US Paper Currency

February 11, 2004 at 10:59 pm | Posted in Fun Indoors | Leave a comment

Today’s lunchtime discussion was the degree of centralization of paper money (currency) in 19th Century America. I claimed that there was little if any centralization, and that local- and state-level banks printed and stood behind their own currency, with very little federal government controls. Mike claims the opposite, that the Bank of the United States (the precursor to the Federal Reserve) had significant power to normalize currency (and therefore prices) throughout the country. Well, as this article shows, I was right. Looking back, it had to be decentralized, since the federal government was not very strong until it was required to be strong during the Civil War.

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