The Development And Evolution Of The City Of London In 1694-1914

From 1694 to 1914,the City of London gradually evolved from a domestic financial center to a global financial centre.The development of the City can be divided into three stages.In the first stage(1694-1760),the City combined geographical advantages with capital accumulation under the promotion of wars and the Financial Revolution.Banking,insurance,security and some other financial industries had gradually developed in the “Square Mile”.So that the City had become a domestic financial centre.In the second stage(1760-1860),the British Industrial Revolution was in full swing and economic growth rapidly.Under the demand of the Industrial Revolution,the discount system and banking network had developed with the City as the core.Some of the capital accumulated in manufacturing and commerce was also be attracted to the City,which made it grow into an important regional financial centre and had the strength to compete with Amsterdam and Paris as the global financial centre.The City also contributed to the development of manufacturing at the early period of the Industrial Revolution,and its ever-improving financial system provided convenient conditions for the development of the Industrial Revolution.In the third stage(1860-1914),the City became a well-deserved global financial centre.In addition to the Industrial Revolution,the establishment of the international gold standard,the development of free trade and the “Pax Britannica”environment were also direct reasons for the City as a global financial centre.The City had changed internally since it became the global financial centre: it has changed from an area which mixed with living and working function into a pure working area,and the financial industry has gradually become the core industry in the City.The development of the City had attracted many overseas financial elites to work here and its bank’s branches had spread all over the world...All these elements demonstrated the City’s international influence as a global financial centre.But dangers had also hidden behind the glorious development of the City.Firstly,the City was keening on overseas investment and neglecting to provide financial support for domestic industries.Secondly,there was a mutually beneficial relationship between the City,the Bank of England and the Treasury.So that the City’s emphasis on overseas investment inevitably influenced the government’s decision-making and closely linked British economy with overseas investment,thus government ignored the development of industry.Thirdly,social groups of the City were recognized by the traditional landed elites,and they formed a group of “gentlemanly capitalists” that excluded the industrial group.As a result,the City unconsciously caused the separation of finance and industry in Britain.And this separation was one of the reasons for Britain’s decline during the second Industrial Revolution and it also presaged the decline of the City as a global financial centre.