In his 1873 treatise Lombard Street, Walter Bagehot sought to explain, among other things, “Why Lombard Street is Often Very Dull, and Sometimes Extremely Excited.” He ascribed panics to the money market’s reaction to accidents. “Such accidental events are of the most various nature,” he wrote. “[A] bad harvest, an apprehension of foreign invasion, the sudden failure of a great firm which everybody trusted, and many other similar events, have all caused a sudden demand for cash … [t]here is little difference in the effect of one accident and another upon our credit system. We must be prepared for all of them, and we must prepare for all of them in the same way – by keeping a large cash reserve.” He went on to outline the principles for legitimate central bank action in a crisis: to lend freely, but only to solvent firms with good collateral, and at high rates of interest. He was clear to his readers that he would have preferred a world of free banking, but he thought it politically impossible to abolish the Bank of England and to let crises play out unchecked, so he advocated for rules that would constrain the Bank’s discretion.