The Only Thing New is History We Didn’t Know

Lots of people bemoan the fact that we had the worst financial crisis since the Great Depression, and also that fools and skallywags brought this upon us. So it’s fun to read this from the Commercial and Financial Cronicle in 1874, right after the Panic of 1873 when default rates jumped to 14%:

“It was a fearful storm while it lasted, and although every one of course can say now that he knew it was coming, yet the real truth is, its breaking was terribly sudden and unexpected. . . . There are few people who allow themselves to remember long the lessons experience would teach them. If this were not so, there would be many less failures in the world. . . . almost all felt they were carrying too much debt; they would henceforth be out of it. There are now, however, very evident signs that these resolutions have been mostly forgotten. Overtrading, as it is called, is an evil that has ever existed, and pretty much the same epitaph can be written above each business prostration—here lies the result of an attempt to do too much with too little capital. Must history necessarily repeat itself?”

Quoted in Giesecke et al, 2010.

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