Managing money risk in antebellum New York: From chartered banking to free banking and beyond

Studies in American Political Development

Volumn 15, Issue 2, 2001, Pages 138-162

  Moss, David A ^a   Brennan, Sarah ^a  

^a HARVARD UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 0035738477     PISSN: 0898588X     EISSN: None     Source Type: Journal    
DOI: 10.1017/s0898588x01000025     Document Type: Article

References (307)

1. The literature on free banking is extensive. See esp. Hugh T. Rockoff, "The Free Banking Era: A Reexamination," Journal of Money, Credit and Banking 6 (1974): 141-67; Hugh T. Rockoff, "Varieties of Banking and Regional Economic Development in the United States, 1840-1860," Journal of Economic History 35 (1975): 160-81; Hugh T. Rockoff, The Free Banking Era: A Reexamination (New York: Arno Press, 1975); Arthur J. Rolnick and Warren E. Weber, "New Evidence on the Free Banking Era," American Economic Review 73 (1983): 1080-91; Arthur J. Rolnick and Warren E. Weber, "The Causes of Free Bank Failures: A Detailed Examination," Journal of Monetary Economics 14 (1984): 267-91; Arthur J. Rolnick and Warren E. Weber, "Banking Instability and Regulation in the U.S. Free Banking Era," Federal Reserve Bank of Minneapolis Quarterly Review 9 (1985): 2-9; Howard Bodenhorn, "Entry, Rivalry and Free Banking in Antebellum America," Review of Economics and Statistics 72 (1990): 682-86; Howard Bodenhorn and Michael Haupert, "The Note Issue Paradox in the Free Banking Era," Journal of Economic History 56 (1996): 687-93; Bray Hammond, "Free Banks and Corporations: The New York Free Banking Act of 1838," Journal of Political Economy 44 (1936): 184-209; Gary Gorton, "Banking Theory and Free Banking History: A Review Essay," Journal of Monetary Economics 16 (1985): 267-76; Kenneth Ng, "Free Banking Laws and Barriers to Entry in Banking, 1838-1860," Journal of Economic History 48 (1988): 877-89; Iftekhar Hasan and Gerald P. Dwyer, Jr., "Bank Runs in the Free Banking Period," Journal of Money, Credit, and Banking 26 (1994): 271-88. In contrast to the vast literature on free banking in the United States, there are only scattered pieces on double liability for bank shareholders and mandatory bank-liability insurance during the antebellum period. The best overview of double liability in banking is Ralph W. Marquis and Frank P. Smith, "Double Liability for Bank Stock," American Economic Review 27 (1937): 490-502, which includes several pages on double liability provisions in antebellum New York. On the impact of double liability rules at the state and federal levels after the Civil War, see esp. Jonathan R. Macey and Geoffrey P. Miller, "Double Liability of Bank Shareholders: History and Implications," Wake Forest Low Review 27 (1992): 31-62; Benjamin C. Esty, "The Impact of Contingent Liability on Commercial Bank Risk-Taking," Journal of Financial Economics 47 (1998): 189-218. The best examination of antebellum bank liability insurance may be found in Carter H. Golembe, "The Deposit Insurance Legislation of 1933: An Examination of Its Antecedents and its Purposes," Political Science Quarterly 75 (1960): 181-200. See also Bray Hammond, Banks and Politics in America: From the Revolution to the Civil War (Princeton: Princeton University Press, 1957), 352-56, 556-63; Charles W. Calomiris, "Is Deposit Insurance Necessary? A Historical Perspective," Journal of Economic History 50 (1990): 283-95; Howard Bodenhorn, "Zombie Banks and the Demise of New York's Safety Fund," Eastern Economic Journal 22 (1996): 21-33; Robert E. Wright, "Banking and Politics in New York, 1784-1829" (Ph.D. diss., SUNY Buffalo, 1996).
2. The literature on free banking is extensive. See esp. Hugh T. Rockoff, "The Free Banking Era: A Reexamination," Journal of Money, Credit and Banking 6 (1974): 141-67; Hugh T. Rockoff, "Varieties of Banking and Regional Economic Development in the United States, 1840-1860," Journal of Economic History 35 (1975): 160-81; Hugh T. Rockoff, The Free Banking Era: A Reexamination (New York: Arno Press, 1975); Arthur J. Rolnick and Warren E. Weber, "New Evidence on the Free Banking Era," American Economic Review 73 (1983): 1080-91; Arthur J. Rolnick and Warren E. Weber, "The Causes of Free Bank Failures: A Detailed Examination," Journal of Monetary Economics 14 (1984): 267-91; Arthur J. Rolnick and Warren E. Weber, "Banking Instability and Regulation in the U.S. Free Banking Era," Federal Reserve Bank of Minneapolis Quarterly Review 9 (1985): 2-9; Howard Bodenhorn, "Entry, Rivalry and Free Banking in Antebellum America," Review of Economics and Statistics 72 (1990): 682-86; Howard Bodenhorn and Michael Haupert, "The Note Issue Paradox in the Free Banking Era," Journal of Economic History 56 (1996): 687-93; Bray Hammond, "Free Banks and Corporations: The New York Free Banking Act of 1838," Journal of Political Economy 44 (1936): 184-209; Gary Gorton, "Banking Theory and Free Banking History: A Review Essay," Journal of Monetary Economics 16 (1985): 267-76; Kenneth Ng, "Free Banking Laws and Barriers to Entry in Banking, 1838-1860," Journal of Economic History 48 (1988): 877-89; Iftekhar Hasan and Gerald P. Dwyer, Jr., "Bank Runs in the Free Banking Period," Journal of Money, Credit, and Banking 26 (1994): 271-88. In contrast to the vast literature on free banking in the United States, there are only scattered pieces on double liability for bank shareholders and mandatory bank-liability insurance during the antebellum period. The best overview of double liability in banking is Ralph W. Marquis and Frank P. Smith, "Double Liability for Bank Stock," American Economic Review 27 (1937): 490-502, which includes several pages on double liability provisions in antebellum New York. On the impact of double liability rules at the state and federal levels after the Civil War, see esp. Jonathan R. Macey and Geoffrey P. Miller, "Double Liability of Bank Shareholders: History and Implications," Wake Forest Low Review 27 (1992): 31-62; Benjamin C. Esty, "The Impact of Contingent Liability on Commercial Bank Risk-Taking," Journal of Financial Economics 47 (1998): 189-218. The best examination of antebellum bank liability insurance may be found in Carter H. Golembe, "The Deposit Insurance Legislation of 1933: An Examination of Its Antecedents and its Purposes," Political Science Quarterly 75 (1960): 181-200. See also Bray Hammond, Banks and Politics in America: From the Revolution to the Civil War (Princeton: Princeton University Press, 1957), 352-56, 556-63; Charles W. Calomiris, "Is Deposit Insurance Necessary? A Historical Perspective," Journal of Economic History 50 (1990): 283-95; Howard Bodenhorn, "Zombie Banks and the Demise of New York's Safety Fund," Eastern Economic Journal 22 (1996): 21-33; Robert E. Wright, "Banking and Politics in New York, 1784-1829" (Ph.D. diss., SUNY Buffalo, 1996).
3. The literature on free banking is extensive. See esp. Hugh T. Rockoff, "The Free Banking Era: A Reexamination," Journal of Money, Credit and Banking 6 (1974): 141-67; Hugh T. Rockoff, "Varieties of Banking and Regional Economic Development in the United States, 1840-1860," Journal of Economic History 35 (1975): 160-81; Hugh T. Rockoff, The Free Banking Era: A Reexamination (New York: Arno Press, 1975); Arthur J. Rolnick and Warren E. Weber, "New Evidence on the Free Banking Era," American Economic Review 73 (1983): 1080-91; Arthur J. Rolnick and Warren E. Weber, "The Causes of Free Bank Failures: A Detailed Examination," Journal of Monetary Economics 14 (1984): 267-91; Arthur J. Rolnick and Warren E. Weber, "Banking Instability and Regulation in the U.S. Free Banking Era," Federal Reserve Bank of Minneapolis Quarterly Review 9 (1985): 2-9; Howard Bodenhorn, "Entry, Rivalry and Free Banking in Antebellum America," Review of Economics and Statistics 72 (1990): 682-86; Howard Bodenhorn and Michael Haupert, "The Note Issue Paradox in the Free Banking Era," Journal of Economic History 56 (1996): 687-93; Bray Hammond, "Free Banks and Corporations: The New York Free Banking Act of 1838," Journal of Political Economy 44 (1936): 184-209; Gary Gorton, "Banking Theory and Free Banking History: A Review Essay," Journal of Monetary Economics 16 (1985): 267-76; Kenneth Ng, "Free Banking Laws and Barriers to Entry in Banking, 1838-1860," Journal of Economic History 48 (1988): 877-89; Iftekhar Hasan and Gerald P. Dwyer, Jr., "Bank Runs in the Free Banking Period," Journal of Money, Credit, and Banking 26 (1994): 271-88. In contrast to the vast literature on free banking in the United States, there are only scattered pieces on double liability for bank shareholders and mandatory bank-liability insurance during the antebellum period. The best overview of double liability in banking is Ralph W. Marquis and Frank P. Smith, "Double Liability for Bank Stock," American Economic Review 27 (1937): 490-502, which includes several pages on double liability provisions in antebellum New York. On the impact of double liability rules at the state and federal levels after the Civil War, see esp. Jonathan R. Macey and Geoffrey P. Miller, "Double Liability of Bank Shareholders: History and Implications," Wake Forest Low Review 27 (1992): 31-62; Benjamin C. Esty, "The Impact of Contingent Liability on Commercial Bank Risk-Taking," Journal of Financial Economics 47 (1998): 189-218. The best examination of antebellum bank liability insurance may be found in Carter H. Golembe, "The Deposit Insurance Legislation of 1933: An Examination of Its Antecedents and its Purposes," Political Science Quarterly 75 (1960): 181-200. See also Bray Hammond, Banks and Politics in America: From the Revolution to the Civil War (Princeton: Princeton University Press, 1957), 352-56, 556-63; Charles W. Calomiris, "Is Deposit Insurance Necessary? A Historical Perspective," Journal of Economic History 50 (1990): 283-95; Howard Bodenhorn, "Zombie Banks and the Demise of New York's Safety Fund," Eastern Economic Journal 22 (1996): 21-33; Robert E. Wright, "Banking and Politics in New York, 1784-1829" (Ph.D. diss., SUNY Buffalo, 1996).
4. The literature on free banking is extensive. See esp. Hugh T. Rockoff, "The Free Banking Era: A Reexamination," Journal of Money, Credit and Banking 6 (1974): 141-67; Hugh T. Rockoff, "Varieties of Banking and Regional Economic Development in the United States, 1840-1860," Journal of Economic History 35 (1975): 160-81; Hugh T. Rockoff, The Free Banking Era: A Reexamination (New York: Arno Press, 1975); Arthur J. Rolnick and Warren E. Weber, "New Evidence on the Free Banking Era," American Economic Review 73 (1983): 1080-91; Arthur J. Rolnick and Warren E. Weber, "The Causes of Free Bank Failures: A Detailed Examination," Journal of Monetary Economics 14 (1984): 267-91; Arthur J. Rolnick and Warren E. Weber, "Banking Instability and Regulation in the U.S. Free Banking Era," Federal Reserve Bank of Minneapolis Quarterly Review 9 (1985): 2-9; Howard Bodenhorn, "Entry, Rivalry and Free Banking in Antebellum America," Review of Economics and Statistics 72 (1990): 682-86; Howard Bodenhorn and Michael Haupert, "The Note Issue Paradox in the Free Banking Era," Journal of Economic History 56 (1996): 687-93; Bray Hammond, "Free Banks and Corporations: The New York Free Banking Act of 1838," Journal of Political Economy 44 (1936): 184-209; Gary Gorton, "Banking Theory and Free Banking History: A Review Essay," Journal of Monetary Economics 16 (1985): 267-76; Kenneth Ng, "Free Banking Laws and Barriers to Entry in Banking, 1838-1860," Journal of Economic History 48 (1988): 877-89; Iftekhar Hasan and Gerald P. Dwyer, Jr., "Bank Runs in the Free Banking Period," Journal of Money, Credit, and Banking 26 (1994): 271-88. In contrast to the vast literature on free banking in the United States, there are only scattered pieces on double liability for bank shareholders and mandatory bank-liability insurance during the antebellum period. The best overview of double liability in banking is Ralph W. Marquis and Frank P. Smith, "Double Liability for Bank Stock," American Economic Review 27 (1937): 490-502, which includes several pages on double liability provisions in antebellum New York. On the impact of double liability rules at the state and federal levels after the Civil War, see esp. Jonathan R. Macey and Geoffrey P. Miller, "Double Liability of Bank Shareholders: History and Implications," Wake Forest Low Review 27 (1992): 31-62; Benjamin C. Esty, "The Impact of Contingent Liability on Commercial Bank Risk-Taking," Journal of Financial Economics 47 (1998): 189-218. The best examination of antebellum bank liability insurance may be found in Carter H. Golembe, "The Deposit Insurance Legislation of 1933: An Examination of Its Antecedents and its Purposes," Political Science Quarterly 75 (1960): 181-200. See also Bray Hammond, Banks and Politics in America: From the Revolution to the Civil War (Princeton: Princeton University Press, 1957), 352-56, 556-63; Charles W. Calomiris, "Is Deposit Insurance Necessary? A Historical Perspective," Journal of Economic History 50 (1990): 283-95; Howard Bodenhorn, "Zombie Banks and the Demise of New York's Safety Fund," Eastern Economic Journal 22 (1996): 21-33; Robert E. Wright, "Banking and Politics in New York, 1784-1829" (Ph.D. diss., SUNY Buffalo, 1996).
5. The literature on free banking is extensive. See esp. Hugh T. Rockoff, "The Free Banking Era: A Reexamination," Journal of Money, Credit and Banking 6 (1974): 141-67; Hugh T. Rockoff, "Varieties of Banking and Regional Economic Development in the United States, 1840-1860," Journal of Economic History 35 (1975): 160-81; Hugh T. Rockoff, The Free Banking Era: A Reexamination (New York: Arno Press, 1975); Arthur J. Rolnick and Warren E. Weber, "New Evidence on the Free Banking Era," American Economic Review 73 (1983): 1080-91; Arthur J. Rolnick and Warren E. Weber, "The Causes of Free Bank Failures: A Detailed Examination," Journal of Monetary Economics 14 (1984): 267-91; Arthur J. Rolnick and Warren E. Weber, "Banking Instability and Regulation in the U.S. Free Banking Era," Federal Reserve Bank of Minneapolis Quarterly Review 9 (1985): 2-9; Howard Bodenhorn, "Entry, Rivalry and Free Banking in Antebellum America," Review of Economics and Statistics 72 (1990): 682-86; Howard Bodenhorn and Michael Haupert, "The Note Issue Paradox in the Free Banking Era," Journal of Economic History 56 (1996): 687-93; Bray Hammond, "Free Banks and Corporations: The New York Free Banking Act of 1838," Journal of Political Economy 44 (1936): 184-209; Gary Gorton, "Banking Theory and Free Banking History: A Review Essay," Journal of Monetary Economics 16 (1985): 267-76; Kenneth Ng, "Free Banking Laws and Barriers to Entry in Banking, 1838-1860," Journal of Economic History 48 (1988): 877-89; Iftekhar Hasan and Gerald P. Dwyer, Jr., "Bank Runs in the Free Banking Period," Journal of Money, Credit, and Banking 26 (1994): 271-88. In contrast to the vast literature on free banking in the United States, there are only scattered pieces on double liability for bank shareholders and mandatory bank-liability insurance during the antebellum period. The best overview of double liability in banking is Ralph W. Marquis and Frank P. Smith, "Double Liability for Bank Stock," American Economic Review 27 (1937): 490-502, which includes several pages on double liability provisions in antebellum New York. On the impact of double liability rules at the state and federal levels after the Civil War, see esp. Jonathan R. Macey and Geoffrey P. Miller, "Double Liability of Bank Shareholders: History and Implications," Wake Forest Low Review 27 (1992): 31-62; Benjamin C. Esty, "The Impact of Contingent Liability on Commercial Bank Risk-Taking," Journal of Financial Economics 47 (1998): 189-218. The best examination of antebellum bank liability insurance may be found in Carter H. Golembe, "The Deposit Insurance Legislation of 1933: An Examination of Its Antecedents and its Purposes," Political Science Quarterly 75 (1960): 181-200. See also Bray Hammond, Banks and Politics in America: From the Revolution to the Civil War (Princeton: Princeton University Press, 1957), 352-56, 556-63; Charles W. Calomiris, "Is Deposit Insurance Necessary? A Historical Perspective," Journal of Economic History 50 (1990): 283-95; Howard Bodenhorn, "Zombie Banks and the Demise of New York's Safety Fund," Eastern Economic Journal 22 (1996): 21-33; Robert E. Wright, "Banking and Politics in New York, 1784-1829" (Ph.D. diss., SUNY Buffalo, 1996).
6. The literature on free banking is extensive. See esp. Hugh T. Rockoff, "The Free Banking Era: A Reexamination," Journal of Money, Credit and Banking 6 (1974): 141-67; Hugh T. Rockoff, "Varieties of Banking and Regional Economic Development in the United States, 1840-1860," Journal of Economic History 35 (1975): 160-81; Hugh T. Rockoff, The Free Banking Era: A Reexamination (New York: Arno Press, 1975); Arthur J. Rolnick and Warren E. Weber, "New Evidence on the Free Banking Era," American Economic Review 73 (1983): 1080-91; Arthur J. Rolnick and Warren E. Weber, "The Causes of Free Bank Failures: A Detailed Examination," Journal of Monetary Economics 14 (1984): 267-91; Arthur J. Rolnick and Warren E. Weber, "Banking Instability and Regulation in the U.S. Free Banking Era," Federal Reserve Bank of Minneapolis Quarterly Review 9 (1985): 2-9; Howard Bodenhorn, "Entry, Rivalry and Free Banking in Antebellum America," Review of Economics and Statistics 72 (1990): 682-86; Howard Bodenhorn and Michael Haupert, "The Note Issue Paradox in the Free Banking Era," Journal of Economic History 56 (1996): 687-93; Bray Hammond, "Free Banks and Corporations: The New York Free Banking Act of 1838," Journal of Political Economy 44 (1936): 184-209; Gary Gorton, "Banking Theory and Free Banking History: A Review Essay," Journal of Monetary Economics 16 (1985): 267-76; Kenneth Ng, "Free Banking Laws and Barriers to Entry in Banking, 1838-1860," Journal of Economic History 48 (1988): 877-89; Iftekhar Hasan and Gerald P. Dwyer, Jr., "Bank Runs in the Free Banking Period," Journal of Money, Credit, and Banking 26 (1994): 271-88. In contrast to the vast literature on free banking in the United States, there are only scattered pieces on double liability for bank shareholders and mandatory bank-liability insurance during the antebellum period. The best overview of double liability in banking is Ralph W. Marquis and Frank P. Smith, "Double Liability for Bank Stock," American Economic Review 27 (1937): 490-502, which includes several pages on double liability provisions in antebellum New York. On the impact of double liability rules at the state and federal levels after the Civil War, see esp. Jonathan R. Macey and Geoffrey P. Miller, "Double Liability of Bank Shareholders: History and Implications," Wake Forest Low Review 27 (1992): 31-62; Benjamin C. Esty, "The Impact of Contingent Liability on Commercial Bank Risk-Taking," Journal of Financial Economics 47 (1998): 189-218. The best examination of antebellum bank liability insurance may be found in Carter H. Golembe, "The Deposit Insurance Legislation of 1933: An Examination of Its Antecedents and its Purposes," Political Science Quarterly 75 (1960): 181-200. See also Bray Hammond, Banks and Politics in America: From the Revolution to the Civil War (Princeton: Princeton University Press, 1957), 352-56, 556-63; Charles W. Calomiris, "Is Deposit Insurance Necessary? A Historical Perspective," Journal of Economic History 50 (1990): 283-95; Howard Bodenhorn, "Zombie Banks and the Demise of New York's Safety Fund," Eastern Economic Journal 22 (1996): 21-33; Robert E. Wright, "Banking and Politics in New York, 1784-1829" (Ph.D. diss., SUNY Buffalo, 1996).
7. The literature on free banking is extensive. See esp. Hugh T. Rockoff, "The Free Banking Era: A Reexamination," Journal of Money, Credit and Banking 6 (1974): 141-67; Hugh T. Rockoff, "Varieties of Banking and Regional Economic Development in the United States, 1840-1860," Journal of Economic History 35 (1975): 160-81; Hugh T. Rockoff, The Free Banking Era: A Reexamination (New York: Arno Press, 1975); Arthur J. Rolnick and Warren E. Weber, "New Evidence on the Free Banking Era," American Economic Review 73 (1983): 1080-91; Arthur J. Rolnick and Warren E. Weber, "The Causes of Free Bank Failures: A Detailed Examination," Journal of Monetary Economics 14 (1984): 267-91; Arthur J. Rolnick and Warren E. Weber, "Banking Instability and Regulation in the U.S. Free Banking Era," Federal Reserve Bank of Minneapolis Quarterly Review 9 (1985): 2-9; Howard Bodenhorn, "Entry, Rivalry and Free Banking in Antebellum America," Review of Economics and Statistics 72 (1990): 682-86; Howard Bodenhorn and Michael Haupert, "The Note Issue Paradox in the Free Banking Era," Journal of Economic History 56 (1996): 687-93; Bray Hammond, "Free Banks and Corporations: The New York Free Banking Act of 1838," Journal of Political Economy 44 (1936): 184-209; Gary Gorton, "Banking Theory and Free Banking History: A Review Essay," Journal of Monetary Economics 16 (1985): 267-76; Kenneth Ng, "Free Banking Laws and Barriers to Entry in Banking, 1838-1860," Journal of Economic History 48 (1988): 877-89; Iftekhar Hasan and Gerald P. Dwyer, Jr., "Bank Runs in the Free Banking Period," Journal of Money, Credit, and Banking 26 (1994): 271-88. In contrast to the vast literature on free banking in the United States, there are only scattered pieces on double liability for bank shareholders and mandatory bank-liability insurance during the antebellum period. The best overview of double liability in banking is Ralph W. Marquis and Frank P. Smith, "Double Liability for Bank Stock," American Economic Review 27 (1937): 490-502, which includes several pages on double liability provisions in antebellum New York. On the impact of double liability rules at the state and federal levels after the Civil War, see esp. Jonathan R. Macey and Geoffrey P. Miller, "Double Liability of Bank Shareholders: History and Implications," Wake Forest Low Review 27 (1992): 31-62; Benjamin C. Esty, "The Impact of Contingent Liability on Commercial Bank Risk-Taking," Journal of Financial Economics 47 (1998): 189-218. The best examination of antebellum bank liability insurance may be found in Carter H. Golembe, "The Deposit Insurance Legislation of 1933: An Examination of Its Antecedents and its Purposes," Political Science Quarterly 75 (1960): 181-200. See also Bray Hammond, Banks and Politics in America: From the Revolution to the Civil War (Princeton: Princeton University Press, 1957), 352-56, 556-63; Charles W. Calomiris, "Is Deposit Insurance Necessary? A Historical Perspective," Journal of Economic History 50 (1990): 283-95; Howard Bodenhorn, "Zombie Banks and the Demise of New York's Safety Fund," Eastern Economic Journal 22 (1996): 21-33; Robert E. Wright, "Banking and Politics in New York, 1784-1829" (Ph.D. diss., SUNY Buffalo, 1996).
8. The literature on free banking is extensive. See esp. Hugh T. Rockoff, "The Free Banking Era: A Reexamination," Journal of Money, Credit and Banking 6 (1974): 141-67; Hugh T. Rockoff, "Varieties of Banking and Regional Economic Development in the United States, 1840-1860," Journal of Economic History 35 (1975): 160-81; Hugh T. Rockoff, The Free Banking Era: A Reexamination (New York: Arno Press, 1975); Arthur J. Rolnick and Warren E. Weber, "New Evidence on the Free Banking Era," American Economic Review 73 (1983): 1080-91; Arthur J. Rolnick and Warren E. Weber, "The Causes of Free Bank Failures: A Detailed Examination," Journal of Monetary Economics 14 (1984): 267-91; Arthur J. Rolnick and Warren E. Weber, "Banking Instability and Regulation in the U.S. Free Banking Era," Federal Reserve Bank of Minneapolis Quarterly Review 9 (1985): 2-9; Howard Bodenhorn, "Entry, Rivalry and Free Banking in Antebellum America," Review of Economics and Statistics 72 (1990): 682-86; Howard Bodenhorn and Michael Haupert, "The Note Issue Paradox in the Free Banking Era," Journal of Economic History 56 (1996): 687-93; Bray Hammond, "Free Banks and Corporations: The New York Free Banking Act of 1838," Journal of Political Economy 44 (1936): 184-209; Gary Gorton, "Banking Theory and Free Banking History: A Review Essay," Journal of Monetary Economics 16 (1985): 267-76; Kenneth Ng, "Free Banking Laws and Barriers to Entry in Banking, 1838-1860," Journal of Economic History 48 (1988): 877-89; Iftekhar Hasan and Gerald P. Dwyer, Jr., "Bank Runs in the Free Banking Period," Journal of Money, Credit, and Banking 26 (1994): 271-88. In contrast to the vast literature on free banking in the United States, there are only scattered pieces on double liability for bank shareholders and mandatory bank-liability insurance during the antebellum period. The best overview of double liability in banking is Ralph W. Marquis and Frank P. Smith, "Double Liability for Bank Stock," American Economic Review 27 (1937): 490-502, which includes several pages on double liability provisions in antebellum New York. On the impact of double liability rules at the state and federal levels after the Civil War, see esp. Jonathan R. Macey and Geoffrey P. Miller, "Double Liability of Bank Shareholders: History and Implications," Wake Forest Low Review 27 (1992): 31-62; Benjamin C. Esty, "The Impact of Contingent Liability on Commercial Bank Risk-Taking," Journal of Financial Economics 47 (1998): 189-218. The best examination of antebellum bank liability insurance may be found in Carter H. Golembe, "The Deposit Insurance Legislation of 1933: An Examination of Its Antecedents and its Purposes," Political Science Quarterly 75 (1960): 181-200. See also Bray Hammond, Banks and Politics in America: From the Revolution to the Civil War (Princeton: Princeton University Press, 1957), 352-56, 556-63; Charles W. Calomiris, "Is Deposit Insurance Necessary? A Historical Perspective," Journal of Economic History 50 (1990): 283-95; Howard Bodenhorn, "Zombie Banks and the Demise of New York's Safety Fund," Eastern Economic Journal 22 (1996): 21-33; Robert E. Wright, "Banking and Politics in New York, 1784-1829" (Ph.D. diss., SUNY Buffalo, 1996).
9. The literature on free banking is extensive. See esp. Hugh T. Rockoff, "The Free Banking Era: A Reexamination," Journal of Money, Credit and Banking 6 (1974): 141-67; Hugh T. Rockoff, "Varieties of Banking and Regional Economic Development in the United States, 1840-1860," Journal of Economic History 35 (1975): 160-81; Hugh T. Rockoff, The Free Banking Era: A Reexamination (New York: Arno Press, 1975); Arthur J. Rolnick and Warren E. Weber, "New Evidence on the Free Banking Era," American Economic Review 73 (1983): 1080-91; Arthur J. Rolnick and Warren E. Weber, "The Causes of Free Bank Failures: A Detailed Examination," Journal of Monetary Economics 14 (1984): 267-91; Arthur J. Rolnick and Warren E. Weber, "Banking Instability and Regulation in the U.S. Free Banking Era," Federal Reserve Bank of Minneapolis Quarterly Review 9 (1985): 2-9; Howard Bodenhorn, "Entry, Rivalry and Free Banking in Antebellum America," Review of Economics and Statistics 72 (1990): 682-86; Howard Bodenhorn and Michael Haupert, "The Note Issue Paradox in the Free Banking Era," Journal of Economic History 56 (1996): 687-93; Bray Hammond, "Free Banks and Corporations: The New York Free Banking Act of 1838," Journal of Political Economy 44 (1936): 184-209; Gary Gorton, "Banking Theory and Free Banking History: A Review Essay," Journal of Monetary Economics 16 (1985): 267-76; Kenneth Ng, "Free Banking Laws and Barriers to Entry in Banking, 1838-1860," Journal of Economic History 48 (1988): 877-89; Iftekhar Hasan and Gerald P. Dwyer, Jr., "Bank Runs in the Free Banking Period," Journal of Money, Credit, and Banking 26 (1994): 271-88. In contrast to the vast literature on free banking in the United States, there are only scattered pieces on double liability for bank shareholders and mandatory bank-liability insurance during the antebellum period. The best overview of double liability in banking is Ralph W. Marquis and Frank P. Smith, "Double Liability for Bank Stock," American Economic Review 27 (1937): 490-502, which includes several pages on double liability provisions in antebellum New York. On the impact of double liability rules at the state and federal levels after the Civil War, see esp. Jonathan R. Macey and Geoffrey P. Miller, "Double Liability of Bank Shareholders: History and Implications," Wake Forest Low Review 27 (1992): 31-62; Benjamin C. Esty, "The Impact of Contingent Liability on Commercial Bank Risk-Taking," Journal of Financial Economics 47 (1998): 189-218. The best examination of antebellum bank liability insurance may be found in Carter H. Golembe, "The Deposit Insurance Legislation of 1933: An Examination of Its Antecedents and its Purposes," Political Science Quarterly 75 (1960): 181-200. See also Bray Hammond, Banks and Politics in America: From the Revolution to the Civil War (Princeton: Princeton University Press, 1957), 352-56, 556-63; Charles W. Calomiris, "Is Deposit Insurance Necessary? A Historical Perspective," Journal of Economic History 50 (1990): 283-95; Howard Bodenhorn, "Zombie Banks and the Demise of New York's Safety Fund," Eastern Economic Journal 22 (1996): 21-33; Robert E. Wright, "Banking and Politics in New York, 1784-1829" (Ph.D. diss., SUNY Buffalo, 1996).
10. The literature on free banking is extensive. See esp. Hugh T. Rockoff, "The Free Banking Era: A Reexamination," Journal of Money, Credit and Banking 6 (1974): 141-67; Hugh T. Rockoff, "Varieties of Banking and Regional Economic Development in the United States, 1840-1860," Journal of Economic History 35 (1975): 160-81; Hugh T. Rockoff, The Free Banking Era: A Reexamination (New York: Arno Press, 1975); Arthur J. Rolnick and Warren E. Weber, "New Evidence on the Free Banking Era," American Economic Review 73 (1983): 1080-91; Arthur J. Rolnick and Warren E. Weber, "The Causes of Free Bank Failures: A Detailed Examination," Journal of Monetary Economics 14 (1984): 267-91; Arthur J. Rolnick and Warren E. Weber, "Banking Instability and Regulation in the U.S. Free Banking Era," Federal Reserve Bank of Minneapolis Quarterly Review 9 (1985): 2-9; Howard Bodenhorn, "Entry, Rivalry and Free Banking in Antebellum America," Review of Economics and Statistics 72 (1990): 682-86; Howard Bodenhorn and Michael Haupert, "The Note Issue Paradox in the Free Banking Era," Journal of Economic History 56 (1996): 687-93; Bray Hammond, "Free Banks and Corporations: The New York Free Banking Act of 1838," Journal of Political Economy 44 (1936): 184-209; Gary Gorton, "Banking Theory and Free Banking History: A Review Essay," Journal of Monetary Economics 16 (1985): 267-76; Kenneth Ng, "Free Banking Laws and Barriers to Entry in Banking, 1838-1860," Journal of Economic History 48 (1988): 877-89; Iftekhar Hasan and Gerald P. Dwyer, Jr., "Bank Runs in the Free Banking Period," Journal of Money, Credit, and Banking 26 (1994): 271-88. In contrast to the vast literature on free banking in the United States, there are only scattered pieces on double liability for bank shareholders and mandatory bank-liability insurance during the antebellum period. The best overview of double liability in banking is Ralph W. Marquis and Frank P. Smith, "Double Liability for Bank Stock," American Economic Review 27 (1937): 490-502, which includes several pages on double liability provisions in antebellum New York. On the impact of double liability rules at the state and federal levels after the Civil War, see esp. Jonathan R. Macey and Geoffrey P. Miller, "Double Liability of Bank Shareholders: History and Implications," Wake Forest Low Review 27 (1992): 31-62; Benjamin C. Esty, "The Impact of Contingent Liability on Commercial Bank Risk-Taking," Journal of Financial Economics 47 (1998): 189-218. The best examination of antebellum bank liability insurance may be found in Carter H. Golembe, "The Deposit Insurance Legislation of 1933: An Examination of Its Antecedents and its Purposes," Political Science Quarterly 75 (1960): 181-200. See also Bray Hammond, Banks and Politics in America: From the Revolution to the Civil War (Princeton: Princeton University Press, 1957), 352-56, 556-63; Charles W. Calomiris, "Is Deposit Insurance Necessary? A Historical Perspective," Journal of Economic History 50 (1990): 283-95; Howard Bodenhorn, "Zombie Banks and the Demise of New York's Safety Fund," Eastern Economic Journal 22 (1996): 21-33; Robert E. Wright, "Banking and Politics in New York, 1784-1829" (Ph.D. diss., SUNY Buffalo, 1996).
11. The literature on free banking is extensive. See esp. Hugh T. Rockoff, "The Free Banking Era: A Reexamination," Journal of Money, Credit and Banking 6 (1974): 141-67; Hugh T. Rockoff, "Varieties of Banking and Regional Economic Development in the United States, 1840-1860," Journal of Economic History 35 (1975): 160-81; Hugh T. Rockoff, The Free Banking Era: A Reexamination (New York: Arno Press, 1975); Arthur J. Rolnick and Warren E. Weber, "New Evidence on the Free Banking Era," American Economic Review 73 (1983): 1080-91; Arthur J. Rolnick and Warren E. Weber, "The Causes of Free Bank Failures: A Detailed Examination," Journal of Monetary Economics 14 (1984): 267-91; Arthur J. Rolnick and Warren E. Weber, "Banking Instability and Regulation in the U.S. Free Banking Era," Federal Reserve Bank of Minneapolis Quarterly Review 9 (1985): 2-9; Howard Bodenhorn, "Entry, Rivalry and Free Banking in Antebellum America," Review of Economics and Statistics 72 (1990): 682-86; Howard Bodenhorn and Michael Haupert, "The Note Issue Paradox in the Free Banking Era," Journal of Economic History 56 (1996): 687-93; Bray Hammond, "Free Banks and Corporations: The New York Free Banking Act of 1838," Journal of Political Economy 44 (1936): 184-209; Gary Gorton, "Banking Theory and Free Banking History: A Review Essay," Journal of Monetary Economics 16 (1985): 267-76; Kenneth Ng, "Free Banking Laws and Barriers to Entry in Banking, 1838-1860," Journal of Economic History 48 (1988): 877-89; Iftekhar Hasan and Gerald P. Dwyer, Jr., "Bank Runs in the Free Banking Period," Journal of Money, Credit, and Banking 26 (1994): 271-88. In contrast to the vast literature on free banking in the United States, there are only scattered pieces on double liability for bank shareholders and mandatory bank-liability insurance during the antebellum period. The best overview of double liability in banking is Ralph W. Marquis and Frank P. Smith, "Double Liability for Bank Stock," American Economic Review 27 (1937): 490-502, which includes several pages on double liability provisions in antebellum New York. On the impact of double liability rules at the state and federal levels after the Civil War, see esp. Jonathan R. Macey and Geoffrey P. Miller, "Double Liability of Bank Shareholders: History and Implications," Wake Forest Low Review 27 (1992): 31-62; Benjamin C. Esty, "The Impact of Contingent Liability on Commercial Bank Risk-Taking," Journal of Financial Economics 47 (1998): 189-218. The best examination of antebellum bank liability insurance may be found in Carter H. Golembe, "The Deposit Insurance Legislation of 1933: An Examination of Its Antecedents and its Purposes," Political Science Quarterly 75 (1960): 181-200. See also Bray Hammond, Banks and Politics in America: From the Revolution to the Civil War (Princeton: Princeton University Press, 1957), 352-56, 556-63; Charles W. Calomiris, "Is Deposit Insurance Necessary? A Historical Perspective," Journal of Economic History 50 (1990): 283-95; Howard Bodenhorn, "Zombie Banks and the Demise of New York's Safety Fund," Eastern Economic Journal 22 (1996): 21-33; Robert E. Wright, "Banking and Politics in New York, 1784-1829" (Ph.D. diss., SUNY Buffalo, 1996).
12. The literature on free banking is extensive. See esp. Hugh T. Rockoff, "The Free Banking Era: A Reexamination," Journal of Money, Credit and Banking 6 (1974): 141-67; Hugh T. Rockoff, "Varieties of Banking and Regional Economic Development in the United States, 1840-1860," Journal of Economic History 35 (1975): 160-81; Hugh T. Rockoff, The Free Banking Era: A Reexamination (New York: Arno Press, 1975); Arthur J. Rolnick and Warren E. Weber, "New Evidence on the Free Banking Era," American Economic Review 73 (1983): 1080-91; Arthur J. Rolnick and Warren E. Weber, "The Causes of Free Bank Failures: A Detailed Examination," Journal of Monetary Economics 14 (1984): 267-91; Arthur J. Rolnick and Warren E. Weber, "Banking Instability and Regulation in the U.S. Free Banking Era," Federal Reserve Bank of Minneapolis Quarterly Review 9 (1985): 2-9; Howard Bodenhorn, "Entry, Rivalry and Free Banking in Antebellum America," Review of Economics and Statistics 72 (1990): 682-86; Howard Bodenhorn and Michael Haupert, "The Note Issue Paradox in the Free Banking Era," Journal of Economic History 56 (1996): 687-93; Bray Hammond, "Free Banks and Corporations: The New York Free Banking Act of 1838," Journal of Political Economy 44 (1936): 184-209; Gary Gorton, "Banking Theory and Free Banking History: A Review Essay," Journal of Monetary Economics 16 (1985): 267-76; Kenneth Ng, "Free Banking Laws and Barriers to Entry in Banking, 1838-1860," Journal of Economic History 48 (1988): 877-89; Iftekhar Hasan and Gerald P. Dwyer, Jr., "Bank Runs in the Free Banking Period," Journal of Money, Credit, and Banking 26 (1994): 271-88. In contrast to the vast literature on free banking in the United States, there are only scattered pieces on double liability for bank shareholders and mandatory bank-liability insurance during the antebellum period. The best overview of double liability in banking is Ralph W. Marquis and Frank P. Smith, "Double Liability for Bank Stock," American Economic Review 27 (1937): 490-502, which includes several pages on double liability provisions in antebellum New York. On the impact of double liability rules at the state and federal levels after the Civil War, see esp. Jonathan R. Macey and Geoffrey P. Miller, "Double Liability of Bank Shareholders: History and Implications," Wake Forest Low Review 27 (1992): 31-62; Benjamin C. Esty, "The Impact of Contingent Liability on Commercial Bank Risk-Taking," Journal of Financial Economics 47 (1998): 189-218. The best examination of antebellum bank liability insurance may be found in Carter H. Golembe, "The Deposit Insurance Legislation of 1933: An Examination of Its Antecedents and its Purposes," Political Science Quarterly 75 (1960): 181-200. See also Bray Hammond, Banks and Politics in America: From the Revolution to the Civil War (Princeton: Princeton University Press, 1957), 352-56, 556-63; Charles W. Calomiris, "Is Deposit Insurance Necessary? A Historical Perspective," Journal of Economic History 50 (1990): 283-95; Howard Bodenhorn, "Zombie Banks and the Demise of New York's Safety Fund," Eastern Economic Journal 22 (1996): 21-33; Robert E. Wright, "Banking and Politics in New York, 1784-1829" (Ph.D. diss., SUNY Buffalo, 1996).
13. The literature on free banking is extensive. See esp. Hugh T. Rockoff, "The Free Banking Era: A Reexamination," Journal of Money, Credit and Banking 6 (1974): 141-67; Hugh T. Rockoff, "Varieties of Banking and Regional Economic Development in the United States, 1840-1860," Journal of Economic History 35 (1975): 160-81; Hugh T. Rockoff, The Free Banking Era: A Reexamination (New York: Arno Press, 1975); Arthur J. Rolnick and Warren E. Weber, "New Evidence on the Free Banking Era," American Economic Review 73 (1983): 1080-91; Arthur J. Rolnick and Warren E. Weber, "The Causes of Free Bank Failures: A Detailed Examination," Journal of Monetary Economics 14 (1984): 267-91; Arthur J. Rolnick and Warren E. Weber, "Banking Instability and Regulation in the U.S. Free Banking Era," Federal Reserve Bank of Minneapolis Quarterly Review 9 (1985): 2-9; Howard Bodenhorn, "Entry, Rivalry and Free Banking in Antebellum America," Review of Economics and Statistics 72 (1990): 682-86; Howard Bodenhorn and Michael Haupert, "The Note Issue Paradox in the Free Banking Era," Journal of Economic History 56 (1996): 687-93; Bray Hammond, "Free Banks and Corporations: The New York Free Banking Act of 1838," Journal of Political Economy 44 (1936): 184-209; Gary Gorton, "Banking Theory and Free Banking History: A Review Essay," Journal of Monetary Economics 16 (1985): 267-76; Kenneth Ng, "Free Banking Laws and Barriers to Entry in Banking, 1838-1860," Journal of Economic History 48 (1988): 877-89; Iftekhar Hasan and Gerald P. Dwyer, Jr., "Bank Runs in the Free Banking Period," Journal of Money, Credit, and Banking 26 (1994): 271-88. In contrast to the vast literature on free banking in the United States, there are only scattered pieces on double liability for bank shareholders and mandatory bank-liability insurance during the antebellum period. The best overview of double liability in banking is Ralph W. Marquis and Frank P. Smith, "Double Liability for Bank Stock," American Economic Review 27 (1937): 490-502, which includes several pages on double liability provisions in antebellum New York. On the impact of double liability rules at the state and federal levels after the Civil War, see esp. Jonathan R. Macey and Geoffrey P. Miller, "Double Liability of Bank Shareholders: History and Implications," Wake Forest Low Review 27 (1992): 31-62; Benjamin C. Esty, "The Impact of Contingent Liability on Commercial Bank Risk-Taking," Journal of Financial Economics 47 (1998): 189-218. The best examination of antebellum bank liability insurance may be found in Carter H. Golembe, "The Deposit Insurance Legislation of 1933: An Examination of Its Antecedents and its Purposes," Political Science Quarterly 75 (1960): 181-200. See also Bray Hammond, Banks and Politics in America: From the Revolution to the Civil War (Princeton: Princeton University Press, 1957), 352-56, 556-63; Charles W. Calomiris, "Is Deposit Insurance Necessary? A Historical Perspective," Journal of Economic History 50 (1990): 283-95; Howard Bodenhorn, "Zombie Banks and the Demise of New York's Safety Fund," Eastern Economic Journal 22 (1996): 21-33; Robert E. Wright, "Banking and Politics in New York, 1784-1829" (Ph.D. diss., SUNY Buffalo, 1996).
14. The literature on free banking is extensive. See esp. Hugh T. Rockoff, "The Free Banking Era: A Reexamination," Journal of Money, Credit and Banking 6 (1974): 141-67; Hugh T. Rockoff, "Varieties of Banking and Regional Economic Development in the United States, 1840-1860," Journal of Economic History 35 (1975): 160-81; Hugh T. Rockoff, The Free Banking Era: A Reexamination (New York: Arno Press, 1975); Arthur J. Rolnick and Warren E. Weber, "New Evidence on the Free Banking Era," American Economic Review 73 (1983): 1080-91; Arthur J. Rolnick and Warren E. Weber, "The Causes of Free Bank Failures: A Detailed Examination," Journal of Monetary Economics 14 (1984): 267-91; Arthur J. Rolnick and Warren E. Weber, "Banking Instability and Regulation in the U.S. Free Banking Era," Federal Reserve Bank of Minneapolis Quarterly Review 9 (1985): 2-9; Howard Bodenhorn, "Entry, Rivalry and Free Banking in Antebellum America," Review of Economics and Statistics 72 (1990): 682-86; Howard Bodenhorn and Michael Haupert, "The Note Issue Paradox in the Free Banking Era," Journal of Economic History 56 (1996): 687-93; Bray Hammond, "Free Banks and Corporations: The New York Free Banking Act of 1838," Journal of Political Economy 44 (1936): 184-209; Gary Gorton, "Banking Theory and Free Banking History: A Review Essay," Journal of Monetary Economics 16 (1985): 267-76; Kenneth Ng, "Free Banking Laws and Barriers to Entry in Banking, 1838-1860," Journal of Economic History 48 (1988): 877-89; Iftekhar Hasan and Gerald P. Dwyer, Jr., "Bank Runs in the Free Banking Period," Journal of Money, Credit, and Banking 26 (1994): 271-88. In contrast to the vast literature on free banking in the United States, there are only scattered pieces on double liability for bank shareholders and mandatory bank-liability insurance during the antebellum period. The best overview of double liability in banking is Ralph W. Marquis and Frank P. Smith, "Double Liability for Bank Stock," American Economic Review 27 (1937): 490-502, which includes several pages on double liability provisions in antebellum New York. On the impact of double liability rules at the state and federal levels after the Civil War, see esp. Jonathan R. Macey and Geoffrey P. Miller, "Double Liability of Bank Shareholders: History and Implications," Wake Forest Low Review 27 (1992): 31-62; Benjamin C. Esty, "The Impact of Contingent Liability on Commercial Bank Risk-Taking," Journal of Financial Economics 47 (1998): 189-218. The best examination of antebellum bank liability insurance may be found in Carter H. Golembe, "The Deposit Insurance Legislation of 1933: An Examination of Its Antecedents and its Purposes," Political Science Quarterly 75 (1960): 181-200. See also Bray Hammond, Banks and Politics in America: From the Revolution to the Civil War (Princeton: Princeton University Press, 1957), 352-56, 556-63; Charles W. Calomiris, "Is Deposit Insurance Necessary? A Historical Perspective," Journal of Economic History 50 (1990): 283-95; Howard Bodenhorn, "Zombie Banks and the Demise of New York's Safety Fund," Eastern Economic Journal 22 (1996): 21-33; Robert E. Wright, "Banking and Politics in New York, 1784-1829" (Ph.D. diss., SUNY Buffalo, 1996).
15. The literature on free banking is extensive. See esp. Hugh T. Rockoff, "The Free Banking Era: A Reexamination," Journal of Money, Credit and Banking 6 (1974): 141-67; Hugh T. Rockoff, "Varieties of Banking and Regional Economic Development in the United States, 1840-1860," Journal of Economic History 35 (1975): 160-81; Hugh T. Rockoff, The Free Banking Era: A Reexamination (New York: Arno Press, 1975); Arthur J. Rolnick and Warren E. Weber, "New Evidence on the Free Banking Era," American Economic Review 73 (1983): 1080-91; Arthur J. Rolnick and Warren E. Weber, "The Causes of Free Bank Failures: A Detailed Examination," Journal of Monetary Economics 14 (1984): 267-91; Arthur J. Rolnick and Warren E. Weber, "Banking Instability and Regulation in the U.S. Free Banking Era," Federal Reserve Bank of Minneapolis Quarterly Review 9 (1985): 2-9; Howard Bodenhorn, "Entry, Rivalry and Free Banking in Antebellum America," Review of Economics and Statistics 72 (1990): 682-86; Howard Bodenhorn and Michael Haupert, "The Note Issue Paradox in the Free Banking Era," Journal of Economic History 56 (1996): 687-93; Bray Hammond, "Free Banks and Corporations: The New York Free Banking Act of 1838," Journal of Political Economy 44 (1936): 184-209; Gary Gorton, "Banking Theory and Free Banking History: A Review Essay," Journal of Monetary Economics 16 (1985): 267-76; Kenneth Ng, "Free Banking Laws and Barriers to Entry in Banking, 1838-1860," Journal of Economic History 48 (1988): 877-89; Iftekhar Hasan and Gerald P. Dwyer, Jr., "Bank Runs in the Free Banking Period," Journal of Money, Credit, and Banking 26 (1994): 271-88. In contrast to the vast literature on free banking in the United States, there are only scattered pieces on double liability for bank shareholders and mandatory bank-liability insurance during the antebellum period. The best overview of double liability in banking is Ralph W. Marquis and Frank P. Smith, "Double Liability for Bank Stock," American Economic Review 27 (1937): 490-502, which includes several pages on double liability provisions in antebellum New York. On the impact of double liability rules at the state and federal levels after the Civil War, see esp. Jonathan R. Macey and Geoffrey P. Miller, "Double Liability of Bank Shareholders: History and Implications," Wake Forest Low Review 27 (1992): 31-62; Benjamin C. Esty, "The Impact of Contingent Liability on Commercial Bank Risk-Taking," Journal of Financial Economics 47 (1998): 189-218. The best examination of antebellum bank liability insurance may be found in Carter H. Golembe, "The Deposit Insurance Legislation of 1933: An Examination of Its Antecedents and its Purposes," Political Science Quarterly 75 (1960): 181-200. See also Bray Hammond, Banks and Politics in America: From the Revolution to the Civil War (Princeton: Princeton University Press, 1957), 352-56, 556-63; Charles W. Calomiris, "Is Deposit Insurance Necessary? A Historical Perspective," Journal of Economic History 50 (1990): 283-95; Howard Bodenhorn, "Zombie Banks and the Demise of New York's Safety Fund," Eastern Economic Journal 22 (1996): 21-33; Robert E. Wright, "Banking and Politics in New York, 1784-1829" (Ph.D. diss., SUNY Buffalo, 1996).
16. The literature on free banking is extensive. See esp. Hugh T. Rockoff, "The Free Banking Era: A Reexamination," Journal of Money, Credit and Banking 6 (1974): 141-67; Hugh T. Rockoff, "Varieties of Banking and Regional Economic Development in the United States, 1840-1860," Journal of Economic History 35 (1975): 160-81; Hugh T. Rockoff, The Free Banking Era: A Reexamination (New York: Arno Press, 1975); Arthur J. Rolnick and Warren E. Weber, "New Evidence on the Free Banking Era," American Economic Review 73 (1983): 1080-91; Arthur J. Rolnick and Warren E. Weber, "The Causes of Free Bank Failures: A Detailed Examination," Journal of Monetary Economics 14 (1984): 267-91; Arthur J. Rolnick and Warren E. Weber, "Banking Instability and Regulation in the U.S. Free Banking Era," Federal Reserve Bank of Minneapolis Quarterly Review 9 (1985): 2-9; Howard Bodenhorn, "Entry, Rivalry and Free Banking in Antebellum America," Review of Economics and Statistics 72 (1990): 682-86; Howard Bodenhorn and Michael Haupert, "The Note Issue Paradox in the Free Banking Era," Journal of Economic History 56 (1996): 687-93; Bray Hammond, "Free Banks and Corporations: The New York Free Banking Act of 1838," Journal of Political Economy 44 (1936): 184-209; Gary Gorton, "Banking Theory and Free Banking History: A Review Essay," Journal of Monetary Economics 16 (1985): 267-76; Kenneth Ng, "Free Banking Laws and Barriers to Entry in Banking, 1838-1860," Journal of Economic History 48 (1988): 877-89; Iftekhar Hasan and Gerald P. Dwyer, Jr., "Bank Runs in the Free Banking Period," Journal of Money, Credit, and Banking 26 (1994): 271-88. In contrast to the vast literature on free banking in the United States, there are only scattered pieces on double liability for bank shareholders and mandatory bank-liability insurance during the antebellum period. The best overview of double liability in banking is Ralph W. Marquis and Frank P. Smith, "Double Liability for Bank Stock," American Economic Review 27 (1937): 490-502, which includes several pages on double liability provisions in antebellum New York. On the impact of double liability rules at the state and federal levels after the Civil War, see esp. Jonathan R. Macey and Geoffrey P. Miller, "Double Liability of Bank Shareholders: History and Implications," Wake Forest Low Review 27 (1992): 31-62; Benjamin C. Esty, "The Impact of Contingent Liability on Commercial Bank Risk-Taking," Journal of Financial Economics 47 (1998): 189-218. The best examination of antebellum bank liability insurance may be found in Carter H. Golembe, "The Deposit Insurance Legislation of 1933: An Examination of Its Antecedents and its Purposes," Political Science Quarterly 75 (1960): 181-200. See also Bray Hammond, Banks and Politics in America: From the Revolution to the Civil War (Princeton: Princeton University Press, 1957), 352-56, 556-63; Charles W. Calomiris, "Is Deposit Insurance Necessary? A Historical Perspective," Journal of Economic History 50 (1990): 283-95; Howard Bodenhorn, "Zombie Banks and the Demise of New York's Safety Fund," Eastern Economic Journal 22 (1996): 21-33; Robert E. Wright, "Banking and Politics in New York, 1784-1829" (Ph.D. diss., SUNY Buffalo, 1996).
17. The literature on free banking is extensive. See esp. Hugh T. Rockoff, "The Free Banking Era: A Reexamination," Journal of Money, Credit and Banking 6 (1974): 141-67; Hugh T. Rockoff, "Varieties of Banking and Regional Economic Development in the United States, 1840-1860," Journal of Economic History 35 (1975): 160-81; Hugh T. Rockoff, The Free Banking Era: A Reexamination (New York: Arno Press, 1975); Arthur J. Rolnick and Warren E. Weber, "New Evidence on the Free Banking Era," American Economic Review 73 (1983): 1080-91; Arthur J. Rolnick and Warren E. Weber, "The Causes of Free Bank Failures: A Detailed Examination," Journal of Monetary Economics 14 (1984): 267-91; Arthur J. Rolnick and Warren E. Weber, "Banking Instability and Regulation in the U.S. Free Banking Era," Federal Reserve Bank of Minneapolis Quarterly Review 9 (1985): 2-9; Howard Bodenhorn, "Entry, Rivalry and Free Banking in Antebellum America," Review of Economics and Statistics 72 (1990): 682-86; Howard Bodenhorn and Michael Haupert, "The Note Issue Paradox in the Free Banking Era," Journal of Economic History 56 (1996): 687-93; Bray Hammond, "Free Banks and Corporations: The New York Free Banking Act of 1838," Journal of Political Economy 44 (1936): 184-209; Gary Gorton, "Banking Theory and Free Banking History: A Review Essay," Journal of Monetary Economics 16 (1985): 267-76; Kenneth Ng, "Free Banking Laws and Barriers to Entry in Banking, 1838-1860," Journal of Economic History 48 (1988): 877-89; Iftekhar Hasan and Gerald P. Dwyer, Jr., "Bank Runs in the Free Banking Period," Journal of Money, Credit, and Banking 26 (1994): 271-88. In contrast to the vast literature on free banking in the United States, there are only scattered pieces on double liability for bank shareholders and mandatory bank-liability insurance during the antebellum period. The best overview of double liability in banking is Ralph W. Marquis and Frank P. Smith, "Double Liability for Bank Stock," American Economic Review 27 (1937): 490-502, which includes several pages on double liability provisions in antebellum New York. On the impact of double liability rules at the state and federal levels after the Civil War, see esp. Jonathan R. Macey and Geoffrey P. Miller, "Double Liability of Bank Shareholders: History and Implications," Wake Forest Low Review 27 (1992): 31-62; Benjamin C. Esty, "The Impact of Contingent Liability on Commercial Bank Risk-Taking," Journal of Financial Economics 47 (1998): 189-218. The best examination of antebellum bank liability insurance may be found in Carter H. Golembe, "The Deposit Insurance Legislation of 1933: An Examination of Its Antecedents and its Purposes," Political Science Quarterly 75 (1960): 181-200. See also Bray Hammond, Banks and Politics in America: From the Revolution to the Civil War (Princeton: Princeton University Press, 1957), 352-56, 556-63; Charles W. Calomiris, "Is Deposit Insurance Necessary? A Historical Perspective," Journal of Economic History 50 (1990): 283-95; Howard Bodenhorn, "Zombie Banks and the Demise of New York's Safety Fund," Eastern Economic Journal 22 (1996): 21-33; Robert E. Wright, "Banking and Politics in New York, 1784-1829" (Ph.D. diss., SUNY Buffalo, 1996).
18. The literature on free banking is extensive. See esp. Hugh T. Rockoff, "The Free Banking Era: A Reexamination," Journal of Money, Credit and Banking 6 (1974): 141-67; Hugh T. Rockoff, "Varieties of Banking and Regional Economic Development in the United States, 1840-1860," Journal of Economic History 35 (1975): 160-81; Hugh T. Rockoff, The Free Banking Era: A Reexamination (New York: Arno Press, 1975); Arthur J. Rolnick and Warren E. Weber, "New Evidence on the Free Banking Era," American Economic Review 73 (1983): 1080-91; Arthur J. Rolnick and Warren E. Weber, "The Causes of Free Bank Failures: A Detailed Examination," Journal of Monetary Economics 14 (1984): 267-91; Arthur J. Rolnick and Warren E. Weber, "Banking Instability and Regulation in the U.S. Free Banking Era," Federal Reserve Bank of Minneapolis Quarterly Review 9 (1985): 2-9; Howard Bodenhorn, "Entry, Rivalry and Free Banking in Antebellum America," Review of Economics and Statistics 72 (1990): 682-86; Howard Bodenhorn and Michael Haupert, "The Note Issue Paradox in the Free Banking Era," Journal of Economic History 56 (1996): 687-93; Bray Hammond, "Free Banks and Corporations: The New York Free Banking Act of 1838," Journal of Political Economy 44 (1936): 184-209; Gary Gorton, "Banking Theory and Free Banking History: A Review Essay," Journal of Monetary Economics 16 (1985): 267-76; Kenneth Ng, "Free Banking Laws and Barriers to Entry in Banking, 1838-1860," Journal of Economic History 48 (1988): 877-89; Iftekhar Hasan and Gerald P. Dwyer, Jr., "Bank Runs in the Free Banking Period," Journal of Money, Credit, and Banking 26 (1994): 271-88. In contrast to the vast literature on free banking in the United States, there are only scattered pieces on double liability for bank shareholders and mandatory bank-liability insurance during the antebellum period. The best overview of double liability in banking is Ralph W. Marquis and Frank P. Smith, "Double Liability for Bank Stock," American Economic Review 27 (1937): 490-502, which includes several pages on double liability provisions in antebellum New York. On the impact of double liability rules at the state and federal levels after the Civil War, see esp. Jonathan R. Macey and Geoffrey P. Miller, "Double Liability of Bank Shareholders: History and Implications," Wake Forest Low Review 27 (1992): 31-62; Benjamin C. Esty, "The Impact of Contingent Liability on Commercial Bank Risk-Taking," Journal of Financial Economics 47 (1998): 189-218. The best examination of antebellum bank liability insurance may be found in Carter H. Golembe, "The Deposit Insurance Legislation of 1933: An Examination of Its Antecedents and its Purposes," Political Science Quarterly 75 (1960): 181-200. See also Bray Hammond, Banks and Politics in America: From the Revolution to the Civil War (Princeton: Princeton University Press, 1957), 352-56, 556-63; Charles W. Calomiris, "Is Deposit Insurance Necessary? A Historical Perspective," Journal of Economic History 50 (1990): 283-95; Howard Bodenhorn, "Zombie Banks and the Demise of New York's Safety Fund," Eastern Economic Journal 22 (1996): 21-33; Robert E. Wright, "Banking and Politics in New York, 1784-1829" (Ph.D. diss., SUNY Buffalo, 1996).
19. The literature on free banking is extensive. See esp. Hugh T. Rockoff, "The Free Banking Era: A Reexamination," Journal of Money, Credit and Banking 6 (1974): 141-67; Hugh T. Rockoff, "Varieties of Banking and Regional Economic Development in the United States, 1840-1860," Journal of Economic History 35 (1975): 160-81; Hugh T. Rockoff, The Free Banking Era: A Reexamination (New York: Arno Press, 1975); Arthur J. Rolnick and Warren E. Weber, "New Evidence on the Free Banking Era," American Economic Review 73 (1983): 1080-91; Arthur J. Rolnick and Warren E. Weber, "The Causes of Free Bank Failures: A Detailed Examination," Journal of Monetary Economics 14 (1984): 267-91; Arthur J. Rolnick and Warren E. Weber, "Banking Instability and Regulation in the U.S. Free Banking Era," Federal Reserve Bank of Minneapolis Quarterly Review 9 (1985): 2-9; Howard Bodenhorn, "Entry, Rivalry and Free Banking in Antebellum America," Review of Economics and Statistics 72 (1990): 682-86; Howard Bodenhorn and Michael Haupert, "The Note Issue Paradox in the Free Banking Era," Journal of Economic History 56 (1996): 687-93; Bray Hammond, "Free Banks and Corporations: The New York Free Banking Act of 1838," Journal of Political Economy 44 (1936): 184-209; Gary Gorton, "Banking Theory and Free Banking History: A Review Essay," Journal of Monetary Economics 16 (1985): 267-76; Kenneth Ng, "Free Banking Laws and Barriers to Entry in Banking, 1838-1860," Journal of Economic History 48 (1988): 877-89; Iftekhar Hasan
20. The literature on free banking is extensive. See esp. Hugh T. Rockoff, "The Free Banking Era: A Reexamination," Journal of Money, Credit and Banking 6 (1974): 141-67; Hugh T. Rockoff, "Varieties of Banking and Regional Economic Development in the United States, 1840-1860," Journal of Economic History 35 (1975): 160-81; Hugh T. Rockoff, The Free Banking Era: A Reexamination (New York: Arno Press, 1975); Arthur J. Rolnick and Warren E. Weber, "New Evidence on the Free Banking Era," American Economic Review 73 (1983): 1080-91; Arthur J. Rolnick and Warren E. Weber, "The Causes of Free Bank Failures: A Detailed Examination," Journal of Monetary Economics 14 (1984): 267-91; Arthur J. Rolnick and Warren E. Weber, "Banking Instability and Regulation in the U.S. Free Banking Era," Federal Reserve Bank of Minneapolis Quarterly Review 9 (1985): 2-9; Howard Bodenhorn, "Entry, Rivalry and Free Banking in Antebellum America," Review of Economics and Statistics 72 (1990): 682-86; Howard Bodenhorn and Michael Haupert, "The Note Issue Paradox in the Free Banking Era," Journal of Economic History 56 (1996): 687-93; Bray Hammond, "Free Banks and Corporations: The New York Free Banking Act of 1838," Journal of Political Economy 44 (1936): 184-209; Gary Gorton, "Banking Theory and Free Banking History: A Review Essay," Journal of Monetary Economics 16 (1985): 267-76; Kenneth Ng, "Free Banking Laws and Barriers to Entry in Banking, 1838-1860," Journal of Economic History 48 (1988): 877-89; Iftekhar Hasan and Gerald P. Dwyer, Jr., "Bank Runs in the Free Banking Period," Journal of Money, Credit, and Banking 26 (1994): 271-88. In contrast to the vast literature on free banking in the United States, there are only scattered pieces on double liability for bank shareholders and mandatory bank-liability insurance during the antebellum period. The best overview of double liability in banking is Ralph W. Marquis and Frank P. Smith, "Double Liability for Bank Stock," American Economic Review 27 (1937): 490-502, which includes several pages on double liability provisions in antebellum New York. On the impact of double liability rules at the state and federal levels after the Civil War, see esp. Jonathan R. Macey and Geoffrey P. Miller, "Double Liability of Bank Shareholders: History and Implications," Wake Forest Low Review 27 (1992): 31-62; Benjamin C. Esty, "The Impact of Contingent Liability on Commercial Bank Risk-Taking," Journal of Financial Economics 47 (1998): 189-218. The best examination of antebellum bank liability insurance may be found in Carter H. Golembe, "The Deposit Insurance Legislation of 1933: An Examination of Its Antecedents and its Purposes," Political Science Quarterly 75 (1960): 181-200. See also Bray Hammond, Banks and Politics in America: From the Revolution to the Civil War (Princeton: Princeton University Press, 1957), 352-56, 556-63; Charles W. Calomiris, "Is Deposit Insurance Necessary? A Historical Perspective," Journal of Economic History 50 (1990): 283-95; Howard Bodenhorn, "Zombie Banks and the Demise of New York's Safety Fund," Eastern Economic Journal 22 (1996): 21-33; Robert E. Wright, "Banking and Politics in New York, 1784-1829" (Ph.D. diss., SUNY Buffalo, 1996).
21. L. Ray Gunn, The Decline of Authority: Public Economic Policy and Political Development in New York, 1800-1860 (Ithaca: Cornell University Press, 1988), 109.
22. Journal of the Assembly of the Slate of New York, 52nd sess. (Albany: E. Croswell, 1829), 176.
23. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (1776; Chicago: University of Chicago Press, 1976), bk. 1, chap. 4, 29.
24. C.A.E. Goodhart, Money, Information and Uncertainly (New York: Harper and Row, 1975), 3.
25. Karl Brunner and Allan H. Meltzer, "The Uses of Money: Money in the Theory of an Exchange Economy," American Economic Review 61 (1971): 787, 804.
26. Milton Friedman, A Program for Monetary Stability (New York: Fordham University Press, 1960), 4.
27. Henry Thornton, An Enquiry into the Nature and Effects of the Paper Credit of Great Britain (1802; New York: Farrar & Rinehart, Inc., 1939), 171.
28. Friedman, A Program for Monetary Stability, 6. See also Robert G. King, "On the Economics of Private Money," Journal of Monetary Economics 12 (1983): 132-39.
29. Friedman, A Program for Monetary Stability, 6. See also Robert G. King, "On the Economics of Private Money," Journal of Monetary Economics 12 (1983): 132-39.
30. At this time, specie served as the monetary base.
31. F. M. Taylor, "The Objects and Methods of Currency Reform in the United States," Quarterly Journal of Economics 12 (1898): 340.
32. Message from Governor William H. Seward, Jan. 7, 1840, Journal of the Assembly of the State of New York, 63rd sess. (Albany: E. Croswell, 1840), 20.
33. Annual Message of the Governor, Jan. 6, 1829, Journal of the Senate of the Stale of New York, 52nd sess. (Albany: E. Croswell, 1829), 10.
34. Report of the Committee on Banks and Insurance Companies, made to the Assembly, February 13, 1829, commonly known as the Paige Report (Albany: Croswell & Van Benthuysen, 1829), 14. See also David Ricardo, Proposals for an Economical and Secure Currency: With Observations on the Profits of the Bank of England, as They Regard the Public and the Proprietors of Bank Stock, 2d ed. (London: J. Murray, 1810), 35-36.
35. Report of the Committee on Banks and Insurance Companies, made to the Assembly, February 13, 1829, commonly known as the Paige Report (Albany: Croswell & Van Benthuysen, 1829), 14. See also David Ricardo, Proposals for an Economical and Secure Currency: With Observations on the Profits of the Bank of England, as They Regard the Public and the Proprietors of Bank Stock, 2d ed. (London: J. Murray, 1810), 35-36.
36. Journal of the Assembly 1829, 176. See also Sister Mary Grace Madeleine, Monetary and Banking Theories of Jacksonian Democracy (Philadelphia: Dolphin Press, 1943), esp. x-xi, 145, 152.
37. Journal of the Assembly 1829, 176. See also Sister Mary Grace Madeleine, Monetary and Banking Theories of Jacksonian Democracy (Philadelphia: Dolphin Press, 1943), esp. x-xi, 145, 152.
38. Journal of the Assembly 1829, 176. See also Michael D. Bordo and Anna J. Schwartz, "Money and Prices in the Nineteenth Century: An Old Debate Rejoined," Journal of Economic History 40 (1980): 61-67. The British monetary expert Henry Thornton implicitly agreed with Forman's assessment. See Thornton, Paper Credit of Great Britain (1802), esp. 199-200, 247-49.
39. Journal of the Assembly 1829, 176. See also Michael D. Bordo and Anna J. Schwartz, "Money and Prices in the Nineteenth Century: An Old Debate Rejoined," Journal of Economic History 40 (1980): 61-67. The British monetary expert Henry Thornton implicitly agreed with Forman's assessment. See Thornton, Paper Credit of Great Britain (1802), esp. 199-200, 247-49.
40. Journal of the Assembly 1829, 176. See also Michael D. Bordo and Anna J. Schwartz, "Money and Prices in the Nineteenth Century: An Old Debate Rejoined," Journal of Economic History 40 (1980): 61-67. The British monetary expert Henry Thornton implicitly agreed with Forman's assessment. See Thornton, Paper Credit of Great Britain (1802), esp. 199-200, 247-49.
41. See Journal of the Assembly 1829, 174, 176. On the common practice of effectively converting short-term debt into long-term debt, see Bray Hammond, "Long and Short Term Credit in Early American Banking," Quarterly Journal of Economics 49 (1934), 89-90.
42. See Journal of the Assembly 1829, 174, 176. On the common practice of effectively converting short-term debt into long-term debt, see Bray Hammond, "Long and Short Term Credit in Early American Banking," Quarterly Journal of Economics 49 (1934), 89-90.
43. Governor DeWitt Clinton, Journal of the Senate of the Slate of New York, 42nd, Sess. (Albany: J. Buel, 1819), 11.
44. Journal of the Assembly 1829, 184.
45. See esp. Rolnick and Weber, "New Evidence on the Free Banking Era."
46. Although the literature on banking regimes has indeed focused largely on note safety and bank failures, a considerable literature on banking and economic development has devoted much more attention to the asset side of bank balance sheets. See esp. Alexander Gerschenkron, Economic Backwardness in Historical Perspective: A Book of Essays (Cambridge, Massachusetts: Belknap Press, 1960), 5-30; Rondo Cameron, et al., Banking in the Early Stages of Industrialization: A Study in Comparative Economic History (New York: Oxford University Press, 1967); Cameron, ed., Banking and Economic Development: Some Lessons of History (New York: Oxford University Press, 1972); Hugh Neuburger and Houston H. Stokes, "German Banks and German Growth, 1883-1913: An Empirical View," Journal of Economic History 34 (1974): 710-31; Naomi R. Lamoreaux, Insider Lending: Banks, Personal Connections, and Economic Development in Industrial New England (New York: Cambridge University Press, 1994); Paul B. Trescott, Financing American Enterprise: The Story of Commercial Banking (New York: Harper & Row, 1963).
47. Although the literature on banking regimes has indeed focused largely on note safety and bank failures, a considerable literature on banking and economic development has devoted much more attention to the asset side of bank balance sheets. See esp. Alexander Gerschenkron, Economic Backwardness in Historical Perspective: A Book of Essays (Cambridge, Massachusetts: Belknap Press, 1960), 5-30; Rondo Cameron, et al., Banking in the Early Stages of Industrialization: A Study in Comparative Economic History (New York: Oxford University Press, 1967); Cameron, ed., Banking and Economic Development: Some Lessons of History (New York: Oxford University Press, 1972); Hugh Neuburger and Houston H. Stokes, "German Banks and German Growth, 1883-1913: An Empirical View," Journal of Economic History 34 (1974): 710-31; Naomi R. Lamoreaux, Insider Lending: Banks, Personal Connections, and Economic Development in Industrial New England (New York: Cambridge University Press, 1994); Paul B. Trescott, Financing American Enterprise: The Story of Commercial Banking (New York: Harper & Row, 1963).
48. Although the literature on banking regimes has indeed focused largely on note safety and bank failures, a considerable literature on banking and economic development has devoted much more attention to the asset side of bank balance sheets. See esp. Alexander Gerschenkron, Economic Backwardness in Historical Perspective: A Book of Essays (Cambridge, Massachusetts: Belknap Press, 1960), 5-30; Rondo Cameron, et al., Banking in the Early Stages of Industrialization: A Study in Comparative Economic History (New York: Oxford University Press, 1967); Cameron, ed., Banking and Economic Development: Some Lessons of History (New York: Oxford University Press, 1972); Hugh Neuburger and Houston H. Stokes, "German Banks and German Growth, 1883-1913: An Empirical View," Journal of Economic History 34 (1974): 710-31; Naomi R. Lamoreaux, Insider Lending: Banks, Personal Connections, and Economic Development in Industrial New England (New York: Cambridge University Press, 1994); Paul B. Trescott, Financing American Enterprise: The Story of Commercial Banking (New York: Harper & Row, 1963).
49. Although the literature on banking regimes has indeed focused largely on note safety and bank failures, a considerable literature on banking and economic development has devoted much more attention to the asset side of bank balance sheets. See esp. Alexander Gerschenkron, Economic Backwardness in Historical Perspective: A Book of Essays (Cambridge, Massachusetts: Belknap Press, 1960), 5-30; Rondo Cameron, et al., Banking in the Early Stages of Industrialization: A Study in Comparative Economic History (New York: Oxford University Press, 1967); Cameron, ed., Banking and Economic Development: Some Lessons of History (New York: Oxford University Press, 1972); Hugh Neuburger and Houston H. Stokes, "German Banks and German Growth, 1883-1913: An Empirical View," Journal of Economic History 34 (1974): 710-31; Naomi R. Lamoreaux, Insider Lending: Banks, Personal Connections, and Economic Development in Industrial New England (New York: Cambridge University Press, 1994); Paul B. Trescott, Financing American Enterprise: The Story of Commercial Banking (New York: Harper & Row, 1963).
50. Although the literature on banking regimes has indeed focused largely on note safety and bank failures, a considerable literature on banking and economic development has devoted much more attention to the asset side of bank balance sheets. See esp. Alexander Gerschenkron, Economic Backwardness in Historical Perspective: A Book of Essays (Cambridge, Massachusetts: Belknap Press, 1960), 5-30; Rondo Cameron, et al., Banking in the Early Stages of Industrialization: A Study in Comparative Economic History (New York: Oxford University Press, 1967); Cameron, ed., Banking and Economic Development: Some Lessons of History (New York: Oxford University Press, 1972); Hugh Neuburger and Houston H. Stokes, "German Banks and German Growth, 1883-1913: An Empirical View," Journal of Economic History 34 (1974): 710-31; Naomi R. Lamoreaux, Insider Lending: Banks, Personal Connections, and Economic Development in Industrial New England (New York: Cambridge University Press, 1994); Paul B. Trescott, Financing American Enterprise: The Story of Commercial Banking (New York: Harper & Row, 1963).
51. Although the literature on banking regimes has indeed focused largely on note safety and bank failures, a considerable literature on banking and economic development has devoted much more attention to the asset side of bank balance sheets. See esp. Alexander Gerschenkron, Economic Backwardness in Historical Perspective: A Book of Essays (Cambridge, Massachusetts: Belknap Press, 1960), 5-30; Rondo Cameron, et al., Banking in the Early Stages of Industrialization: A Study in Comparative Economic History (New York: Oxford University Press, 1967); Cameron, ed., Banking and Economic Development: Some Lessons of History (New York: Oxford University Press, 1972); Hugh Neuburger and Houston H. Stokes, "German Banks and German Growth, 1883-1913: An Empirical View," Journal of Economic History 34 (1974): 710-31; Naomi R. Lamoreaux, Insider Lending: Banks, Personal Connections, and Economic Development in Industrial New England (New York: Cambridge University Press, 1994); Paul B. Trescott, Financing American Enterprise: The Story of Commercial Banking (New York: Harper & Row, 1963).
52. Rockoff, "Varieties of Banking," esp. 161-62.
53. Hammond characterizes prospective borrowers in the antebellum period as "tortured with a thirst for credit...sought not for the facilitation of trade but for the exploitation of capital resources" [Hammond, "Long and Short Term Credit," 102].
54. Although most bank loans in antebellum New York were for terms of not more than 90 (or, in the extreme, 180) days, it was common for such loans to be granted on the understanding that they would be rolled over again and again. Hammond described this practice as "a convenient mask for advances of long term credit" (Hammond, "Long and Short Term Credit," 89). See also George Tucker, The Theory of Money and Banks Investigatal (Boston: Charles C. Little and James Brown, 1839), 165-67. Even if banks had backed their notes and deposits exclusively with short-term credits, they still would have been vulnerable to runs so long as the credits were not readily marketable. But the problem was only exacerbated by the fact that a considerable proportion of bank assets were effectively long-term loans.
55. Although most bank loans in antebellum New York were for terms of not more than 90 (or, in the extreme, 180) days, it was common for such loans to be granted on the understanding that they would be rolled over again and again. Hammond described this practice as "a convenient mask for advances of long term credit" (Hammond, "Long and Short Term Credit," 89). See also George Tucker, The Theory of Money and Banks Investigatal (Boston: Charles C. Little and James Brown, 1839), 165-67. Even if banks had backed their notes and deposits exclusively with short-term credits, they still would have been vulnerable to runs so long as the credits were not readily marketable. But the problem was only exacerbated by the fact that a considerable proportion of bank assets were effectively long-term loans.
56. Both political economists and policymakers during the antebellum period recognized the potential dangers of this sort of mismatch between bank assets and liabilities. The creation of liquidity and the provision of long-term credit were widely viewed as incompatible functions, which would be destabilizing when practiced together in one bank. See John McVickar, Hints on Banking in a Letter to a Gentleman in Albany; by New Yorker (New York: Vanderpool & Cole, 1827), 28. Many experts, like McVickar, were so alarmed by the integration of these two functions that they demanded public policies prohibiting banks from extending longterm loans.
57. See Charles Goodhart, The Evolution of Central Banks (Cambridge, MA: MIT Press, 1988), in which the confluence of these two functions within the banking system is characterized as an historical accident (93). See also Robert G. King, "On the Economics of Private Money," Journal of Monetary Economics 12 (1983): 132.
58. See Charles Goodhart, The Evolution of Central Banks (Cambridge, MA: MIT Press, 1988), in which the confluence of these two functions within the banking system is characterized as an historical accident (93). See also Robert G. King, "On the Economics of Private Money," Journal of Monetary Economics 12 (1983): 132.
59. On the special role of capital stock in antebellum banks, see Naomi Lamoreaux, Insider Lending: Banks, Personal Connections, and Economic Development in Industrial New England (Cambridge: Cambridge University Press, 1994), esp. 3, 65. It appears, however, that bank capital was even more important in New England than in New York. Focusing on Maine, Massachusetts, New Hampshire, and Rhode Island, Lamoreaux found ratios of capital to total bank liabilities of between 48 and 69 percent in 1835, and between 47 and 67 percent in 1860 (65). In New York, by comparison, the ratios for all New York banks were 30 percent in 1836 and 36 percent in 1860 (see Table 3).
60. Hammond, "Long and Short Term Credit," 95.
61. John Jay Knox, A History of Banking in the United States (New York: Bradford Rhodes & Company, 1903), 393.
62. Robert E. Chaddock, The Safety Fund Banking System in New York, 1829-1866, National Monetary Commission, Gist Cong., 2nd sess., Senate Doc. 581, 243. On the role of banks in state finance, see esp. Richard Sylla, John B. Legier, and John J. Wallis, "Banks and State Public Finance in the New Republic: The United States, 1790-1860," Journal of Economic History 47 (1987): 391-403.
63. Robert E. Chaddock, The Safety Fund Banking System in New York, 1829-1866, National Monetary Commission, Gist Cong., 2nd sess., Senate Doc. 581, 243. On the role of banks in state finance, see esp. Richard Sylla, John B. Legier, and John J. Wallis, "Banks and State Public Finance in the New Republic: The United States, 1790-1860," Journal of Economic History 47 (1987): 391-403.
64. Bray Hammond, Banks and Politics in America from the Revolution to the Civil War (Princeton: Princeton University Press, 1957), pp. 578-579.
65. See esp. L. Carroll Root, "New York Bank Currency: Safety Fund vs. Bond Security," Sound Currency 2 (1895): 13; Chaddock, Safety Fund Banking Syslem, 233, 242; Robert V. Remini, "The Albany Regency," New York History 39 (1958): 341-55.
66. See esp. L. Carroll Root, "New York Bank Currency: Safety Fund vs. Bond Security," Sound Currency 2 (1895): 13; Chaddock, Safety Fund Banking Syslem, 233, 242; Robert V. Remini, "The Albany Regency," New York History 39 (1958): 341-55.
67. See esp. L. Carroll Root, "New York Bank Currency: Safety Fund vs. Bond Security," Sound Currency 2 (1895): 13; Chaddock, Safety Fund Banking Syslem, 233, 242; Robert V. Remini, "The Albany Regency," New York History 39 (1958): 341-55.
68. John Cleaveland, The Banking System of the State of New York (New York: John S. Voorhies, 1857), xv-xvi.
69. Knox, History of Banking in the United States, 398, Massachusetts and New Hampshire prohibited unincorporated banks in 1799. Rhode Island forbid associations from issuing notes in 1805. After 1810, many other states passed laws either prohibiting unincorporated banks or forbidding them from issuing notes. See esp. J. Van Fenstermaker, The Development of American Commercial Banking, 1782-1837 (Kent, Ohio: Kent State University, 1965), 21-22.
70. Knox, History of Banking in the United States, 398, Massachusetts and New Hampshire prohibited unincorporated banks in 1799. Rhode Island forbid associations from issuing notes in 1805. After 1810, many other states passed laws either prohibiting unincorporated banks or forbidding them from issuing notes. See esp. J. Van Fenstermaker, The Development of American Commercial Banking, 1782-1837 (Kent, Ohio: Kent State University, 1965), 21-22.
71. Knox, History of Banking in the United States, 391. See also Hammond, Banks and Politics in America, 578.
72. Knox, History of Banking in the United States, 391. See also Hammond, Banks and Politics in America, 578.
73. See Knox, History of Banking in the United States, 394-97; Chaddock, Safety Fund Banking System, 234-35; Wright, "Banking and Politics in New York," esp. 228-32.
74. See Knox, History of Banking in the United States, 394-97; Chaddock, Safety Fund Banking System, 234-35; Wright, "Banking and Politics in New York," esp. 228-32.
75. See Knox, History of Banking in the United States, 394-97; Chaddock, Safety Fund Banking System, 234-35; Wright, "Banking and Politics in New York," esp. 228-32.
76. Wright, "Banking and Politics in New York," 231 (emphasis in the original).
77. Root, "New York Bank Currency," 3.
78. See Chaddock, Safely Fund Banking System, 244-45.
79. On the deterioration of the trade balance, see U.S. Department of Commerce, Bureau of the Census, Historical Statistics of the United States, Colonial Times to 1910 (Washington, DC: Government Printing Office, 1975), ser. U-19G (merchandise trade deficit). The balance deteriorated in both real and nominal terms. For relevant price indexes, see ser. E-52 (wholesale prices), and ser. E-135 (consumer prices). On the deterioration of the gold stock, see Milton Friedman and Anna Jacobson Schwartz, Monetary Statistics of the United States (New York: National Bureau of Economic Research, 1970), 218-19.
80. On the deterioration of the trade balance, see U.S. Department of Commerce, Bureau of the Census, Historical Statistics of the United States, Colonial Times to 1910 (Washington, DC: Government Printing Office, 1975), ser. U-19G (merchandise trade deficit). The balance deteriorated in both real and nominal terms. For relevant price indexes, see ser. E-52 (wholesale prices), and ser. E-135 (consumer prices). On the deterioration of the gold stock, see Milton Friedman and Anna Jacobson Schwartz, Monetary Statistics of the United States (New York: National Bureau of Economic Research, 1970), 218-19.
81. Quoted in Donald H. Kagin, "Monetary Aspects of the Treasury Notes of the War of 1812," Journal of Economic History (1984): 79.
82. See William M. Gouge, A Short History of Paper-Money and Banking in the United States, 2d ed. (New York: B & S Collins, 1835), 19; Fenstermaker, Development of American Commercial Banking, 111; Historical Statistics of the United States, ser. X-561 (which offers slightly different numbers than Fenstermaker); Friedman and Schwartz, Monetary Statistics of the United States, 218-19.
83. See William M. Gouge, A Short History of Paper-Money and Banking in the United States, 2d ed. (New York: B & S Collins, 1835), 19; Fenstermaker, Development of American Commercial Banking, 111; Historical Statistics of the United States, ser. X-561 (which offers slightly different numbers than Fenstermaker); Friedman and Schwartz, Monetary Statistics of the United States, 218-19.
84. See William M. Gouge, A Short History of Paper-Money and Banking in the United States, 2d ed. (New York: B & S Collins, 1835), 19; Fenstermaker, Development of American Commercial Banking, 111; Historical Statistics of the United States, ser. X-561 (which offers slightly different numbers than Fenstermaker); Friedman and Schwartz, Monetary Statistics of the United States, 218-19.
85. See William M. Gouge, A Short History of Paper-Money and Banking in the United States, 2d ed. (New York: B & S Collins, 1835), 19; Fenstermaker, Development of American Commercial Banking, 111; Historical Statistics of the United States, ser. X-561 (which offers slightly different numbers than Fenstermaker); Friedman and Schwartz, Monetary Statistics of the United States, 218-19.
86. See esp. Nussbaum, History of the Dollar, 70-71; John Watt Kearny, Sketch of American Finances, 1789-1835 (New York: G.P. Putnam's Sons, 1887), 107-8; Kagin, "Monetary Aspects of the Treasury Notes, of the War of 1812," 81-86. Congress authorized $25 million, but much less was deemed necessary once the war effort wound down.
87. See esp. Nussbaum, History of the Dollar, 70-71; John Watt Kearny, Sketch of American Finances, 1789-1835 (New York: G.P. Putnam's Sons, 1887), 107-8; Kagin, "Monetary Aspects of the Treasury Notes, of the War of 1812," 81-86. Congress authorized $25 million, but much less was deemed necessary once the war effort wound down.
88. See esp. Nussbaum, History of the Dollar, 70-71; John Watt Kearny, Sketch of American Finances, 1789-1835 (New York: G.P. Putnam's Sons, 1887), 107-8; Kagin, "Monetary Aspects of the Treasury Notes, of the War of 1812," 81-86. Congress authorized $25 million, but much less was deemed necessary once the war effort wound down.
89. For wholesale and consumer price indices, see Historical Statistics of the United States, ser. E-52 and ser. E-135. Discount rates on state bank notes surged almost everywhere except New England, where strict laws (including a 12 percent annual penalty for nonpayment of notes) apparently prevented depreciation relative to specie. See "Report on the Causes and Extent of the Present General Distress, read January 29th, 1820," Pennsylvania Senate Committee, qtd. in Gouge, Short History of Paper-Money and Banking in the United States, 19. According to Knox, not one Massachusetts bank stopped payments because of "the severe penalty imposed for non-payment of ... notes" ( History of Banking in the United States, 361).
90. For wholesale and consumer price indices, see Historical Statistics of the United States, ser. E-52 and ser. E-135. Discount rates on state bank notes surged almost everywhere except New England, where strict laws (including a 12 percent annual penalty for nonpayment of notes) apparently prevented depreciation relative to specie. See "Report on the Causes and Extent of the Present General Distress, read January 29th, 1820," Pennsylvania Senate Committee, qtd. in Gouge, Short History of Paper-Money and Banking in the United States, 19. According to Knox, not one Massachusetts bank stopped payments because of "the severe penalty imposed for non-payment of ... notes" ( History of Banking in the United States, 361).
91. For wholesale and consumer price indices, see Historical Statistics of the United States, ser. E-52 and ser. E-135. Discount rates on state bank notes surged almost everywhere except New England, where strict laws (including a 12 percent annual penalty for nonpayment of notes) apparently prevented depreciation relative to specie. See "Report on the Causes and Extent of the Present General Distress, read January 29th, 1820," Pennsylvania Senate Committee, qtd. in Gouge, Short History of Paper-Money and Banking in the United States, 19. According to Knox, not one Massachusetts bank stopped payments because of "the severe penalty imposed for non-payment of ... notes" ( History of Banking in the United States, 361).
92. Albert Gallatin, "Considerations on the Currency and Banking System of the United States," (1831), rep. in The Writings of Albert Gallatin, ed. Henry Adams, 3 vols. (New York: Antiquarian Press, Ltd., 1960), 3:363.
93. Albert Gallatin, "Considerations on the Currency and Banking System of the United States," (1831), rep. in The Writings of Albert Gallatin, ed. Henry Adams, 3 vols. (New York: Antiquarian Press, Ltd., 1960), 3:363.
94. Margaret G. Myers, A Financial History of the United States (New York: Columbia University Press, 1970), 83; William J. Shultz, Financial Development of the United States (New York, Prentice-Hall, Inc., 1937), 181.
95. Margaret G. Myers, A Financial History of the United States (New York: Columbia University Press, 1970), 83; William J. Shultz, Financial Development of the United States (New York, Prentice-Hall, Inc., 1937), 181.
96. See e.g. Journal of the Assembly of the State of New York, 41st sess. (Albany:J. Buel, 1818), 15.
97. The Restraining Act of 1818, Laws of 1818, 242, sec. 3 (10 percent penalty on the nonpayment of notes) and sec. 1 (prohibition on note issue by individuals and non-bank corporations), rep. in Cleaveland, Banking System of the State of New York, 237-38.
98. Journal of the Senate 1819, 11.
99. Journal of the Senate 1819, 66, 69.
100. Root, "New York Bank Currency," 3.
101. Knox, History of Banking in the United States, 398. See also Hammond, Banks and Politics in America, 579.
102. Knox, History of Banking in the United States, 398. See also Hammond, Banks and Politics in America, 579.
103. Jabez Hammond, The History of Political Parties in the State of New York, 3 vols. (Albany, 1843), 1:337, qtd. in Bray Hammond, "Free Banks and Corporations: The New York Free Banking Act of 1838," Journal of Political Economy 44 (1936): 190. See also Hammond, Banks and Politics in America, 578-79; Wright, "Banking and Politics in New York," 940-41.
104. Jabez Hammond, The History of Political Parties in the State of New York, 3 vols. (Albany, 1843), 1:337, qtd. in Bray Hammond, "Free Banks and Corporations: The New York Free Banking Act of 1838," Journal of Political Economy 44 (1936): 190. See also Hammond, Banks and Politics in America, 578-79; Wright, "Banking and Politics in New York," 940-41.
105. Jabez Hammond, The History of Political Parties in the State of New York, 3 vols. (Albany, 1843), 1:337, qtd. in Bray Hammond, "Free Banks and Corporations: The New York Free Banking Act of 1838," Journal of Political Economy 44 (1936): 190. See also Hammond, Banks and Politics in America, 578-79; Wright, "Banking and Politics in New York," 940-41.
106. Jabez Hammond, The History of Political Parties in the State of New York, 3 vols. (Albany, 1843), 1:337, qtd. in Bray Hammond, "Free Banks and Corporations: The New York Free Banking Act of 1838," Journal of Political Economy 44 (1936): 190. See also Hammond, Banks and Politics in America, 578-79; Wright, "Banking and Politics in New York," 940-41.
107. Root, "New York Bank Currency," 3.
108. Ibid. For information on the Bank of Niagara, whose charter was briefly revived in 1825, see William H. Dillistin, Historical Directory of the Banks of the State of New York (New York: New York State Bankers Association, 1946), 105.
109. Ibid. For information on the Bank of Niagara, whose charter was briefly revived in 1825, see William H. Dillistin, Historical Directory of the Banks of the State of New York (New York: New York State Bankers Association, 1946), 105.
110. See Ralph W. Marquis and Frank P. Smith, "Double Liability for Bank Stock," The American Economic Review 27 (1937): 493; Chaddock, Safety Fund Banking System, 245-46; Cleaveland, Banking System of the State of New York, xxvii-xxviii.
111. See Ralph W. Marquis and Frank P. Smith, "Double Liability for Bank Stock," The American Economic Review 27 (1937): 493; Chaddock, Safety Fund Banking System, 245-46; Cleaveland, Banking System of the State of New York, xxvii-xxviii.
112. See Ralph W. Marquis and Frank P. Smith, "Double Liability for Bank Stock," The American Economic Review 27 (1937): 493; Chaddock, Safety Fund Banking System, 245-46; Cleaveland, Banking System of the State of New York, xxvii-xxviii.
113. Cleaveland, Banking System of the State of New York, xxix-xxxix; Root; "New York Bank Currency," 3.
114. Cleaveland, Banking System of the State of New York, xxix-xxxix; Root; "New York Bank Currency," 3.
115. Journal of the Assembly of the State of New York, 50th sess. (Albany: E. Croswell, 1827), 16; Chaddock, Safety Fund Banking System, 252.
116. Journal of the Assembly of the State of New York, 50th sess. (Albany: E. Croswell, 1827), 16; Chaddock, Safety Fund Banking System, 252.
117. Cleaveland, Banking System of the State of New York, xxvix.
118. Marquis and Smith, "Double Liability for Bank Stock," 493. By this time, New Hampshire, Pennsylvania, Massachusetts, and Rhode Island had already begun experimenting with excess liability provisions for bank shareholders. See Davis R. Dewey, State Banking Before the Civil War, National Monetary Commission, 61st Cong., 2nd sess., Senate Doc. 581, 117-19.
119. Marquis and Smith, "Double Liability for Bank Stock," 493. By this time, New Hampshire, Pennsylvania, Massachusetts, and Rhode Island had already begun experimenting with excess liability provisions for bank shareholders. See Davis R. Dewey, State Banking Before the Civil War, National Monetary Commission, 61st Cong., 2nd sess., Senate Doc. 581, 117-19.
120. Marquis and Smith, "Double Liability for Bank Stock," 493.
121. Revised Statutes of 1827, chap. 18, pt. 1, title 2, art. 1, sec. 16, rep. in Cleaveland, Banking System of the State of New York, 12. The double-liability provision enacted in 1827 was limited to bank insolvencies that were "adjudged fraudulent." However, the statute held that fraud would be assumed unless bank directors and shareholders could prove otherwise. According to the statute, Every insolvency of a moneyed corporation shall be deemed fraudulent, unless its affairs shall appear, upon investigation, to have been fairly and legally administered, and generally with the same care and diligence that agents, receiving a compensation for their services, are bound by law to observe; and it shall be incumbent on the directors and stockholders of every such insolvent corporation, to repel, by proof, the presumption of fraud (sec. 14). In addition to imposing double liability on each shareholder, the statute also imposed full liability on each director "for his proportional share" of losses stemming from a "fraudulent insolvency." Each director's proportion was "to be ascertained by dividing the whole loss amongst the whole number of directors liable for its reimbursement" (sec. 15). It is worth noting that the problem of financial fraud had assumed special significance in the public mind in the wake of the conspiracy trials of 1826 (see Marquis and Smith, "Double Liability for Bank Stock," 494).
122. Revised Statutes of 1827, chap. 18, pt. 1, title 2, art. 1, sec. 16, rep. in Cleaveland, Banking System of the State of New York, 12. The double-liability provision enacted in 1827 was limited to bank insolvencies that were "adjudged fraudulent." However, the statute held that fraud would be assumed unless bank directors and shareholders could prove otherwise. According to the statute, Every insolvency of a moneyed corporation shall be deemed fraudulent, unless its affairs shall appear, upon investigation, to have been fairly and legally administered, and generally with the same care and diligence that agents, receiving a compensation for their services, are bound by law to observe; and it shall be incumbent on the directors and stockholders of every such insolvent corporation, to repel, by proof, the presumption of fraud (sec. 14). In addition to imposing double liability on each shareholder, the statute also imposed full liability on each director "for his proportional share" of losses stemming from a "fraudulent insolvency." Each director's proportion was "to be ascertained by dividing the whole loss amongst the whole number of directors liable for its reimbursement" (sec. 15). It is worth noting that the problem of financial fraud had assumed special significance in the public mind in the wake of the conspiracy trials of 1826 (see Marquis and Smith, "Double Liability for Bank Stock," 494).
123. See esp. Wright, "Banking and Politics in New York," 1010.
124. Wright, "Banking and Politics in New York," 989-90.
125. Quoted in Wright, "Banking and Politics in New York," 979. See also 1010.
126. On the Regency's political weakness in 1824-1825, see Sullivan. History of New York State, 4: 1634-36.
127. For a contemporary recitation of this logic (to justify an 1825 proposal to allow individuals to engage in private banking with unlimited liability) see Journal of the Senate of the State of New York, 48th sess. (Albany: E. Croswell, 1825), 102-3.
128. See esp. Roger E. Meiners, James S. Mofsky, and Robert D. Tollison, "Piercing the Veil of Limited Liability," Delaware Journal of Corporate Law 4 (1979): 351-67; David A. Moss, "Limited Liability and the Birth of American Industry: Theory Meets History," Harvard Business School Working Paper No. 98-079, Mar. 16, 1998, 6-16.
129. See esp. Roger E. Meiners, James S. Mofsky, and Robert D. Tollison, "Piercing the Veil of Limited Liability," Delaware Journal of Corporate Law 4 (1979): 351-67; David A. Moss, "Limited Liability and the Birth of American Industry: Theory Meets History," Harvard Business School Working Paper No. 98-079, Mar. 16, 1998, 6-16.
130. For an alternative view, see Gary Gorton, "Reputation Formation in Early Bank Note Markets," Journal of Political Economy 104 (1990): 346-97.
131. Benjamin C. Esty, "The Impact of Contingent Liability," 189-218.
132. "Conclusion of the Debate in the house of Assembly, on the subject of the renewal of Bank Charters," Albany Argus and City Gazette, Feb. 26, 1827, 2. See also Rep. J. Van Beuren, in the Albany Argus, Mar. 4, 1829, 2.
133. "Conclusion of the Debate in the house of Assembly, on the subject of the renewal of Bank Charters," Albany Argus and City Gazette, Feb. 26, 1827, 2. See also Rep. J. Van Beuren, in the Albany Argus, Mar. 4, 1829, 2.
134. Root, "New York Bank Currency," 3.
135. On Barker, see esp. J. T. W. Hubbard, For Each, the Strength of All: A History of Banking in the State of New York (New York: New York University Press, 1995), 70-71. Strangely, although the Bank of Washington and Warren is widely described as having failed in 1825, its notes continued to circulate near par until 1830. See New-York American (bank note tables), 1825-1830.
136. On Barker, see esp. J. T. W. Hubbard, For Each, the Strength of All: A History of Banking in the State of New York (New York: New York University Press, 1995), 70-71. Strangely, although the Bank of Washington and Warren is widely described as having failed in 1825, its notes continued to circulate near par until 1830. See New-York American (bank note tables), 1825-1830.
137. Ronald Seavoy, The Origins of the American Business Corporation, 1784-1855 (Westport, CT: Greenwood Press, 1982), 117. The legislature received at least eighteen applications for new banks and fourteen for rechartering. See also Albany Argus, Apr. 4, 16, 17, 1828.
138. Ronald Seavoy, The Origins of the American Business Corporation, 1784-1855 (Westport, CT: Greenwood Press, 1982), 117. The legislature received at least eighteen applications for new banks and fourteen for rechartering. See also Albany Argus, Apr. 4, 16, 17, 1828.
139. Journal of the Senate 1829, 8.
140. Martin Van Buren, The Autobiography of Martin Van Buren, ed. John C. Fitzpatrick (Washington, DC: Government Printing Office, 1920), 221.
141. See esp. Hubbard, For Each, the Strength of All, 57-78.
142. Journal of the Assembly 1829, p. 175.
143. Ibid., 174.
144. Ibid., 10 (emphasis added).
145. Ibid., 177.
146. Ibid., 184.
147. Fritz Redlich, The Molding of American Banking: Men and Ideas 2 vols. (New York: Johnson Reprint Company, 1968), 1:92.
148. Journal of the Assembly 1829, 176-77, 181-82.
149. Ibid., 176.
150. Hammond, Banks and Politics in America, 558.
151. Journal of the Senate 1829, 9. Although Van Buren believed that a quasi-public branch system would "probably better subserve the interests" of the public than the prevailing system, he anticipated that replacing the existing unit banks with a branch system would cause an unbearable "pecuniary convulsion."
152. Journal of the Assembly 1829, 178.
153. Report of the Committee on Banks and Insurance Campanies (Paige Report, 1823), 19-20, 22-23.
154. Erastus Root, The Speeches of General Erastus Root on the Resolution of Mr. Clayton of Georgia Proposing a Committee of Visitation to the Bank of the U.S., Delivered on the 7th, 8th and 14th days of March, 1832, in the House of Representatives (Washington, DC, 1832), II.
155. Albany Argus, Feb. 28, 1829, 2. See also Cliaddock, Safety Fund Banking System in New York, 264-06.
156. Albany Argus, Feb. 28, 1829, 2. See also Cliaddock, Safety Fund Banking System in New York, 264-06.
157. Albany Argus, Feb. 28, 1829, 2.
158. Albany Argus, Mar. 2, 1829, 2.
159. Chaddock, Safety Fund Banking System in New York, 241-42, 267.
160. Journal of the Assembly 1829, 923.
161. "An Act to Create a Fund for the Benefit of Certain Moneyed Corporations, and for other purposes: Passed April 2, 1829," rep. in Cleveland, Banking System of the State of New York, 29-38. Sections 20-22 of the law, which authorized banks to choose two of three commissioners, were repealed in 1837 and not reprinted in Cleaveland. They may be found in Journal of the Assembly 1829, 755.
162. "An Act to Create a Fund for the Benefit of Certain Moneyed Corporations, and for other purposes: Passed April 2, 1829," rep. in Cleveland, Banking System of the State of New York, 29-38. Sections 20-22 of the law, which authorized banks to choose two of three commissioners, were repealed in 1837 and not reprinted in Cleaveland. They may be found in Journal of the Assembly 1829, 755.
163. See Niles'Register, Apr. 11, 1829, 102.
164. Root, "New York Bank Currency," 7. The Middle District Bank failed within months of renewing its charter in 1829 and therefore is not counted as a member of the Safety Fund system. On the entry of the City banks, which involved considerable negotiation, see Chaddock, Safety Fund Banking System in New York, 270-71; An Examination of Some of the Provisions of the "Act to Create a Fund for the Benefit of the Creditors of Certain Monied Corporations, and for other Purposes." Passed April 1829, Particularly as to its effect on the City of New York, By a Stockholder, 1829; R. K. Moulton, Legislative and Documentary History of the Banks of the United States, from the Time of Establishing the Bank of North America, 1781, to October, 1834 (New York: G.&C. Carvill & Co., 1834), 71; Redlich, Molding of American Banking, 1:95.
165. Root, "New York Bank Currency," 7. The Middle District Bank failed within months of renewing its charter in 1829 and therefore is not counted as a member of the Safety Fund system. On the entry of the City banks, which involved considerable negotiation, see Chaddock, Safety Fund Banking System in New York, 270-71; An Examination of Some of the Provisions of the "Act to Create a Fund for the Benefit of the Creditors of Certain Monied Corporations, and for other Purposes." Passed April 1829, Particularly as to its effect on the City of New York, By a Stockholder, 1829; R. K. Moulton, Legislative and Documentary History of the Banks of the United States, from the Time of Establishing the Bank of North America, 1781, to October, 1834 (New York: G.&C. Carvill & Co., 1834), 71; Redlich, Molding of American Banking, 1:95.
166. Root, "New York Bank Currency," 7. The Middle District Bank failed within months of renewing its charter in 1829 and therefore is not counted as a member of the Safety Fund system. On the entry of the City banks, which involved considerable negotiation, see Chaddock, Safety Fund Banking System in New York, 270-71; An Examination of Some of the Provisions of the "Act to Create a Fund for the Benefit of the Creditors of Certain Monied Corporations, and for other Purposes." Passed April 1829, Particularly as to its effect on the City of New York, By a Stockholder, 1829; R. K. Moulton, Legislative and Documentary History of the Banks of the United States, from the Time of Establishing the Bank of North America, 1781, to October, 1834 (New York: G.&C. Carvill & Co., 1834), 71; Redlich, Molding of American Banking, 1:95.
167. Root, "New York Bank Currency," 7. The Middle District Bank failed within months of renewing its charter in 1829 and therefore is not counted as a member of the Safety Fund system. On the entry of the City banks, which involved considerable negotiation, see Chaddock, Safety Fund Banking System in New York, 270-71; An Examination of Some of the Provisions of the "Act to Create a Fund for the Benefit of the Creditors of Certain Monied Corporations, and for other Purposes." Passed April 1829, Particularly as to its effect on the City of New York, By a Stockholder, 1829; R. K. Moulton, Legislative and Documentary History of the Banks of the United States, from the Time of Establishing the Bank of North America, 1781, to October, 1834 (New York: G.&C. Carvill & Co., 1834), 71; Redlich, Molding of American Banking, 1:95.
168. Root, "New York Bank Currency," 7. The Middle District Bank failed within months of renewing its charter in 1829 and therefore is not counted as a member of the Safety Fund system. On the entry of the City banks, which involved considerable negotiation, see Chaddock, Safety Fund Banking System in New York, 270-71; An Examination of Some of the Provisions of the "Act to Create a Fund for the Benefit of the Creditors of Certain Monied Corporations, and for other Purposes." Passed April 1829, Particularly as to its effect on the City of New York, By a Stockholder, 1829; R. K. Moulton, Legislative and Documentary History of the Banks of the United States, from the Time of Establishing the Bank of North America, 1781, to October, 1834 (New York: G.&C. Carvill & Co., 1834), 71; Redlich, Molding of American Banking, 1:95.
169. See Journal of the Senate 1829, 8; Knox, History of Banking in the United States, 404.
170. See Journal of the Senate 1829, 8; Knox, History of Banking in the United States, 404.
171. Journal of the Assembly of the State of New York, 53rd sess. (Albany: E. Croswell, 1830), 26; Cleaveland, Banking System of the State of New York, 13 n. G; Chaddock, Safety Fund Banking System in New York, 271; Moulton, Legislative and Documentary History, 70-71.
172. Journal of the Assembly of the State of New York, 53rd sess. (Albany: E. Croswell, 1830), 26; Cleaveland, Banking System of the State of New York, 13 n. G; Chaddock, Safety Fund Banking System in New York, 271; Moulton, Legislative and Documentary History, 70-71.
173. Journal of the Assembly of the State of New York, 53rd sess. (Albany: E. Croswell, 1830), 26; Cleaveland, Banking System of the State of New York, 13 n. G; Chaddock, Safety Fund Banking System in New York, 271; Moulton, Legislative and Documentary History, 70-71.
174. Journal of the Assembly of the State of New York, 53rd sess. (Albany: E. Croswell, 1830), 26; Cleaveland, Banking System of the State of New York, 13 n. G; Chaddock, Safety Fund Banking System in New York, 271; Moulton, Legislative and Documentary History, 70-71.
175. Quoted in Wright, "Banking and Politics in New York," 1041. See also Redlich, Molding of American Banking, 1:94-95.
176. Quoted in Wright, "Banking and Politics in New York," 1041. See also Redlich, Molding of American Banking, 1:94-95.
177. Root, Speeches of General Erastus Root, 13. See also Hammond, Banks and Politics in America, 392.
178. Root, Speeches of General Erastus Root, 13. See also Hammond, Banks and Politics in America, 392.
179. Root, "New York Bank Currency," 7.
180. Redlich, Molding of American Banking, 1:230; Knox, History of Banking in the United States, 355-56.
181. Redlich, Molding of American Banking, 1:230; Knox, History of Banking in the United States, 355-56.
182. Root, "New York Bank Currency" 3, 7; Fenstermaker, Development of American Commercial Banking, 111 (table A-1).
183. Root, "New York Bank Currency" 3, 7; Fenstermaker, Development of American Commercial Banking, 111 (table A-1).
184. Root, "New York Bank Currency," 3. Dillistin, Historical Directory, 105.
185. Root, "New York Bank Currency," 3. Dillistin, Historical Directory, 105.
186. Annual Report of the Bank Commissioners, January 31, 1832, Assembly Doc. 70, 1832, 10.
187. Annual Report of the Bank Commissioners, January 31, 1833, Assembly Doc. 69, 1833, 5-6.
188. Chaddock, Safety Fund Banking System in New York, 276.
189. Journal of the Assembly 1829, 184.
190. Root, "New York Bank Currency," 7. The charters granted in 1834 appear to have limited note-to-capital ratios to only 1.5 [ Schultz, Financial Development of the United States, 206].
191. Root, "New York Bank Currency," 7. The charters granted in 1834 appear to have limited note-to-capital ratios to only 1.5 [ Schultz, Financial Development of the United States, 206].
192. Repr. in the Daily Albany Argus, Mar. 14, 1837, 2.
193. See ibid, and Daily Albany Argus, Mar. 16, 1837, 2.
194. See ibid, and Daily Albany Argus, Mar. 16, 1837, 2.
195. Qtd. in Remini, "Albany Regency," 342.
196. Ibid., 352.
197. Qtd. in Moulton, Legislative and Documentary History, 67. See also Origin, Provisions, and Effect of the Safety Fund Law (Albany: Packard & Benthuysen, 1834), 5; Seavoy, Origins of the American Business Corporation, 117-19, 128; Hammond, Banks and Politics in America, 352; Wright, "Banking and Politics in New York," 9, 1040-41.
198. Qtd. in Moulton, Legislative and Documentary History, 67. See also Origin, Provisions, and Effect of the Safety Fund Law (Albany: Packard & Benthuysen, 1834), 5; Seavoy, Origins of the American Business Corporation, 117-19, 128; Hammond, Banks and Politics in America, 352; Wright, "Banking and Politics in New York," 9, 1040-41.
199. Qtd. in Moulton, Legislative and Documentary History, 67. See also Origin, Provisions, and Effect of the Safety Fund Law (Albany: Packard & Benthuysen, 1834), 5; Seavoy, Origins of the American Business Corporation, 117-19, 128; Hammond, Banks and Politics in America, 352; Wright, "Banking and Politics in New York," 9, 1040-41.
200. Qtd. in Moulton, Legislative and Documentary History, 67. See also Origin, Provisions, and Effect of the Safety Fund Law (Albany: Packard & Benthuysen, 1834), 5; Seavoy, Origins of the American Business Corporation, 117-19, 128; Hammond, Banks and Politics in America, 352; Wright, "Banking and Politics in New York," 9, 1040-41.
201. Qtd. in Moulton, Legislative and Documentary History, 67. See also Origin, Provisions, and Effect of the Safety Fund Law (Albany: Packard & Benthuysen, 1834), 5; Seavoy, Origins of the American Business Corporation, 117-19, 128; Hammond, Banks and Politics in America, 352; Wright, "Banking and Politics in New York," 9, 1040-41.
202. See Carl Degler, "The Locofocos: Urban 'Agrarians'," Journal of Economic History 16 (1956): 322-33.
203. For descriptions of public meetings advocating this position, see the Daily Albany Argus, Mar. 17, 18, 28, 31, 1837, and for reprints of editorials on this issue, see the Daily Albany Argus, Mar. 14, 20, 1837.
204. For descriptions of public meetings advocating this position, see the Daily Albany Argus, Mar. 17, 18, 28, 31, 1837, and for reprints of editorials on this issue, see the Daily Albany Argus, Mar. 14, 20, 1837.
205. Reprinted in the Daily Albany Argus, Mar. 14, 1837, 2 (emphasis in the original).
206. "Message from the Governor, to the Senate and Assembly," Senate Doc. 1 (1837), 17, 18, 20.
207. "Report of the Select Committee ... on sundry petitions for the passage of a law creating a general system of private banking," Senate Doc. 55 (1837), 19, 11, 12.
208. Chaddock, Safety Fund Banking System in New York, 370; Assembly Doc. 303 (1837), 9. On a related bill see also Daily Albany Argus, Mar. 20, 1837, 2.
209. Chaddock, Safety Fund Banking System in New York, 370; Assembly Doc. 303 (1837), 9. On a related bill see also Daily Albany Argus, Mar. 20, 1837, 2.
210. Assembly Doc. 318 (1838), 2-3; Root, "New York Bank Currency," 8; Chaddock, Safely Fund Banking System in New York, 300-301; Knox, History of Banking in the United States, 408. See also William Trimble, "Diverging Tendencies in New York Democracy in the Period of the Locofocus," American Historical Review 24 (1919): 406.
211. Assembly Doc. 318 (1838), 2-3; Root, "New York Bank Currency," 8; Chaddock, Safely Fund Banking System in New York, 300-301; Knox, History of Banking in the United States, 408. See also William Trimble, "Diverging Tendencies in New York Democracy in the Period of the Locofocus," American Historical Review 24 (1919): 406.
212. Assembly Doc. 318 (1838), 2-3; Root, "New York Bank Currency," 8; Chaddock, Safely Fund Banking System in New York, 300-301; Knox, History of Banking in the United States, 408. See also William Trimble, "Diverging Tendencies in New York Democracy in the Period of the Locofocus," American Historical Review 24 (1919): 406.
213. Assembly Doc. 318 (1838), 2-3; Root, "New York Bank Currency," 8; Chaddock, Safely Fund Banking System in New York, 300-301; Knox, History of Banking in the United States, 408. See also William Trimble, "Diverging Tendencies in New York Democracy in the Period of the Locofocus," American Historical Review 24 (1919): 406.
214. Annual Report of the Comptroller, January 11, 1843, Assembly Doc. 10 (1843), 53.
215. Annual Report of the Bank Commissioners, January 24, 1838, Assembly Doc. 71 (1838), 13.
216. Root, "New York Bank Currency," 8. Although the three Buffalo Banks made it through the immediate crisis intact, all three subsequently failed in the early 1840s.
217. Early in the legislative debates over free banking, the Assembly rejected an amendment that would have incorporated free banks into the safety fund. Further discussion of the matter cannot be found. See Daily Albany Argus, Feb. 20, 1838.
218. Hammond, Banks and Politics in America, 582; Redlich, Molding of American Banking, 1:190.
219. Hammond, Banks and Politics in America, 582; Redlich, Molding of American Banking, 1:190.
220. Although the Safety Fund survived for nearly thirty more years, the Panic of 1837 marked the beginning of a long decline. No new Safety Fund banks were chartered after 1836, and the failure of eleven banks in 1840-1842 overwhelmed the resources of the Fund. To ease the pressure, the legislature removed the guarantee on deposits in April 1842. Between November 1841 and April 1845, however, the Comptroller still proved unable to redeem notes regularly because the Safety Fund remained effectively insolvent. The state finally solved the problem in 1845 by issuing a stock mortgaging all future contributions to the Safety Fund; and the notes of failed banks were soon redeemed. After the debacle of the early 1840s, the Safety Fund suffered five more failures - one in 1818, one in 1854, and three in 1857. Meanwhile, the total number of Safety Fund banks continued to dwindle since charters were simply allowed to lapse as Safety Fund banks steadily converted to free banks. The last Safety Fund charters expired in 1866; with that, the system quietly came to an end. Although the Fund did ultimately make good on all of its commitments, many note holders of failed banks had been forced to suffer long delays and depreciation before receiving appropriate reimbursement. See Chaddock, Safety Fund Banking System in New York, 328, 360-67; Annual Report of the Comptroller, December 30, 1848, Assembly Doc. 5 (1849), 51-52; Root, "New York Bank Currency," 7-10. The Safety Fund's profound weakness, which first became apparent in the early 1840s, can be attributed to various defects in the original legislation. Perhaps the most severe flaw was that mandatory contributions to the Fund were based on bank capital rather than on bank liabilities (notes and deposits), which were the items being insured. Many authors have charged that the coverage of deposits was itself a serious mistake because it dramatically overextended the Fund. The fact that banks were not required to register their notes with the Comptroller (presumably to prevent overissues) has been cited as yet another flaw. See esp. Chaddock, Safety Fund Banking System in Naw York, 350-54, 358-59, 387; Root, "New York Bank Currency," 14-15; Knox, History of Banking in the United States, 412-13. According to Bodenhorn, another problem was ineffective monitoring by the Bank Commissioners as a result of "[i]inadequate oversight capabilities and regulatory forbearance" [ Bodenhorn, "Zombie Banks," 26].
221. Although the Safety Fund survived for nearly thirty more years, the Panic of 1837 marked the beginning of a long decline. No new Safety Fund banks were chartered after 1836, and the failure of eleven banks in 1840-1842 overwhelmed the resources of the Fund. To ease the pressure, the legislature removed the guarantee on deposits in April 1842. Between November 1841 and April 1845, however, the Comptroller still proved unable to redeem notes regularly because the Safety Fund remained effectively insolvent. The state finally solved the problem in 1845 by issuing a stock mortgaging all future contributions to the Safety Fund; and the notes of failed banks were soon redeemed. After the debacle of the early 1840s, the Safety Fund suffered five more failures - one in 1818, one in 1854, and three in 1857. Meanwhile, the total number of Safety Fund banks continued to dwindle since charters were simply allowed to lapse as Safety Fund banks steadily converted to free banks. The last Safety Fund charters expired in 1866; with that, the system quietly came to an end. Although the Fund did ultimately make good on all of its commitments, many note holders of failed banks had been forced to suffer long delays and depreciation before receiving appropriate reimbursement. See Chaddock, Safety Fund Banking System in New York, 328, 360-67; Annual Report of the Comptroller, December 30, 1848, Assembly Doc. 5 (1849), 51-52; Root, "New York Bank Currency," 7-10. The Safety Fund's profound weakness, which first became apparent in the early 1840s, can be attributed to various defects in the original legislation. Perhaps the most severe flaw was that mandatory contributions to the Fund were based on bank capital rather than on bank liabilities (notes and deposits), which were the items being insured. Many authors have charged that the coverage of deposits was itself a serious mistake because it dramatically overextended the Fund. The fact that banks were not required to register their notes with the Comptroller (presumably to prevent overissues) has been cited as yet another flaw. See esp. Chaddock, Safety Fund Banking System in Naw York, 350-54, 358-59, 387; Root, "New York Bank Currency," 14-15; Knox, History of Banking in the United States, 412-13. According to Bodenhorn, another problem was ineffective monitoring by the Bank Commissioners as a result of "[i]inadequate oversight capabilities and regulatory forbearance" [ Bodenhorn, "Zombie Banks," 26].
222. Although the Safety Fund survived for nearly thirty more years, the Panic of 1837 marked the beginning of a long decline. No new Safety Fund banks were chartered after 1836, and the failure of eleven banks in 1840-1842 overwhelmed the resources of the Fund. To ease the pressure, the legislature removed the guarantee on deposits in April 1842. Between November 1841 and April 1845, however, the Comptroller still proved unable to redeem notes regularly because the Safety Fund remained effectively insolvent. The state finally solved the problem in 1845 by issuing a stock mortgaging all future contributions to the Safety Fund; and the notes of failed banks were soon redeemed. After the debacle of the early 1840s, the Safety Fund suffered five more failures - one in 1818, one in 1854, and three in 1857. Meanwhile, the total number of Safety Fund banks continued to dwindle since charters were simply allowed to lapse as Safety Fund banks steadily converted to free banks. The last Safety Fund charters expired in 1866; with that, the system quietly came to an end. Although the Fund did ultimately make good on all of its commitments, many note holders of failed banks had been forced to suffer long delays and depreciation before receiving appropriate reimbursement. See Chaddock, Safety Fund Banking System in New York, 328, 360-67; Annual Report of the Comptroller, December 30, 1848, Assembly Doc. 5 (1849), 51-52; Root, "New York Bank Currency," 7-10. The Safety Fund's profound weakness, which first became apparent in the early 1840s, can be attributed to various defects in the original legislation. Perhaps the most severe flaw was that mandatory contributions to the Fund were based on bank capital rather than on bank liabilities (notes and deposits), which were the items being insured. Many authors have charged that the coverage of deposits was itself a serious mistake because it dramatically overextended the Fund. The fact that banks were not required to register their notes with the Comptroller (presumably to prevent overissues) has been cited as yet another flaw. See esp. Chaddock, Safety Fund Banking System in Naw York, 350-54, 358-59, 387; Root, "New York Bank Currency," 14-15; Knox, History of Banking in the United States, 412-13. According to Bodenhorn, another problem was ineffective monitoring by the Bank Commissioners as a result of "[i]inadequate oversight capabilities and regulatory forbearance" [ Bodenhorn, "Zombie Banks," 26].
223. Although the Safety Fund survived for nearly thirty more years, the Panic of 1837 marked the beginning of a long decline. No new Safety Fund banks were chartered after 1836, and the failure of eleven banks in 1840-1842 overwhelmed the resources of the Fund. To ease the pressure, the legislature removed the guarantee on deposits in April 1842. Between November 1841 and April 1845, however, the Comptroller still proved unable to redeem notes regularly because the Safety Fund remained effectively insolvent. The state finally solved the problem in 1845 by issuing a stock mortgaging all future contributions to the Safety Fund; and the notes of failed banks were soon redeemed. After the debacle of the early 1840s, the Safety Fund suffered five more failures - one in 1818, one in 1854, and three in 1857. Meanwhile, the total number of Safety Fund banks continued to dwindle since charters were simply allowed to lapse as Safety Fund banks steadily converted to free banks. The last Safety Fund charters expired in 1866; with that, the system quietly came to an end. Although the Fund did ultimately make good on all of its commitments, many note holders of failed banks had been forced to suffer long delays and depreciation before receiving appropriate reimbursement. See Chaddock, Safety Fund Banking System in New York, 328, 360-67; Annual Report of the Comptroller, December 30, 1848, Assembly Doc. 5 (1849), 51-52; Root, "New York Bank Currency," 7-10. The Safety Fund's profound weakness, which first became apparent in the early 1840s, can be attributed to various defects in the original legislation. Perhaps the most severe flaw was that mandatory contributions to the Fund were based on bank capital rather than on bank liabilities (notes and deposits), which were the items being insured. Many authors have charged that the coverage of deposits was itself a serious mistake because it dramatically overextended the Fund. The fact that banks were not required to register their notes with the Comptroller (presumably to prevent overissues) has been cited as yet another flaw. See esp. Chaddock, Safety Fund Banking System in Naw York, 350-54, 358-59, 387; Root, "New York Bank Currency," 14-15; Knox, History of Banking in the United States, 412-13. According to Bodenhorn, another problem was ineffective monitoring by the Bank Commissioners as a result of "[i]inadequate oversight capabilities and regulatory forbearance" [ Bodenhorn, "Zombie Banks," 26].
224. Although the Safety Fund survived for nearly thirty more years, the Panic of 1837 marked the beginning of a long decline. No new Safety Fund banks were chartered after 1836, and the failure of eleven banks in 1840-1842 overwhelmed the resources of the Fund. To ease the pressure, the legislature removed the guarantee on deposits in April 1842. Between November 1841 and April 1845, however, the Comptroller still proved unable to redeem notes regularly because the Safety Fund remained effectively insolvent. The state finally solved the problem in 1845 by issuing a stock mortgaging all future contributions to the Safety Fund; and the notes of failed banks were soon redeemed. After the debacle of the early 1840s, the Safety Fund suffered five more failures - one in 1818, one in 1854, and three in 1857. Meanwhile, the total number of Safety Fund banks continued to dwindle since charters were simply allowed to lapse as Safety Fund banks steadily converted to free banks. The last Safety Fund charters expired in 1866; with that, the system quietly came to an end. Although the Fund did ultimately make good on all of its commitments, many note holders of failed banks had been forced to suffer long delays and depreciation before receiving appropriate reimbursement. See Chaddock, Safety Fund Banking System in New York, 328, 360-67; Annual Report of the Comptroller, December 30, 1848, Assembly Doc. 5 (1849), 51-52; Root, "New York Bank Currency," 7-10. The Safety Fund's profound weakness, which first became apparent in the early 1840s, can be attributed to various defects in the original legislation. Perhaps the most severe flaw was that mandatory contributions to the Fund were based on bank capital rather than on bank liabilities (notes and deposits), which were the items being insured. Many authors have charged that the coverage of deposits was itself a serious mistake because it dramatically overextended the Fund. The fact that banks were not required to register their notes with the Comptroller (presumably to prevent overissues) has been cited as yet another flaw. See esp. Chaddock, Safety Fund Banking System in Naw York, 350-54, 358-59, 387; Root, "New York Bank Currency," 14-15; Knox, History of Banking in the United States, 412-13. According to Bodenhorn, another problem was ineffective monitoring by the Bank Commissioners as a result of "[i]inadequate oversight capabilities and regulatory forbearance" [ Bodenhorn, "Zombie Banks," 26].
225. Although the Safety Fund survived for nearly thirty more years, the Panic of 1837 marked the beginning of a long decline. No new Safety Fund banks were chartered after 1836, and the failure of eleven banks in 1840-1842 overwhelmed the resources of the Fund. To ease the pressure, the legislature removed the guarantee on deposits in April 1842. Between November 1841 and April 1845, however, the Comptroller still proved unable to redeem notes regularly because the Safety Fund remained effectively insolvent. The state finally solved the problem in 1845 by issuing a stock mortgaging all future contributions to the Safety Fund; and the notes of failed banks were soon redeemed. After the debacle of the early 1840s, the Safety Fund suffered five more failures - one in 1818, one in 1854, and three in 1857. Meanwhile, the total number of Safety Fund banks continued to dwindle since charters were simply allowed to lapse as Safety Fund banks steadily converted to free banks. The last Safety Fund charters expired in 1866; with that, the system quietly came to an end. Although the Fund did ultimately make good on all of its commitments, many note holders of failed banks had been forced to suffer long delays and depreciation before receiving appropriate reimbursement. See Chaddock, Safety Fund Banking System in New York, 328, 360-67; Annual Report of the Comptroller, December 30, 1848, Assembly Doc. 5 (1849), 51-52; Root, "New York Bank Currency," 7-10. The Safety Fund's profound weakness, which first became apparent in the early 1840s, can be attributed to various defects in the original legislation. Perhaps the most severe flaw was that mandatory contributions to the Fund were based on bank capital rather than on bank liabilities (notes and deposits), which were the items being insured. Many authors have charged that the coverage of deposits was itself a serious mistake because it dramatically overextended the Fund. The fact that banks were not required to register their notes with the Comptroller (presumably to prevent overissues) has been cited as yet another flaw. See esp. Chaddock, Safety Fund Banking System in Naw York, 350-54, 358-59, 387; Root, "New York Bank Currency," 14-15; Knox, History of Banking in the United States, 412-13. According to Bodenhorn, another problem was ineffective monitoring by the Bank Commissioners as a result of "[i]inadequate oversight capabilities and regulatory forbearance" [ Bodenhorn, "Zombie Banks," 26].
226. Although the Safety Fund survived for nearly thirty more years, the Panic of 1837 marked the beginning of a long decline. No new Safety Fund banks were chartered after 1836, and the failure of eleven banks in 1840-1842 overwhelmed the resources of the Fund. To ease the pressure, the legislature removed the guarantee on deposits in April 1842. Between November 1841 and April 1845, however, the Comptroller still proved unable to redeem notes regularly because the Safety Fund remained effectively insolvent. The state finally solved the problem in 1845 by issuing a stock mortgaging all future contributions to the Safety Fund; and the notes of failed banks were soon redeemed. After the debacle of the early 1840s, the Safety Fund suffered five more failures - one in 1818, one in 1854, and three in 1857. Meanwhile, the total number of Safety Fund banks continued to dwindle since charters were simply allowed to lapse as Safety Fund banks steadily converted to free banks. The last Safety Fund charters expired in 1866; with that, the system quietly came to an end. Although the Fund did ultimately make good on all of its commitments, many note holders of failed banks had been forced to suffer long delays and depreciation before receiving appropriate reimbursement. See Chaddock, Safety Fund Banking System in New York, 328, 360-67; Annual Report of the Comptroller, December 30, 1848, Assembly Doc. 5 (1849), 51-52; Root, "New York Bank Currency," 7-10. The Safety Fund's profound weakness, which first became apparent in the early 1840s, can be attributed to various defects in the original legislation. Perhaps the most severe flaw was that mandatory contributions to the Fund were based on bank capital rather than on bank liabilities (notes and deposits), which were the items being insured. Many authors have charged that the coverage of deposits was itself a serious mistake because it dramatically overextended the Fund. The fact that banks were not required to register their notes with the Comptroller (presumably to prevent overissues) has been cited as yet another flaw. See esp. Chaddock, Safety Fund Banking System in Naw York, 350-54, 358-59, 387; Root, "New York Bank Currency," 14-15; Knox, History of Banking in the United States, 412-13. According to Bodenhorn, another problem was ineffective monitoring by the Bank Commissioners as a result of "[i]inadequate oversight capabilities and regulatory forbearance" [ Bodenhorn, "Zombie Banks," 26].
227. See James Sullivan, ed., History of New York State, 1523-1927, 6 vols. (New York: Lewis Historical Publishing Company, Inc., 1927), 4: 1630-31.
228. "Report of the Select Committee on so much of the Governor's message as relates to the restraining laws, and a general bank law," Assembly Doc. 122 (1838), 2-3.
229. "Report of the Select Committee on...the repeal of the restraining laws and free competition in the business of banking," Senate Doc. 68 (1838), 32-33.
230. Redlich, Molding of American Banking, 1:199, 201.
231. The constitutionality of free banks was contested in New York until a new state constitution was adopted in 1846. See Hammond, Banks and Politics in America, 585-92.
232. An Act to Authorize the Business of Banking [Free Banking Act], New York Laws of 1838, chap. 260, p. 245, sec. 15.
233. The 1838 law required that at least half of the backing be in the form of government bonds, which were then referred to as "stock." Originally, almost all state and federal bonds qualified, but this was subsequently narrowed solely to New York State and federal bonds (thus excluding the bonds of other states). The other half of note backing could take the form of low-risk mortgages. See Laws of 1838, chap.. 260, p. 245, sects. 2, 7, 8; Laws of 1810, chap. 363, p. 306; sect. 1; Laws of 1844, chap. 41, p. 35, sect. 1; Laws of 1848, chap. 340, p. 462, sects. 2, 3; Laws of 1849, chap. 313, p. 455, sect. 1; Laws of 1851, chap. 164, p. 309, sect. 10; and Root, "New York Bank Currency," 16-17. All of these sections are reprinted in Cleaveland, Banking System of the State of New York, 83-184. Unlike state and federal bonds, mortgages were not easily tradable on secondary markets. See esp. Margaret G. Myers, The New York Money Market, 4 vols. (New York: Columbia University Press, 1931), 1:293-94; D.M. Frederiksen, "Mortgage Banking in America," Journal of Political Economy 2 (1894): esp. 222-23. The state's banking regulators explicitly acknowledged this problem on numerous occasions. The superintendent of banking reported in 1855, "It is conceded that the stock of our own State, and stocks of the United States, arc a more convertible and more perfect security as a basis for banking, than [real estate] bonds and mortgages, being more easily converted into cash, and having a more permanent and certain value in the market" (Annual Report of the Superintendent the Banking Department, Assembly Doc. 10, Jan. 5, 1855, 14).
234. The 1838 law required that at least half of the backing be in the form of government bonds, which were then referred to as "stock." Originally, almost all state and federal bonds qualified, but this was subsequently narrowed solely to New York State and federal bonds (thus excluding the bonds of other states). The other half of note backing could take the form of low-risk mortgages. See Laws of 1838, chap.. 260, p. 245, sects. 2, 7, 8; Laws of 1810, chap. 363, p. 306; sect. 1; Laws of 1844, chap. 41, p. 35, sect. 1; Laws of 1848, chap. 340, p. 462, sects. 2, 3; Laws of 1849, chap. 313, p. 455, sect. 1; Laws of 1851, chap. 164, p. 309, sect. 10; and Root, "New York Bank Currency," 16-17. All of these sections are reprinted in Cleaveland, Banking System of the State of New York, 83-184. Unlike state and federal bonds, mortgages were not easily tradable on secondary markets. See esp. Margaret G. Myers, The New York Money Market, 4 vols. (New York: Columbia University Press, 1931), 1:293-94; D.M. Frederiksen, "Mortgage Banking in America," Journal of Political Economy 2 (1894): esp. 222-23. The state's banking regulators explicitly acknowledged this problem on numerous occasions. The superintendent of banking reported in 1855, "It is conceded that the stock of our own State, and stocks of the United States, arc a more convertible and more perfect security as a basis for banking, than [real estate] bonds and mortgages, being more easily converted into cash, and having a more permanent and certain value in the market" (Annual Report of the Superintendent the Banking Department, Assembly Doc. 10, Jan. 5, 1855, 14).
235. The 1838 law required that at least half of the backing be in the form of government bonds, which were then referred to as "stock." Originally, almost all state and federal bonds qualified, but this was subsequently narrowed solely to New York State and federal bonds (thus excluding the bonds of other states). The other half of note backing could take the form of low-risk mortgages. See Laws of 1838, chap.. 260, p. 245, sects. 2, 7, 8; Laws of 1810, chap. 363, p. 306; sect. 1; Laws of 1844, chap. 41, p. 35, sect. 1; Laws of 1848, chap. 340, p. 462, sects. 2, 3; Laws of 1849, chap. 313, p. 455, sect. 1; Laws of 1851, chap. 164, p. 309, sect. 10; and Root, "New York Bank Currency," 16-17. All of these sections are reprinted in Cleaveland, Banking System of the State of New York, 83-184. Unlike state and federal bonds, mortgages were not easily tradable on secondary markets. See esp. Margaret G. Myers, The New York Money Market, 4 vols. (New York: Columbia University Press, 1931), 1:293-94; D.M. Frederiksen, "Mortgage Banking in America," Journal of Political Economy 2 (1894): esp. 222-23. The state's banking regulators explicitly acknowledged this problem on numerous occasions. The superintendent of banking reported in 1855, "It is conceded that the stock of our own State, and stocks of the United States, arc a more convertible and more perfect security as a basis for banking, than [real estate] bonds and mortgages, being more easily converted into cash, and having a more permanent and certain value in the market" (Annual Report of the Superintendent the Banking Department, Assembly Doc. 10, Jan. 5, 1855, 14).
236. The 1838 law required that at least half of the backing be in the form of government bonds, which were then referred to as "stock." Originally, almost all state and federal bonds qualified, but this was subsequently narrowed solely to New York State and federal bonds (thus excluding the bonds of other states). The other half of note backing could take the form of low-risk mortgages. See Laws of 1838, chap.. 260, p. 245, sects. 2, 7, 8; Laws of 1810, chap. 363, p. 306; sect. 1; Laws of 1844, chap. 41, p. 35, sect. 1; Laws of 1848, chap. 340, p. 462, sects. 2, 3; Laws of 1849, chap. 313, p. 455, sect. 1; Laws of 1851, chap. 164, p. 309, sect. 10; and Root, "New York Bank Currency," 16-17. All of these sections are reprinted in Cleaveland, Banking System of the State of New York, 83-184. Unlike state and federal bonds, mortgages were not easily tradable on secondary markets. See esp. Margaret G. Myers, The New York Money Market, 4 vols. (New York: Columbia University Press, 1931), 1:293-94; D.M. Frederiksen, "Mortgage Banking in America," Journal of Political Economy 2 (1894): esp. 222-23. The state's banking regulators explicitly acknowledged this problem on numerous occasions. The superintendent of banking reported in 1855, "It is conceded that the stock of our own State, and stocks of the United States, arc a more convertible and more perfect security as a basis for banking, than [real estate] bonds and mortgages, being more easily converted into cash, and having a more permanent and certain value in the market" (Annual Report of the Superintendent the Banking Department, Assembly Doc. 10, Jan. 5, 1855, 14).
237. The 1838 law required that at least half of the backing be in the form of government bonds, which were then referred to as "stock." Originally, almost all state and federal bonds qualified, but this was subsequently narrowed solely to New York State and federal bonds (thus excluding the bonds of other states). The other half of note backing could take the form of low-risk mortgages. See Laws of 1838, chap.. 260, p. 245, sects. 2, 7, 8; Laws of 1810, chap. 363, p. 306; sect. 1; Laws of 1844, chap. 41, p. 35, sect. 1; Laws of 1848, chap. 340, p. 462, sects. 2, 3; Laws of 1849, chap. 313, p. 455, sect. 1; Laws of 1851, chap. 164, p. 309, sect. 10; and Root, "New York Bank Currency," 16-17. All of these sections are reprinted in Cleaveland, Banking System of the State of New York, 83-184. Unlike state and federal bonds, mortgages were not easily tradable on secondary markets. See esp. Margaret G. Myers, The New York Money Market, 4 vols. (New York: Columbia University Press, 1931), 1:293-94; D.M. Frederiksen, "Mortgage Banking in America," Journal of Political Economy 2 (1894): esp. 222-23. The state's banking regulators explicitly acknowledged this problem on numerous occasions. The superintendent of banking reported in 1855, "It is conceded that the stock of our own State, and stocks of the United States, arc a more convertible and more perfect security as a basis for banking, than [real estate] bonds and mortgages, being more easily converted into cash, and having a more permanent and certain value in the market" (Annual Report of the Superintendent the Banking Department, Assembly Doc. 10, Jan. 5, 1855, 14).
238. New York Laws of 1838, chap. 260, sects. 4, 11, 29. The 14 percent penalty was increased to 20 percent in 1840 and then reduced to 7 percent in 1851.
239. On narrow banking, see Robert E. Litan, What Should Banks Do? (Washington, DC: Brookings Institution, 1987), esp. chap. 5; Lawrence J. White, "Litan's What Should Banks Do?: A Review Essay," Rand Journal of Economics 19 (1988): 305-15; Neil Wallace, "Narrow Banking Meets the Diamond-Dybvig Model," Quarterly Review (Federal Reserve Bank of Minneapolis) (1996): 3-10; Goodhart, Evolution of Central Banks, esp. chap. 7; James Tobin, "Financial Innovation and Deregulation in Prespective," BOJ Monetary and Economic Studies 3 (1985): 19-29.
240. On narrow banking, see Robert E. Litan, What Should Banks Do? (Washington, DC: Brookings Institution, 1987), esp. chap. 5; Lawrence J. White, "Litan's What Should Banks Do?: A Review Essay," Rand Journal of Economics 19 (1988): 305-15; Neil Wallace, "Narrow Banking Meets the Diamond-Dybvig Model," Quarterly Review (Federal Reserve Bank of Minneapolis) (1996): 3-10; Goodhart, Evolution of Central Banks, esp. chap. 7; James Tobin, "Financial Innovation and Deregulation in Prespective," BOJ Monetary and Economic Studies 3 (1985): 19-29.
241. On narrow banking, see Robert E. Litan, What Should Banks Do? (Washington, DC: Brookings Institution, 1987), esp. chap. 5; Lawrence J. White, "Litan's What Should Banks Do?: A Review Essay," Rand Journal of Economics 19 (1988): 305-15; Neil Wallace, "Narrow Banking Meets the Diamond-Dybvig Model," Quarterly Review (Federal Reserve Bank of Minneapolis) (1996): 3-10; Goodhart, Evolution of Central Banks, esp. chap. 7; James Tobin, "Financial Innovation and Deregulation in Prespective," BOJ Monetary and Economic Studies 3 (1985): 19-29.
242. On narrow banking, see Robert E. Litan, What Should Banks Do? (Washington, DC: Brookings Institution, 1987), esp. chap. 5; Lawrence J. White, "Litan's What Should Banks Do?: A Review Essay," Rand Journal of Economics 19 (1988): 305-15; Neil Wallace, "Narrow Banking Meets the Diamond-Dybvig Model," Quarterly Review (Federal Reserve Bank of Minneapolis) (1996): 3-10; Goodhart, Evolution of Central Banks, esp. chap. 7; James Tobin, "Financial Innovation and Deregulation in Prespective," BOJ Monetary and Economic Studies 3 (1985): 19-29.
243. On narrow banking, see Robert E. Litan, What Should Banks Do? (Washington, DC: Brookings Institution, 1987), esp. chap. 5; Lawrence J. White, "Litan's What Should Banks Do?: A Review Essay," Rand Journal of Economics 19 (1988): 305-15; Neil Wallace, "Narrow Banking Meets the Diamond-Dybvig Model," Quarterly Review (Federal Reserve Bank of Minneapolis) (1996): 3-10; Goodhart, Evolution of Central Banks, esp. chap. 7; James Tobin, "Financial Innovation and Deregulation in Prespective," BOJ Monetary and Economic Studies 3 (1985): 19-29.
244. Daily Albany Argus, Apr. 4, 1838, 1.
245. Madeleine, Monetary and Banking Throries, 140; Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, bk. 2, chap. 2, 323-26.
246. Madeleine, Monetary and Banking Throries, 140; Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, bk. 2, chap. 2, 323-26.
247. Quoted in Abraham H. Venit, "Isaac Bronson: His Banking Theory and the Financial Controversies of the Jacksonian Period,"Journal of Economic History 5 (1945): 203-4.
248. John McVickar, Hints on Banking in a Letter to a Gentleman in Albany by a New Yorker (New York: Vanderpool & Cole, 1827), 39. See also Madeleine, Monetary and Banking Theories, 159; Redlich, Molding of American Banking, 1:194.
249. John McVickar, Hints on Banking in a Letter to a Gentleman in Albany by a New Yorker (New York: Vanderpool & Cole, 1827), 39. See also Madeleine, Monetary and Banking Theories, 159; Redlich, Molding of American Banking, 1:194.
250. John McVickar, Hints on Banking in a Letter to a Gentleman in Albany by a New Yorker (New York: Vanderpool & Cole, 1827), 39. See also Madeleine, Monetary and Banking Theories, 159; Redlich, Molding of American Banking, 1:194.
251. Isaac Bronson, "Letter from Isaac Bronson, Esq., to a Member of Congress, New York, 1832," Financial Register of the United Stales 2 (1838): 11-12.
252. We are deeply indebted to Julio Rotemberg for highlighting this point. Interestingly, the same logic would apply to current proposals for narrow banking, even though we now live under a regime of fiat money rather than commodity money. Unless the central bank were willing literally to flood the economy with base money in the event of a run on "narrow" banks, seemingly secure assets would plummet in value as holders of demand deposits all simultaneously demanded their cash.
253. Journal of the Senate 1829, 81-84. Although there were thirty-eight chartered banks as of 1828, only twenty-one were included in the 1829 legislative report.
254. Diamond and Dybvig, "Bank Runs, Deposit Insurance, and Liquidity," 405.
255. Eddie George, "Are Banks Still Special?," Bank of England Quarterly Bulletin (1997): 113.
256. See Charles J. Jacklin, "Demand Equity and Deposit Insurance," in Symposium on Deposit Insurance - Proceedings (Garn Institute of Finance, 1989), 53; Eugene F. Fama, "Banking in the Theory of Finance," Journal of Monetary Economics 6 (1980): 39-57. Even within a developed-country context, there are numerous arguments against narrow banking. See esp. White, "Litan's What Should Banks Do?," 313-14; Lawrence White, "The Reform of Deposit Insurance," Journal of Economic Perspectives 3 (1989): 27; Charles M. James and Richard H. Jefferis, "Introduction," Symposium on Deposit Insurance - Proceedings, esp. 9. In a somewhat related argument, Calomiris and Kahn suggest that funds for nonmarketable lending must be raised in the form of "hair trigger" demandable debt in order to assure depositors that intermediary agents (that is, bank management) face appropriate discipline ( Charles W. Calomiris and Charles M. Kahn, "The Role of Demandable Debt in Structuring Optimal Banking Arrangements," American Economic Review 81 [1991]: 497-513).
257. See Charles J. Jacklin, "Demand Equity and Deposit Insurance," in Symposium on Deposit Insurance - Proceedings (Garn Institute of Finance, 1989), 53; Eugene F. Fama, "Banking in the Theory of Finance," Journal of Monetary Economics 6 (1980): 39-57. Even within a developed-country context, there are numerous arguments against narrow banking. See esp. White, "Litan's What Should Banks Do?," 313-14; Lawrence White, "The Reform of Deposit Insurance," Journal of Economic Perspectives 3 (1989): 27; Charles M. James and Richard H. Jefferis, "Introduction," Symposium on Deposit Insurance - Proceedings, esp. 9. In a somewhat related argument, Calomiris and Kahn suggest that funds for nonmarketable lending must be raised in the form of "hair trigger" demandable debt in order to assure depositors that intermediary agents (that is, bank management) face appropriate discipline ( Charles W. Calomiris and Charles M. Kahn, "The Role of Demandable Debt in Structuring Optimal Banking Arrangements," American Economic Review 81 [1991]: 497-513).
258. See Charles J. Jacklin, "Demand Equity and Deposit Insurance," in Symposium on Deposit Insurance - Proceedings (Garn Institute of Finance, 1989), 53; Eugene F. Fama, "Banking in the Theory of Finance," Journal of Monetary Economics 6 (1980): 39-57. Even within a developed-country context, there are numerous arguments against narrow banking. See esp. White, "Litan's What Should Banks Do?," 313-14; Lawrence White, "The Reform of Deposit Insurance," Journal of Economic Perspectives 3 (1989): 27; Charles M. James and Richard H. Jefferis, "Introduction," Symposium on Deposit Insurance - Proceedings, esp. 9. In a somewhat related argument, Calomiris and Kahn suggest that funds for nonmarketable lending must be raised in the form of "hair trigger" demandable debt in order to assure depositors that intermediary agents (that is, bank management) face appropriate discipline ( Charles W. Calomiris and Charles M. Kahn, "The Role of Demandable Debt in Structuring Optimal Banking Arrangements," American Economic Review 81 [1991]: 497-513).
259. See Charles J. Jacklin, "Demand Equity and Deposit Insurance," in Symposium on Deposit Insurance - Proceedings (Garn Institute of Finance, 1989), 53; Eugene F. Fama, "Banking in the Theory of Finance," Journal of Monetary Economics 6 (1980): 39-57. Even within a developed-country context, there are numerous arguments against narrow banking. See esp. White, "Litan's What Should Banks Do?," 313-14; Lawrence White, "The Reform of Deposit Insurance," Journal of Economic Perspectives 3 (1989): 27; Charles M. James and Richard H. Jefferis, "Introduction," Symposium on Deposit Insurance - Proceedings, esp. 9. In a somewhat related argument, Calomiris and Kahn suggest that funds for nonmarketable lending must be raised in the form of "hair trigger" demandable debt in order to assure depositors that intermediary agents (that is, bank management) face appropriate discipline ( Charles W. Calomiris and Charles M. Kahn, "The Role of Demandable Debt in Structuring Optimal Banking Arrangements," American Economic Review 81 [1991]: 497-513).
260. See Charles J. Jacklin, "Demand Equity and Deposit Insurance," in Symposium on Deposit Insurance - Proceedings (Garn Institute of Finance, 1989), 53; Eugene F. Fama, "Banking in the Theory of Finance," Journal of Monetary Economics 6 (1980): 39-57. Even within a developed-country context, there are numerous arguments against narrow banking. See esp. White, "Litan's What Should Banks Do?," 313-14; Lawrence White, "The Reform of Deposit Insurance," Journal of Economic Perspectives 3 (1989): 27; Charles M. James and Richard H. Jefferis, "Introduction," Symposium on Deposit Insurance - Proceedings, esp. 9. In a somewhat related argument, Calomiris and Kahn suggest that funds for nonmarketable lending must be raised in the form of "hair trigger" demandable debt in order to assure depositors that intermediary agents (that is, bank management) face appropriate discipline ( Charles W. Calomiris and Charles M. Kahn, "The Role of Demandable Debt in Structuring Optimal Banking Arrangements," American Economic Review 81 [1991]: 497-513).
261. See Charles J. Jacklin, "Demand Equity and Deposit Insurance," in Symposium on Deposit Insurance - Proceedings (Garn Institute of Finance, 1989), 53; Eugene F. Fama, "Banking in the Theory of Finance," Journal of Monetary Economics 6 (1980): 39-57. Even within a developed-country context, there are numerous arguments against narrow banking. See esp. White, "Litan's What Should Banks Do?," 313-14; Lawrence White, "The Reform of Deposit Insurance," Journal of Economic Perspectives 3 (1989): 27; Charles M. James and Richard H. Jefferis, "Introduction," Symposium on Deposit Insurance - Proceedings, esp. 9. In a somewhat related argument, Calomiris and Kahn suggest that funds for nonmarketable lending must be raised in the form of "hair trigger" demandable debt in order to assure depositors that intermediary agents (that is, bank management) face appropriate discipline ( Charles W. Calomiris and Charles M. Kahn, "The Role of Demandable Debt in Structuring Optimal Banking Arrangements," American Economic Review 81 [1991]: 497-513).
262. Civis, An Appeal to the Honorable Members of the Senate and the House of Assembly, of the State of New York (New York, 1816), 6.
263. Annual Report of the Bank Commissioners, Assembly Doc. 29, Jan. 26, 1842, 88-90; Annual Report of the Superintendent of the Banking Department, Assembly Doc. 4, Jan. 6, 1802, 63-73. Although the free banking system was inaugurated in 1838 in New York, we have chosen 1841 as the first year of comparison because free bank liabilities were relatively unstable during the earlier years. We chose 1860 as a terminal date to exclude effects related to the Civil War and the National Banking Acls. As it turns out, however, free bank deposits continued to surge after 1800, reaching S2·48 million in 1864. The deposit-to-note ratio reached about 9 in 1801, and nominal free bank deposits were now more than 88 times greater than they were in 1841. Annual Report of the Superintendent of the Banking Department (1866), 82-90. All of the deposit figures cited above exclude interbank (and, where possible, government) deposits. If all such items are included, then total free bank deposits increased from S4.0 million in 18-11 to S130.7 million in 1800 to S295.2 million in 1805; and the deposit-to-note ratio increased from 1.8 to 5.9 to 10.7 over these years.
264. Annual Report of the Bank Commissioners, Assembly Doc. 29, Jan. 26, 1842, 88-90; Annual Report of the Superintendent of the Banking Department, Assembly Doc. 4, Jan. 6, 1802, 63-73. Although the free banking system was inaugurated in 1838 in New York, we have chosen 1841 as the first year of comparison because free bank liabilities were relatively unstable during the earlier years. We chose 1860 as a terminal date to exclude effects related to the Civil War and the National Banking Acls. As it turns out, however, free bank deposits continued to surge after 1800, reaching S2·48 million in 1864. The deposit-to-note ratio reached about 9 in 1801, and nominal free bank deposits were now more than 88 times greater than they were in 1841. Annual Report of the Superintendent of the Banking Department (1866), 82-90. All of the deposit figures cited above exclude interbank (and, where possible, government) deposits. If all such items are included, then total free bank deposits increased from S4.0 million in 18-11 to S130.7 million in 1800 to S295.2 million in 1805; and the deposit-to-note ratio increased from 1.8 to 5.9 to 10.7 over these years.
265. Annual Report of the Bank Commissioners, Assembly Doc. 29, Jan. 26, 1842, 88-90; Annual Report of the Superintendent of the Banking Department, Assembly Doc. 4, Jan. 6, 1802, 63-73. Although the free banking system was inaugurated in 1838 in New York, we have chosen 1841 as the first year of comparison because free bank liabilities were relatively unstable during the earlier years. We chose 1860 as a terminal date to exclude effects related to the Civil War and the National Banking Acls. As it turns out, however, free bank deposits continued to surge after 1800, reaching S2·48 million in 1864. The deposit-to-note ratio reached about 9 in 1801, and nominal free bank deposits were now more than 88 times greater than they were in 1841. Annual Report of the Superintendent of the Banking Department (1866), 82-90. All of the deposit figures cited above exclude interbank (and, where possible, government) deposits. If all such items are included, then total free bank deposits increased from S4.0 million in 18-11 to S130.7 million in 1800 to S295.2 million in 1805; and the deposit-to-note ratio increased from 1.8 to 5.9 to 10.7 over these years.
266. Annual Report of the Bank Commissioners (1842), 90; Annual Report of the Superintendent (1862), pp. 63-73. Non-free banks include chartered banks and Safety Fund banks.
267. Annual Report of the Bank Commissioners (1842), 90; Annual Report of the Superintendent (1862), pp. 63-73. Non-free banks include chartered banks and Safety Fund banks.
268. Annual Report of the Bank Commissioners, Assembly Doc. 34, Jan. 30, 1843, 84; Annual Report of the Superintendent of the Banking Department (1862), 63-82.
269. Annual Report of the Bank Commissioners, Assembly Doc. 34, Jan. 30, 1843, 84; Annual Report of the Superintendent of the Banking Department (1862), 63-82.
270. Annual Report of the Superintendent of the Banking Department, Assembly Doc. 3, Jan. 3, 1860.
271. Annual Report of the Comptroller of the Currency to the Second Session of the Forty-Fourth Congress of the United States, December 4, 1876 (Washington, DC: Government Printing Office, 1876), xlv, cii. The comptroller's report presents the data for the beginning of January of each year. Because the annual data presented here reflect end-of-the-year values (unless otherwise noted), the comptroller's annual figures have all been shifted back by one year.
272. Quoted in Harry E. Miller, Banking Thaories in the United States Before 1860 (Cambridge, MA: Harvard University Press, 1927), 110.
273. Annual Report of the Bank Commissioners, Assembly Doc. 64, Jan. 25, 1841, 16. Redlich asserts, by contrast, that Forman and other framers of the Safety Fund legislation had always intended to cover deposits as well as notes ( Redlich, Molding of American Banking; 1:264 n.21).
274. Annual Report of the Bank Commissioners, Assembly Doc. 64, Jan. 25, 1841, 16. Redlich asserts, by contrast, that Forman and other framers of the Safety Fund legislation had always intended to cover deposits as well as notes ( Redlich, Molding of American Banking; 1:264 n.21).
275. Chaddock, Safety Fund Banking System in New York, 329.
276. Confusion about the monetary function of demand deposits persisted for many, many years. See Charles F. Dunbar, "Deposits as Currency," Quarterly Journal of Economics 1 (1887), 402.
277. See Albany Argus, Apr. 6, 1838, 2, quoting Representative Griffin ("the passage of this bill, will ... tend to prevent the repetition of the ruinous panics which in 1834, and more particularly in 1837 and 1838, prostrated the business operations of our state"); "Report of the Select Committee on so much of the Governor's message as relates to the restraining laws, and a general bank, law," Assembly Doc. 122, Feb. 3, 1838, 3 ("If the associations are compelled to pay in the whole amount of their capital stock, and to give such other security as will enable the bill-holder at all times to convert his bill into coin, there can be no possible loss to the public").
278. Louisiana presents an interesting point of comparison. Although its legislature did not pass a general incorporation law until 1853, it separated liquidity creation from credit creation more than ten years earlier. The Louisiana Bank Act of 1842 required banks to hold specie reserves equal to one-third of liquid liabilities and back the other two-thirds with short-term (90-day) commercial paper. Long-term lending was limited to loans on capital since both notes and deposits were included in the definition of liquid liabilities. There were no bank failures under this Louisiana system after 1842, leading many authors to herald the legislation as a great success. But as we have argued above, safety represents only one side of the equation. Over the next twenty years, loans and discounts in Louisiana remained relatively stagnant, despite significant growth in the country at large. See Hammond, Banks and Politics in America, 676-86; Knox, History of Banking in the United States, 613-14; William Graham Summer, A History of Banking in the United States (New York: Journal of Commerce and Commercial Bulletin, 1896), 387-91, 434-37; Rockoff, "Varieties of Banking," 163; Annual Report of the Comptroller, cxii-cxiii (for Louisiana bank balance sheets); George D. Green, "Louisiana 1804-1861," in Banking and Economic Development, ed. Rondo Cameron (New York: Oxford University Press, 1972), esp. 216-20.
279. Louisiana presents an interesting point of comparison. Although its legislature did not pass a general incorporation law until 1853, it separated liquidity creation from credit creation more than ten years earlier. The Louisiana Bank Act of 1842 required banks to hold specie reserves equal to one-third of liquid liabilities and back the other two-thirds with short-term (90-day) commercial paper. Long-term lending was limited to loans on capital since both notes and deposits were included in the definition of liquid liabilities. There were no bank failures under this Louisiana system after 1842, leading many authors to herald the legislation as a great success. But as we have argued above, safety represents only one side of the equation. Over the next twenty years, loans and discounts in Louisiana remained relatively stagnant, despite significant growth in the country at large. See Hammond, Banks and Politics in America, 676-86; Knox, History of Banking in the United States, 613-14; William Graham Summer, A History of Banking in the United States (New York: Journal of Commerce and Commercial Bulletin, 1896), 387-91, 434-37; Rockoff, "Varieties of Banking," 163; Annual Report of the Comptroller, cxii-cxiii (for Louisiana bank balance sheets); George D. Green, "Louisiana 1804-1861," in Banking and Economic Development, ed. Rondo Cameron (New York: Oxford University Press, 1972), esp. 216-20.
280. Louisiana presents an interesting point of comparison. Although its legislature did not pass a general incorporation law until 1853, it separated liquidity creation from credit creation more than ten years earlier. The Louisiana Bank Act of 1842 required banks to hold specie reserves equal to one-third of liquid liabilities and back the other two-thirds with short-term (90-day) commercial paper. Long-term lending was limited to loans on capital since both notes and deposits were included in the definition of liquid liabilities. There were no bank failures under this Louisiana system after 1842, leading many authors to herald the legislation as a great success. But as we have argued above, safety represents only one side of the equation. Over the next twenty years, loans and discounts in Louisiana remained relatively stagnant, despite significant growth in the country at large. See Hammond, Banks and Politics in America, 676-86; Knox, History of Banking in the United States, 613-14; William Graham Summer, A History of Banking in the United States (New York: Journal of Commerce and Commercial Bulletin, 1896), 387-91, 434-37; Rockoff, "Varieties of Banking," 163; Annual Report of the Comptroller, cxii-cxiii (for Louisiana bank balance sheets); George D. Green, "Louisiana 1804-1861," in Banking and Economic Development, ed. Rondo Cameron (New York: Oxford University Press, 1972), esp. 216-20.
281. Louisiana presents an interesting point of comparison. Although its legislature did not pass a general incorporation law until 1853, it separated liquidity creation from credit creation more than ten years earlier. The Louisiana Bank Act of 1842 required banks to hold specie reserves equal to one-third of liquid liabilities and back the other two-thirds with short-term (90-day) commercial paper. Long-term lending was limited to loans on capital since both notes and deposits were included in the definition of liquid liabilities. There were no bank failures under this Louisiana system after 1842, leading many authors to herald the legislation as a great success. But as we have argued above, safety represents only one side of the equation. Over the next twenty years, loans and discounts in Louisiana remained relatively stagnant, despite significant growth in the country at large. See Hammond, Banks and Politics in America, 676-86; Knox, History of Banking in the United States, 613-14; William Graham Summer, A History of Banking in the United States (New York: Journal of Commerce and Commercial Bulletin, 1896), 387-91, 434-37; Rockoff, "Varieties of Banking," 163; Annual Report of the Comptroller, cxii-cxiii (for Louisiana bank balance sheets); George D. Green, "Louisiana 1804-1861," in Banking and Economic Development, ed. Rondo Cameron (New York: Oxford University Press, 1972), esp. 216-20.
282. Louisiana presents an interesting point of comparison. Although its legislature did not pass a general incorporation law until 1853, it separated liquidity creation from credit creation more than ten years earlier. The Louisiana Bank Act of 1842 required banks to hold specie reserves equal to one-third of liquid liabilities and back the other two-thirds with short-term (90-day) commercial paper. Long-term lending was limited to loans on capital since both notes and deposits were included in the definition of liquid liabilities. There were no bank failures under this Louisiana system after 1842, leading many authors to herald the legislation as a great success. But as we have argued above, safety represents only one side of the equation. Over the next twenty years, loans and discounts in Louisiana remained relatively stagnant, despite significant growth in the country at large. See Hammond, Banks and Politics in America, 676-86; Knox, History of Banking in the United States, 613-14; William Graham Summer, A History of Banking in the United States (New York: Journal of Commerce and Commercial Bulletin, 1896), 387-91, 434-37;
283. Louisiana presents an interesting point of comparison. Although its legislature did not pass a general incorporation law until 1853, it separated liquidity creation from credit creation more than ten years earlier. The Louisiana Bank Act of 1842 required banks to hold specie reserves equal to one-third of liquid liabilities and back the other two-thirds with short-term (90-day) commercial paper. Long-term lending was limited to loans on capital since both notes and deposits were included in the definition of liquid liabilities. There were no bank failures under this Louisiana system after 1842, leading many authors to herald the legislation as a great success. But as we have argued above, safety represents only one side of the equation. Over the next twenty years, loans and discounts in Louisiana remained relatively stagnant, despite significant growth in the country at large. See Hammond, Banks and Politics in America, 676-86; Knox, History of Banking in the United States, 613-14; William Graham Summer, A History of Banking in the United States (New York: Journal of Commerce and Commercial Bulletin, 1896), 387-91, 434-37; Rockoff, "Varieties of Banking," 163; Annual Report of the Comptroller, cxii-cxiii (for Louisiana bank balance sheets); George D. Green, "Louisiana 1804-1861," in Banking and Economic Development, ed. Rondo Cameron (New York: Oxford University Press, 1972), esp. 216-20.
284. "Governor's Message to the Senate and Assembly," Assembly Doc. 2 (1858), 2. In his assessment of the 1857 panic, New York's superintendent of banking focused particular attention on the role of deposits as a destabilizing factor. According to a report issued in 1860, It is almost unnecessary for the Superintendent to say, that the experience of 1857, and 1858, confirms his opinion, that the element of weakness in our present method of banking, is in stimulating deposits by the payment of interest, or offering any other extraordinary inducement, to concentrate balances in that shape in our banks. (The Annual Report of the Superintendent of the Banking Department [1860], 15) See also Samuel Rezneck, "The Influence of Depression Upon American Opinion, 1857-1859," Journal of Economic History 2 (1942): 3.
285. "Governor's Message to the Senate and Assembly," Assembly Doc. 2 (1858), 2. In his assessment of the 1857 panic, New York's superintendent of banking focused particular attention on the role of deposits as a destabilizing factor. According to a report issued in 1860, It is almost unnecessary for the Superintendent to say, that the experience of 1857, and 1858, confirms his opinion, that the element of weakness in our present method of banking, is in stimulating deposits by the payment of interest, or offering any other extraordinary inducement, to concentrate balances in that shape in our banks. (The Annual Report of the Superintendent of the Banking Department [1860], 15) See also Samuel Rezneck, "The Influence of Depression Upon American Opinion, 1857-1859," Journal of Economic History 2 (1942): 3.
286. Rezneck, "Influence of Depression," 2. See also Charles W. Calomiris and Larry Schweikart, "The Panic of 1857: Origins, Transmission, and Containment," Journal of Economic History 51 (1991): 807-34; Sumner, History of Banking in the United States, 426-28.
287. Rezneck, "Influence of Depression," 2. See also Charles W. Calomiris and Larry Schweikart, "The Panic of 1857: Origins, Transmission, and Containment," Journal of Economic History 51 (1991): 807-34; Sumner, History of Banking in the United States, 426-28.
288. Rezneck, "Influence of Depression," 2. See also Charles W. Calomiris and Larry Schweikart, "The Panic of 1857: Origins, Transmission, and Containment," Journal of Economic History 51 (1991): 807-34; Sumner, History of Banking in the United States, 426-28.
289. Root, "New York Bank Currency," 3, 19.
290. On the concept of "cheapest cost avoider," see Guido Calabresi and John Hirschoff, "Toward a Test for Strict Liability in Torts," Yale Law Journal 81 (1972): 1083.
291. Double liability was readopted at the New York constitutional convention of 1846, but it was not put into effect until the beginning of 1850. See Article VIII, sect. 7, the Constitution of 18-16, printed in Report of the Debates and Proceeding of the Convention for the Revision of the Constitution of the State of New York (1846), 13; Cleaveland, Banking System of the State of New York, 155-70, 264-65.
292. Double liability was readopted at the New York constitutional convention of 1846, but it was not put into effect until the beginning of 1850. See Article VIII, sect. 7, the Constitution of 18-16, printed in Report of the Debates and Proceeding of the Convention for the Revision of the Constitution of the State of New York (1846), 13; Cleaveland, Banking System of the State of New York, 155-70, 264-65.
293. See John Wilson Million, "The Debate on the National Bank Act of I863," Journal of Political Economy 2 (1894): 251-80; James Willard Hurst, A Legal History of Money in the United States, 1774-1970 (Lincoln: University of Nebraska Press, 1973), 79; John A. James, Money and Capital Markets in Postbellum America (Princeton: Princeton University Press, 1978), 27-29, 74-78; Thomas Wilson, The Power la "To Coin" Money: The Exercise of Monetary Powers by the Congress (Armonk, NY: M.E. Sharpe, Inc., 1992), 156-60.
294. See John Wilson Million, "The Debate on the National Bank Act of I863," Journal of Political Economy 2 (1894): 251-80; James Willard Hurst, A Legal History of Money in the United States, 1774-1970 (Lincoln: University of Nebraska Press, 1973), 79; John A. James, Money and Capital Markets in Postbellum America (Princeton: Princeton University Press, 1978), 27-29, 74-78; Thomas Wilson, The Power la "To Coin" Money: The Exercise of Monetary Powers by the Congress (Armonk, NY: M.E. Sharpe, Inc., 1992), 156-60.
295. See John Wilson Million, "The Debate on the National Bank Act of I863," Journal of Political Economy 2 (1894): 251-80; James Willard Hurst, A Legal History of Money in the United States, 1774-1970 (Lincoln: University of Nebraska Press, 1973), 79; John A. James, Money and Capital Markets in Postbellum America (Princeton: Princeton University Press, 1978), 27-29, 74-78; Thomas Wilson, The Power la "To Coin" Money: The Exercise of Monetary Powers by the Congress (Armonk, NY: M.E. Sharpe, Inc., 1992), 156-60.
296. See John Wilson Million, "The Debate on the National Bank Act of I863," Journal of Political Economy 2 (1894): 251-80; James Willard Hurst, A Legal History of Money in the United States, 1774-1970 (Lincoln: University of Nebraska Press, 1973), 79; John A. James, Money and Capital Markets in Postbellum America (Princeton: Princeton University Press, 1978), 27-29, 74-78; Thomas Wilson, The Power la "To Coin" Money: The Exercise of Monetary Powers by the Congress (Armonk, NY: M.E. Sharpe, Inc., 1992), 156-60.
297. Golembe, "Deposit Insurance Legislation of 1933," 187.
298. The first state-level deposit insurance scheme of the twentieth century was enacted in Oklahoma in 1907. On the various state level initiatives in Oklahoma and seven other states at this time, see esp. Thornton Cooke, The Insurance of Bank Deposits in the West," Quarterly Journal of Economics 2-1 (1909): 85-108; Thornton Cooke, "The Insurance of Bank Deposits in the West: II," Quarterly Journal of Economics 24 (1910): 327-391; Thornton Cooke, "Four Years More of Deposit Guaranty," Quarterly Journal of Economics 28 (1913): 69-114; Thornton Cooke, "The Collapse of Bank-Deposit Guaranty in Oklahoma and its Position in Other States," Quarterly Journal of Economics 38 (1923): 108-39; Eugene Nelson White, "State-Sponsored Insurance of Bank Deposits in the United States, 1907-1929," Journal of Economic History 41 (1981): 537-57; Golembe, "Deposit Insurance Legislation of 1933," esp. pp. 187-88; Charles W. Calomiris, "Is Deposit Insurance Necessary? A Historical Perspective," Journal of Economic History 50 (1990), esp. 288-93.
299. The first state-level deposit insurance scheme of the twentieth century was enacted in Oklahoma in 1907. On the various state level initiatives in Oklahoma and seven other states at this time, see esp. Thornton Cooke, The Insurance of Bank Deposits in the West," Quarterly Journal of Economics 2-1 (1909): 85-108; Thornton Cooke, "The Insurance of Bank Deposits in the West: II," Quarterly Journal of Economics 24 (1910): 327-391; Thornton Cooke, "Four Years More of Deposit Guaranty," Quarterly Journal of Economics 28 (1913): 69-114; Thornton Cooke, "The Collapse of Bank-Deposit Guaranty in Oklahoma and its Position in Other States," Quarterly Journal of Economics 38 (1923): 108-39; Eugene Nelson White, "State-Sponsored Insurance of Bank Deposits in the United States, 1907-1929," Journal of Economic History 41 (1981): 537-57; Golembe, "Deposit Insurance Legislation of 1933," esp. pp. 187-88; Charles W. Calomiris, "Is Deposit Insurance Necessary? A Historical Perspective," Journal of Economic History 50 (1990), esp. 288-93.
300. The first state-level deposit insurance scheme of the twentieth century was enacted in Oklahoma in 1907. On the various state level initiatives in Oklahoma and seven other states at this time, see esp. Thornton Cooke, The Insurance of Bank Deposits in the West," Quarterly Journal of Economics 2-1 (1909): 85-108; Thornton Cooke, "The Insurance of Bank Deposits in the West: II," Quarterly Journal of Economics 24 (1910): 327-391; Thornton Cooke, "Four Years More of Deposit Guaranty," Quarterly Journal of Economics 28 (1913): 69-114; Thornton Cooke, "The Collapse of Bank-Deposit Guaranty in Oklahoma and its Position in Other States," Quarterly Journal of Economics 38 (1923): 108-39; Eugene Nelson White, "State-Sponsored Insurance of Bank Deposits in the United States, 1907-1929," Journal of Economic History 41 (1981): 537-57; Golembe, "Deposit Insurance Legislation of 1933," esp. pp. 187-88; Charles W. Calomiris, "Is Deposit Insurance Necessary? A Historical Perspective," Journal of Economic History 50 (1990), esp. 288-93.
301. The first state-level deposit insurance scheme of the twentieth century was enacted in Oklahoma in 1907. On the various state level initiatives in Oklahoma and seven other states at this time, see esp. Thornton Cooke, The Insurance of Bank Deposits in the West," Quarterly Journal of Economics 2-1 (1909): 85-108; Thornton Cooke, "The Insurance of Bank Deposits in the West: II," Quarterly Journal of Economics 24 (1910): 327-391; Thornton Cooke, "Four Years More of Deposit Guaranty," Quarterly Journal of Economics 28 (1913): 69-114; Thornton Cooke, "The Collapse of Bank-Deposit Guaranty in Oklahoma and its Position in Other States," Quarterly Journal of Economics 38 (1923): 108-39; Eugene Nelson White, "State-Sponsored Insurance of Bank Deposits in the United States, 1907-1929," Journal of Economic History 41 (1981): 537-57; Golembe, "Deposit Insurance Legislation of 1933," esp. pp. 187-88; Charles W. Calomiris, "Is Deposit Insurance Necessary? A Historical Perspective," Journal of Economic History 50 (1990), esp. 288-93.
302. The first state-level deposit insurance scheme of the twentieth century was enacted in Oklahoma in 1907. On the various state level initiatives in Oklahoma and seven other states at this time, see esp. Thornton Cooke, The Insurance of Bank Deposits in the West," Quarterly Journal of Economics 2-1 (1909): 85-108; Thornton Cooke, "The Insurance of Bank Deposits in the West: II," Quarterly Journal of Economics 24 (1910): 327-391; Thornton Cooke, "Four Years More of Deposit Guaranty," Quarterly Journal of Economics 28 (1913): 69-114; Thornton Cooke, "The Collapse of Bank-Deposit Guaranty in Oklahoma and its Position in Other States," Quarterly Journal of Economics 38 (1923): 108-39; Eugene Nelson White, "State-Sponsored Insurance of Bank Deposits in the United States, 1907-1929," Journal of Economic History 41 (1981): 537-57; Golembe, "Deposit Insurance Legislation of 1933," esp. pp. 187-88; Charles W. Calomiris, "Is Deposit Insurance Necessary? A Historical Perspective," Journal of Economic History 50 (1990), esp. 288-93.
303. The first state-level deposit insurance scheme of the twentieth century was enacted in Oklahoma in 1907. On the various state level initiatives in Oklahoma and seven other states at this time, see esp. Thornton Cooke, The Insurance of Bank Deposits in the West," Quarterly Journal of Economics 2-1 (1909): 85-108; Thornton Cooke, "The Insurance of Bank Deposits in the West: II," Quarterly Journal of Economics 24 (1910): 327-391; Thornton Cooke, "Four Years More of Deposit Guaranty," Quarterly Journal of Economics 28 (1913): 69-114; Thornton Cooke, "The Collapse of Bank-Deposit Guaranty in Oklahoma and its Position in Other States," Quarterly Journal of Economics 38 (1923): 108-39; Eugene Nelson White, "State-Sponsored Insurance of Bank Deposits in the United States, 1907-1929," Journal of Economic History 41 (1981): 537-57; Golembe, "Deposit Insurance Legislation of 1933," esp. pp. 187-88; Charles W. Calomiris, "Is Deposit Insurance Necessary? A Historical Perspective," Journal of Economic History 50 (1990), esp. 288-93.
304. The first state-level deposit insurance scheme of the twentieth century was enacted in Oklahoma in 1907. On the various state level initiatives in Oklahoma and seven other states at this time, see esp. Thornton Cooke, The Insurance of Bank Deposits in the West," Quarterly Journal of Economics 2-1 (1909): 85-108; Thornton Cooke, "The Insurance of Bank Deposits in the West: II," Quarterly Journal of Economics 24 (1910): 327-391; Thornton Cooke, "Four Years More of Deposit Guaranty," Quarterly Journal of Economics 28 (1913): 69-114; Thornton Cooke, "The Collapse of Bank-Deposit Guaranty in Oklahoma and its Position in Other States," Quarterly Journal of Economics 38 (1923): 108-39; Eugene Nelson White, "State-Sponsored Insurance of Bank Deposits in the United States, 1907-1929," Journal of Economic History 41 (1981): 537-57; Golembe, "Deposit Insurance Legislation of 1933," esp. pp. 187-88; Charles W. Calomiris, "Is Deposit Insurance Necessary? A Historical Perspective," Journal of Economic History 50 (1990), esp. 288-93.
305. See Benjamin C. Esty, "The Impact of Contingent Liability," 189-218.
306. See Robert E. Litan, What Should Banks Do? (Washington, DC: Brookings Institution, 1987), esp. chap. 5. A prominent critic of narrow banking, Neil Wallace, observes (drawing on the same analogy that we have) that "narrow banking eliminates the role of banking.... [U]sing narrow banking to cope with the potential problems of banking liquidity is analogous to reducing automobile accidents by limiting automobile speeds to zero" ( Wallace, "Narrow Banking," 9).
307. See Robert E. Litan, What Should Banks Do? (Washington, DC: Brookings Institution, 1987), esp. chap. 5. A prominent critic of narrow banking, Neil Wallace, observes (drawing on the same analogy that we have) that "narrow banking eliminates the role of banking.... [U]sing narrow banking to cope with the potential problems of banking liquidity is analogous to reducing automobile accidents by limiting automobile speeds to zero" ( Wallace, "Narrow Banking," 9).