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Abraham Lincoln: Difference between revisions
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Next, the bankers proposed a national banking system which would allow them to issue bank notes backed by U.S. government bonds. These notes would be just short of legal tender since the law said that they could be used in payment for all debts except duties on imports. The National Bank Act which incorporated their plan would allow expansion of the money supply through a fractional reserve system: banks could lend out more money than they had on deposit.<ref>)Herman E. Krooss, ed., ''Documentary History of Banking and Currency in the United States'' (Edgemont, Pa.: Chelsea House Publishers, 1969), 2:1392–93.</ref> | Next, the bankers proposed a national banking system which would allow them to issue bank notes backed by U.S. government bonds. These notes would be just short of legal tender since the law said that they could be used in payment for all debts except duties on imports. The National Bank Act which incorporated their plan would allow expansion of the money supply through a fractional reserve system: banks could lend out more money than they had on deposit.<ref>)Herman E. Krooss, ed., ''Documentary History of Banking and Currency in the United States'' (Edgemont, Pa.: Chelsea House Publishers, 1969), 2:1392–93.</ref> | ||
After heavy lobbying by bankers led by Jay and Henry Cooke, the act was passed in 1863 and it resulted in a surge of inflation. Furthermore, as economist Murray Rothbard writes, it also “paved the way for the Federal Reserve System by instituting a quasi-central banking type of monetary system.”<ref>Murray N. Rothbard, ''The Mystery of Banking'' (n.p.: Richardson & Snyder, 1983), p. 224.</ref> | After heavy lobbying by bankers led by Jay and Henry Cooke, the act was passed in 1863 and it resulted in a surge of [[inflation]]. Furthermore, as economist Murray Rothbard writes, it also “paved the way for the Federal Reserve System by instituting a quasi-central banking type of monetary system.”<ref>Murray N. Rothbard, ''The Mystery of Banking'' (n.p.: Richardson & Snyder, 1983), p. 224.</ref> | ||
An undocumented source says that during his second term in office Lincoln planned to repeal the National Bank Act or restrict the powers it had granted bankers. Had Lincoln repealed this privilege, banks would have lost a huge money-making opportunity. | An undocumented source says that during his second term in office Lincoln planned to repeal the National Bank Act or restrict the powers it had granted bankers. Had Lincoln repealed this privilege, banks would have lost a huge money-making opportunity. | ||