The Rise and Fall of the Suffolk System

Howard Bodenhorn

in State Banking in Early America

Published in print December 2002 | ISBN: 9780195147766
Published online November 2003 | e-ISBN: 9780199832910 | DOI:
The Rise and Fall of the Suffolk System

Show Summary Details


The Suffolk Bank of Boston established a regional clearinghouse system known as the Suffolk system. Traditional interpretations of the system emphasize the benefits created by the system's clearing operations and effective coinsurance scheme. Although the system created such benefits, it did so by intimidating and coercing member banks. The system is analyzed using modern theories of networks, including membership externalities and appropriate pricing rules. Because the Suffolk Bank did not set efficient prices for its services, an alternative network was established and the system collapsed.

Keywords: banknotes; Boston; clearinghouse; coercion; coinsurance; membership externalities; networks; pricing; Suffolk system

Chapter.  12585 words.  Illustrated.

Subjects: Economic History

Full text: subscription required

How to subscribe Recommend to my Librarian

Buy this work at Oxford University Press »

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.