Walter Bagehot (pronounced /ˈbædʒət/ BA-jət) (3 February 1826 – 24 March 1877) was a British businessman, essayist, and journalist who wrote extensively about literature, government, and economic affairs. Bagehot was born in Langport, Somerset, England on 3 February 1826. His father, Thomas Walter Bagehot, was managing director and vice-chairman of Stuckey's Banking Company. He attended University College London, where he studied mathematics and in 1848 earned a master's degree in intellectual and moral philosophy.[1] In April 1848, Bagehot was sworn as a Special Constable in anticipation of Chartist riots in London.[2] Bagehot was called to the bar by Lincoln's Inn, but preferred to join his father in 1852 in his family's shipping and banking business. He wrote for various periodicals, and in 1855 founded the National Review with his friend Richard Holt Hutton.[3][4] Later becoming editor-in-chief of The Economist, which had been founded by his father-in-law, James Wilson, in 1860, Bagehot expanded The Economist's reporting on the United States and on politics and is considered to have increased its influence among policymakers over the seventeen years he served as editor. In honour of his contributions, the paper's weekly commentary on current affairs in the UK is entitled "Bagehot," just as its "Lexington" column addresses the United States, "Charlemagne" addresses Europe, "Banyan" addresses Asia, and "Buttonwood" addresses economic affairs. In 1867, he wrote a book called The English Constitution that explored the nature of the constitution of the United Kingdom, specifically the functioning of Parliament and the British monarchy and the contrasts between British and American government. The book is considered a classic and has been translated into many languages. Bagehot also wrote Physics and Politics (1872), in which he coined the still-current expression, "the cake of custom," to describe the tension between social institutions and innovations. Lombard Street (1873), explains the world of finance and banking and focuses particularly on issues in the management of financial crises. In his contributions to sociological theory within historical studies, Bagehot may be compared to his contemporary, Henry James Sumner Maine. Collections of Bagehot's literary, political, and economic essays were published after his death. Their subjects ranged from Shakespeare and Disraeli to the price of silver. Every year, the British Political Studies Association awards the Walter Bagehot Prize for the best dissertation in the field of government and public administration. Recently, Bagehot has come to people's attention in connection with the Federal Reserve's bail out of the financial system in 2008-9. Paul Tucker recently summarized Bagehot's dictum as follows: "[T]o avert panic, central banks should lend early and freely (ie without limit), to solvent firms, against good collateral, and at 'high rates.'* " This was a basis for the Federal Reserve's successful effort to deal with financial crisis. Bagehot goes on to say (Bagehot, Lombard Streetpp. 51-2), "The way in which the panic of 1825 was stopped by advancing money has been described in so broad and graphic a way that the passage has become classical. 'We lent it,' said Mr. Harman, on behalf of the Bank of England, 'by every possible means and in modes we had never adopted before; we took in stock on security, we purchased Exchequer bills, we made advances on Exchequer bills, we not only discounted outright, but we made advances on the deposit of bills of exchange to an immense amount[,] in short, by every possible means consistent with the safety of the Bank, and we were not on some occasions over-nice....' After a day or two of this treatment, the entire panic subsided, and the 'City' was quite calm."