Few Americans outside of New York’s financial markets initially noted the Austrian crash. More noticed the Bank of England’s response. Uncertain where panic would strike next, the British sought both to curtail the reckless borrowing that had brought Austria to its knees and to increase the gold reserves of the Bank of England. The Old Lady of Threadneedle Street raised her discount rates—the amount charged other banks for short-term loans—thus effectively raising interest rates across Europe and North America. The discount rate jumped from 4 percent at the beginning of May to 9 percent by
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