the UK in 1931.

The limits of control: corporate ownership and control of German joint-stock firms, 1869–1945

Sibylle Lehmann-Hasemeyer, Andreas Neumayer

Pages 152-197

DOI: https://doi.org/10.1017/S0968565022000075

We study the social structure of ownership of German joint-stock firms covering the period 1869 to 1945 based on a random sample of attendance lists of general meetings. We confirm previous research findings based on smaller samples that despite several changes in the economic and political environment, the majority of shares of the attendees of the general meetings remained firmly in the hands of a few male and mostly inside investors. Moreover, we closely investigate the socio-economic characteristics of the shareholders. We do occasionally find investors from lower social classes and women, but their share of votes was negligible. Adding to the discussion of whether banks strongly monitored and controlled German industrial firms, we aim to track their impact at the meetings. In about 30 per cent of the meetings, a banker or bank was the most influential shareholder and in more than 50 per cent of the meetings a banker or bank was among the three largest shareholders, remarkably without necessarily owning the shares themselves. Although we cannot evaluate whether the banks used this power to pursue their targets, they certainly were in a position to do so.

Health and safety regulations and stock returns: evidence from the 1974 Swedish legislative lottery

Linus Siming

Pages 198-218

DOI: https://doi.org/10.1017/S0968565022000087

This article provides causal evidence on a long-standing controversy in the finance and labour literature, namely, whether better health and safety in the working environment is in the best interests of firm owners. While, on the one hand, an influential strand of the literature argues that improvements in workers’ health and safety provision can increase costs and harm the market value of equity, another well-consolidated strand of the literature argues that such improvements can reduce costs and create shareholder value. It is empirically challenging to study the relation between the work environment and equity value due to their endogenous relation. To overcome this challenge, I utilize a historic natural experiment that uniquely isolates the effects of mandated investments in health and safety provision on firm market value: on 27 March 1974, the Swedish hung parliament drew a lottery ticket to decide on a legislative proposal that mandated companies to improve their employees’ work environment. The lottery resulted in the approval of the proposal. I find that this outcome led to an immediate and sizable decrease in the market value of Swedish companies that persisted for several days.

Securities trading in an emerging market: Indonesia, 1890s–1940s

Pierre van der Eng

Pages 219-246

DOI: https://doi.org/10.1017/S0968565022000099

This article analyses trends in the development of the stock exchange in Jakarta between its stepwise institutionalisation since 1898 and its closure in 1942. The article contributes to literature on the significance of stock markets in the process of mobilising external capital for investment by private enterprise in emerging economies. It finds that the brokers participating in the stock exchange traded shares and bonds of companies operating in Indonesia and registered in Indonesia or in the Netherlands. Many of these securities were also traded on the much larger stock exchange in Amsterdam. Although formally independent, both securities markets were integrated. Based on estimates of relatively high market capitalisation during 1901–40, the article concludes that the Jakarta and Amsterdam stock exchanges together contributed significantly to the mobilisation of private investment and the development of private enterprise in Indonesia.

Banking crises, banking mortality and the structuring of the banking market in Switzerland, 1850–2000

Thibaud Giddey, Malik Mazbouri

Pages 247-270

DOI: https://doi.org/10.1017/S0968565022000129

The Swiss financial centre, as it developed during the twentieth century, has for a long time been presented and perceived as a singularly stable and solid environment escaping crises and restructuring. This view, promoted by the dominant actors – private banks, cantonal banks and large commercial banks – presenting their own development, in a teleological vision, as success stories, is strongly challenged by more recent research developments. Our article deals with the evolution of banking demography in Switzerland between 1850 and 2000 and examines the exits of banking institutions from the statistics, identifying six periods of crisis and restructuring. The article proposes a new statistical series that makes it possible to scrutinise with a high level of granularity the banks that fail or are taken over, in particular by observing their category of bank and, for the period 1934–99, their size. It uses historical banking demography as a gateway to understand more broadly the phases of transformation of the financial centre. In doing so, this contribution questions the gap between the existence of significant phases of banking instability, their low importance in collective memory, and the perception of the Swiss banking sector as a model of stability. It also helps to refine our understanding of the evolution of the Swiss financial centre in general.