ABSTRACT
How far had manufacturing business begun to draw on the general pool of national capital for long-term investment by 1914, instead of retained profits sustaining firms originally financed from just local pools of capital coming in from the families and friends of the partners in business? We have seen that long-term capital was essentially a local, personal thing during the industrial revolution supplemented by some long-term lending by country banks and considerable mercantile credit. Supposedly the essence of capitalism in the nineteenth century was the presumption that here was a factor in production, perfectly mobile, with a single national market, all the savings of the nation being available for industrialists to tap by offering to pay the going rate of interest. To what extent was this concept of capital realized? Certainly, it became true for short-term credit, with the banking system and the bill brokers maintaining exactly such a single efficient national — indeed international — market. But the banking system did not make institutionalized savings in bank deposits available regularly to industrialists, particularly new entrants to industry, wanting long-term loans for capital investment in the later nineteenth century. Did the Stock Exchange do this, as the other main specialized institution in the capital market, mobilizing the savings of the nation for investment?
