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On the Bank rate and the moon: 
 
The exact maxim is: "7 percent will draw gold from the moon" (the fact that 
it is gold, and not money, is important, because this relies on an 
international capital flow in the form of gold, when the exchange rate has 
reached the import gold point). This maxim is quoted by R. Dornbusch and 
J.A. Frenkel in their paper "The Gold Standard and the Bank of England in 
the Crisis of 1847" (in M.D. Bordo and A.J. Schwartz eds. (1984) A 
Retrospective on the Classical Gold Standard 1821-1931, Chicago: University 
of Chicago Press: 254). They write: "The 1847 episode was probably 
responsible for the popular maxim that '7 per cent...'", but confess in a 
footnote that they "could note trace the exact origin of this maxim" (note 
9 
page 263). They add that "it was referred to by Lionel Robbins in a 
memorandum submitted to the (Radcliffe) Committee on the Working of the 
Monetary System, United Kingdom, Parliament 1960, p. 218. Robbins ascribes 
this maxim to 'a practical banker'". 
 
Ghislain Deleplace 
University of Paris 8, France. 
 
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