Making the little guy pay: Payments-system networks, cross-subsidization, and the collapse of the Suffolk system

• 成果类型: Article
• 署名作者: Lafayette College; National Bureau of Economic Research
• 刊物名称: JOURNAL OF ECONOMIC HISTORY
• ISSN/ISSBN: 0022-0507
• 发表日期: 2002
• 页码: 147-169
• 关键词: private money creation; banking system; UNITED-STATES

摘要

In the early nineteenth century, the Suffolk Bank established a regional banknote clearing network. Despite the benefits offered, many of the system's member banks were unhappy with it and quickly affiliated with an alternative clearing network as soon as it appeared. The reason for the quick abandonment of the Suffolk system was that it failed to price its network clearing services efficiently. Pressured by large Boston banks to shift the costs of the system to small country banks, the Suffolk engaged in inefficient cross-subsidization. Once a competitor emerged that priced efficiently, it drove the Suffolk from the market.