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The Free Banking Era: new evidence on laissez-faire banking

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  • Arthur J. Rolnick
  • Warren E. Weber

Abstract

The purpose of this paper is to begin a reevaluation of the Free Banking Era by developing and examining individual bank information on the population of banks which existed under the free banking laws in four states. This information allows us to determine the number of free banks which failed and to estimate the resulting losses to their note holders. While the new evidence suggests there were problems with free banking, it presents a serious challenge to the prevailing view that free banking led to financial chaos.

Suggested Citation

  • Arthur J. Rolnick & Warren E. Weber, 1982. "The Free Banking Era: new evidence on laissez-faire banking," Staff Report 80, Federal Reserve Bank of Minneapolis.
    • Handle: RePEc:fip:fedmsr:80
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    References listed on IDEAS

    as
    1. Fama, Eugene F., 1980. "Banking in the theory of finance," Journal of Monetary Economics, Elsevier, vol. 6(1), pages 39-57, January.
    2. Kareken, John H & Wallace, Neil, 1978. "Deposit Insurance and Bank Regulation: A Partial-Equilibrium Exposition," The Journal of Business, University of Chicago Press, vol. 51(3), pages 413-438, July.
    3. Rockoff, Hugh, 1974. "The Free Banking Era: A Reexamination," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 6(2), pages 141-167, May.
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    Cited by:

    1. Shambaugh, Jay C., 2006. "An experiment with multiple currencies: the American monetary system from 1838-60," Explorations in Economic History, Elsevier, vol. 43(4), pages 609-645, October.

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