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O.M.W. Sprague (the Man who "Wrote the Book" on Financial Crises) and the Founding of the Federal Reserve

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  • Hugh Rockoff

Abstract

O.M.W. Sprague was America's leading expert on financial crises when America was debating establishing the Federal Reserve. His History of Crises under the National Banking Act is one of the most enduring legacies of the National Monetary Commission; a still frequently cited classic. Since the Commission recommended a central bank, and its recommendation after some modifications became the Federal Reserve System, it might be assumed that Sprague was a strong supporter of establishing a central bank. But he was not. Initially, Sprague favored more limited reforms, a position that he did not abandon until the Federal Reserve became a fait accompli. Here I discuss the sources of Sprague's opposition to a central bank and the relationship of that opposition to his understanding of the history and structure of the American banking system at the turn of the nineteenth century.

Suggested Citation

  • Hugh Rockoff, 2013. "O.M.W. Sprague (the Man who "Wrote the Book" on Financial Crises) and the Founding of the Federal Reserve," NBER Working Papers 19758, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:19758
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    References listed on IDEAS

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    1. Moen, Jon R. & Tallman, Ellis W., 2000. "Clearinghouse Membership and Deposit Contraction during the Panic of 1907," The Journal of Economic History, Cambridge University Press, vol. 60(01), pages 145-163, March.
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    5. Timberlake, Richard H, Jr, 1984. "The Central Banking Role of Clearinghouse Associations," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 16(1), pages 1-15, February.
    6. Perry Mehrling, 2002. "Retrospectives: Economists and the Fed: Beginnings," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 207-218, Fall.
    7. Gorton, Gary & Mullineaux, Donald J, 1987. "The Joint Production of Confidence: Endogenous Regulation and Nineteenth Century Commercial-Bank Clearinghouses," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 19(4), pages 457-468, November.
    8. William L. Silber, 2007. "The Great Financial Crisis of 1914: What Can We Learn from Aldrich–Vreeland Emergency Currency?," American Economic Review, American Economic Association, vol. 97(2), pages 285-289, May.
    9. Wicker,Elmus, 2000. "Banking Panics of the Gilded Age," Cambridge Books, Cambridge University Press, number 9780521770231.
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    More about this item

    JEL classification:

    • B26 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Financial Economics
    • N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations

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