ABSTRACT
This chapter examines the operation of Spanish banks of issue as private businesses in the period 1858–1874, looking basically at their economic performance and their assets. It presents a calculation of the banks’ return on equity and analyses the associated factors. When analysing the banks’ net income and their profitability, the first important issue concerns the calculation of the net income. The banks’ cash position relative to liabilities follows a similar course, falling from 43% in 1858 to 30% in the second half of 1873 and rising again to 39% in 1874. One activity characteristic of the banks of issue was to take deposits of securities. Trust, or confidence, is a key issue because the banks of issue in nineteenth-century Spain were institutions that not only competed with commercial financial entities in taking deposits, but also had to secure a clientele that would be willing to hold their banknotes.
