Bagehot

by James Grant

  John Stuart Mill, economist, philosopher, feminist, MP.

  Richard Holt Hutton, editor of the Spectator and Bagehot’s fast friend from college years. While chafing at his “superciliousness” and “arrogance,” Hutton saw that Bagehot really was smarter than the rest of the class.

  Isambard Kingdom Brunel, the epitome of confident British enterprise, pictured on the day of the attempted launch of SS Great Eastern in 1858.

  Sir George Cornewall Lewis, MP, scholar and poor-law reformer, editor of the Edinburgh Review, and unmartial minister of war.

  Samuel Jones Loyd, later Lord Overstone, banker, monetary theorist, and a sometimes bitter critic: “the muddy slime of Bagehot’s crotchets and heresies.”

  Matthew Arnold, poet and critic, who praised Bagehot’s work for “showing not talent only, but a concern for the simple truth, which is as rare in English literature as it is in English politics and English religion.”

  Granville George-Leveson, second Earl of Granville, foreign secretary under Gladstone, who called on Bagehot for a journalistic favor during the Franco-Prussian War.

  Thomson Hankey, MP, longtime director of the Bank of England. No match for Bagehot in wit, he argued presciently against the doctrine of a lender of last resort.

  Robert Lowe, later Viscount Sherbrook, half-blind classicist, lawyer, journalist, MP, and eloquent critic of democracy and reformer of public education.

  Charles Pelham Villiers, MP, fighter against the Corn Laws and fixture of London society—“ill-dressed but witty, informed, civilized, at times mischievous.”

  John Lubbock, first Baron Avebury, banker, naturalist, mathematician, and author of a bill to create the first secular holiday in British history—“St. Lubbock’s Day,” grateful workers called it.

  Victorian money machine: the profits and assets of Stuckey’s rose virtually without interruption during Bagehot’s lifetime.

  ACKNOWLEDGMENTS

  The generosity of my creditors is exceeded only by their number. I am in debt, first, to Harrison Waddill, my enterprising and unflappable research assistant, who investigated (and discovered) Bagehot-related source material on both sides of the Atlantic. In the U.K., he and I incurred an especially heavy obligation to the staff of the Royal Bank of Scotland Archive, Edinburgh, in which are domiciled the records of Stuckey’s Banking Company. Sally Cholewa and Lyn Crawford, along with Sophie Volker, Ruth Reed and Philip Winterbottom, went above and beyond the call of duty to welcome their visiting American patrons.

  The papers of George Warde Norman contain a remarkable contemporary document describing Bagehot’s views of money and banking. It was thanks to the help of Lucy Bonner, archivist on the Bromley Historical Collections at the Bromley Central Library, that Harrison was able to lay hands on it.

  Barry and Janet Winetrobe, residents of Bagehot’s hometown of Langport, contributed their time, encouragement, hospitality, and historical knowledge to this project. Their dedicated work at the Bagehot Fund is helping to perpetuate the great man’s legacy in his birthplace and beyond.

  Thanks, too, to Chris Thorn, who sacrificed his vacation days at Eton College to track down archival material.

  Edward Chancellor, an English journalist and historian in the Bagehot mold, to whom this volume is dedicated, read my first draft, attempting, as he said, to rid the text of “Yankee solecisms.” Adam Rowe, a rising young historian at the University of Chicago, made expert suggestions. And I thank my daughter, Alice Grant, for her perceptive reading. For any and all remaining errors, I claim full credit.

  Whatever this book might be, it would be much less without the myriad editorial improvements effected by the all-seeing John A. Glusman, editor-in-chief of W. W. Norton & Co., Helen Thomaides, John’s assistant, and Allegra Huston, who is not so much a copy editor—though she certainly is all of that—as the author’s guardian angel. And thanks, too, for the intelligent and perceptive proofreading of Dassi Zeidel and John Gould.

  NOTES

  AUTHOR’S NOTE

  1Walter Bagehot, The Works of Walter Bagehot with Memoirs by R. H. Hutton, ed. Forest Morgan, 5 vols. (Hartford, CT: Travelers Insurance Company, 1891), 3:320.

  2Report from the Committee of Secrecy on the Bank of England Charter, 1832, 145–55.

  PROLOGUE: “WITH DEVOURING FURY”

  1Edwin Canaan, ed., The Paper Pound of 1797–1821: The Bullion Report 8th June 1810, 2nd ed. (New York: Augustus M. Kelley, 1909), viii.

  2Philip T. Saunders, Stuckey’s Bank (Taunton, UK: Barnicott and Pearce, 1928), 11.

  3Report from the Committee of Secrecy, 11.

  4Report from the Committee of Secrecy, 12.

  5Bray Hammond, Banks and Politics in America from the Revolution to the Civil War (Princeton, NJ: Princeton University Press, 1957), 35–36.

  6“With respect to the crisis which now agitates in the city . . . ,” The Times, December 13, 1825.

  7Frank Whitson Fetter, Development of British Monetary Orthodoxy: 1797–1875, (Cambridge, MA: Harvard University Press, 1965), 94.

  8David Ricardo, MP, 40 Parl. Deb. (1st ser.) (1819) col. 746.

  9Report from the Committee of Secrecy, 69.

  10Frank Griffith Dawson, The First Latin American Debt Crisis: The City of London and the 1822-25 Loan Bubble (New Haven: Yale University Press, 1990), 246.

  11Edward Chancellor, Devil Take the Hindmost: A History of Financial Speculation (New York: Farrar, Straus and Giroux, 1999), 107.

  12John D. Turner, Banking in Crisis: The Rise and Fall of British Banking Stability, 1800 to Present (Cambridge: Cambridge University Press, 2014), 70.

  13Chancellor, Devil Take the Hindmost, 107.

  14Report from the Committee of Secrecy, 47.

  15Report from the Committee of Secrecy, 90.

  16Report from the Committee of Secrecy, 47.

  1713 Parl. Deb. (2d ser.) (1825) cols. 1272–4.

  18Report from the Committee of Secrecy, 400.

  19“The Money-Market,” The Times, December 15, 1825.

  20Report from the Committee of Secrecy, 45.

  21Report from the Committee of Secrecy, 48.

  22Report from the Committee of Secrecy, 47.

  CHAPTER 1: “LARGE, WILD, FIERY, BLACK”

  1Walter Bagehot, The Collected Works of Walter Bagehot, ed. Norman St John-Stevas, 15 vols. (London: the Economist, 1986), 15:308.

  2Philip T. Saunders, Stuckey’s Bank (Taunton: Barnicott and Pearce, 1928), 24.

  3Russell Barrington, Life of Walter Bagehot (London: Longmans, Green and Co., 1914), 78.

  4Bagehot, Collected Works, 15:378.

  5Barrington, Life of Walter Bagehot, 64.

  6Bagehot, Collected Works, 15:6.

  7Hampshire Chronicle, April 27, 1801.

  8“Anne Beale, Governess and Writer: Extracts from her Diary,” Girls’ Own Paper (1901), 599.

  9Alastair Buchan, The Spare Chancellor: The Life of Walter Bagehot (London: Chatto and Windus, 1959), 25.

  10Barrington, Life of Walter Bagehot, 80–81.

  11Buchan, The Spare Chancellor, 21.

  12Buchan, The Spare Chancellor, 25.

  13David Melville Ross, Langport and its Church (Langport, UK: Herald Press, 1911), 347–48.

  14Ross, Langport, 344.

  15Ross, Langport, 345.

  16Buchan, The Spare Chancellor, 24.

  17Ross, Langport, 357.

  18William Irvine, Walter Bagehot (London: Longmans, Green and Co., 1939), 12.

  19Buchan, The Spare Chancellor, 28.

  20Buchan, The Spare Chancellor, 28.

  21Buchan, The Spare Chancellor, 98.

  22Irvine, Walter Bagehot, 13.

  23Barrington, Life of Walter Bagehot, 86.

  24Barrington, Life of Walter Bagehot, 91.

  25Barrington, Life of Walter Bagehot, 87–99.

  26Barrington, Life of Walter Bagehot, 75.

  27Irvine, Walter Bagehot, 17.

  28Barrington, Life of Walter Bagehot, 92.

&nbs
p; 29Barrington, Life of Walter Bagehot, 72.

  30Bagehot, Collected Works, 15:378.

  CHAPTER 2: “IN MIRTH AND REFUTATION—IN RIDICULE AND LAUGHTER”

  1Lee Jackson, Dirty Old London: The Victorian Fight Against Filth (New Haven: Yale University Press, 2014), 27.

  2Barrington, Life of Walter Bagehot, 101.

  3Irvine, Walter Bagehot, 27.

  4Barrington, Life of Walter Bagehot, 118.

  5Wikipedia contributors, “Augustus De Morgan,” Wikipedia, The Free Encyclopedia, http://en.wikipedia.org/w/index.php?title=Augustus_De_Morgan&oldid=819004288 (accessed February 8, 2018).

  6George Macaulay Trevelyan, The Life of John Bright (London: Constable, 1913), 70.

  7Trevelyan, The Life of John Bright, 69.

  8Scott Gordon, “The London Economist and the High Tide of Laissez Faire,” Journal of Political Economy 63, no. 6 (December 1955): 467.

  9Gordon, “The London Economist,” 468.

  10Ruth Dudley Edwards, The Pursuit of Reason: The Economist, 1843–1993 (Boston: Harvard Business School Press, 1993), 2.

  11Edwards, Pursuit of Reason, 16–17.

  12Edwards, Pursuit of Reason, 12.

  13Barrington, Life of Walter Bagehot, 123.

  14Irvine, Walter Bagehot, 26.

  15Barrington, Life of Walter Bagehot, 135–36.

  16Barrington, Life of Walter Bagehot, 146.

  17Buchan, The Spare Chancellor, 42-43.

  18R. W. Kostal, Law and English Railway Capitalism 1825–1875 (Oxford: Clarendon Press, 1994), 25.

  19W. T. C. King, History of the London Discount Market (London: Frank Cass, 1972), 134.

  20King, History of, 134.

  21Kostal, Law and English Railway Capitalism, 28.

  22Kostal, Law and English Railway Capitalism, 28–29.

  23“Railway Speculation,” the Economist, April 5, 1845, 310.

  24Chancellor, Devil Take the Hindmost, 137.

  25Chancellor, Devil Take the Hindmost, 139.

  26Chancellor, Devil Take the Hindmost, 142.

  27Chancellor, Devil Take the Hindmost, 143.

  28Stuckey’s Banking Co., Ltd., Directors’ Minutes, Royal Bank of Scotland Archives STU2.1, 277a.

  29Chancellor, Devil Take the Hindmost, 143.

  30Kostal, Law and English Railway Capitalism, 35.

  31Edwards, Pursuit of Reason, 77.

  32Gordon, “The London Economist,” 484.

  CHAPTER 3: “VIVE LA GUILLOTINE”

  1Report of Her Majesty’s Commissioners appointed to inquire into The State, Discipline, Studies, And Revenues of the University and Colleges of Oxford, 1852, 76.

  2Barrington, Life of Walter Bagehot, 180–81.

  3Bagehot, Collected Works, 7:250.

  4Barrington, Life of Walter Bagehot, 167.

  5Barrington, Life of Walter Bagehot, 184.

  6G. M. Young, Victorian England: Portrait of an Age (London: Oxford University Press, 1936), 77–78.

  7Barrington, Life of Walter Bagehot, 190.

  8Roger Price, The French Second Empire: An Anatomy of Political Power (Cambridge, UK: Cambridge University Press, 2001), 15.

  9David Harvey, Paris, Capital of Modernity (New York: Routledge, 2006), 97.

  10Price, The French Second Empire, 17.

  11Price, The French Second Empire, 25.

  12The Political and Historical Works of Louis Napoleon Bonaparte with an original memoir of his life (London: Savill and Edwards, 1852), 1:141.

  13Alexis de Tocqueville, Memoir, Letters, and Remains of Alexis de Tocqueville (Cambridge, U.K.: Macmillan, 1861), 191.

  14Barrington, Life of Walter Bagehot, 195.

  15Russell Barrington, ed., The Works and Life of Walter Bagehot, 10 vols. (New York: Longmans Green, and Co., 1915), 1:313.

  16Barrington, The Works and Life, 1:318.

  17Barrington, The Works and Life, 1:314.

  18Barrington, The Works and Life, 1:315.

  19Barrington, The Works and Life, 1:312.

  20Barrington, The Works and Life, 1:316.

  21Barrington, The Works and Life, 1:339.

  22Barrington, The Works and Life, 1:320.

  23Barrington, The Works and Life, 1:337.

  24Barrington, The Works and Life 1:234, 1:239.

  25Buchan, The Spare Chancellor, 68.

  CHAPTER 4: THE LITERARY BANKER

  1Stuckey’s Banking Co., Ltd., Directors’ Minutes, STU3.2, 207.

  2Barrington, Life of Walter Bagehot, 213.

  3Barrington, Life of Walter Bagehot, 211, 213.

  4Ben Wilson, Heyday: The 1850s and the Dawn of the Global Age (New York: Basic Books, 2016), 55.

  5Thomas Tooke and William Newmarch, A History of Prices, vol. 5, 1848–1856 (London: Longman, Brown, Green, Longmans, & Roberts, 1857), 271.

  6Tooke and Newmarch, Prices, 295–96.

  7“Business In 1852,” the Economist, January 8, 1853, 33.

  8Stuckey’s Banking Co., Ltd., Directors’ Minutes, STU3.2, 124.

  9Daniel Hardcastle, Jun., Banks and Bankers, 2nd ed. (London: Whittaker and Co., 1843), 401.

  10Hardcastle, Banks and Bankers, 406.

  11Saunders, Stuckey’s Bank, 43.

  12Saunders, Stuckey’s Bank, 43.

  13Stuckey’s Banking Co., Ltd., Directors’ Minutes, STU3.2, 367.

  14Stuckey’s Banking Co., Ltd., Directors’ Minutes, STU3.2, 437.

  15Stuckey’s Banking Co., Ltd., Directors’ Minutes, STU3.3, 9.

  16Wilson, Heyday, 313.

  17Bagehot, Collected Works, 1:141.

  18Bagehot, Works (ed. Morgan), 1:269.

  19Bagehot, Works (ed. Morgan), 1:279.

  20Bagehot, Works (ed. Morgan), 1:280.

  21Bagehot, Works (ed. Morgan), 1:265.

  22Bagehot, Works (ed. Morgan), 1:283.

  23Bagehot, Works (ed. Morgan), 1:297.

  24Bagehot, Works (ed. Morgan), 1:1.

  25Bagehot, Works (ed. Morgan), 1:5.

  26Bagehot, Works (ed. Morgan), 1:14.

  27Bagehot, Works (ed. Morgan), 1:14.

  28Bagehot, Works (ed. Morgan), 1:22.

  29Bagehot, Works (ed. Morgan), 1:34.

  30Bagehot, Works (ed. Morgan), 1:43.

  31Bagehot, Works (ed. Morgan), 1:41.

  32Stuckey’s Banking Co., Ltd., Directors’ Minutes, STU3.3, 38.

  CHAPTER 5: “THE RUIN INFLICTED ON INNOCENT CREDITORS”

  1Barrington, Life of Walter Bagehot, 230.

  2Barrington, Life of Walter Bagehot, 230.

  3Bagehot, Collected Works, 9:324.

  4D.P. O’ Brien, ed., The Correspondence of Lord Overstone, 3 vols. (London: Cambridge University Press, 1970), 2:279.

  5“The Money Market,” the Economist, October 17, 1857, 1145.

  6Lord Overstone, Tracts and Other Publications on Metallic and Paper Currency (1857; repr. Clifton, UK: Augustus M. Kelley, 1972), 65.

  7Overstone, Tracts, 356.

  8“The Bank And The Prospects Of The Money Market,” the Economist, October 10, 1857, 1117.

  9The Bank And The Prospects Of The Money Market,” the Economist, October 10, 1857, 1117.

  10“The Money Market,” Economist, October 17, 1857, 1145.

  11David Kynaston, The City of London: A World of its Own, 1815–1890 (London: Pimlico, 1995), 86.

  12D. P. O’Brien, The Development of Monetary Economics: A Modern Perspective on Monetary Controversies (Cheltenham: Edward Elgar, 2007), 94.

  13T. E. Gregory, Westminster Bank through a Century, vol. 2 (London: Oxford University Press, 1936), 173.

  14T.E. Gregory, Westminster Bank, vol. 2, 173.

  15Bagehot, Collected Works, 9:356.

  16Bagehot, Collected Works, 5:70.

  17Sir John Clapham, The Bank of England: A History, Vol. 2 (1797-1914) (London: Cambridge University Press, 1970), 226.

  18D. Morier Evans, The History of the Commercial Crisis 1857–1858 and the Stock Exchange Panic of 1859 (1859; repr. New York: Augustus M. Kelley, 1969
), 75.

  19Western Bank of Scotland, RBS Heritage Hub, http://www.rbs.com/heritage.html

  20King, History of the London Discount Market, 198.

  21“Money-Market and City Intelligence,” The Times, November 7, 1857.

  22O’Brien, The Correspondence of Lord Overstone, 2:764.

  23“Money-Market and City Intelligence,” The Times, November 10, 1857.

  24Evans, The History of the Commercial Crisis, 91.

  25Evans, The History of the Commercial Crisis, 73.

  26O’Brien, The Correspondence of Lord Overstone, 2:794.

  27The Correspondence of Lord Overstone, 2, 802.

  28148 Parl. Deb. (3d ser.) (1857), cols. 214–15.

  29Bagehot, Collected Works, 10:55.

  30Bagehot, Collected Works, 10:57.

  31Bagehot, Collected Works, 10:53–54.

  32Bagehot, Collected Works, 10:75.

  33Russell Barrington, ed., The Love Letters of Walter Bagehot and Eliza Wilson: Written from 10 November 1857 to 23 April 1858 (London: Faber and Faber, 1933), 125.

  34Bagehot, Collected Works, 10:63.

  35O’Brien, The Correspondence of Lord Overstone, 2:823.

  36O’Brien, The Correspondence of Lord Overstone, 2:808.

  37O’Brien, The Correspondence of Lord Overstone, 2:822–23.

  CHAPTER 6: “THE YOUNG GENTLEMAN OUT OF MISS AUSTEN’S NOVELS”

  1Stuckey’s Banking Co., Ltd., Directors’ Minutes, STU3.3, 152.

  2Stuckey’s Banking Co., Ltd., Directors’ Minutes, STU3.3, 171.

  3Barrington, The Love Letters, 33.

  4Barrington, The Love Letters, 130.

  5Buchan, The Spare Chancellor, 104.

  6Buchan, The Spare Chancellor, 105.

  7Barrington, Life of Walter Bagehot, 168.

  8Barrington, The Love Letters, 18.

  9Martha Westwater, The Wilson Sisters: A Biographical Study of Upper Middle-Class Victorian Life (Athens, OH: Ohio University Press, 1984), 32–33.

  10Westwater, The Wilson Sisters, 43.

  11Westwater, The Wilson Sisters, 24.

  12Westwater, The Wilson Sisters, 45.

  13Barrington, The Love Letters, 59.

  14Westwater, The Wilson Sisters, 13.

  15Barrington, The Love Letters, 27-67.

  16Barrington, The Love Letters, 31.

  17Barrington, The Love Letters, 33–35.

  18Barrington, The Love Letters, 39.