A History of Money and Banking in The United States (book) - Contents - Pre-20th Century

Pre-20th Century

Part 1, "The History of Money and Banking Before the Twentieth Century", consists of Rothbard’s contribution to the minority report of the U.S. Gold Commission and treats the evolution of the U.S. monetary system from its colonial beginnings to the end of the nineteenth century. In this part, Rothbard gives a detailed account of two early and abortive attempts by the financial elites to shackle the young republic with a quasi-central bank. He demonstrates the inflationary consequences of these privileged banks, the First and Second Banks of the United States, during their years of operation, from 1791 to 1811 and from 1816 to 1833, respectively. Rothbard then discusses the libertarian Jeffersonian and Jacksonian ideological movements that succeeded in destroying these statist and inflationist institutions. This is followed by discussions of the era of comparatively free and decentralized banking that extended from the 1830s up to the Civil War, and the pernicious impact of the war on the U.S. monetary system. Part 1 concludes with an analysis and critique of the post–Civil War National Banking System. Rothbard describes how this regime—which was aggressively promoted by the investment banking firm that had acquired the monopoly of underwriting government bonds—centralized banking and destabilized the economy, resulting in a series of financial crises that prepared the way for the imposition of the Federal Reserve System.