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The Payment System and Liquidity Provision during the US National Banking Era


  • Laurent Le Maux

    (Paris Saint-Denis University, 2, rue de la liberté, Saint-Denis 93200, France)


This essay distinguishes hand-to-hand currency shortage from the funding liquidity crisis in order to apprehend the nature of disruptions of the payment system during the US National Banking Era (1863–1913). Different analytical categories are thus inferred, namely, runs to currency and to liquidity, seasonality and instability of the interest rate, and issuance of small-denominated certificates and large-denominated loan certificates by the Clearing Houses. All of these categories were particularly intertwined under the National Banking System, which may have led to a quid pro quo related to the expected functions of the Federal Reserve System.

Suggested Citation

  • Laurent Le Maux, 2013. "The Payment System and Liquidity Provision during the US National Banking Era," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 55(3), pages 459-477, September.
  • Handle: RePEc:pal:compes:v:55:y:2013:i:3:p:459-477

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    References listed on IDEAS

    1. Charles W. Calomiris & Gary Gorton, 1991. "The Origins of Banking Panics: Models, Facts, and Bank Regulation," NBER Chapters, in: Financial Markets and Financial Crises, pages 109-174, National Bureau of Economic Research, Inc.
    2. J. Laurence Laughlin, 1908. "The Aldrich-Vreeland Act," Journal of Political Economy, University of Chicago Press, vol. 16, pages 489-489.
    3. Itay Goldstein & Ady Pauzner, 2005. "Demand–Deposit Contracts and the Probability of Bank Runs," Journal of Finance, American Finance Association, vol. 60(3), pages 1293-1327, June.
    4. Sylla, Richard, 2006. "The transition to a monetary union in the United States, 1787 1795," Financial History Review, Cambridge University Press, vol. 13(01), pages 73-95, April.
    5. Wicker,Elmus, 2000. "Banking Panics of the Gilded Age," Cambridge Books, Cambridge University Press, number 9780521770231.
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