The Myth of Free Banking in Scotland英文电子书.pdf

The Myth of Free Banking in Scotland Murray N. Rothbard Free Banking in Scotland Professor Whites Free Banking in Britain has already had a substantial im- pact on the economics profession . The main influence has been exerted by one of the books major themes : the wonderful results of the system of free banking in Scotland, a system that allegedly prevailed from 1716 (or 1727) 1 until suppressed by the Peel Act in 1845. Whites Scottish free-banking thesis consists of two crucial propositions . The first is that Scottish banking , in contrast to English, was free during this era ; that while the English banking system was dominated by the Bank of England, pyramiding their notes and deposits on top of the liabilities of that central bank , the Scottish system, in stark contrast , was free of the Bank of England . In Whites words , Scotland rather maintained a system of each tub on its own bottom. Each bank held onto its own specie reserves.2 The second part of the syllogism is that this free system in some way worked much better than the English. Hence, the triumphant conclusion : that free banking in Scotland was far superior to centrally controlled banking in England. White claims that the salutary effects of free banking in Scotland have been long forgotten, and he raises the hope that current public policy will heed this lesson . The influence of Whites thesis is remarkable considering the paucity of his research and the thinness of his discussion . In a brief book of less than two hundred pages,