The market for railway company bonds grew quickly in the mid-to-late 19th century. Laying new track was very expensive and the returns would not come until a line was completed. For larger projects, such as those rail links crossing an entire continent, this could be years away. Thus, financing was as important an input…
Over a century ago, railway companies were among the largest issuers of bonds in the market, second only to governments. Indeed, one could say that it was financing railways that really built the modern bond markets. Because many railway issues had very long terms, some a century or longer, a few vestiges of this…
Under a gold standard regime, exchange rates were understood to be self-regulating courtesy of the ‘price–specie flow’ mechanism. Expansions or contractions in the money supply from trade surpluses or deficits would bring about stability in exchange rates without threats to the gold standard and with minimal or no need for changes in interest rates.…
In the late 18th century, marine insurance in a nascent United States was put to a stressful test. During an undeclared naval war between America and France known as the Quasi-War, merchants were ruined and losses to insurance underwriters rose, as did the frequency of insurance disputes. In the end, insurance not only survived…
Exactly how much of a fiscal burden governments can bare is the subject of frequent debate. Some believe any debt is problematic and others believe that, at least for some countries, there is no limit to the fiscal headroom available. Historically, it is in times of war that governments push themselves to the very…
