It’s important to note that even when we were on a “gold standard”, fractional reserve banking was practiced and often propped up by the government per the approval to suspend specie payments, meaning banks didn’t have to meet their depositors’ demands when they came in and demanded their own money from the bank. We also had two central banks prior to the Federal Reserve, both before 1850, and then centralized banking with multiple levels of fractional reserve banking (each level having a stated reserve requirement) under the National Currency Acts (I believe that’s what they were called but it might have been the National Banking Acts) from 1864 up until the Federal Reserve System in 1913.
There were plenty of booms and busts associated with these periods since exactly the same kind of thing happens as under the Federal Reserve, namely that banks inflate credit and are able to do so in relative harmony because of the central bank (or centralized nature of the banking system). Eventually, the inflation stops and a contraction sets in and you get a depression/panic/recession (whatever). I can’t say for sure that we were ever truly on a gold standard because there was constantly manipulation of the currency in the banking sector. Even the period of “free banking” from the late 1830’s till about the Civil War saw the banks given the ability to suspend specie payment, which took away a natural check against fractional reserve banking and thus made it easier to do.
As for a free market boom and bust, I think they are indeed possible, but without the (seemingly) limitless supply of credit available, the errors would be exposed much more quickly and the malinvestments liquidated relatively painlessly. There would always be fluctuations as some companies went out of business, but nothing to the degree of what the current system is like.
Just my 2 cents.