Not New Jersey; old Jersey, in the Channel Islands. I recently read a paper by Brandon Dixon, an undergraduate economics student at the University of Chicago, that examines currency arrangements in the periphery of the United Kingdom. The paper should be issued in a month or two and I will post a link when it is, because the paper also discusses Scotland. One of the sources Dixon cites on the history of currency in Jersey is this summary by its government, which briefly discusses the island's free banking period (see pages 12-14). There were more than 100 note issuers by 1817, and even churches issued notes! Consolidation then set in. Later in the century, I gather in 1873 (the year of a worldwide financial panic), a number of banks failed. A subject for detailed research by somebody who can go and poke around local archives?
Today the US House of Representatives passed HR 24, the Audit the Fed bill by a vote of 333-24 under the suspension calendar (requiring a ⅔ majority to pass).
House of the Clerk floor summary here:
|1:12:15 P.M.||H.R. 24||Considered as unfinished business. H.R. 24 — "To require a full audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks by the Comptroller General of the United States, and for other purposes."|
|1:44:04 P.M.||H.R. 24||On motion to suspend the rules and pass the bill, as amended Agreed to by the Yeas and Nays: (2/3 required): 333 - 92 (Roll no. 504).|
|1:44:04 P.M.||H.R. 24||Motion to reconsider laid on the table Agreed to without objection.|
The roll call is here to see how your Representative voted:
All Republicans voted "Aye" except for Rep. Campbell (and four not voting) along with a majority of the Democrats (but well less than ⅔ of their number) with 106 in favor 91 opposed and two not voting.
It would be highly unlikely for the Senate to take up the bill this late in the calendar.
That is the new title of a paper I wrote with the Lebanese economist Patrick Mardini. Patrick did the bulk of the work, and he will be presenting the paper at the conference in Lund, Sweden on free banking history later this week (see the previous post). Here is the abstract:
Belgium had a somewhat free banking system from 1835 to 1850. The country had two major banks in Brussels, the Société Générale and the Banque de Belgique; several smaller banks in the provinces; and many private bankers. The system had restrictions on note issue and legal barriers to entry. Belgium suffered from a bank run in 1838 triggered by the threat of war with the Netherlands. The Banque de Belgique had invested its resources in illiquid assets and did not know how or when to reduce its note issue. It was bailed out by the government but knew that another failure would spell its end. This led the bank to reform its activity, deleverage, and hedge the remaining risk. The Société Générale was not seriously threatened in 1838 and continued as before. In 1848, the French revolution of that year and France’s suspension of convertibility induced another crisis. This time it was the turn of the Société Générale to falter, for the same reasons as the Bank de Belgique in 1838. The government intervened through fiat money, suspension of convertibility and permission to monetize liabilities. The free banking system ended with the creation of a central bank on January 2, 1851.