Walton and Rockoff on page 352 write: "American firms...faced banks with more restricted resources. Because of this limitation, investment banking in the United States emerged to serve the expansion of railroads, mining companies, and large-scale manufacturers. Unlike commercial banks, investment banks did not have the power to issue notes or create deposits. Instead they acted as intermediaries, bringing together lends (stock and bond buyers) and borrowers (firms)." The rise of investment banks in the United States was encouraged by the transition of the United States to a developed economy. What role do investment banks serve in a developed economy? Read or browse the following:

https://www.investopedia.com/ask/answers/042215/what-are-some- roles-investment-bank.asp

What were the negative consequences to having investment banks in the United States? How did the establishment of investment banks eventually lead to the creation of the Federal Reserve bank?

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