Postbellum economic change in the United States required an efficient system by which capital could be transferred to areas where it was relatively scarce. In assessing the structure that evolved to meet this need, John James provides a new and convincing explanation of the forces underlying the integration of separate and local money markets to form a national market.

To understand the role of financial markets during the period, the author examines the institutions and operations of the banking system in detail. In contrast to the now-prevailing view among scholars, Professor...