Banking Panics In The Past—That Was The Government

Federal websites to this very day—I’ll spare you the URL’s; they are in the book—say things like federal banking regulation pre and post the Fed strengthened and stabilized the American banking system, and by virtue of that, the economy. In the fall of 1907, banks throughout the country depleted their reserves as brokers cashed on their accounts to ship the farm harvest—an annual ritual that had been going on for eons—and by October, banks were starting to not pay up to depositors and trim their hours and shut their doors and have managers throw themselves out the window. Problem: the United States was generally running budget surpluses and otherwise shrinking the supply of federal debt instruments outstanding relative to the size of the economy, and therefore the natural size of the banking system.

Author: Brian Domitrovic, Contributor, Brian Domitrovic, Contributor https://www.forbes.com/sites/briandomitrovic/

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