Was free banking in the United States so bad that people would have been better off with no banks at
all?
Free banking opened up note issuance to limited-liability organizations without discretionary approval by a legislature, as in earlier years, or by a banking regulator, as in later years. Free banking
ended in 1865 when the federal government imposed a tax on state banknotes.
The defining characteristic of free banking is that if the requirements of a given state’s free banking law are met, any person or group of persons is permitted to open a bank.
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