Saving the City: The Great Financial Crisis of 1914

Saving the City: The Great Financial Crisis of 1914

Language: English

Pages: 304

ISBN: 0199646546

Format: PDF / Kindle (mobi) / ePub

In London, the world's foremost financial centre, the week before the outbreak of the First World War saw the breakdown of the markets, culminating with the closure for the first time ever of the London Stock Exchange on Friday 31 July. Outside the Bank of England a long anxious queue waited to change bank notes for gold sovereigns. Bankers believed that a run on the banks was underway, threatening the collapse of the banking system--all with the nation on the eve of war.

This book tells the extraordinary, and largely unknown, story of this acute financial crisis that surged over London and around the globe. Drawing on diaries, letters, and memoirs of participants and a wide range of press coverage, as well as government and bank archives, it presents a lively and colourful account of a remarkable episode in financial and social history, outlining the drama of the collapse and the measures taken to contain it. This crucial and compelling 'missing piece' in the world's financial development was the first true global financial crisis, and proved a landmark in the management of financial crises.

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Have temporarily closed down. It was the former bank which shut its doors last Monday, and about which ugly rumours had been current for several days previously that in no small degree contributed to the panic. Nearly all the local religious institutions bank with the Banco di Roma and when there were rumours of monetary scarcity they all withdrew their deposits. The Bank of Italy, however, has guaranteed all its deposits, so there is no cause for uneasiness.102 The Italian central bank’s.

Until 31 August for payment.72 ‘The consequences to London houses’, explained the Financial Times, ‘were such that certain leading arbitrage firms whose credit was of the highest found themselves threatened with serious embarrassment. They had big payments to make here in connection with the Settlement [of the Stock Exchange account], while against this the payment to them of sums due from Continental houses could not be enforced.’73 ‘The Paris Bourse action rendered the position serious,’ stated.

Bank would publish its gold holding in its next balance sheet in January 1915. He called for a Royal Commission: ‘If ever a Royal Commission were needed, it was needed today for the purpose of thoroughly investigating the gold question in this country.’64 And he resigned from the LCBGRC. Three weeks later, members received Schuster’s scheme as well as a complementary technical paper by Tritton.65 Schuster formally proposed the establishment of a secondary gold reserve by the major banks to be.

Crisis to be super-imposed on the international and financial crises,’ Herbert Samuel, himself an undecided, wrote to his wife referring to differences among ministers and possible resignations.12 Grey pressed for a decision—‘either we must declare ourselves neutral, or in it,’ pencilled Runciman in a personal aide-memoire. ‘If we are neutral he will go, but he cannot blame the Cabinet if they disagree with him.’13 Grey’s departure would have wrecked the administration, but so too might the.

Their aid’.18 ‘There is a very strong opinion amongst the traders,’ added Chamberlain, ‘that our care is being directed to making the position of banks or bill-brokers or discount houses comfortable, and that we have a little neglected trade. Our understanding with the banks was that they were going to do their utmost for trade.’ Schuster responded that as far as he knew ‘no accommodation that has been actually asked for has been refused, but where the banks have been careful is with regard to.

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