Lombard street: a description of the money market

One of the great and famous classics of economics, Walter Bagehot's Lombard Street is reprinted here from the original 1873 edition, with minor editorial changes. It describes the origin and operation of the English money market and the nature of the role of the Bank of England in that market. Its comments on the nature of banking and bankers are bril liant and represent the sharing of the experience of a sophis ticated man of affairs. Written in response to the problems of its day, Lombard Street still retains an air of urgency and cogency.

The book is easy to read and every budding economist and banker should read it early in his career. The novice can learn much in seeing the situation out of which Bagehot's recommendation of proper banking principles arose. He has the experience of watching the growth of banking practices similar to that which the law student receives in his study of the development of case law. He acquires a kind of institu tionalism in his view of economic matters that is hard to convey in any other fashion. This is an exciting view of economics. The world is seen as it really is. The future is found to evolve out of the past as old institutions are progres sively adapted to meet changing problems.