Industrial lending by English commercial banks, 1860s 1914: Why did banks refuse loans?

English commercial banks have suffered severe criticism for their alleged failure to support industrial activity, to provide 'industrial finance'. They are said to compare unfavourably with their European counterparts. In this article we explore this issue by examining how in the years before 1914 these banks treated loan applications from industrialists, specifically analysing the extent of refusals and the reasons given for refusals. The results confirm that the banks operated their lending business within general constraints imposed by the principles of prudent banking. However, it is also clear that the banks gave very careful consideration to all applicants, applied a set of reasonable criteria, and approved the great bulk of all applications for industrial lending.