As reflected in the April 2006 issue of the Financial History Review, monetary historians remain divided over the central features of the US monetary union and their contribution to US economic development. In that issue – which focused on the monetary union formed by the Constitution and early federal monetary legislation – Ronald Michener and Robert E. Wright focused on the creation of a uniform unit of account defined in terms of specie. The establishment of a uniform unit of account ‘simplified domestic and international transactions’ compared with the colonial period when ‘[e]conomic calculations across regions were complicated by the fact that people had to reckon with different units of account, without the aid of electronic calculators’. By contrast, Richard Sylla emphasised the role the Bank of the United States played in reducing the costs and risks of clearing and settling interregional payments. An institution, like the Bank, that operated on a national scale was particularly important in the United States because of the limited geographical scope of state bank operations. The Bank's notes and deposits became a truly national monetary standard, and the Bank helped to maintain the value of state bank notes, the principal means of cash payment in the antebellum economy, by enforcing par redemption.
Under the National Banking System from 1863 to 1913, the United States experienced a serious banking panic roughly every decade (Sprague 1910; Miron 1986). Yet, despite this anomalous record of financial and economic turbulence, the federal government did not take the decisive step toward comprehensive reform until the panic of 1907. Less than a year later, Congress adopted the Aldrich-Vreeland Act. Establishing the National Monetary Commission, the Act mobilized leading policy makers, bankers, and economists to propose Awhat changes are necessary or desirable in the monetary system@ (White 1911, App. A; Wicker 2005). Through a parallel private organization representing Athe general business public,@ J. Laurence Laughlin weighed in on the policy debate. 2 In his influential edited volume Banking Reform (1912), Laughlin elaborated the consensus view on the defects of the National Banking System, and emphasized its negative impact on Main, not just Wall, Street. Its artificial note-issue and reserve regulations, he argued, diminished the elasticity of currency but more importantly banks=
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