Bagehot

  10Vizcarra, “Guano, Credible Commitments,” 17.

  11“The Peruvian Loan,” the Economist, June 11, 1870, 723.

  12“The Foreign Loans Of The Week,” the Economist, March 23, 1872, 352.

  13“The Peruvian Loan,” the Economist, March 23, 1872, 352.

  14Vizcarra, “Guano,” 41.

  15“The Present Position Of The New South American And Central American Loans—A Warning To Investors In Foreign Government Securities,” the Economist, October 19, 1872, 1279.

  16“The Present Position,” the Economist, October 19, 1872, 1279.

  17“The Egyptian Debt,” the Economist, July 5, 1873, 809.

  18“The Causes And Effects Of The Recent Fall In Government Securities,” the Economist, July 26, 1873, 900.

  19“The Turkish Repudiation,” the Economist, October 9, 1875, 1190.

  20“The Duty Of The English Government With Reference To The Bankruptcy Of Turkey,” the Economist, October 23, 1875, 1250.

  21“The Report Of The Delegation Of Turkish Bondholders,” the Economist, June 17, 1876, 706.

  22Hamilton L. Jenks, The Migration of British Capital to 1875 (New York and London: Alfred A. Knopf, 1927), 321.

  CHAPTER 16: GOVERNMENT BEARS THE COST

  1Diaries, Letters, and Papers of George Warde Norman, 1754–1876, 9 vols., London Borough of Bromley Archives.

  2Kynaston, Till Time’s Last Sand, 230.

  3Bagehot, Collected Works, 11:30.

  4Thomson Hankey, letter to the editor, The Times, November 12, 1872.

  5“The Dangerous Opinions Of A Bank Director,” the Economist, November 16, 1872, 1397.

  6Walter Bagehot, Lombard Street: A Description of the Money Market (New York: E. P. Dutton, 1920), 232.

  7Hankey, The Principles of Banking, vii.

  8Bagehot, Lombard Street, 3–4.

  9Bagehot, Lombard Street, 10.

  10Bagehot, Lombard Street, 16.

  11Bagehot, Lombard Street, 18.

  12Bagehot, Lombard Street, 27.

  13Bagehot, Lombard Street, 32.

  14Bagehot, Lombard Street, 35.

  15Bagehot, Lombard Street, 37.

  16Bagehot, Lombard Street, 43.

  17Bagehot, Lombard Street, 51-52.

  18Bagehot, Lombard Street, 151.

  19Kynaston, Till Time’s Last Sand, 280.

  20Bagehot, Lombard Street, 254.

  21Hankey, The Principles of Banking, xiii–xiv.

  22Richard Davenport-Hines, “Lidderdale, William (1832–1902), merchant and banking official,” Oxford Dictionary of National Biography.

  23Kynaston, Till Time’s Last Sand, 207.

  24Goschen, Essays and Addresses, 112.

  25Kynaston, Till Time’s Last Sand, 261.

  CHAPTER 17: “I WONDER WHAT MY EMINENCE IS?”

  1Bagehot, Collected Works, 14:422–26.

  2Barrington, Life of Walter Bagehot, 445.

  3Bagehot, Collected Works, 9:40.

  4Bagehot, Biographical Studies, 262.

  5Bagehot, Biographical Studies, 278.

  6Bagehot, Biographical Studies, 317.

  7Bagehot, Biographical Studies, 318.

  8Bagehot, Collected Works, 11:407.

  9Barrington, Life of Walter Bagehot, 442.

  10Edwards, The Pursuit of Reason, 318.

  11Bagehot, Collected Works, 15:41.

  12Bagehot, Collected Works, 15:58.

  13Bagehot, Collected Works, 15:70.

  14Bagehot, Collected Works, 15:166.

  15Barrington, Life of Walter Bagehot, 443.

  16Barrington, Life of Walter Bagehot, 318.

  BIBLIOGRAPHY

  List of notable cited works by Walter Bagehot.

  “Bad Lawyers or Good?,” The Fortnightly Review, January-June 1876.

  “The First Edinburgh Reviewers,” The National Review, October 1855.

  “William Cowper,” The National Review, July 1855.

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

  “Festus,” The Prospective Review, November 1847.

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

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

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

  “The General Aspect Of The Banking Question,” the Economist, February 1857.

  “The Act Of 1844 And The Convertibility Of The Note,” the Economist, May 16, 1857.

  “The Monetary Crisis of 1857,” The National Review, January 1858.

  Walter Bagehot, Parliamentary Reform: An Essay (London: Chapman and Hall, 1859).

  “John Milton,” The National Review, July 1859.

  Walter Bagehot, Biographical Studies, ed. Richard Holt Hutton (London: Longmans, Green, and Co., 1907).

  “The Bank Notes Issue Bill,” the Economist, May 27, 1865.

  “Recognition Or Mediation?,” the Economist, October 18, 1862.

  “The Emancipation Proclamation,” the Economist, October 25, 1862.

  “Rumours Of Peace,” the Economist, February 4, 1865.

  “The Fall Of Richmond And Its Effect Upon English Commerce,” the Economist, April 22, 1865.

  “The Assassination Of Mr. Lincoln,” the Economist, April 29, 1865.

  “The Money Market,” the Economist, February 3, 1866.

  “The State Of The Money Market,” the Economist, April 14, 1866.

  “The Prosperity Of The London Joint Stock Banks: Its Cause And Its Effect,” the Economist, August 17, 1861.

  “Limited Liability In Banking,” the Economist, May 17, 1862.

  “The State Of The City,” the Economist, May 1866.

  “What A Panic Is And How It Might Be Mitigated,” the Economist, May 1866.

  “Is It Better That The Banking Reserve Of A Country Should Be Kept In A Single Bank Or Be Distributed Between Several Banks,” the Economist, March 1866.

  “One Banking Reserve Or Many?,” the Economist, September 1866.

  “Garibaldi,” the Economist, April 9, 1864.

  “The Need Of Many Facts For A Good Reform Bill,” the Economist, March 17, 1866.

  “The Duty Of All Parties On The Reform Question,” the Economist, May 5, 1866.

  “The English Constitution,” The Fortnightly Review, no. 1-9, May 15, 1865-January 1, 1867.

  “The Way To Reduce Electoral Corruption,” the Economist, June 2, 1866.

  “Mr. Disraeli,” the Economist, July 2, 1859.

  “Why Mr. Disraeli Has Succeeded,” the Economist, September 7, 1867.

  “The Women’s Degrees,” the Economist, May 23, 1874.

  Walter Bagehot, Physics and Politics (New York: D. Appleton, 1893), 55.

  “The Danger Of Lending To Semi-Civilised Countries,” the Economist, November 23, 1867.

  “The Serious Danger Of Rash Foreign Loans,” the Economist, April 30, 1870.

  “The Peruvian Loan,” the Economist, June 11, 1870.

  “The Foreign Loans Of The Week,” the Economist, March 23, 1872.

  “The Present Position Of The New South American And Central American Loans—A Warning To Investors In Foreign Government Securities,” the Economist, October 19, 1872.

  “The Egyptian Debt,” the Economist, July 5, 1873.

  “The Causes And Effects Of The Recent Fall In Government Securities,” the Economist, July 26, 1873.

  “The Turkish Repudiation,” the Economist, October 9, 1875.

  “The Duty Of The English Government With Reference To The Bankruptcy Of Turkey,” the Economist, October 23, 1875.

  “The Report Of The Delegation Of Turkish Bondholders,” the Economist, June 17, 1876.

  “Investments,” The Inquirer, July 31, 1852.

  “The Dangerous Opinions Of A Bank Director,” the Economist, November 16, 1872.

  Walter Bagehot, Lombard Street: A Description of the Money Market (New York: E. P. Dutton, 1920).

  “Will The Money Market Take C
are Of Itself?,” the Economist, April 1869.

  “Why Not Issue Exchequer Bills At Short Dates?,” the Economist, September 1876.

  INDEX

  Page numbers listed correspond to the print edition of this book. You can use your device’s search function to locate particular terms in the text.

  Page numbers followed by n refer to footnotes.

  Aberdeen, George Hamilton-Gordon, Lord, 117

  Act of 1844, see Peel’s Act

  Adams, Charles Francis, 125n

  Aird, David Mitchell, 99

  Althorp, Lord, 288–89

  America, see United States

  “Amicus,” see Bagehot, Walter, writings of

  Anstey, Thomas Chisholm, 217, 218

  Anti-Corn Law League, 11, 19, 20, 22, 31, 99, 173, 222, 235

  Arbuthnot, George, 122–23

  Arbuthnot, Harriet, xxvii

  Arnold, Matthew, 91, 105, 237

  Athenaeum Club, 235, 292–93

  Atkinson, Thomas, xxi

  Atlantic, The, 245

  Atlantic & Royal Mail Steam Packet Company, 146

  Aubrey, John, 103

  Austen, Jane, Mansfield Park, 88–89

  Australia:

  emigration to, 48, 197

  gold strikes in, 47, 48, 97

  Australian Mortgage Land and Finance Company, 142

  Bacon, Francis, 58

  Bagehot, Edith Stuckey Estlin (mother), 2–4, 7

  children of, 3

  death of, 239–40

  friends of, 38–39

  madness of, 3, 11–12, 47, 84

  and Walter, 9, 13, 24–25, 65, 239–40

  Bagehot, Eliza Wilson:

  courtship and marriage of, 83–94

  diary of, 84, 119, 208, 239

  headaches of, 105

  personal traits of, 91, 105–6

  social life of, 105–6, 107–8

  travels of, 105–6

  and Walter’s career, 97, 239

  and Walter’s health, 239, 290

  widowhood of, 287, 291

  writing of, 101n

  Bagehot, Robert Codrington (grandfather), 3, 8

  Bagehot, Sir Thomas, Master of the Buckhounds to King James I, 3

  Bagehot, Thomas Watson “Watson” (father):

  personal traits of, 5, 12

  and Stuckey’s bank, 2, 3, 5, 23, 24, 36n, 51–52, 64, 169n, 286

  and Walter, 7, 10–12, 24–25, 46, 47, 110–11

  Bagehot, Walter:

  ambitions of, 88

  on “animated moderation,” 186

  banking career of, 45, 46–47, 56, 235

  banking principles of, xiv, 123, 263–77, 279, 280, 281, 283

  birth and family background of, 1, 2–6

  and British constitution, 184–92

  childhood of, 6–10

  and class differences, 96, 131, 190–91, 208

  as club member, 100n, 233, 234–35, 238, 263, 292–93

  death of, 290–91

  and Disraeli, see Disraeli, Benjamin

  and the Economist, see Economist

  on electoral reform, 199, 224

  essays by, see Bagehot, Walter, writings of

  failed bids for election, xv, 180–83, 185–86, 205–19, 230–33, 237, 238

  on foreign investments, 246, 247–48, 251–56, 259, 262

  and Gladstone, 114, 116–18, 120–24, 136, 237–39, 291

  on gold reserve, 270–71

  health issues of, xvi, 24, 35, 86, 239, 240, 283, 286, 290

  and his father, 7, 10–12, 24–25, 46, 47, 110–11

  and his mother, 9, 13, 24–25, 65, 239–40

  home life of, 114

  income of, 64, 82, 106, 153, 169n, 170, 286

  influence of, xiv-xv, 137, 237–39, 291–94

  as journalist, xv-xvi, 39, 41, 47, 119, 121, 130, 170, 235–38, 250, 283, 293–94; see also Bagehot, Walter, writings of

  law studies of, 25, 34–36, 46n

  legacy of, xv, 290, 292–94

  on morality, 242

  and Norman’s opinions, 263–66

  and Overend Gurney, 153–62

  and paradox, 17, 42, 43, 92, 127, 138, 143, 170–71, 173, 188, 223n, 244, 272

  in Paris, 37–45, 47

  and Peel’s Act, 170

  personal traits of, xvi, 60–61, 63, 88, 91, 105–6, 180, 191, 228–29, 230, 291–92

  as political Liberal, 73, 141, 142, 185–86, 204, 206, 208–15, 220, 230

  on population growth, 244–45

  on racial stereotypes, 43–44, 131, 241; see also slavery

  and religion, 24, 37

  reputation of, 234, 292

  residences of, 93, 105, 113, 271

  and romance, 65–66, 83–94; see also Bagehot, Eliza Wilson

  social life of, 83–84, 105–6, 113, 119, 196, 234–39

  and Stuckey’s bank, xxxi, 1, 46–47, 113, 137, 153, 180, 238, 274n, 279, 283

  studies of, 4, 7, 9–13, 23–24, 56

  travels of, 24

  on Treasury bills, 289–90

  at University College London, 14–18, 23–26, 32n, 46, 65, 185

  on U.S. Civil War, 125–27, 130–31

  on warfare, 241–42

  wide range of interests, 101–2, 240

  on women’s roles, 228–29

  Bagehot, Walter, writings of:

  “Adam Smith as a Person,” 287–88

  as “Amicus,” 41–45

  “A Bank Director On Banking And The Currency,” 174–75

  “A Banker,” 66–73, 74, 79

  on Bank of England, 169–72

  “The Cabinet,” 184

  collected works, 292

  “The Currency Monopoly,” 32–33, 47

  “The Dangerous Opinions Of A Bank Director,” 269

  “The Distribution Of Seats Bill,” 180

  Economic Studies, 287

  The English Constitution, 185, 186–94, 230, 234

  essays in Economist, xv-xvi, 66, 79, 88, 89, 90, 113, 170–72, 177, 179–80

  Estimates of Some Englishmen and Scotchmen, 90–91

  “Festus,” 56–58

  “The First Edinburgh Reviewers,” 61–64

  on gold reserves, 98, 173

  “The House of Commons,” 185, 189

  “The House of Lords,” 185, 189

  “The Late Lord Clarendon,” 241n

  “Law of 15 percent,” 262

  on Lewis, 120

  Lombard Street, xiv, 163, 178, 185, 186, 188, 271–77, 278, 279, 281, 283, 286

  “Lord Althorp and the Reform Act of 1832,” 288–89

  “John Milton,” 102–5

  misquotations from, 293

  “The Monarchy,” 185

  “The Monetary Crisis of 1857,” 79–81

  “Mr. Gladstone,” 116–18

  “Parliamentary Reform,” 95–97

  Physics and Politics, 185, 234, 240–45, 248, 254

  planned volumes on political economy, 287–88

  “The Postulates of English Political Economy,” 287

  “The Prequisites of Cabinet Government,” 185

  purposes of, 276

  quality and style of, xvi, 32-33, 45, 56-57, 59, 61-62, 72, 103, 113, 116, 122n, 133n, 142, 162, 179, 188, 192, 204, 230n, 237, 240, 245, 272, 277, 286-87, 288, 292n

  self-quotation in, 79n

  “Shakespeare—the Man,” 58–61

  “The State Of The City,” 179

  “A Warning To Investors In Foreign Government Securities,” 253

  “The Way to Reduce Electoral Corruption,” 211, 213

  “What A Panic Is And How It Might be Mitigated,” 179

  “William Pitt,” 113

  Bagehot, Watson (foster brother), 3–4

  Bagehot family, 2–6

  and Stuckey family, 3

  and Unitarianism, 4, 7–8

  Bailey, Philip James, “Festus,” 56–58

  Balzac, Honoré, Eugenie Grandet, 105

  Bank Charter Act (1844), see Peel�
�s Act

  Bankers’ Magazine, 152–53

  Bank of England:

  Bagehot’s essay on, 169–72

  and Bank Charter (Peel’s) Act, 26

  Banking Department of, 26, 72

  as Bank of Recourse, 166–70, 171–72

  Bank Rate, 48, 49

  as central bank, 73–74, 164

  and convertibility of paper to gold, xxvi, xxi, 30, 71, 72

  discount rate of, xxv, xxix, 29, 74, 149, 248

  and foreign exchange, xxvii-xxviii

  founding (1694), 33, 267

  gold reserves of, 74, 79, 174, 186, 266–72, 274, 278, 279, 281, 282

  Hankey’s book about, 164, 174, 175–78, 272, 278, 279–81

  and interest rates, xxi, xxviii, 28, 29, 48, 69, 76, 139, 266

  Issue Department of, 26, 72, 73, 74

  as lender of last resort, xiv, 167–70, 171, 174–75, 186, 266, 267, 268, 278, 279, 280

  and limited liability, 138–42, 195, 267, 276

  and Lombard Street, 271–72

  as monopoly, xviii, 33, 79, 267

  in nineteenth-century banking, xviii-xix, xxii-xxiii, 28–29

  notes issued by, xv, xviii, xix, xxi, xxviii, xxix-xxx, 26, 71, 73, 77, 121, 142, 162, 174, 264, 265, 274

  as Old Lady of Threadneedle Street, xix

  and Overend Gurney, 148–49, 160, 166, 167, 266

  overseers and management of, xxiii, 80, 159, 275–76, 278n

  and Panic of 1825, xiii-xvi, xvii, xxii, xxviii-xxxi, 167, 266

  and Panic of 1847, 167, 266

  and Panic of 1857, 69, 75–76, 266

  and Peel’s Act, 28, 30, 71–72, 142, 279–80

  roles of, xviii, 73–74, 171–72, 178, 266–68

  run on (1797), xvii

  stockholders’ meetings, 167–68, 169–70

  and stock market, 28, 267

  Bank Rate, 165, 285

  banks:

  checking accounts in, 51, 137, 162

  commercial banking, 278–79

  and convertibility of paper to gold, xvii, xx, xxix, 71, 72, 265, 277

  decentralized banking, 51, 171

  and government, xv, xxiii, xxx, 32, 70n, 71–74, 76–81, 121–22, 166–70, 176, 178, 185, 266–67, 282

  joint-stock, xxx, 79, 122, 138, 143, 268, 275, 282

  liabilities of, 282

  limited liability in, 138–42, 143, 152, 157, 159

  modern-day changes in, 278, 280–81, 294

  mortgages vs. bills of exchange, 172–73

  paper currency issued by, xviii, xix-xx, xxix, 71, 73, 120–24, 264, 274

  personal responsibility in, 293

  private, xix, xxx, 141