"The best way for the bank or banks who have the custody of the bank reserve to deal with a drain arising from internal discredit, is to lend freely. The first instinct of everyone is the contrary. There being a large demand on a fund which you want to preserve, the most obvious way to preserve it is to hoard it—to get in as much as you can, and to let nothing go out which you can help. But every banker knows that this is not the way to diminish discredit. This discredit means, 'an opinion that you have not got any money,' and to dissipate that opinion, you must, if possible, show that you have money: you must employ it for the public benefit in order that the public may know that you have it."
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Essayists from EnglandEconomists from EnglandJournalists from EnglandBusinesspeople from EnglandUniversity College London alumni
Original Language: English
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Ch. II, A General View of Lombard Street
https://en.wikiquote.org/wiki/Walter_Bagehot
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Walter Bagehot
Walter Bagehot (February 3 1826 – March 24 1877) was an English businessman, essayist and journalist who wrote about literature, government and economics.
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