Abstract
It is time to pull the threads of the argument together. But before we do, there remains one difficult, unanswered question: Does it make a difference if there is no lender of last resort? For one thing, for most of the financial crises covered from 1720 to 1988, both national and international, a lender of last resort did swing into action in response to the pressures of the market—though often protesting all the way. The role was not always dispatched with efficiency, so that a refined analysis would categorize the aftermath of crises not only by the presence or absence of a lender of last resort but also by how well the role was discharged. Second, the aftermath of a depression depends not just on how the crisis was handled but on a host of other variables, especially the factors affecting long-term investment: population growth, the existence of a frontier, demands arising from war, exports, the presence or absence of innovations that are not fully exploited, and the like. A speculative crisis like that of 1847 in England was likely in any eveny to be pulled quickly back into prosperity by renesed investment in railroads, regardless of whether the Bank of England suspended the Bank Act of 1844 and stood ready to provide liquidity to all borrowers with sound collateral.
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Notes
12. Conclusion: The Lessons of History
William Wisely, A Tool of Power: The Political History of Money (New York: Wiley-Interscience, 1977), p. 41.
As quoted in William Smart, Economic Annals of the Nineteenth Century (1912; reprinted., New York: Augustus M. Kelley, 1964), vol. 2, p. 328.
Leone Levi, History of British Commerce (London: John Murray, 1872), p. 182.
George W. Van Vleck, The Panic of 1857: An Analytical Study (New York: Columbia University Press, 1953), pp. 83, 106.
John Carswell, The South Sea Bubble (London: Cresset Press, 1960), pp. 271–72.
Joseph A. Schumpeter, Business Cycles: A Theoretical, Historical and Statistical Analysis of the Capitalist Process (New York: McGraw-Hill, 1939), vol. 1, pp. 250–51.
Carswell, South Sea Bubble, pp. 184, 205, 213.
T. S. Ashton, Economic Fluctuations in England, 1700–1800 (Oxford: Oxford University Press, Clarendon Press, 1959), p. 121.
Ibid., p. 172.
Clément Juglar, Les crises commerciales et leur retour périodique en France, en Angleterre et aux Etats-Unis, 2nd ed. (1889; reprinted., New York: Augustus M. Kelley, 1967), p. 99.
E. Ray McCartney, Crisis of 1873 (Minneapolis: Burgess, 1935), pp. ll3, ll7.
Ibid., p. 117.
S. B. Saul, The Myth of the Great Depression (New York: St. Martin’s Press, 1969).
W. Jett Lauck, The Causes of the Panic of 1893 (Boston: Houghton Mifflin, 1907), p. 55.
C. P. Kindleberger, “International Propagation of Financial Crises: The Experience of 1888–93,” in idem, Keynesianism vs. Monetarism and Other Essays in Financial History (London: Allen & Unwin, 1985), pp. 226–39.
Bureau of the Census, U.S. Department of Commerce, Historical Statistics of the United States, 1789–1945 (Washington, D.C.: U.S. Government Printing Office, 1949), pp. 151, 275.
Jørgen Pedersen, “Some Notes on the Economic Policy of the United States During the Period 1919–1932,” in Hugo Hegelund, ed., Money, Growth and Methodology (Lund: Lund Social Science Studies, 1961);
reprinted in J. Pedersen, Essays in Monetary Theory and Related Subjects (Copenhagen: Samfundsvidenskabeligt Forlag, 1975), p. 188.
Ibid., pp. 193–94.
Ashton, Economic Fluctuations, p. 127.
Thomas Joplin, Case for Parliamentary Inquiry into the Circumstances of the Panic, in a letter to Thomas Gisborne, Esq., M.P. (London: F. Ridgeway and Sons, n.d. [after 1832]), p. 14.
Reginald Charles McGrane, The Panic of 1837: Some Financial Problems of the Jacksonian Era (1924; reprinted., New York: Russell and Russell, 1965), p. 1.
James Wilson, Capital, Currency and Banking (London: Economist, 1847), p. 1101.
D. Morier Evans, The Commercial Crisis, 1847–48, 2nd ed. (1849; reprinted., New York: Augustus M. Kelley, 1969), p. 111.
D. Morier Evans, The History of the Commercial Crisis, 1857–1858, and the Stock Exchange Panic of 1859 (1859; reprinted., New York: Augustus M. Kelley, 1969), p. v.
Fred Oelssner, Die Wirtschaftskrisen, vol. 1, Die Krisen in vormonopolistischen Kapitalismus (Berlin: Dietz Verlag, 1953), p. 237, quoting Friedrich Engels.
Albert E. Fr. Schaffle, “Die Handelskrise von 1857 in Hamburg, mit besondered Rucksicht auf das Bankwesen,” quoted in Wladimir d’Ormesson, La grande crise mondiale de 1857: L’histoire recommence, les causes, les remèdes (Paris-Suresnes: Maurice d’Hartoy, 1933), p. 119.
A. Andréadès, History of the Bank of England (London: P. S. King, 1909), p. 357.
E. Victor Morgan, The Theory and Practice of Central Banking, 1797–1913 (Cambridge: Cambridge University Press, 1943), p. 177.
Fritz Stern, Gold and Iron: Bismarck, Bleichroder, and the Building of the German Empire (London: Allen & Unwin, 1977), p. 189, quoting a letter of October 1875 from Baron Abraham von Oppenheim to Bleichröder.
Jean Bouvier:, Le krach de l’Union Générale (Paris: Presses universitaires de France, 1960), p. 145, quoting a director of the Crédit Lyonnais.
John Kenneth Galbraith, The Great Crash, 1929, 3rd ed. (Boston: Houghton Mifflin, 1972), p. vii.
Fourth Report of the Committee on Economic Information, “Survey of the Economic Situation, July, 1932,” in Susan Howson and Donald Winch, The Economic Advisory Council, 1930–1939: A Study in Economic Advice During Depression and Recovery (Cambridge: Cambridge University Press, 1977), pp. 277–78.
The Economist, voi. 352, no. 8135 (August 21, 1999), “Asia’s BounceBack,” (editorial, in Brithsh “leader”), pp. ll–12;
see also “Asia’s economic recovery,” ibid., 16–18.
Sebastian Edwards, “Abolish the IMF,” Financial Times, November 13, 1998, p. 12,
and Milton Friedman, “Markets to the Rescue,” Wall Street Journal, October 13, 1998, p. A22.
See John Eatwell and Lance Taylor, “International Capital Markets and the Future of Economic Policy,” Working Paper no. 9 of the Center for Economic Policy Analysis, Series III (New York: New School for Social Research, 1998), pp. 12–15.
Barry Eichengreen, Toward a New International Financial Architecture: A Practical Post-Asia Agenda (Washington, D.C.: Institute for International Economics, 1999).
A summary is set out in Eichengreen’s “International Architecture Reform Scorecard,” The International Economy (May/June 1999), pp. 34–35 and accompanying article.
Ibid.
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Kindleberger, C.P., Bernstein, P.L. (2000). Conclusion: The Lessons of History. In: Manias, Panics and Crashes. Palgrave Macmillan, London. https://doi.org/10.1057/9780230536753_12
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