I mean it's published by the Cato Institute. Regulatory gatekeeping is the root cause of all problems.
Joking aside, I didn't see the prohibition on branching specifically called out, other than to say that Scotland (which did allow it) did not see banknote discounting, and that ultimately it was the 1864 National Banking act which finally ended the practice.
The most common thread it seemed to be were that banks held confederate bonds and caused massive losses after the war broke out.
Ironically I think the author makes an excellent comparison between Wilcat banking to Stablecoin. I've replaced a few key words like "notes" and "loans" and "currency" with coin and stablecoin:
> Nor did they make any loans, their profits having instead consisted entirely of fees drawn on the transactions from their stablecoins. "People needed the coins they produced at a time when money was scarce," Du says. "So the community acquiesced in their conduct."
> But, the debate continues, if the public "acquiesced," in what sense can the stablecoins be said to have bamboozled it? Would having no stablecoin at all to trade with really have been better than having to rely on suspended ones?
Where it explains the harm done by the prohibitions on branching:
>>Thanks to the combination of a large country, poor (though rapidly improving) transportation infrastructure, and unit banking, when notes traveled any substantial distance from their source, getting them redeemed could be quite costly. In smaller nations, and especially those, like Scotland, where banks were allowed to branch nationwide, banknote discounts were unknown: the fact that there were many different banks of issue, with varying assets, didn't prevent such nations from having "uniform" banknote currencies. Even Canada, which was geographically as large as the United States, but much less populous and with a far less developed internal transportation system, managed (with the help of several private clearinghouses) to achieve a uniform currency, based on the notes of several dozen commercial banks, by the early 1890s.[4]
>>Had it not been for unit banking, the United States might well have had a uniform state banknote currency before the Civil War, thanks to its by then impressive railroad network. Even with unit banking, it came a lot closer than most people realize. Despite already having had over a hundred banks of issue at the time, with hardly any branches, New England managed, with the help of the Suffolk System—an early, Boston-based banknote clearinghouse—to achieve a uniform currency as early as 1824.
But yes, the most harmful restrictions were those barring banks that didn't hold the state-mandated reserves, which made banks, and the money supply in general, susceptible to changes in public finances, and made those changes systemic in nature, since all banks were affected in the same way, and at the same, by a change in the availability and value of the statutory reserve assets.
Joking aside, I didn't see the prohibition on branching specifically called out, other than to say that Scotland (which did allow it) did not see banknote discounting, and that ultimately it was the 1864 National Banking act which finally ended the practice.
The most common thread it seemed to be were that banks held confederate bonds and caused massive losses after the war broke out.
Ironically I think the author makes an excellent comparison between Wilcat banking to Stablecoin. I've replaced a few key words like "notes" and "loans" and "currency" with coin and stablecoin:
> Nor did they make any loans, their profits having instead consisted entirely of fees drawn on the transactions from their stablecoins. "People needed the coins they produced at a time when money was scarce," Du says. "So the community acquiesced in their conduct."
> But, the debate continues, if the public "acquiesced," in what sense can the stablecoins be said to have bamboozled it? Would having no stablecoin at all to trade with really have been better than having to rely on suspended ones?