Freedom in Banking and the Founding of the Federal Reserve


This conference examined the establishment of the Federal Reserve System, focusing on the role of economic freedom, on the one hand, and government intervention, on the other, with an eye toward either enhancing or undermining financial order and stability.


From Liberty Fund

The Rationale of Central Banking

by By Vera C. Smith
Foreword by Leland B. Yeager

The Rationale of Central Banking was first published in England in 1936. Vera Smith spent her professional career in a variety of research positions. She wrote articles and books on money, banking, economic development, and the labor market and translated into English books by Wilhelm Röpke, Oskar Morgenstern, and Fritz…

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Additional Readings

Bordo, Michael D. and Angela Redish. “Why Did the Bank of Canada Emerge in 1935?” The Journal of Economic History 47, no. 2 (January 1987): 405-417.

Dwyer, Gerald P. “Wildcat Banking, Banking Panics, and Free Banking in the United States.” Economic Review 8, no. 1 (December 1996): 1-20.

Friedman, Milton and Anna Jacobson Schwartz. A Monetary History of the United States, 1867–1960. Princeton: Princeton University Press, 1963.

Gordon, John Steele. “How the Civil War United Our Money.” Barron’s (January 19, 2013): 1.

Haltom, Renee. “Why was Canada Exempt from Financial Crises?” Econ Focus (Fourth Quarter 2013): 22-25.

Hammond, Bray. “Banking in the Early West: Monopoly, Prohibition, and Laissez Faire.” The Journal of Economic History 8, no. 1 (May 1948): 1-25.

Livingston, James. Origins of the Federal Reserve System: Money, Class, and Corporate Capitalism, 1890–1913. Ithaca: Cornell University Press, 1986.

Morawetz, Victor. The Banking and Currency Problem in the United States. New York: North American Review Publishing Company, 1911.

Root, Elihu. “The Banking and Currency Bill.” Senate Speech, New York, December 13, 1913.

Root, L. Carroll. “Canadian Bank-Note Currency.” Sound Currency 2, no. 2 (December 15, 1894): 2-16.

Schuler, Kurt., “Free Banking in Canada.” In The Experience of Free Banking, edited by Kevin Dowd, 79-92. London: Routledge, 1992.

Selgin, George. “The Suppression of State Banknotes: A Reconsideration.” Economic Inquiry 38, no. 4 (October 2000): 600-615.

Silber, William L. “The Great Financial Crisis of 1914: What Can We Learn From Aldrich-Vreeland Emergency Currency.” American Economic Review 97, no. 2 (May 2007): 285-289.

Wicker, Elmus. The Great Debate on Banking Reform: Nelson Aldrich and the Origins of the Fed. Columbus: Ohio State University Press, 2005.