Branching Out: Banking, Credit, and the Globalizing US Economy, 1900s–1930s
"Branching Out: Banking, Credit, and the Globalizing US Economy, 1900s–1930s" In the 1890s, there was virtually no such thing as a US international banker. By the 1920s, the economic position of the United States had shifted from being a debtor nation to a global creditor, and hundreds of US bank branches dotted the globe, from Manila to Montevideo. This dissertation examines the first wave of US branch banking overseas in the early twentieth century and argues that banks provided a crucial infrastructure of both global capitalism and US empire—and, further, that the actions of banks and the state cannot be understood separately. US international banks succeeded less because of their rigorous assessments of risk and more because of bankers’ on-the-ground improvisations and reliance on the US government for deposits and influence. In turn, bankers’ work carved the channels for the movement of US capital and shaped the distribution of economic advantages. The project draws on previously overlooked internal records of the nation’s first broadly multinational bank, the International Banking Corporation (IBC), to analyze the connections between US empire and the changing landscape of US banking overseas. IBC began as the fiscal agent to the US colonial government in the Philippines, and its bankers relied on social connections and political privileges to garner business. The Federal Reserve Act of 1913 created a set of financial tools that increased opportunities for US banks to profit from overseas work. The dissertation shows how the newly created Federal Reserve System caused banks to adopt an increasingly paper-bound, rationalized approach to credit information that nonetheless fortified elite privilege with state power. Throughout the period, overseas banks continued to depend on US political power, social hierarchies, and personal networks in their day-to-day work. The result was a system that institutionalized elitism while imbuing it with the rhetoric of efficient risk management. It was also a system well adapted to exploit the structures of US political influence around the world. The study provides a new perspective for understanding banks’ overseas work as part of the operation of US empire and a foundation for systematizing economic privilege.