Chapter III. State Proposals and Actions for Monetary Expansion

Because banks were chartered by the states, the monetary fight was fought mainly in state legislatures, and Rothbard follows it across the Union. Proposals ranged from the modest—permitting failing banks to suspend specie payment while continuing to operate—to the radical creation of state-owned banks and loan offices issuing inconvertible paper. Illinois, Missouri, Kentucky, and Tennessee went the full distance. Some states even attempted to outlaw the depreciation of bank notes by statute. The results converted several prominent inflationists, including future leaders of the Jacksonian hard-money movement.