I guess I missed something; when was "free banking" ever free?  The 
great era of "free banking" in the U.S. was defined by open entry and 
exit by those satisfying the regulatory requirements, principally in 
New York.  But government was very much present.  There was of course 
extralegal banking by George Smith, for example, but his genius was 
creating and sustaining the credibility of his receipts of deposit, 
so they circulated with virtually no discount.  But is that rarity a 
basis for arguing that one could in general have unregulated banking, 
i.e. a complete absence of a legal basis for banking?  I am 
skeptical.

Fred Carstensen