(no subject)

[randomness]

"There is one form of panic, however, which I believe the Federal Reserve system will relegate to its proper place, the museum of antiquities, and that is the panic generated by distrust in our banking system leading to a struggle for self-preservation between bank and bank and individual and individual and ultimate hoarding by the people. I say ultimate hoarding by the people, for to my mind such hoarding usually follows hoarding by the banks and does not precede it. It is safe to say that if hoarding by banks should cease, hoarding by individuals would never occur, and both, I believe, will be relegated to obscurity under the Federal Reserve system.

"No hoarding can be imagined more injurious than the hoarding of banks when they have engaged in this operation in the past. Each bank retreats into its own citadel at the sound of danger and at a time when it should be drawing upon its reserves to help the business man of the community, it stays aloof, piling up reserves upon reserves like Pelion upon Ossa, and the business men have to care for themselves as best they can."

--Charles S. Hamlin, Governor of the Federal Reserve Board, in the New York Times, Friday, December 4, 1914.

(From http://query.nytimes.com/mem/archive-free/pdf?res=9E02E6DF1438E633A25757C0A9649D946596D6CF,
pointer via http://paul.kedrosky.com/archives/2008/10/09/financial_panic_1.html)

Comments

Wow.

[ddreslough.livejournal.com]

So, Hamlin gets a big posthumous "I CALLED IT! I, LIKE, TOTALLY CALLED IT, YO!"

:)

[karakara98.livejournal.com]

Thanks for all your posts on the financial crisis. You do an excellent job of pulling cogent tidbits out of the media frenzy.

[r-ness.livejournal.com]

You're welcome! Sometimes I worry that I've driven away all the people who read me for the food posts.

But I'm enjoying this, and I'm glad someone is getting something out of it.

Thanks for the kind words!

[babasyzygy.livejournal.com]

My favorite quote:

"I believe, however, that the Financial Reserve system will materially check undue expansion by making banks conservative as to their loans, because of the knowledge that any departure from strictly commercial transactions will take away their ability to liquidate such investments by rediscounts in the Federal Reserve Banks."

Clearly, he didn't count on the entire industry realizing that they can always go to the liquidator of last resort - the US Congress.