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How Free Banks Promote Economic Growth
Public Commercial
Banks Firms
Savings
Bank IOUs,
Including
Banknotes
(Intermediation Costs)
Capital
(Note: Thickness of Lines Indicates Value of Flows)
An Act for … for secureing certaine Recompenses and Advantages …to such Persons as shall voluntarily advance the summe of Fifteene hundred thousand pounds towards the carrying on the Warr against France.
The Bank of England Act (1694)
How Central Banking
Impedes Economic Growth
Public Commercial
Banks Firms
Savings
Bank IOUs,
Including Notes
(Intermediation Costs)
Capital
Central Bank Government
Fiat
Currency Savings Mandatory Reserves
And Vault Cash
I have tediously insisted that the natural system of banking is that of many banks keeping their own cash reserve, with the penalty of failure before them if they neglect it. I have shown that our system is that of a single bank keeping the whole reserve under no effectual penalty of failure. And yet I propose to retain that system, and only attempt to mend and palliate it.
I can only reply that I propose to retain this system because I am quite sure that it is of no manner of use proposing to alter it... You might as well, or better, try to alter the English monarchy and substitute a republic, as to alter the present constitution of the English money market, founded on the Bank of England.