Is Fractional Reserve Banking Criminal?
Here is the important question for Rothbardians. Do you support a free-market banking system? If we are to have such a system, then we are going to have to come to grips with allowing banks to freely create notes to discount real bills as long as they do so openly, and as long as they stand ready to redeem such notes with gold coins upon a depositor’s request. This will allow for fractional reserve banking. An advocate of free-market banking cannot justifiably suppress such an openly disclosed process between consenting adults. It is not fraudulent and it is not a result of special privileges granted to the banker from government. To clarify this issue better, let’s refer to Edwin Vieira, seeing that he is the nation’s foremost scholar in regards to the legality and constitutionality of monetary issues. In a paper titled, How to Restore Constitutional Money, that he presented to the Conservative Caucus Foundation in Washington, D.C. on January 13, 1997, he states: “Article I, Section 8
