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British Financial Crises since 1825$
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Nicholas Dimsdale and Anthony Hotson

Print publication date: 2014

Print ISBN-13: 9780199688661

Published to Oxford Scholarship Online: November 2014

DOI: 10.1093/acprof:oso/9780199688661.001.0001

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PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 03 December 2021

‘How We Saved the City’

‘How We Saved the City’

The Management of the Financial Crisis of 1914

(p.94) 6 ‘How We Saved the City’
British Financial Crises since 1825

Richard Roberts

Oxford University Press

The chapter examines the breakdown of international payments at the outbreak of the First World War. The acceptance houses were exposed to the risk of default and their failure could have undermined the discount market and banking system. The reactions of the authorities showed some inventiveness and flexibility, including a payment moratorium, purchases of impaired bills, and advances to acceptors. The government decided to issue Treasury notes and these were readily accepted by the public. The general panic was rapidly stilled, but the supply of commercial bills contracted paving the way for an expanded issue of Treasury bills. Measures were also taken to protect the viability of the Stock Exchange which became the conduit for long-term government borrowing during the war. In this way the crisis was used to redirect the markets to meet the needs of an economy mobilizing for war.

Keywords:   war, moratorium, Treasury notes, Stock Exchange, gold, accepting

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