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Debtors and Creditors in the Modern Age: An Interdisciplinary Dialogue.

Sergei Antonov, Bankrupts and Usurers of Imperial Russia: Debt, Property, and the Law in the Age of Dostoevsky and Tolstoy, viii + 387 pp. Cambridge, MA: Harvard University Press, 2016. ISBN-13 978-0674971486. $49.95.

Kim Oosterlinck, Hope Springs Eternal: French Bondholders and the Repudiation of Russian Sovereign Debt, xiv + 244 p. New Haven: Yale University Press, 2016. ISBN-13 978-0300190915. $85.00.

Jennifer Siegel, For Peace and Money: French and British Finance in the Service of Tsars and Commissars, xv + 306 pp. New York: Oxford University Press, 2014. ISBN-13 978-0199387816. $51.00.

"Owe the bank five thousand dollars, the bank owns you. Owe the bank five million dollars, you own the bank"--this aphorism cited in Jennifer Siegel's book (8, 219) and attributed to John Maynard Keynes, explains in a nutshell the main idea of this review essay. Historians of finance and banking know all too well that the formula "I owe you" does not imply any hierarchy between the debtor and the creditor. However, the practices of credit are rich with nuances that allow historians to analyze the system of economic, social, and political relationships by studying the flow of money.

The three books under consideration here focus on the practices of domestic Russian as well as international credit relations in the 19th and early 20th centuries, approaching the topic from a variety of perspectives.

Sergei Antonov analyzes relations between creditors (usurers) and debtors operating outside the banking system of the Russian Empire. This book is written by and for historian(s) of law and legal culture. Jennifer Siegel's monograph reviews the status of the Russian Empire within the Entente, taking into account the large market for Russian debt (securities) in France and the United Kingdom between the 1890s and the early 1920s. As such, the book belongs to the fields of diplomatic history and the history of international relations. Kim Oosterlinck, meanwhile, examines the question of the repudiation of sovereign debt and its consequences through a case study of the Bolsheviks' refusal to honor tsarist obligations. His work is rich with theoretical and econometrical analysis and represents an example of traditional economic history.

I should add that my own specialization--the history of banking and finance--falls within both economic history and traditional political history. My academic concentration, combined with the diversity of disciplinary affiliations of the three authors, thus creates the potential for interdisciplinary dialogue and the generation of new insights on different aspects of Russia's financial past.

What types of debt are at issue in these three books?

Antonov's work offers a microhistorical analysis of the culture of the informal credit market in contrast to the formal credit market in banks. The informal market is risky everywhere, inasmuch as it tends to be marked by high interest rates and considerable instability, and it is difficult to regulate because it easily evades restrictions. Over the course of the 19th century, participants in the informal credit market gradually moved their activity into the banking sphere. Antonov reveals that business, family, and paternalistic connections or networks were the principal forces providing the loans that made up the informal market.

The works by Siegel and Oosterlinck analyze public (sovereign) debt as an important element of the securities market. Understood in terms of contemporary financial theory, sovereign debt has an ambivalent quality. On the one hand, it is often considered a risk-free and reliable asset, yet, on the other, private creditors--the individuals and institutions that purchase state bonds--enjoy only limited opportunities to negotiate terms with the state; Oosterlinck's book focuses on this conundrum. Jennifer Siegel emphasizes a different aspect of the sovereign debt system: citizen-buyers of small quantities of state bonds (so-called retail investors) emerged for the first time in the late 19th century as a notable portion of Russian bondholders on the international market. This "public" proved quite sensitive to any information that might affect its investments. Therefore, both central banks and large commercial financial institutions had to deal with the new reality of retail investor anxiety in order to avoid provoking panics on the securities market.

The three books under review thus offer a chance to survey the financial processes of modernity from a variety of perspectives, including the opportunity to reflect on the latest concepts, assessments, and trends emerging from contemporary scholarship. Of particular value is what one senses to be an emerging and long overdue reconsideration of Russia's financial development during the 19th century. My review essay pays special attention to this topic.

Beyond the Boundaries of the Banking System and Banking History

Antonov's book explores how people of various social estates--from aristocrats to peasants--borrowed money, lent money, registered transactions in legal deeds, appealed to administrative institutions, litigated, declared bankruptcy, and negotiated debts. These are credit practices that fall outside the confines of the limited and imperfect banking system of the 1850s and 1860s, and in that sense, one can say that the book addresses more of the 19th century than the title might suggest. Antonov correctly points out that social, cultural, and legal norms cannot be understood without analyzing the life trajectories of individuals (4) and illustrates his analysis of credit practices with colorful episodes drawn from the lives of real people. He underscores that his book is not an economic history but rather a study of credit as a social, cultural, and legal practice.

When it came to such informal practices, the evaluation of a given debtor's creditworthiness and reputation was critical and, perhaps not surprisingly, determining creditworthiness also often proved to be a difficult process in which family, paternalistic, and patron-client connections and perceptions played a significant role. I should add that the deficit of information about the financial profiles--that is, the financial history and capabilities--of those seeking loans often provided latitude to usurers to act arbitrarily, and the book offers a number of examples of such behavior. The informal segment of the credit market was not susceptible to regulation, and none of the legally imposed limitations on interest rates were able to reduce the real costs of credit.

The book consists of two parts--one dealing with credit practices, the other analyzing the legal settlements of conflicts surrounding debts. Antonov refutes the argument that Russia was defined by a primitive credit culture and argues in response that the prereform judicial system provided a basic structure through which individuals could protect their interests. In general, his book suggests that individuals could achieve their goals even as the institutions they were using remained relatively underdeveloped.

This is an important study for the history of credit and banks, because it provides interesting material for understanding the evolution of the country's credit system. Historians of banking rarely pay attention to judicial, notarial, and administrative documents that reflect informal credit practices. By contrast, Antonov offers an in-depth analysis of the historiography on credit and social history (2-32). He also provides a survey of Russian historiography, which only highlights the extent to which the archival materials he uses have remained outside the traditional purview of historians of Russian banking.

As I see it, Antonov's book can be read as a call for us to reconceptualize the financial history of the Russian Empire. To do this, contemporary insights on the history of finance and financial systems and the financial history of more recent times offer useful perspectives.

Credit relations perform a fundamental economic function, and they therefore exist always and everywhere. (1) An informal credit market develops either when formal institutions are lacking or when access to such institutions is limited. One could characterize the landscape of Russian finances in the prereform era as constituting what Charles Calomiris and Stephen Haber refer to as an "underbanked economy"--that is, a financial context in which the amount of capital credit offered by the institutionalized banking system fails to correspond to the size and needs of the economy. (2) Prior to the 1860s, the imperial government prevented the development of private banking. The rapid development of the private banking system in the 1860s and 1870s, (3) as well as Antonov's analysis of informal credit relations, also suggests that leading up to the transition of the 1860s Russia indeed represented an underbanked economy rather than an economy without deep credit traditions.

Juha Tarkka's work proves that Russia's credit system in the 18th and first half of the 19th centuries resembled the financial profile we see in Northern Europe, where one finds an alternative to the "classical model" of the Bank of England and the Bank of France. In the contest of approaches, the classical model ultimately won out, displacing alternatives such as the Northern European system, with the result that countries in the region began undertaking a series of modernizing reforms in the financial arena over the first half of the 19th century. (4)

In the 19th century, the formal (bank) credit market was also based primarily on personal and family connections, including the lender's knowledge of the nature of the borrower's business and his or her relative economic standing. Social networks play an important role in both formal and informal credit markets, and therefore their presence is not an effective determinant of the type of financial system in question. (5)

Wherever West European banking practices were adopted in the 19th century, the bulk of the population was left with no access to credit through formal credit institutions--that is, through banks, in particular joint-stock commercial banks. There was nothing, for example, to compare to the kind of consumer credit system that we see today in which ordinary borrowers are able to purchase a refrigerator or other durable items on credit. The various systems of small cooperative credit institutions were attempts to dismantle the basic elitism of 19th-century banking. In the Russian Empire, businessmen, landowners, and property owners (i.e., not peasants), as well as holders of significant sums in securities, generally had better access to credit, regardless of their social status (we have archival evidence from the 1910s suggesting that some peasants used bank credit to trade large sums on the stock exchange). (6) Given these limitations, Russian credit practices in the early 20th century were more democratic than they had been in the 1850s, or even the 1880s.

The view that prereform Russia lacked a "credit culture" took hold for at least two reasons. First, Marxist discourse drew a distinction between what were seen as usurious forms of credit and credit provided within a "capitalist" economy. In Soviet historiography, this idea was embodied in the standard periodization of Russian history and the supposedly clear separation drawn between the "feudal" prereform period and the "capitalist stage" that followed the Emancipation of the Serfs in 1861.

Second, the idea of a "low credit culture" has been supported by the Russian variation of the so-called "real bill doctrine." This doctrine dominated the applied theory of banking across the world in the 19th century and was premised on the view that the most reliable bank loan from the perspective of the bank needed to reflect the potential discounting of a given bill of exchange and that therefore banks should only issue money in return for what were deemed "real bills": that is, bills originating from financing a real transaction, namely the sale of goods. (7) This might be a sale of goods by a manufacturer to a wholesaler, or by a wholesaler to a retailer, or possibly a purchase of raw materials by a manufacturer. The use of real bills of exchange in connection with foreign trade was also very important. (8) In theory, this was all quite clear. In practice, however, things tended to be more complicated because the "real" economy demanded a greater variety of forms of lending than allowed for by the theory. Yet the doctrine nonetheless had an impact not only on transactions with bills of exchange, now known only to historians, but also with regards to bank credit, which in reality was restricted largely to entrepreneurs. The real bill doctrine gradually lost its influence during the 19th century. In the 1930s, bankers finally rejected the doctrine of "normal credit" in favor of a different view, according to which if a bank bore the risks of lending money, the actual form of credit did not matter. Remarkably, this turn in economic thinking opened the door for the development of consumer credit in the second half of the 20th century.

The discourse of the "real bill doctrine" dominated Russian prerevolutionary literature on credit, but insofar as the doctrine assumed that there existed a would-be "normal" form of commercial credit, it also held that any would-be form of credit that departed from the norm should not have access to banks. Yet a reading of Antonov's work suggests that most credit was in reality "abnormal." Russian prerevolutionary literature, particularly of the 1880s and 1890s, was full of laments about the supposed underdevelopment of credit practices that deviated from Western norms. In fact, Russian practices deviated simply from the ideal as presented in Western banking textbooks. The reality of banking practices in the 19th-century West also rarely followed the "real bill doctrine," and thus the criticism of Russia's deviation from Western practices is quite exaggerated. (9) When the real bill doctrine was finally abandoned in the 1930s, this important shift in world financial theory was ignored by Soviet and Russian historians. As a result, the legacy of the doctrine continues to influence the historiography on Russian banking, which still tends to mistakenly characterize 19th-century Russia as a low credit culture. (10)

In conclusion, I would like to point out that much interesting work remains to be done by researchers interested in applying quantitative methods to social, economic, and demographic sources related to the informal credit market. Antonov deserves our praise for uncovering rich material to document this little-known world of lending and borrowing, but at the same time, it is clear that standard judicial and notarial materials only reveal one dimension of the issue. Sources of this sort cannot be representative if only because if one focuses predominantly on estate records, older and better-off individuals will be far more fully documented than other types of individuals. There are quantitative methods that draw on demographic and social data that can help mitigate this bias, however, and it is precisely these methods that are likely to further enhance the picture that Antonov's book has begun to provide. (11)

Financial Conflicts among the Political Alliances of the Belle Epoque

Jennifer Siegel's book attempts to answer the question of how indebtedness changes the balance of powers between debtors and creditors in cases involving sovereign states. More precisely, the book analyzes how Russian state debt affected its status as a member of the Entente alliance and shows that not only does the debtor depend on a creditor, but the opposite situation is also true, especially if the debt in question is significant. Historians seem to have reached a general consensus regarding whether politics and security tend to trump economic and financial concerns, or vice versa. In the context explored by Siegel, both factors appear to have been equally important. Russia needed money and allies; France and Great Britain needed an ally on the Eastern Front, as well as another reliable destination for capital investment. Siegel's book reflects a growing trend in the history of finance that seeks to analyze how the City, which formally stood outside politics, influenced Whitehall (6-7). Russian debt played an important role in this equation, and in the history of international finance in general, and its case indeed enriches discussion about how international financial mediators and investors influenced the foreign and domestic policies of their own countries as well as their countries' debtors.

Using the archives of the biggest banks/mediators, as well as those of the government and of diplomatic and financial ministries, Siegel reveals the financial subtext of major diplomatic events. She reinterprets well-known factual material while shifting the focus and adding new points of emphasis. Let us see how this process worked using the example of the so-called "French decade" from 1894 to 1903: that is, the period when France emerged as Russia's major creditor (chapter 1).

Siegel shows that Minister of Finance Sergei Witte, who made efforts to secure Russian state access to stock exchanges around the world, was met with a certain ambivalence on the part of the international financial elite and would-be creditor governments because, as Witte found out, the larger the debt one seeks to take on, the more questions creditors are forced to ask about the dangers of potential default.

In the 1890s, the market for Russian securities in France changed in the sense that small-scale, so-called "retail investors"--that is, members of the middle class--began intervening in the market on a much greater scale than before, moving in alongside the big investors--banks and the wealthy public--that had previously dominated the market. Yet retail investors, because they are more vulnerable to losses, tend to be more susceptible to panic whenever there is even a slight chance of a downturn in the price of securities. As a result, both the Russian and French governments became more concerned than before with doing whatever they could to "not let the market fall."

The French government perceived Russia as an excessively large foreign player in its domestic market, which was undesirable since it meant that Russian borrowing ran the risk of overflowing the market and depressing the price of securities. French officials also thought that the Russian government was too lax in coordinating its actions with the French side. For example, France did not receive the Russian orders for French industrial goods that the government had counted on. But in accordance with the political principle that one should not scare away retail investors or quarrel with an ally, the French government took almost no decisive action against what it saw as Russia's irresponsible behavior.

France was not alone in worrying about Russia. International bankers and mediators shared similar concerns. Siegel's work offers an opportunity to discuss the role of this profession in the banking business.

In the late 19th and early 20th centuries, it was customary for professional mediators (underwriters) to float government securities on the market and, under certain conditions, to assume responsibility for the success of the issue. In this elite segment of the international capital market, governments effectively became the clients of bankers operating as international mediators. One should not regard the position of the bankers in this relationship as an example of the conspiracy between money and power, however, but rather as a banking specialization that serves to connect diverse national financial systems within an international banking network. Governments and banks depend on such international linkages to settle payments between countries, establish currency rates, and to release large runs of securities to the market--all tasks that national banking networks are unable to perform on their own.

The securities market works in such a way that the average person cannot tell "bad" securities from "good" ones. Nowadays, special agencies rate securities, but in the 19th century, underwriters played this role. If the Rothschilds underwrote a loan to a given country, for example, buyers of securities instantly knew--or at least assumed--that the Rothschilds were well informed about the government's ability to pay its debts. In financial terms, the Rothschilds, as well as other underwriters, thus bore a significant risk to their reputation on the financial market inasmuch as a case of a failed bond emission (that is, an emission of state bonds that failed to produce a sufficient number of buyers) or of a debtor going bankrupt could cause real difficulties for them in placing subsequent loans. International bankers were very sensitive to changes in the market and selective in their choice of clients, as we can see from the Rothschilds' example. Siegel's book demonstrates the difficult process of coming to terms with underwriters who might choose to exit negotiations at any moment if conditions seemed unfavorable or they had claims against the debtor.

At the same time, the Rothschilds' strong position on the government debt market did not imply omnipotence. The media of the time made much of the Rothschilds' dislike of Russia's policy on the Jewish Question, yet Siegel shows how economic and political considerations in 1894 nonetheless convinced them to set concerns about the Jewish issue aside and sponsor a loan to the imperial government at a 3.5 percent interest rate. Market conditions were excellent, and choosing not to sponsor the loan would have meant ceding ground to their competitors. France was full of enthusiasm for the Russo-French union, and the Rothschilds clearly determined that it was important not to miss out on this patriotic surge. Furthermore, Nicholas II had recently ascended to the throne following the death of Alexander III, and the transfer of power buoyed hopes for a positive shift in the government's policy toward the Jews. In assisting with the loan, did the Rothschilds persuade the Russian government to improve its treatment of its Jewish citizens? Obviously not.

By the beginning of the 20th century, the Rothschilds' power declined due to the growth of other international financial intermediaries, primarily large joint-stock commercial banks.

The chapters that follow focus on the financial aspects of diplomatic relations among Russia, France, and Great Britain until 1922. During the Russo-Japanese War and the 1905 revolution, France decided for political reasons to save its ally from financial difficulties (chapter 2). In 1907-13, France received assistance from another Russian creditor: Great Britain, which was constantly seeking new areas for investment and thus became interested in the Russian market (chapter 3). During World War I, Russia took on greater debt, and its allies had to provide money to the country or risk undermining conditions on the Eastern Front. Toward the end of the war, these same allies watched in horror as their debtor country then descended into anarchy; at that time, it was obvious that the chances of Russia defaulting on its debt were very high (chapter 4). After the revolution and the Bolsheviks' repudiation of the tsarist debt, Soviet Russia benefited from a split between the remaining Entente allies in which France, in contrast to the other lender states, argued for protecting the rights of retail investors. Indeed, Soviet Russia seems to have played an important role in confirming this split, since its position further convinced most of the European lenders that retail investors were not worth fighting for.

The main takeaway from Siegel's book is that a major debtor creates major problems for its creditors. One might assume that the creditor has the power to manipulate the debtor, but it often turns out that the latter has strong interests that the creditor cannot ignore. The story of Russian debts provides another argument against the concept of Russia's dependent geopolitical position and more proof that the enormous market of individual investors began to influence their nations' politics in the 1890s.

When a Debtor Renounces Its Debt, or How to Measure Hope

Oosterlinck's book examines the repudiation of state debts from the standpoint of financial theory through a close study of French investors who lent a sum approximately equal to 4.5 percent of the national wealth of France to the Russian Empire (vii). Oosterlinck aims his focus most tightly on the fate of tsarist bonds (not private bonds or shares) during the 1918-21 period, though his study ultimately takes in a wider chronological range and engages with international finance beyond Russia as well.

The book starts with a cliometric puzzle: Why, after the repudiation of Russian state debts by the Bolsheviks on 21 January (3 February) 1918, did the price of Russian bonds not immediately fall to zero? For example, in 1918-20 the price of the 4.5 percent Russian bond of 1906 ranged between 26.5 percent and 66.5 percent of its nominal value (on average, 52.88 percent) (161, Table 6.1). By comparison, the maximum price of the 3 percent French perpetual bond was 73.5 percent in 1915-19 (166). Oosterlinck argues that this curious situation is explained by the fact that investors hoped that political developments might change the situation and ultimately make payment possible, and it was this hope that propped up the price of Russian bonds in France for the next three years--that is, throughout the 1918-21 period. It thus turns out that the bond market is kind of a bellwether for hope: a sudden increase or decrease in bond prices as the market reacts to new information offers an indication of either rising hopes or growing despair.

Chapter 1 analyzes the specific nature of state debts (in contrast to private debts) caused by "the sovereign nature of the issuer" (34). A state cannot be liquidated in the way that one can shut down a bankrupt company; there are no laws on state default and therefore no rules for negotiating problems associated with state debt. The state and its individual investors are therefore perforce a priori unequal negotiators. Economic theory thus contains a potentially challenging dilemma: if state debt is regarded as a reliable asset relative to private securities, what does one do in instances when this reliable asset turns out to be unreliable---that is, what happens when a government defaults on or repudiates its debts?

The repudiation of debts, unlike a regular default, symbolizes a break from the previous regime after a revolution or the acquisition of sovereignty. In theory, a country that repudiates its debt may expect expulsion from the capital market (loss of reputation), economic sanctions, military intervention, and the sequestration of its property abroad. To what extent did these threats become real for Russia after the repudiation of its obligations?

The books second chapter analyzes the threats of expulsion from the market and of sanctions as means to compel the government to negotiate. On the whole, after the 1930s, reputation costs in the form of denied access to the capital market or increased interest rates on state borrowing ceased to play as significant a role in enforcement as they had in the bond markets of the 19th and early 20th centuries. Siegel makes a similar point in her book. There is no unambiguous explanation for that phenomenon: key factors may have been the smaller number of participant countries in the 19th relative to the 20th century and the dominant role of Great Britain, which made it easier to control debtor nations (48).

The Bolsheviks' repudiation of tsarist debt seems not to support this theory, however, because reputational losses and the threat of sanctions did not work in the Bolshevik case. The problem of reputation simply did not exist for them. More important, for European countries restoring trade with Soviet Russia turned out to be more critical than exerting collective pressure on the debtor. The Soviet government made full use of this opportunity by continuing to discuss the issue of the tsarist debt, while at the same time negotiating diplomatic recognition and then concluding a series of trade agreements with all the creditor countries without acknowledging its responsibility for any tsarist-era obligations.

Chapters 3-5 analyze the failure of other means to make the debtor pay as suggested by the theory. In particular, these chapters examine how the Civil War destroyed all hopes for the victory of political forces (namely, the Whites) that might acknowledge the empire's debts; how foreign intervention in Soviet Russia pursued many aims but not that of forcing Russia to pay its creditors; how French citizens' hopes that their government would cover their losses ultimately failed (despite historical precedents); and how other political solutions--such as shifting the burden of the tsarist debt to Germany or to the countries that emerged from the ruins of the Russian Empire--eventually disappeared.

After his survey of theories and their applicability to the Russian debt question of 1918-22, Oosterlinck then undertakes three cliometric studies to test whether French investors continued to nurture hopes of receiving their money (chapter 6). The first shows how French holders of Russian bonds in 1918-20 lost and regained hope. When good news arrived from Russia, the price of Russian bonds rose; when the news was bad, the price dropped (160-65).

The second study shows that after 1918 the price of Russian bonds in France depended on events in Russia rather than in France. To prove his point, Oosterlinck compares the prices of Russian and French state bonds in France. Before the repudiation, the prices of Russian and French bonds changed in a similar fashion, but afterward the dynamics of Russian bonds became quite unlike French ones; Russian bond prices were reacting to events in Russia.

The third study analyzes such a seemingly ephemeral phenomenon as the expectation that the French government would compensate French holders of Russian bonds for their losses. In this case study, Oosterlinck compares the prices of Russian bonds in London and in Paris before and after the repudiation of 1918. During the war, these two markets were separate, and the difference between the positions of the French and British governments on the question of Russian debt is well known: France sought a solution that would take into account the interest of retail investors, whereas Great Britain, where the military debt to the government prevailed, staked its claim from the very beginning on the renewal of trade relations and ignored the interests of retail investors. As a result, whereas before the Bolsheviks' repudiation of the debt price dynamics did not differ between Paris and London, after the repudiation in 1918-19 the price of Russian bonds in Paris was 3 percent higher than in London (170-73).

As a result, one can see that the Bolsheviks' repudiation of tsarist debt--one of the most significant events of its type--was unexpected. Not wanting to believe that the repudiation would stand, many investors awaited events that would change the situation. This response was quite rational, because investors remembered examples from the past of successful negotiations over repudiated debts and defaults. It is striking, however, that none of the possible outcomes ended well for the investors. In general, the fate of the tsarist debt suggests a rather pessimistic conclusion about the rights of small investors and collective international efforts in such situations.

These new works on relations between debtors and creditors do much to enrich our understanding of Russian history. They also expose a diversity of disciplinary approaches to the same subject. Sergei Antonov successfully demonstrates that the Russian Empire was home to a well-developed credit and legal culture; his research on the informal market of credit based on rich primary sources further proves that the history of finance and banking in Russia deserves continuing reconceptualization. Historians of finance and banking need to offer a truly contemporary, revised picture of the history of finance in the Russian Empire, one that approaches Russia as integrated within the broader international processes of the time. Current research in the field of Russian financial and credit practices has begun deconstructing old paradigms and searching for new ones. In the process, researchers have uncovered a wide range of new narrative and quantitative sources. The next step is for historians of Russian finance to bring all this together in a new interpretive historiography.

The books by Jennifer Siegel and Kim Oosterlinck do not only share a common focus on the Russian Empire's state debt; both also make important contributions to the analysis of the financial risks faced by the empire and its allies. As problems increase, a country reaches a stage when it must constantly search for money and use all its diplomatic and media resources to fight for a positive image.

On the one hand, the beginning of the 20th century, before World War I, marked the high point of the financial expansion of the long 19th century. On the other, if we take into account the subsequent 100 years of financial history, 19th-century finances appear to have been in a process of transition that would eventually lead to their disappearance with the onset of the Great Depression. At the beginning of the 20th century, the world was approaching the end of an era in which state debt was seen as reliable and the reputation of the issuer was key; where a few select underwriters like the Rothschilds could pretend they ruled the world; and where the British pound was the world's currency and the gold standard seemed unshakable. In that era, small investors believed that by buying securities they were making a solid investment, and governments did everything to support that view. In the 20th century, that market no longer existed, yielding to riskier behaviors that depended less on reputation. (12)

Another conclusion one can draw from these works is that the methods of assessing creditworthiness that dominated in the 19th century, which were based on reputation and the creditor's knowledge of the debtor's financial capabilities, also changed in the 20th century. The devaluation of reputation as a sign of creditworthiness coincided with the democratization of financial services in banks and other credit institutions. Financial services became more accessible, even as the world around them grew less stable and ever more complex.

Faculty of History

Moscow Lomonosov State University

Lomonosovskii prospekt, 27-4

119192 Moscow, Russian Federation

(1) Richard S. Grossman, Unsettled Account: The Evolution of Banking in the Industrialized World since 1800 (Princeton, NJ: Princeton University Press, 2010), 28-35.

(2) Charles W. Calomiris and Stephen H. Haber, Fragile by Design: The Political Origins of Banking Crises and Scarce Credit (Princeton, NJ: Princeton University Press, 2014), 7-12.

(3) Sofia Salomatina, Kommercheskie banki v Rossii: Dinamika istruktura operatsii, 1864-1917 gg. (Moscow: Rosspen, 2004), 105-14.

(4) Juha Tarkka, "The North European Model of Early Central Banking," in Designing Central Banks, ed. David G. Mayes and Geoffrey E. Wood (London: Routledge, 2009), 34-67.

(5) Naomi R. Lamoreaux, Insider Lending: Banks, Personal Connections, and Economic Development in Industrial New England (New York: Cambridge University Press, 1994); Iurii Petrov, Kommercheskie banki Moskvy, konets XIX v-1914g. (Moscow: Rosspen, 1998); Sofia Salomatina, "Teoriia biznes-setei i rossiiskoe bankovskoe delo, vtoraia polovina XIX nachalo XX w.," in Rol' informatsii v formirovanii i razvitii sotsiuma v istoricheskom proshlom (Moscow: IVI RAN, 2004), 253-66; Salomatina and Elizaveta Tuzhilina, "Bank 'dlia svoikh': Moskovskoe otdelenie Russko-Kitaiskogo banka v 1897-1899 gg.," Ekonomicbeskaia istoriia 35, 4 (2016): 47-62.

(6) For example, the peasant Dmitry Ivanovich Lomonosov owned an exchange business located in the Teplye merchant rows on Il'inka Street in Moscow in 1912, which he supported through a credit account at the Riabushinskii brothers' bank (the Moscow Bank). Lomonosov's business that year engaged in intensive stock speculation with a turnover of 2.3 million rubles. See Spravochnaia kniga o litsakh, poluchivshikh na 1912g. kupecheskie ipromyslovye svidetel 'stva po g. Moskve (Moscow: n.p., 1912), 205; and Tsentral'nyi gosudarstvennyi arkhiv Moskvy (TsGA Moskvy) f. 254, op. 1, d. 246, 11. 196ob.-199; d. 249, 11. 41ob.-44.

(7) I would like to emphasize that this is a version of the real bill doctrine that applies to banking practice; I am not considering the real bill doctrine as part of the debates on money circulation theory at the end of the 18th and the first half of the 19th centuries. On the real bill doctrine, see Dzh. A. Shumpeter [Joseph A. Schumpeter], Istoriia ekonomicheskogo anaiiza, trans. V. S. Antonomov, 3 vols. (St. Petersburg: Ekonomicheskaia shkola, 2001), 2:960-63, 3:1461-69; Tarkka, "North European Model"; and Sofia Salomatina, "Trudy Efima Epshteina i razvitie kontseptsii v izuchenii istorii bankov Rossiiskoi imperii," Vestnik Moskovskogo universiteta, Seriia 8: Istoriia, no. 2 (2015): 79-94.

(8) Lloyd W. Mints, A History of Banking Theory in Great Britain and the United States (Chicago: University of Chicago Press, 1945): 9, 25, 29-30.

(9) See Lamoreaux, Insider Lending; Shizuya Nishimura, "The French Provincial Banks, the Banque de France, and Bill Finance, 1890-1913," Economic History Review, n.s., 48, 3 (1995): 536-54; and Ta-Chen Wang, "Credit Markets and Early American Development: A Case Study of Entry and Competition," Journal of Economic History 68, 2 (2008): 438-61.

(10) For later echoes of these discussions, which influenced Russian studies in the 20th century, see Efim Epstein, Les banques de commerce russes: Leur role dans I evolution economique de la Russie, leur nationalisation (Paris: M. Giard, 1925), 16-17; and Alexander Gerschenkron, Economic Backwardness in Historical Perspective: A Book of Essays (Cambridge, MA- Belknap 1962), 19-20).

(11) See Hakan Lindgren, "The Modernization of Swedish Credit Markets, 1840-1905: Evidence from Probate Records," Journal of Economic History 62, 3 (2002): 810-32; and Lindgren, "Parish Banking in Informal Credit Markets: The Business of Private Lending in Early Nineteenth-Century Sweden," Financial History Review 24, 1 (2017): 83-102.

(12) Marc Flandreau, Juan H. Flores, Norbert Gaillard, and Sebastian Nieto-Parra, "The End of Gate-Keeping: Underwriters and the Quality of Sovereign Bond Markets, 1815-2007," National Bureau of Economic Research Working Paper, no. 15128 (July 2009).
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Title Annotation:"Bankrupts and Usurers of Imperial Russia: Debt, Property, and the Law in the Age of Dostoevsky and Tolstoy" by Sergei Antonov, "Hope Springs Eternal: French Bondholders and the Repudiation of Russian Sovereign Debt" by Kim Oosterlinck, "For Peace and Money: French and British Finance in the Service of Tsars and Commissars" by Jennifer Siegel
Author:Salomatina, Sofya
Article Type:Book review
Date:Sep 22, 2018
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