By Vinayak on Saturday, September 7, 2013 with 0 comments

In the United States, the Free Banking Era lasted between 1837 and 1866, when almost anyone could issue paper money. States, municipalities, private banks, railroad and construction companies, stores, restaurants, churches and individuals printed an estimated 8,000 different monies by 1860. If an issuer went bankrupt, closed, left town, or otherwise went out of business the note would be worthless. Such organizations earned the nickname of "wildcat banks" for a reputation of unreliability; they were often situated in remote, unpopulated locales said to be inhabited more by wildcats than by people. Yet according to Lawrence H. White's article in The Freeman, "it turns out that 'wildcat' banking is largely a myth. Although stories about crooked banking practices are entertaining—and for that reason have been repeated endlessly by textbooks—modern economic historians have found that there were in fact very few banks that fit any reasonable definition of wildcat bank

The city of Ithaca in Western New York State has experimented with barter in which participating workers exchange services for Ithaca Hours which are used to buy goods and services forming a subprivate currency for a small locality. The system has been ruled legal provided all transactions are taxed and all currency is redeemable in United States Dollars.

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