Buying Against the Panic: The 1912 Russian Banking Syndicate and the Limits of Price Intervention

The Russian banking syndicate of 1912 was designed to defend eight industrial shares during the Balkan crisis with State Bank credit, fixed purchase prices and security-specific quotas worth 16.845 million rubles at the protocol prices. We link the protocol and purchase ledgers to daily exchange quotations and 11,677 trades by margin clients. The eight supported shares had been selected after unusually severe September losses: between 17 and 29 September they lagged the other regularly quoted shares by 5.9 log percentage points, a gap matched by only 0.7% of random sets of eight shares. Trend-free difference-in-differences estimates show no lasting post-intervention advantage. Cumulated through year-end, the estimates are −4.2 percentage points (95% CI −17.2 to 8.7) relative to the rest of the market and +3.2 points (−10.9 to 17.3) within sectors, excluding a large gain above about 17 points while leaving moderate effects possible. Comparative interrupted time-series estimates are larger because they extrapolate the September dip. Event studies of purchases recorded by the Russo-Asiatic Bank show no positive abnormal returns after either state-sponsored or private syndicate purchases. Transaction quotations remained near the prescribed purchase prices mainly for shares with larger quotas. By 2 October, the Russo-Asiatic Bank had bought 11,445 Putilov shares, equivalent to 95.4% of the 12,000-share quota specified in the protocol of 4 October. Margin clients did not shift their purchases toward the supported shares. The evidence therefore supports a narrow conclusion: visible, stock-specific purchase limits could absorb selling temporarily but did not leave a durable relative-price effect.