Since the financial crisis of 2007–2008, much attention has been given to comparisons between the Great Recession and Great Depression, but the financial crisis of 1914 has received little attention. Richard Roberts, financial historian at King’s College, London, has filled the gap. Saving the City: The Great Financial Crisis of 1914 provides such a rich, detailed, history that it is likely to become the authoritative source for this previously ignored part of the events of 1914.

In his foreword, Mervyn King, former Governor of the Bank of England, accurately describes Saving the City as a mix of “detective story and compelling political and social history.” Drawing on an impressive quantity of archival material from a large range of sources, Richard Roberts has carefully woven it into a gripping story covering all dimensions of London’s financial crisis, from Austria’s ultimatum to Serbia on July 23, 1914 to the reopening of the Stock Exchange on January 4, 1915. Austria’s announcement shocked financial markets and perception of the risk of war changed overnight, triggering a rush for gold or cash in other forms. Liquidation of assets threatened London’s major financial institutions: banks, brokers, jobbers, and discount houses. Market participants feared contagion as panic spread from one market to another. The Bank of England, Treasury, and Chancellor all became involved in a rush of policies to contain the crisis. From the perspective of most of the key players, the challenge throughout was maintaining confidence in the financial system. On these terms, the policies implemented may be considered an overall success. Individually, however, the role played by each policy and its contribution to containing the crisis is a far messier picture.

We are introduced to all the main characters involved in the crisis, including John Maynard Keynes, whose influence on policy was clear but indirect (p. 128), and Lloyd George, whose bold scheme to indemnify the Bank of England against loss from accepting low-class bills paid off. Throughout the book, arguments made by different people—or by the same person at different times—are skillfully connected into a narrative that takes us back, almost as eavesdroppers, to learn of policies that were considered before being dropped or enacted. In at least one case, of a prescient argument made by Robert Brandt in 1912 (pp. 81–82), Roberts achieves this even when Brandt himself failed to make the connection. The careful writing means that it is always clear whether we are eavesdropping on conversations that remained private in 1914 or are revisiting information made public at the time.

Roberts highlights tensions between the Bank of England (then still a joint-stock bank), the other joint-stock banks, and the Treasury as a result of both shared and conflicting interests. The bankers’ scheme, a proposal that the joint-stock banks would deposit £13 million of gold at the Bank of England in exchange for Bank of England notes, though presented as a solution to the financial crisis after Germany’s declaration of war, involved many aspects similar to a scheme the banks had been proposing prior to the war. Despite seeking a way to pay out notes rather than gold, the Treasury was reluctant to give the impression that it was endorsing the bankers’ scheme more permanently. A version of the bankers’ scheme seemed to remain under consideration until August 5; when the final crisis containment package was announced, however, it was not included, having been made unnecessary by the Treasury’s commitment to provide currency notes in small denominations (p. 132).

The initial focus on banks’ loss of gold externally, as other countries liquidated assets, and internally, as depositors withdrew their savings, were soon superseded by concerns about the demand for small-denomination bills to meet payments. The interdependence of real and financial markets took the crisis out of London. Traders unable to make loan payments or pay wages as a result of the disruption to shipping were critical of the joint-stock banks being unwilling to extend credit. As the policy focus shifted to the need for small-denomination notes, there was disagreement over whether £1 notes should be issued by the Bank of England or the Treasury, with the final decision in favor of Treasury notes issued through the Bank (p. 122). This impact of financial markets on the real economy is the only part of the story in which we are tantalizingly left wanting to know more. Because many pages have been written about the impact of war on the economy, however, this is understandable.

Having reached the relatively calm opening of the London Stock Exchange in January 1915, the final chapters of Saving the City put London’s response to the financial crisis in perspective. Chapter 11 shows the extent to which the 1914 financial crisis was a global event, affecting not just allies and belligerents but also countries across the globe that were connected through trade, international finance, and the gold standard. Roberts shows that countries implemented surprisingly similar policies without any prior coordination. These included a moratorium on debt payment, the suspension of convertibility of notes into gold, issuing emergency currency notes, and raising of interest rates. The final chapter briefly explains why the 1914 financial crisis has received so little attention, making the case that it should no longer remain an unknown crisis. By writing so engagingly, Saving the City conveys this forgotten part of London’s financial history to a wide audience.