² Figures from Mitchell, B. R., International Historical Statistics. Europe, 1750–1988 (London, 1992), pp. 142–7, 496–7, 656–8.CrossRefGoogle Scholar

³ For Catalonia's industrialisation, see Nadal, J., ‘The failure of the Industrial Revolution in Spain, 1830–1913’, in Cipolla, C. M. (ed.), The Fontana Economic History of Europe: 4, The Emergence of Industrial Societies (Part Two) (Glasgow, 1973)Google Scholar; idem, Moler, tejer y fundir. Estudios de Historia Industrial (Barcelona, 1992), ch. 3Google Scholar; Maluquer de Motes, J., ‘The industrial revolution in Catalonia’, in Sánchez-Albornoz, N. (ed.), The Economic Modernization of Spain, 1830–1930 (New York, 1987)Google Scholar; Carreras, A., ‘Cataluña, primera región industrial de España’, in Nadal, J. and Carreras, A. (eds), Pautas regionales de la industrialización española (siglos XIX y XX) (Barcelona, 1990)Google Scholar; and Nadal, J., Maluquer de Motes, J., Sudrià, C. and Cabana, F. (eds), Història Econòmica de la Catalunya Contemporània, 6 vols (Barcelona, 1989–1994).Google Scholar

⁴ Some specific studies are Sudrià, C., ‘Desarrollo industrial y subdesarrollo bancario en Cataluña, 1844–1950’, Investigations económicas, 18 (1982)Google Scholar; Carreras, A. and Sudrià, C., ‘Formació de capital i finançament industrial a Catalunya (s. XIX)’, Revista Econòmica de Catalunya, 4 (1987)Google Scholar; Pascual, P., Agricultura i industrialització a la Catalunya del segle XIX (Barcelona, 1990)Google Scholar; idem, Los caminos de la era industrial (Barcelona, 1999)Google Scholar; and Castañeda, L., Pascual, P. and Tafunell, X., ‘Les finances’, in Nadal et al., Història Econòmica, vol. 3.Google Scholar

⁵ See Zarnowitz, V., Business Cycles: Theory, History, and Forecasting (Chicago, 1992), ch. 2, for a useful surveyCrossRefGoogle Scholar; and also Schumpeter, J. A., Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process, 2 vols (New York, 1939)Google Scholar; Kindleberger, C., Manias, Panics, and Crashes: A History of Financial Crises (New York, 1989)CrossRefGoogle Scholar; and Minsky, H. P., ‘The financial-instability hypothesis: capitalist process and the behavior of the economy’, in Kindleberger, C. and Laffargue, J.-P. (eds), Financial Crises: Theory, History, and Policies (Cambridge, 1982).Google Scholar

⁶ Cameron, R. (ed.), Banking in the Early Stages of Industrialization (Oxford, 1967)Google Scholar; and Goldsmith, R. W., Financial Structure and Development (New Haven, 1969).Google Scholar

⁷ We also capture, even if with some delay, most of ploughed-back profits. Partnerships had to be renewed when any change of partners occurred, or in any case when this was set in the previous contract. In a new deed, the firm's value was usually updated. Five years was the average interval between renewals. On the other hand, it can be inferred from available accounts that partnerships and companies almost never resorted to bank credit. Even the short-term discounting of bills of exchange was rare. Most of circulating capital was financed by firms' own means and by suppliers.

⁸ Enterprises conducted by a sole proprietor represent at most 20% of total investment, 1849–57, and less than 15%, 1858–66.

⁹ The increase in public investment at Spanish level is recorded by Carreras, A., Industrialización española. Estudios de historia cuantitativa (Madrid, 1990)Google Scholar, Appendix F. Investment in new housing in Barcelona increased from Pts 4.5m. per year, 1854–60, to Pts 8.2m., 1861–65; see Tafunell, X., La construcció de la Barcelona moderna. La indústria de l'habitatge entre 1854 i 1897 (Barcelona, 1993), p. 45.Google Scholar

¹⁰ Half of the capital (c. Pts 5m.) of the first railway company, Barcelona-Mataró, was provided by British capitalists. In 1860, the Barcelona-Saragossa railway managed to place Pts 20m. of its capital through the Paris bourse. French capitalists also financed the first sections of both the Granollers-Sant Joan de les Abadesses and the Tarragona-Reus-Lleida, although these companies' lines were not completed until the 1880s.

¹¹ Pascual, , Agricultura i industrialització, pp. 280–6.Google Scholar

¹² A detailed study of Catalan railways' financial history can be found in Pascual, Los caminos de la era industrial.

¹³ This hypothesis was first put forward by Tortella, G., Los orígenes del capitalismo en España (Madrid, 1973)Google Scholar. ch. 4. Both Nadal, ‘The failure’ and Sudrià, ‘Desarrollo industrial’ have taken a more sceptical view.

¹⁴ See, for instance, Cottrell, P. L., Industrial Finance, 1830–1914 (London, 1979).Google Scholar

¹⁵ Maluquer de Motes, J., ‘El índice de la producción industrial de Cataluña. Una nueva estimación (1817–1935)’, Revista de Historia Industrial, 5 (1994)Google Scholar; and L. Prados, Spain's gross domestic product, 1850–1993: quantitative conjectures, Universidad Carlos III de Madrid, Working Paper 95–05/95–06(1995).

¹⁶ All these annual rates and those following have been log-linearly adjusted.

¹⁷ It also has to be borne in mind that, after 1860, the cotton industry (which accounted for a large share of Catalan industrial production), was affected by the ‘cotton famine’. Cotton mills had to reduce, or sometimes to halt, activity, and profits fell sharply. The ability of the modern sector of the economy to generate savings to be invested was undoubtedly falling.

¹⁸ Feinstein, C., ‘Capital formation in Great Britain’, in Mathias, P. and Postan, M. M. (eds), Cambridge Economic History of Europe, 7, pt 1 (Cambridge, 1978)Google Scholar. See also Crafts, N. F. R., British Economic Growth During the Industrial Revolution (Oxford, 1985)Google Scholar, ch. 4. The growth of the proportion of investment with respect to GDP was slower in France - see Lévy-Leboyer, M., ‘Capital investment and economic growth in France, 1820–1930’, in Mathias, and Postan, , Cambridge Economic HistoryGoogle Scholar; and Lévy-Leboyer, M. and Bourguignon, F., The French Economy in the Nineteenth Century. An Essay in Econometric Analysis (Cambridge, 1990).Google Scholar

¹⁹ ‘Normal’ hypothetical investment has been log-linearly adjusted over ‘total investment without railways’. When using non-joint-stock investment as a proxy, the results are not significantly different.

²⁰ Interest rates for discounted promissory notes, the average of a sample of operations registered by chartered stockbrokers in Arxiu Nacional de Catalunya; Fons registrals. Llibres dels Corredors Reials de Canvis.

²¹ All available sources indicate that, during this period, Catalonia's trade balance with the rest of Spain was in equilibrium or, at most, had a small surplus.

²² Prados, L., De imperio a natión. Credmiento y atraso económico en España (1780–1930) (Madrid, 1988), pp. 251–2.Google Scholar

²³ This assumption has been corroborated by a new price index constructed by J. Maluquer de Motes (unpublished but kindly provided by the author) and by Prados's GDP deflator. Both display movements very close to that of the British wholesale price index. See Prados, Spain's gross domestic product, Appendix, Table D.3; and Mitchell, , International Statistics, pp. 839–40.Google Scholar

²⁴ A detailed study of this legislative change and its making can be found in Tortella, , Los orígenes, pp. 48–63.Google Scholar

²⁵ Bills of exchange were also used as money. Their use as such, however, was restricted to transactions between companies which had a long-term commercial relationship. Consequently, the contribution of bills of exchange to total money supply could not be decisive. See Cuadras-Morató, X. and Rosés, J. R., ‘Bills of exchange as money: sources of monetary supply during the industrialisation of Catalonia, 1844–74’, Financial History Review, 5 (1998).CrossRefGoogle Scholar

²⁶ The three sociedades were: Catalana General, Crédito Mobiliario, and Unión Comercial; and the two cajas: Caja Catalana and Caja Barcelonesa. Two more sociedades de crédito: Crédito Mercantil (1864) and El Comercio (1865), and two small banks of issue, those of Reus (1863) and Tarragona (1864), were created later.

²⁷ To be differentiated from hoarded metallic money; see below.

²⁸ See, for instance, Marshall, A., Money, Credit, and Commerce (London, 1923)Google Scholar; and Wicksell, K., Lectures on Political Economy (London, 1935), p. 2.Google Scholar

²⁹ Bordo, M. D. and Jonung, L., The Long-Run Behaviour of the Velocity of Circulation. The International Evidence (Cambridge, 1987).Google Scholar

³⁰ Smith, A., An Inquiry into the Nature and Causes of the Wealth of Nations, ed. Cannan, E. (London, 1961), 1, p. 341.Google Scholar