Hankey & Bagehot

Origins of Modern Central Banking
Edited with an Introduction by Henry Lewis
Paperback: $10.00 • ISBN: 9781604190878

Summary

In 2008 we witnessed the failures of such giant financial organizations as Lehman Brothers, AIG, Fannie Mae, and Freddie Mac. In order to rescue the last three and prevent major banks from going under, the government produced extensive “bailout” packages.

Although we think of the “bailout” as a modern method of crisis control, it was not unknown in 1860s Britain. The question then, as now, was the form it should take, and the rules that should govern it. This led to a celebrated debate between two leading economists, Thomson Hankey and Walter Bagehot, each of whom had strong views about proper banking policy.

Ben Bernanke, US Federal Reserve chairman during the Crash of 2008, was closer to Bagehot in approach than to Hankey, but he was not very close to Bagehot either.

Do we have anything to learn from the great Victorians who lived so many years ago? It would seem likely that we do. There were banks then and there are banks now. Human nature presumably has not changed much.

About the Editor

Henry Lewis is a recent high school graduate from Charlottesville, Virginia. His previous books include an edition of Two Little Savages by Ernest Thompson Seton, which he co-edited in 2010; A Traveler’s Guide to the Georgian Language (American Friends of Georgia, 2013); and The Essence of David Hume on Religion, Morals, and Economics (Axios Press, 2014).

Introduction (by Henry Lewis)

THE PRINCIPLES OF BANKING, ITS UTILITY AND ECONOMY WITH REMARKS ON THE WORKING AND MANAGEMENT OF THE BANK OF ENGLAND

by Thomson Hankey, Esq.

  • Preface
  • Banking in Connection with the Currency and the Bank of England
  • A Lecture Delivered at Peterborough, 29th November, 1858, on Banking: Its Utility and Economy

LOMBARD STREET: A DESCRIPTION OF THE MONEY MARKET

by Walter Bagehot

I: Introduction

II: A General View of Lombard Street

IV: The Position of the Chancellor of the Exchequer in the Money Market

V: The Mode in Which the Value of Money Is Settled in Lombard Street

VI: Why Lombard Street Is Often Very Dull, and Sometimes Extremely Excited

VII: A More Exact Account of the Mode in Which the Bank of England Has Discharged Its Duty of Retaining a Good Bank Reserve, and of Administering It Effectually

VIII: The Government of the Bank of England

IX: The Joint Stock Banks

XI: The Bill-Brokers

XII: The Principles Which Should Regulate the Amount of the Banking Reserve to Be Kept by the Bank of England

XIII: Conclusion

Index