Chapter V. Restricting Bank Credit: Proposals and Actions
The hard-money response held that excessive bank credit had caused the depression and that only rigid specie payment could end it. Rothbard catalogs the remedies proposed: confining banks to commercial cities, prohibiting small-denomination notes, barring interbank borrowing, forfeiting charters at the first refusal to redeem. Virginia's statesmen—Jefferson among them, along with Spencer Roane and the editor Thomas Ritchie—were the most uncompromising. This chapter also documents the American formulation of the currency principle and a monetary theory of the business cycle several years ahead…
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