Leonard Seabrooke Social sources of the international rentier economy During the latter half of the nineteenth century much of the wealth within the 1sn6n L booming English financial system was not in the City of London but in the provinces.England's capacity to create a deep and broad domestic pool of capital had been created by its unique mixing of 'state capitalism'with private capitalism that permitted networks for capital flows in the country to flourish.At this time England had a financial system with a much broader social basis than its European neighbours,leading Adolph Weber to comment in 1902 that in the mid nineteenth century English joint-stock banks took capital from all classes without exception'?6 While we certainly should not exaggerate the capacity of LIGs to invest in the banking system (which is largely a twentieth-century phenomenon),depositors were further down the society ladder than we may assume.Stanley Chapman,for example,describes the typical joint-stock bank in the period as holding deposits of which nearly 益 70 per cent came from people in middle-class occupations(in order of represen- tation:cotton spinners,retailers,corn merchants,linen merchants)with only 18 per cent represented by 'Gentlemen'and ten percent by professionals (mainly lawyers and doctors).As such,and at a time when provincial banks were more powerful than those in the City of London,they were drawing from a wide social base rather than a narrow concentrated elite. In addition to these banks,the state began to intervene in a positive manner for LIGs,including W.E.Gladstone's efforts in the 1860s to create a postal saving system that could extend the capacity for personal savings beyond the wealthy and tackle the 'anti-social and immoral'treatment of LIGs on credit and property.28 While LIGs'expectations concerning property ownership were not high at this point,the desire was growing.There was not,however, any significant change to their access to property,and mortgages as a pro- portion of financial assets within the English financial system nearly halved between 1850 and 1913,especially as other instruments associated with rentier investments grew in prominence.This situation worsened with the post-1890 rentier shift. English credit politics After 1890,there was a significant change in English finance as the City of London was able to assert itself and successfully draw in capital from the provinces. Accordingly,while the ratio of provincial assets to London joint-stock bank assets was 3.2:1 in 1844,it was 1:1.06 by 1880 and worsened thereafter.30 Tracing these dynamics,Edgar Jaffe commented in 1905: Is it not amazing that only in the 90s was the survival of provincial banks threatened when capital city banks turned the tables and sought to get hold of an advantage through the extension into the Provinces ..leading to today's principle,that only big banks that are established both in London and the Provinces are competi- tive enough to fight their way through with a view of success.Downloaded By: [University of Sydney] At: 02:46 7 August 2007 Social sources of the international rentier economy During the latter half of the nineteenth century much of the wealth within the booming English financial system was not in the City of London but in the provinces. England’s capacity to create a deep and broad domestic pool of capital had been created by its unique mixing of ‘state capitalism’ with private capitalism that permitted networks for capital flows in the country to flourish.25 At this time England had a financial system with a much broader social basis than its European neighbours, leading Adolph Weber to comment in 1902 that in the mid nineteenth century English joint-stock banks took capital ‘from all classes without exception’.26 While we certainly should not exaggerate the capacity of LIGs to invest in the banking system (which is largely a twentieth-century phenomenon), depositors were further down the society ladder than we may assume. Stanley Chapman, for example, describes the typical joint-stock bank in the period as holding deposits of which nearly 70 per cent came from people in middle-class occupations (in order of represen￾tation: cotton spinners, retailers, corn merchants, linen merchants) with only 18 per cent represented by ‘Gentlemen’ and ten percent by professionals (mainly lawyers and doctors).27 As such, and at a time when provincial banks were more powerful than those in the City of London, they were drawing from a wide social base rather than a narrow concentrated elite. In addition to these banks, the state began to intervene in a positive manner for LIGs, including W. E. Gladstone’s efforts in the 1860s to create a postal saving system that could extend the capacity for personal savings beyond the wealthy and tackle the ‘anti-social and immoral’ treatment of LIGs on credit and property.28 While LIGs’ expectations concerning property ownership were not high at this point, the desire was growing. There was not, however, any significant change to their access to property, and mortgages as a pro￾portion of financial assets within the English financial system nearly halved between 1850 and 1913, especially as other instruments associated with rentier investments grew in prominence.29 This situation worsened with the post-1890 rentier shift. English credit politics After 1890, there was a significant change in English finance as the City of London was able to assert itself and successfully draw in capital from the provinces. Accordingly, while the ratio of provincial assets to London joint-stock bank assets was 3.2 : 1 in 1844, it was 1 : 1.06 by 1880 and worsened thereafter.30 Tracing these dynamics, Edgar Jaffe´ commented in 1905: Is it not amazing that only in the 90s was the survival of provincial banks threatened when capital city banks turned the tables and sought to get hold of an advantage through the extension into the Provinces ... leading to today’s principle, that only big banks that are established both in London and the Provinces are competi￾tive enough to fight their way through with a view of success.31 Leonard Seabrooke 4