Yeah, just ask those who lost everything in the 1820s due to wild cat banking about "moral hazard."
When one cannot make proper distinctions their arguments fall flat.
Yeah, just ask those who lost everything in the 1820s due to wild cat banking about "moral hazard." Oh please. Is that the best boogey man you can conjure up?
The Government encouraged the wildcatters to purchase war-debt bonds and convert them into bank notes to help fund the War of 1812. Within 2 years this tripled the nation's currency supply.
Hardly an example of "free banking" or a GS.
In your comments on the constitutionality of (un-backed) paper money and the history, thereof, you over-simplify some key issues and make some outright errors. For example, you oversimplify the interplay between three distinctly different, but related issues: 1.) coining money, 2.) emitting bills of credit, and 3.) establishing legal tender. States were explicitly disallowed from coining money (a power explicitly granted to Congress), from emitting bills of credit (i.e. issuing un-backed paper money) and from making anything but gold or silver legal tender. Congress was explicitly granted the power to coin money. The issues, as I say, are very complex. Based on original intent, however, both the states and the federal government were precluded from issuing money.
Also, you cited wildcat banks as examples of banks issuing currency. This is inaccurate. Wildcat banks notes, like all 19th century bank notes, were legally redeemable in specie. They were not legal tender. To make it difficult for people to redeem in specie wildcat banks established their main offices where “even the wildcats wouldn’t go.” Before 1933, the only fiat currencies were the Continentals issued during the Revolutionary War, the Greenbacks issued during (and directly after) the Civil War, and maybe an issue during the War of 1812. In any event, banks issued bank notes, not currency.