============== HES POSTING ========================= It is with a large sigh that I enter this discussion. :) Three quick points: 1. The only scholarly source for the notion that the Fed was a conspiracy, or an intentional attempt to cartelize the banking conspiracy, that I know of (and surely the one that explains the Austrian connection) is Murray Rothbard's "The Federal Reserve as a Cartelization Device" in *Money in Crisis* edited by Barry N. Siegel, 1984, Pacific Institute for Public Policy. Rothbard's argument is just as you put it: the bankers wanting to protect themselves from competition. Rothbard ties it in with the Progressive Era history by folks like Wiebe, Kolko and Weinstein. However, there is no hint in the paper of any new world order stuff or anti-Semitism or the like. While I don't think that Rothbard's argument is totally out of the question (there was surely an element of rent-seeking in the ways in which the big New York bankers helped shaped the legislation), I think it overlooks the whole Progressive Era context as well as the way in which the political forces at the time ensured that non-central bank solutions to the problems of the National Banking System had little chance of success. The Fed was more of a really bad third-best solution than some sort of intentional conspiracy to do anything. Even conspiracy theorists couldn't come up with an institution that was structured so poorly. :) I have tried to articulate this argument to some degree in my 1992 Westview Press book, chapter 5. 2. Obviously, a defense of free banking as being superior to central banking need not commit one to a conspiracy theory view of the Fed. I hope the literature that James refers to does not undermine the very scholarly historical and theoretical arguments that have been made in the literature on free banking (by Austrians and others) that has emerged in the last 15 or 20 years. 3. Equally obviously, I hope, it should be noted that the endorsement of some of those views by folks associated with the Mises Institute should not imply that all Austrians, especially those of us who do monetary history, share that perspective. Austrians are a diverse group too. Steven Horwitz St. Lawrence University [log in to unmask] http://www.stlawu.edu/shor ============ FOOTER TO HES POSTING ============ For information, send the message "info HES" to [log in to unmask]