Abstract
If many financial crises have a stylized form, should there be a standard policy response? Assume plethora, speculation, panic; what then? Should the government authorities intervene to cope with a crisis and if so when? Should they seek to forestall increases in real estate prices and stock prices as their price increases expand so the subsequent crash will be less severe? Should they prick the bubble once it is evident that the prices of property and corporate shares are so high that it is extremely unlikely that increases in rents and in corporate earnings could be sufficiently rapid and large to ‘ratify’ these lofty prices? When the prices of securities begin to fall, should the authorities adopt measures to dampen the decline and ameliorate the consequences?
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Notes
Ian Giddy, ‘Regulation of Off-Balance Sheet Banking’, in The Search for Financial Stability: the Past Fifty Years (San Francisco: Federal Reserve Bank of San Francisco, 1985), pp. 165–77.
Edward J. Kane, ‘Competitive Financial Reregulation: an International Perspective’, in R. Portes and A. Swoboda, eds, Threats to International Financial Stability (Cambridge: Cambridge University Press, 1987), pp. 111–45.
Stanley Zucker, Ludwig Bamberger: German Liberal Politician and Social Critic, 1823–1899 (Pittsburgh: University of Pittsburgh Press, 1975), p. 78.
Thomas Joplin, Case for Parliamentary Inquiry into the Circumstances of the Panic, in a Letter to Thomas Gisborne, Esq., M. P. (London: James Ridgeway & Sons, n.d. [after 1832]), p. 10 (apropos the panic of 1825).
Sir John Clapham, The Bank of England: a History (Cambridge: Cambridge University Press, 1945), vol. 2, p. 236 (apropos the panic of 1847).
E. Victor Morgan, The Theory and Practice of Central Banking, 1797–1913 (Cambridge: Cambridge University Press, 1943), p. 133.
For an extended discussion, see Rudiger Dornbusch and Jacob Frenkel, ‘The Gold Standard and the Bank of England in the Crisis of 1847’, in Michael Bordo and Anna J. Schwartz, eds, A Retrospective on the Classical Gold Standard, 1821–1931 (Chicago: University of Chicago Press, 1984), pp. 233–64.
Ministère des Finances et al., Enquête sur les principes et les faits géneraux qui régissent la circulation monétaire et fiduciare (Paris: Imprimerie impériale, 1867), vol. 1, p. 456.
Herbert Hoover, The Memoirs of Herbert Hoover (New York: Macmillan & Co., 1952), vol. 3, p. 30.
Murray N. Rothbard, America’s Great Depression, 3rd edn (Kansas City: Sheed & Ward, 1975), p. 187.
Paul Johnson, Modern Times: the World from the Twenties to the Eighties (New York: Harper & Row, 1983), p. 244.
Ernst Baasch, Holländische Wirtschaftsgeschichte (Jena: Gustav Fischer, 1927), p. 238.
Great Britain, Parliamentary Papers, Monetary Policy, Commercial Distress (1857; Shannon: Irish University Press, 1969), vol. 1, pp. 427, 431.
D. Morier Evans, The Commercial Crisis, 1847–1848, 2nd edn (1849; reprint edn, New York: Augustus M. Kelley, 1969), p. 89n.
Henrietta M. Larson, Jay Cooke, Private Banker (Cambridge, MA: Harvard University Press, 1936), p. 80.
W. C. T. King, History of the London Discount Market (London: George Routledge & Sons, 1936), p. 243.
Theodore Dreiser, The Financier (1912), in Trilogy of Desire (New York: World Publishing, 1972), p. 491.
W. Jett Lauck, The Causes of the Panic of 1893 (Boston: Houghton, Mifflin, 1907), p. 102.
W. R. Brock, Lord Liverpool and Liberal Toryism, 1820–1827 (Cambridge: Cambridge University Press, 1941), pp. 209–10 (cited by Clapham, Bank of England, vol. 2, p. 108).
Stephan Skalweit, Die Berliner Wirtschaftskrise von 1763 und ihre Hintergründe (Stuttgart: Verlag W. Kohlhammer, 1937), pp. 49–73.
Arthur D. Gayer, W. W. Rostow, and Anna J. Schwartz, The Growth and Fluctuation of the British Economy, 1790–1850 (Oxford: Oxford University Press, Clarendon Press, 1953), vol. 1, p. 272.
John Carswell, The South Sea Bubble (London: Cresset Press, 1960), p. 184.
Alexander Dana Noyes, The Market Place: Reminiscences of a Financial Editor (Boston: Little, Brown, 1938), p. 333.
Max Wirth, Geschichte der Handelskrisen, 4th edn (1890; reprint edn, New York: Burt Franklin, 1968), p. 521.
Maurice Lévy-Leboyer, Les banques européennes et l’industrialisation internationale dans la première moitié du XIXe siècle (Paris: Presses universitaires de France, 1964), p. 480, text and note 5.
George W. Van Vleck, The Panic of 1857: An Analytical Study (New York: Columbia University Press, 1943), p. 80.
Jacob H. Schiff, ‘Relation of a Central Bank to the Elasticity of the Currency’, Annals ofthe American Academy of Political and Social Science, vol. 31 (January–June 1908), p. 375.
For a more contemporary account, see Jean Strouse ‘The Brilliant Bailout’, New Yorker (23 November 1998), pp. 62–77.
Myron T. Herrick, ‘The Panic of 1907 and Some of Its Lessons’, Annals of the American Academy of Political and Social Science, vol. 31 (January-June 1908), p. 309.
John Kenneth Galbraith, The Great Crash, 1929, 3rd edn (Boston: Houghton Mifflin, 1972), pp. 107–8.
For a discussion of the rescue committee (Aufhilfsfonds) in Vienna, see Eduard März, Österreich Industrie- und Bankpolitik in der Zeit Franz Josephs I: Am Beispiel der k.k. priv. Österreichischen Credit-Anstalt für Handel und Gewerbe (Vienna: Europa Verlag, 1968), pp. 177–82.
Bertrand Gille, La banque en France au XIX e siècle (Paris: Droz, 1970), p. 93.
Hans Rosenberg, Die Weltwirtschaftskrise von 1857–1859 (Stuttgart/Berlin: Verlag von W. Kohlhammer, 1934), p. 129.
Albert E. Fr. Schäffle, ‘Die Handelskrise von 1857 in Hamburg, mit besonderer Rücksicht auf das Bankwesen’, in Gesammelte Aufsätze (Tübingen: H. Raupp’schen, 1885), vol. 2, pp. 44, 45, 52, 53.
For more detailed accounts of the Baring crisis and rescue, see L. S. Pressnell, ‘Gold Reserves, Banking Reserves and the Baring Crisis of 1890’, in C. R. Whittlesey and J. S. G. Wilson, eds, Essays in Money and Banking in Honour of R. S. Sayers (Oxford: Clarendon Press, 1968), pp. 67–228;
Ellis T. Powell, The Evolution of the Money Market (1384–1915): an Historical and Analytical Study of the Rise and Development of Finance as a Central Coordinated Force (1915: reprint edn, New York: Augustus M. Kelley, 1966), p. 528.
William Smart, Economic Annals of the Nineteenth Century (1911; reprint edn, New York: Augustus M. Kelley, 1964), vol. 1, pp. 267–8.
Author information
Authors and Affiliations
Copyright information
© 2015 Charles P. Kindleberger and Robert Z. Aliber
About this chapter
Cite this chapter
Aliber, R.Z., Kindleberger, C.P. (2015). Policy Responses: Benign Neglect, Exhortation, and Bank Holidays. In: Manias, Panics, and Crashes. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-137-52574-1_12
Download citation
DOI: https://doi.org/10.1007/978-1-137-52574-1_12
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-137-52575-8
Online ISBN: 978-1-137-52574-1
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)