History of Money and Banking in the United States: The Colonial Era to World War II
Murray N. Rothbard
The master teacher of American economic history covers money and banking in the whole of American history, to show that the meltdown of our times is hardly the first. And guess what caused them in the past? Paper money, loose credit, reckless lending standards, government profligacy, and central banking
When will we learn? When people understand the cause and effect in the history of these repeating calamities
In a complete revision of the standard account, Rothbard traces inflations, banking panics, and money meltdowns from the Colonial Period through the mid-20th century to show how government's systematic war on sound money is the hidden force behind nearly all major economic calamities in American history. Never has the story of money and banking been told with such rhetorical power and theoretical vigor.
Here is how this book came to be. Rothbard died in 1995, leaving many people to wish that he had written a historical treatise on this topic. But the the archives assisted: Rothbard had in fact left several large manuscripts dedicated to American banking history.
In the course of his career, meanwhile, he had published other pieces along the same lines, but they appeared in venues not readily accessible. Given the desperate need for a single volume that covers the topic, the Mises Institute put together this thrilling book. So seamless is the style and argument, and comprehensive is coverage, that it might as well have been written in exactly the format.
The end result is Rothbard's (and the Austrian School's) answer to Friedman and Schwartz.
Sections in this 500-page treatise:
I. "The History of Money and Banking Before the Twentieth Century." This was Rothbard's contribution to the minority report of the US Gold Commission and treats the evolution of the US monetary system from its colonial beginnings.
II. "Origins of the Federal Reserve." This thrilling paper lay unpublished for a long time and only recently appeared in the Quarterly Journal of Austrian Economics. It is easily the most comprehensive account in print. It names names and shows the constellation of interest-group affiliations that led to its creation.
III. "From Hoover to Roosevelt: The Federal Reserve and the Financial Elites." This previously unpublished paper goes into great detail on how the Morgan and Rockefeller financial interests shaped the political and behavior of the Fed.
IV. "The Gold-Exchange Standard in the Interwar Years." This large section has appeared in print but not in its full version. Rothbard elucidates the reasons why the British and US government in the 1920s re-created the gold standard in a manner that was profoundly flawed and potentially inflationary (leading to the Great Depression).
V. "The New Deal and the International Monetary System" This section appeared in a volume first published in 1976 and which is now very difficult to find. Rothbard argues that an abrupt shift occurred in monetary policy just before the US entered World War. He shows who benefited from the shift from dollar nationalism to dollar imperialism. He concludes with a smashing attack and expose of the Bretton Woods agreement of 1944.
From the introduction by Joseph Salerno: "Rothbard employs the Misesian approach to economic history consistently and dazzlingly throughout the volume to unravel the causes and consequences of events and institutions ranging over the course of U.S. monetary history, from the colonial times through the New Deal era. One of the important benefits of Rothbard's unique approach is that it naturally leads to an account of the development of the U.S. monetary system in terms of a compelling narrative linking human motives and plans that often-times are hidden and devious, leading to outcomes that sometimes are tragic. One will learn much more about monetary history from reading this exciting story than from poring over reams of statistical analysis."
Auburn: Mises Institute, 2002. Purchase