As published in the Social Sciences Research Network
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The Eurozone today is going into the same deflationary situation that the U.S. did under Jackson’s destruction of the Second Bank, and the post-Civil War budget surpluses that deflated the economy. But whereas the Fed’s creation was designed to inflate the U.S. economy, Europe’s European Central Bank is designed to deflate it — in the interest of commercial banks in both cases.
Deflation was the main U.S. financial problem prior to 1913. To replace the Treasury conducting its fiscal operations independently from the banking system, New York banks urged more power over public finances and to establish the Federal Reserve to increase the supply of money (a more “elastic” issue) in response to banking needs. Monetary policy since the Great Depression that started in 1929 has aimed at re-inflating the economy after downturns, fueling the post-2001 financial bubble and, since 2008, Quantitative Easing to provide banks with liquidity to support asset prices.
By contrast, Europe’s trauma of hyperinflation after World War I gave Europe’s bankers and bondholders a rationale for gaining power over governments to prevent them from monetizing their budget deficits. The rhetoric of fighting inflation has enabled German and French banks to impose tight money policies and smaller public self-funding than in the United States. On both continents, banks gained power over governments. But in America it was by insisting on more money creation and deficit spending, and in Europe by advocating limits on public money to finance deficits.
For most of the 19th century the U.S. Treasury conducted its monetary and fiscal policy in ways that imposed deflationary pressures on the banking system. President Andrew Jackson (1829-1837) of Democratic Party starved the economy of credit by his war on the Second Bank of the United States and removal of government deposits to sub- treasuries around the nation. His Democratic Party policy was backed by Southern plantation owners opposing Northern industry, seeing that its growth would increase urban industrial demand for food and other consumer goods. This would raise prices for the crops that plantation owners needed to feed their slaves.
The opposition Whig Party (1833-1854), followed by Republicans after 1853, was advocating a policy of recycling tax and land-sale receipts into Northern banks to help fund industrial growth. After the Civil War that started in 1861, the United States pursued a pro-industrial high-tariff policy, but this generated budget surpluses, which deflated the economy and drove prices for gold and other commodities back down to their pre-1861 level. That led to the 1873 crash and a depression until 1896, followed by an even greater crash in 1907.
In the wake of America’s 1907 financial panic, the Aldrich-Vreeland Act of 1908 created a “National Monetary Commission … to inquire into and report to Congress at the earliest date practicable, what changes are necessary or desirable in the monetary system of the United States or in the laws relating to banking and currency …” The Commission’s thirty-five monographs provided an exhaustive study of central banking structures and commercial banking policies, laying the groundwork for what in 1913 became the Federal Reserve Act.
Money and banking textbooks typically portray the Act as modernizing the financial system “to correct certain serious shortcomings in the National Bank Act: to provide an elastic currency, efficient clearing, centralized reserves, readily available credit for banks, and unified control of the banking system.” But David Kinley’s 1910 report (Kinley 1910) shows that the National Banking System had neither responsibility nor ability to steer the nation’s monetary course. Prior to 1913 the Treasury performed these functions, including open market bond purchases to provide the banking system with liquidity. It would be more accurate to view the Federal Reserve as shifting to Wall Street the financial power hitherto concentrated in the hands of the Treasury Secretary in Washington.
From the establishment of the Treasury in 1847 through 1914 the Secretary of the Treasury had held responsibility for regulating the money supply by shifting Treasury deposits among the subtreasuries and the national banks to relieve regional credit stringencies, and by engaging in open market operations to cope with cyclical difficulties. In fact, Kinley (1910) observed, the Treasury had come to perform most of the functions of a central bank:
(1) It issues and redeems paper money – United States and Treasury notes; … (4) it transfers money to move the crops; … (6) it acts as a regulator of the rate of discount by contracting and expanding the currency through its operations upon the deposits in banks and in its own vaults; (7) it keeps the gold reserve of the country.
In 1914 the Federal Reserve System took on these duties, regulating the money supply through open market operations similar to those the Treasury had been conducting since the 1850s to cope with the problems resulting from budget surpluses. The Comptroller of the Currency’s 1907 report noted:
For several years past the revenues of the Government have been largely in excess of expenditures, and there has been a constant problem presented to each successive Secretary of the Treasury as to the best means of replacing in circulation the money which the Government is forced to collect. The method of replacing it by deposit with the banks is probably the only one available and, although it has been handled with unusual skill and ability, is most unsatisfactory, unsystematic, and inefficient. It always is a matter which provokes criticism and complaint. It could be handled with far better results if the Government had under its control a central bank to which all revenues could be paid and through which all disbursements could be made.
The Federal Reserve System dispersed this fiscal management away from Washington. Its twelve regional reserve districts opened the path to abolish the Independent Treasury and its regional subtreasuries in 1921. The main beneficiaries were the leading New York banks. In effect, creation of the Federal Reserve shifted monetary control from Washington to Wall Street – hardly surprising when one looks at the list of attendees at the Jekyll Island meeting of leading bankers in 1910, where J. P. Morgan and Rhode Island Republican Senator Aldrich outlined plans for the Fed (see Griffin, 1994; Chernow, 1997).
2. Origins of the Independent Treasury in Jackson’s War on the Second Bank of the U.S.
Soon after taking presidential office in 1829, Andrew Jackson tried to coerce the bank’s directors of the Second Bank of the United States to perform certain political favors, starting with replacing Jeremiah Mason as the president of the bank’s branch in Portsmouth, New Hampshire. When the Bank’s directors refused to do this, Jackson turned to state banks to deposit government funds. In 1833, Jackson directed his new appointee as Secretary of the Treasury, William J. Duane, not to replenish these deposits as they were drawn down, but to put them in “pet” state banks run by his political supporters.
Duane refused to comply. Claiming that removing government deposits would disrupt the economy, he urged that the issue be decided by Congress, which already had declared the Bank to be safe. Jackson fired him after only four months, and replaced him with Roger B. Taney, whom Congress refused to confirm (the first rejection of a cabinet nominee in U.S. history). But as acting Treasury Secretary, Taney was able to carry out Jackson’s removal of deposits.
The pro-industrial Whigs accused this bank war of centralizing financial power in the hands of the President and whomever he might appoint as Treasury Secretary. As Calvin Colton accused in his biography of Henry Clay, while Jackson was re-depositing Treasury funds in his pet banks, Secretary of State Martin Van Buren was organizing political patronage via the banking system in his native state of New York:
… the old banks found themselves annoyed by unexpected runs upon them for specie, and … while laboring under these inconveniences, hints were passed to them, that, by appointing such and such directors, they would be relieved. The new banks were of course all furnished with suitable director. In this way, it is averred, that the whole banking system of the state of New York, from one of the bank parlors of Albany, was brought under the sway of the dominant political party, and forced to minister to their occasions.
It cannot be denied, that, of all men in the world, they who had accomplished such an achievement, were best qualified to know the power of banks as political engines, and to declaim against them when it should answer their purpose, as an enormity in the social state. Who was better qualified than Mr. Van Buren, when transferred to the state department at Washington, to give advice to the president of the United States on this subject? “Do you not see, sir, how admirably this system works in the state of New York? We govern the state by the banking system there, and force the banks (alias, the people) to pay all the costs of our party in maintaining our ascendency. You have only to adopt the same system with the bank of the United States, get such directors and presidents of the branches as are most suitable, and gradually bring the parent institution under the same discipline, and the politics of the nation will ever afterward be at command.”
The Bank’s fate was sealed when its president, Nicholas Biddle, attempted to compensate for the drawdown of government deposits by a series of speculative business ventures. The Bank’s application for re-charter three years later was revoked. By this time the banking issue had become part of the sectional political conflict between North and South. The Southern slave states advocated monetary deflation for two reasons: to keep the price of cotton low, and hence competitive on world markets; and to thwart northern industrial growth so as to minimize the population voting against extension of slavery. Jackson rewarded the pro-slavery Maryland Democrat Taney by appointing him to the Supreme Court in 1836, where he became notorious for delivering the majority opinion in the 1857 Dred Scott case. His court also declared the Missouri Compromise unconstitutional, opening up the nation’s western territories to slavery. This sectional division colored the Democratic opposition to the Whigs and, after 1853, the Republicans, who advocated protectionism, internal improvements and a national bank.
As for Van Buren, he became Jackson’s Vice President (1833-37) and succeeded him as President (1837-41). His administration started in 1837 with the depression that followed from closing down the Second Bank. Van Buren aggravated the monetary stringency by keeping federal deposits in the independent treasury instead of state banks.
3. Treasury surpluses drain the economy of liquidity
The sale of public lands during Jackson’s second term soared from $4 million in 1833 and $5 million the following year to $15 million in 1835 and $25 million in 1836, producing a large Treasury surplus. Jackson’s extermination of Native Americans cleared a vast territory for slavery in the South and colonization of the West. Most purchases during 1835-36 were made by land speculators, largely with borrowed funds.
The Treasury deposited proceeds from these land sales in state banks, which were assured that the government would not draw them down. New bank credit extended on the basis of these deposits fueled land speculation, which increased federal receipts from these sales by enough to liquidate virtually all the national debt, while maintaining a large cash surplus deposited in state banks.
Much as Whigs had warned, privileged banks were nurtured and bribery was not infrequent. States founded and operated their own banks, issuing notes to finance their budget deficits much as the Treasury would issue greenbacks during the Civil War. This basically corrupt chaos of private and state banking led to Jackson’s Specie Circular of July 1836, requiring all payments for public lands to be made in gold or silver bullion.
This pricked the inflationary bubble of speculative land grabbing. It helped terminate the government’s losses sustained from being obliged to accept worthless banknotes at their face value in payment for public lands, and also helped save the western states from largely non-resident proprietorship. But the Specie Circular also distressed the nation’s industrial finances by leading to widespread bank failures. Van Buren used this to justify his proposal the following year to keep government funds “safely” in subtreasury vaults across the nation.
4. Democratic versus Whig and Republican monetary policy
A party battle around the constitutionality of the subtreasury scheme set the free-trade Democrats as literal constitutionalists against the Whigs, who were federalist on the tariff and internal improvement issues but sought to “separate the power of the purse from the power of the sword.” The “independent” treasury scheme, they argued, was not true federalism but a form of monarchism (the popular Whig term for Jackson’s presidency) centralizing financial power in the Executive and his appointed bureaucracy. In its place, Whigs advocated using government finances to provide the credit base for northern industry. Whig Presidential candidate Henry Clay’s “American System” advocated protective industrial tariffs, internal improvements and a national bank to fund industry.
Recognizing that deflation would result from the subtreasury scheme, Southern plantation owners sought to support their slaves at a low enough cost to maintain the South’s dominant export position in cotton and tobacco. Creditors on the Northeast Seaboard also supported deflation. The result was a deflationary agrarianism aimed at countering the growth of northern industrial power. “The avowed object of the administration and its advisers,” asserted the protectionist Reverend Calvin Colton, associate and biographer of Henry Clay popularizing economic discussion of his “American System” of a national bank, protective tariffs and internal improvements, “was to suppress the paper medium of the country, and introduce a metallic currency; and the independent or sub-treasury, was to be the means of accomplishing the end, although, as shown by Mr. Clay, it must necessarily fail, and itself establish a paper medium of a most dangerous tendency.” The Treasury’s drafts upon its public depositories, Clay argued in 1840, would soon circulate as money, driving state bank notes out of circulation.
There thus existed a sectional polarity to the Democratic-Whig controversy over whether the United States should be characterized by a deflationary monetary system segregating federal finances from the commercial banking sector, or by using government funds as the basis for a national banking system responsive to industrial needs, as was being done in France and Germany.
5. Treasury surpluses necessitate open market bond purchases
“Under the terms of the law establishing the independent treasury,” Kinley describes, “the Government was expected to keep its own money and have no connection with the banking institutions of the country.” This policy proved impractical. Long before Civil War financing necessitated the National Bank Act to provide a means of recirculating government deposits into the banking system, the growing volume of Treasury finances necessitated compensatory activity following re-establishment of the Independent Treasury in 1847.
The main compensatory Treasury activity was to purchase government bonds from the banks. Thanks to the California gold rush, the Treasury ran its largest surplus yet by 1853, “so that there was a considerable accumulation of money in the treasury. To prevent any stringency that might be caused thereby the Secretary issued a circular, on the 30th of July, offering to buy $5,000,000 worth of 6 per cent bonds. He secured them by paying a premium of 21 per cent.” This was the beginning of federal open market operations, often hailed by monetary historians as an accidental “discovery” of the Federal Reserve in the 1920s.
Democratic Treasury Secretary James Guthrie’s used the budget surplus to pay down the national debt from $63 million in 1853 to $25 million in 1857. However, budget surpluses drain monetary resources from the economy. Guthrie’s report of December 1856 observed that the subtreasury might “exercise a fatal control over the currency, the banks, and the trade of the country, and will do so whenever the revenue shall greatly exceed the expenditures.” Furthermore, he noted: “If there had been no public debt, and no means of disbursing this large sum [$45 million since March 1853 by
Treasury bond repurchases] and again giving it to the channels of commerce, the accumulated [sterilized] sum would have acted fatally on the banks and on trade. The only remedy would have been a reduction of the revenue, there being no demand and no reason for increased expenditure.” The Democrats’ opposition to high tariffs and spending on internal improvements would indeed have reduced federal tax revenue.
To avoid the deflationary effects of high tariff duties under the Independent Treasury system, Clay and other protectionists advocated abolition of the subtreasuries and a return to government financial operations such as had characterized the 1816-36 period dominated by the Second Bank of the United States.
When panic broke out in 1857 and dragged many banks under, Republicans (who had replaced the Whigs in 1853) accused the Treasury of having brought it on and contributed to its depth. But Democrats defended the Independent Treasury system by pointing to the safety of government finances achieved by virtue of their having been divorced from the banking system. The Treasury made bond purchases of nearly $5 million in 1858, but federal spending deficits fueled the recovery.
6. Civil War financing needs lead to greenbacks and the National Bank Act
The ultimate break between Republicans and Democrats occurred in 1860 over the slavery question, which threw presidential and congressional power to the Republicans. The outbreak of Civil War increased the government’s financial needs, and effectively ended Treasury “independence” from the banking and private sector.
The new Secretary of the Treasury, Salmon P. Chase, was appointed by Lincoln largely in recognition of his anti-slavery stance. The Civil War quickly derailed the country’s finances. If Chase kept the loans made by the New York banks locked up “in the government vaults in the form of specie … the banks could not keep it as a reserve against their notes.” The problem was that “the Government, under independent treasury law, was obliged to be independent of the banks in the sense that it must not use their notes. If, therefore, the Treasury was to get money to carry on its now extensive operations it must use specie or issue Treasury notes.”
The Treasury became a bank of issue, monetizing its war debt. Bankers urged Chase to stop issuing greenbacks, which were driving their notes out of circulation and draining their specie. They pressed the Treasury to use their bank notes instead. When he refused to do this, the banks were forced to suspend specie payments in December 1861. “Had the Secretary withdrawn the treasury notes and accepted the bank issues” in lieu of gold, Kinley (1910) observed, “it would have been a departure from the independent treasury law.” Instead, Congress and the Treasury forced suspension by “trying to meet the expenses of the war by loans, with as slight an increase of taxation as possible.”
The deflationary pattern of government finances under the independent treasury law made the National Bank Act a necessity. In order to enable the Treasury to recirculate government funds into the banking system to stabilize the currency and float further national debt, the National Bank Act permitted it to deposit all receipts with the newly chartered national banks as well as with the subtreasuries. All national bank notes were to be received at par in all parts of the United States in all payments to or by the government, except for customs duties, which legally had to be paid in coin. These actions restored the circular flow of liquidity in the banking-fiscal system, but gold convertibility remained suspended until 1879.
Terminating much of the Treasury’s “independence” from the banking system drew criticism for its “interference.” The Commercial and Financial Chronicle warned in 1868: “The Treasury, so far as being severed from the banks, may now at certain critical periods take away their legal-tender reserves by sale of gold, by sales of bonds, or by drawing down the balances in the national bank depositories.” This was the gist of criticism of the Treasury through 1914. It was a protest by bankers against government’s power over the banking and financial system. And the main concern was that the Treasury might once again pursue monetary deflation, not inflation.
Over the balance of the 19th century the Treasury helped stabilize the country’s finances by increasing its deposits in national banks (especially those in New York City) in times of credit stringency, and moving its deposits around the country each autumn to provide national banks in the farming districts with the reserve base necessary to finance the harvesting, transportation and sale of crops.
Meanwhile, protective tariffs increased to over half of the federal revenues. The Treasury used the resulting surpluses to buy its bonds from the banking system, severely depleting the stocks of these debt instruments. By 1903, Theodore Roosevelt’s Secretary of the Treasury, Leslie M. Shaw, departed from established policy and accepted “other than United States bonds as security for public deposits, and told the banks that they need not keep a reserve against them.” This freed $100 million in credit for New York City banks alone. Four years later, in 1907, the laws were amended to allow the Treasury to deposit customs receipts in the national banks, effectively terminating the distinction between the subtreasuries and national banks as depositories for public funds.
By this time the Treasury’s role had vastly “increased, if not changed in character, by the growth of the fiscal operations of the Government,” influencing prices “depending on the extent of its absorption, retention and disbursement of money.” This impact obliged the Secretary of the Treasury to work actively to help stabilize the nation’s finances. “There have been times when the autumnal drain would all have fallen on the banks but for the subtreasury. Two channels were open for the Government to put out its accumulated surplus: the purchase of bonds, which was the usual policy in the autumn for some years before 1890, and making deposits of public money in the banks.” However, the contraction of the government debt had reduced the volume of Treasury bonds outstanding, severely restricting its open market operations.
This problem was aggravated by the federal budget surplus in the fact of an inelastic currency. The quantity of U.S. Notes (greenbacks) was fixed by law. The amount of gold specie depended on foreign trade surpluses and domestic mine output, and the volume of national bank notes was being diminished as the federal debt was retired (since the Treasury bonds were the sole legal backing for these notes). Such rigidities led successive Secretaries to relax the limitations of the Treasury’s law and spirit. “When the power to receive checks and to check against bank deposits is conferred on the Secretary,” Kinley concluded, “then, indeed, the repeal of the independent treasury will hardly be necessary. For the various amendments, made in recent years, which permit the use of the banks for practically all the business of the Government, have already virtually abolished the system.”
Nonetheless, “the independent treasury system does not have such an automatic connection, so to speak, with business, as to make its operation responsive to the exigencies of the mercantile community.” In the panic of 1873, “the support of the public purse was tardy, timid, and insufficient.” Kinley concluded:
“the Secretary of the Treasury is not the proper person to determine these points. He is not in immediate touch with business matters. He must get his information of the situation largely at second hand from bankers and others. He is likely to be less experienced in judging such matters than men whose business it is constantly to watch them and care for them.”
The National Monetary Commission was convened to draw up recommendations for a banking system that would not fall heir to the existing reliance on discretionary Treasury activities. Its ultimate Report, released in January 1912, concluded:
The provision of law under which the Government acts as custodian of its own funds results in irregular withdrawals of money from circulation and bank reserves in periods of excessive Government revenues, and in the return of these funds into circulation only in periods of deficient revenues. Recent efforts to modify the Independent Treasury system by a partial distribution of the public moneys among national banks have resulted, it is charged, in discrimination and favoritism in the treatment of different banks.
All parties were agreed that the major aim of the new banking act must be to provide greater elasticity to the currency. This was achieved two years later by granting the Federal Reserve System authority to issue its notes against commercial paper, not only government bonds. This made it primarily responsive to business financing needs.
7. Banks argue for more control over Treasury policy
During 1908-13 many political aspects of the Federal Reserve System were fought out between Democrats and Republicans. The Aldrich Bill, an early Republican draft of the
Federal Reserve Act, called for a National Reserve Association to be dominated by bankers. They had used populist rhetoric to urge that government finance be removed from politics by removing discretionary monetary authority from Washington to the greatest extent possible. The Federal Reserve Act set staggered terms for the Federal Reserve Board members (selected by local business and financial leaders, not Washington politicians) so that the President could not “pack the bench” as Jackson had done in 1833 by removing Secretary Duane in favor of Taney.
Democrats sought to maintain some government regulatory oversight by insisting that the Federal Reserve be situated in Washington rather than New York City, and that its board include the Secretary of the Treasury. Pledged against the “Federal Reserve Association,” they won the 1912 elections behind Wilson and thus had the major say in the Federal Reserve’s structure.
Wilson agreed to leave control of the district banks to the local leadership of private banking and business interests, but urged that the system’s national Board of Governors be appointed entirely by the President rather than by the member banks as ultimately was the case. (The Secretary of the Treasury remained an official member of the Board of Governors until 1935, when he was dropped from the board along with the Comptroller of the Currency.) Once the Federal Reserve began its operations, however, Wilson remained strictly aloof from it.
To divorce the banking system from political influence, the Federal Reserve Board’s financial activities were exempt from reliance on Congressional appropriations. Finally, twelve district banks were established, whose bankers and businessmen possessed the balance of power in the early years of Federal Reserve operations, with
New York quickly emerging as the policy-making center. Roosevelt shifted policy making to the Board and its Federal Open Market Committee in 1935, and the Fed remained largely under the thumb of the Treasury until the Accord of 1951 “freed” it from having to keep interest rates low to minimize the Treasury’s borrowing costs.
But apart from the Accord, the trend under the Democratic administrations of John F. Kennedy and Lyndon Johnson was to shift monetary power back toward the Treasury and the President. The Kennedy Administration in the early 1960s saw proposals to revamp the structure of the Federal Reserve by making the terms of the Governors coterminous with that of the President, returning to him the direct authority and control that he possessed prior to 1914, reappointing the Secretary of the Treasury as a permanent member of the Board of Governors, and even replacing the Board of Governors with a single head, as well removing district directors from the regional Federal Reserve Banks. Republicans replied with Milton Friedman’s proposal to remove discretionary “interference” altogether by increasing the money supply at a fixed rate each year.
Regarding the latter proposal of “automaticity” by establishing a rigidly fixed growth in the money supply, Kinley’s study illustrates that this must soon lead to more active political control to avoid monetary instability. The question is, who will manage financial crises – Wall Street in its own interest, or Washington ostensibly in the public interest favoring debtors more than creditors?
8. Final comments and conclusion
By the 2008 banking crisis there no longer was a partisan political difference between Republicans and Democrats in the United States, or between social democratic and neoliberal parties in Europe. Today’s Federal Reserve has shifted financial and fiscal planning to Wall Street. Presidents of both U.S. parties rely on Wall Street for major political campaign contributions, as do heads of the key Senate and Congressional banking and finance committees. Leaders of both parties appointed Wall Street consultant-lobbyist Alan Greenspan as Federal Reserve Chairman, and promoted New York Federal Reserve President Tim Geithner to Treasury Secretary. In contrast to Jackson’s and Van Buren’s political patronage via banking privilege, the line of control now runs the other way around, from banking to politics.
Since 2008, Wall Street investment banks have obtained much more wealth by capital gains (asset-price gains for real estate, bonds and stocks) and investment fees than from interest. This has led them to press the government for policies to inflate asset sheets more than provide credit for industry. Europe has followed suit. The upshot is that banks both in Europe and America have gained control over government policy to become the main suppliers of the economy’s money and receive public subsidy and favors. Their capture of the government’s financial, regulatory and policy-making institutions has led to a policy bias favoring creditors over debtors. In terms of monetary policy, creditors always have advocated downward commodity prices and wages. But since the 1980s they also have favored debt-leveraged inflation of real estate, stock and bond prices to create “capital” gains via low-interest “soft money” policies.
The European Central Bank’s withdrawal of credit to Greek banks under the Syriza government is reminiscent of Jackson’s war against banks not favorable to his own political control. And the European Central Bank’s support of the largest banks and bondholders at the cost of domestic taxpayers has imposed monetary deflation on Eurozone countries, reminiscent of America’s 19th-century deflation before and after the Civil War.
Aldrich N. W. 1910. An address by Senator Nelson W. Aldrich before the Economic Club of New York, November 29, 1909, on the work of the National monetary commission, Washington, Government Printing Office
Burgess, W. R. 1964. Reflections on the Early Development of Open Market Policy, Federal Reserve Bank of New York, Monthly Review, vol. 11, 219–26
Chernow, R. 1997. The death of the banker: The decline and fall of the great financial dynasties and the triumph of the small investor, Toronto, Vintage Canada.
Colton C. 1846. The Life and Times of Henry Clay, New York, A. S. Barnes & Co. Griffin G. E. 1994. The Creature from Jekyll Island: A Second Look at the Federal
Reserve, Appleton, American Opinion Publishing
Haines W. 1961. Money, Prices, and Policy, New York, McGraw-Hill
Hudson M. 2010. America’s Protectionist Takeoff, 1815-1914: The Neglected American School of Political Economy, New York, ISLET
Kinley D. 1910. The Independent Treasury System of the United States and its Relations to the Banks of the Country, Washington, Government Printing Office
Warburg P. M. 1930. The Federal Reserve System: Its Origin and Growth, New York, Macmillan
4 This sectional aspect of U.S. trade and monetary policy is discussed in Hudson (2010).