9408619 Grossman This research will examine the behavior of the British stock market before World War 1. The major goal of the study is to understand how the development of the market for industrial equities in Britain contributed to the industrial decline of Britain relative to the United States and Germany. It is noted that the price-dividend ratio in the pre-World War 1 Britain was much lower than it was later in Britain, and much lower than in other countries. The study proposes to construct new indices of British industrial stock prices to examine the extent to which British industrial firms found it difficult to raise capital, whether British firms were fearful of "high-tech" firms, and whether the slow growth of managerial capitalism was due to cultural differences. This study is important because the results would shed light on the general process of economic growth, and moreover a fuller understanding of Britain's past would greatly aid in formulating policy for America's future.
