I don't know that you would want to read Business Cycles But I figured Schumpeter's comments about the American banks would interest you.
"The American debt situation and the American bank epidemics- there were three of them- are in a class by themselves... Similarly, bank failures are of course very regular (though still not essential) occurrences in the course of any major crisis and invariably an important cause of secondary phenomena, in particular, again, of downward cumulative processes. Those epidemics cannot, however, be considered as wholly explained by the ordinary mechanism of crisis or by that mechanism plus the fact of of excessive indebtedness all round or even by all that plus the stock exchange crash. The American epidemics become fully understandable only if account be taken of the weaknesses peculiar to the American banking structure, which made it succumb as no European system would have succumbed under similar circumstances- in particular, the presence, fostered by legislation and public opinion, of a large number of small and inefficient banks and the absence of anything like the English tradition. |
