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The Suffolk Bank and the Panic of 1837

The Suffolk Bank in Boston is well known as having been the clearinghouse for virtually all the banknotes that circulated in New England between 1836 and 1858. An examination of 19th century bank balance sheets shows that during and after the U.S. banking Panic of 1837, this private commercial bank also provided some services that today are provided by central banks. These include lending reserves to other banks (providing a discount window) and keeping the payments system operating. Because of Suffolk's activities, banks in New England fared better than banks elsewhere during the Panic of 1837. And after the panic, when much of the United States suffered a prolonged economic slowdown, New England fared better than the rest of the country, at least partly because of Suffolk’s central bank-like activities.Bank notes ; Banks and banking - History

Lessons from a laissez-faire payments system: the Suffolk Banking System (1825-58)

A classic example of a privately created interbank payments system was operated by the Suffolk Bank of New England (1825–58). Known as the Suffolk Banking System, it was the nation’s first regionwide net-clearing system for bank notes. While it operated, notes of all New England banks circulated at par throughout the region. Some have concluded from this experience that unfettered competition in the provision of payments services can produce an efficient payments system. But another look at the history of the Suffolk Banking System questions this conclusion. The Suffolk Bank earned extraordinary profits, and note-clearing may have been a natural monopoly. There is no consensus in the literature about whether unfettered operation of markets with natural monopolies produces an efficient allocation of resources. ; Reprinted in Quarterly Review, Fall 2002 (v. 26. no. 4)Suffolk Banking System ; Payment systems

In order to form a more perfect monetary union

Why did states agree to a U.S. Constitution that prohibits them from issuing their own money? This article argues that two common answers to this question—a fear of inflation and a desire to control what money qualifies as legal tender—do not fit the facts. The article proposes a better answer: a desire to form a viable monetary union that both eliminates the variability of exchange rates between various forms of money and avoids the seigniorage problem that otherwise occurs in a fixed exchange rate system. Supporting evidence is offered from three periods of U.S. history: the colonial period (1690–1776), the Revolutionary War (1776–83), and the Confederation period (1783–89). This article is adapted from a chapter prepared for a forthcoming book, Varieties of Monetary Reforms: Lessons and Experiences on the Road to Monetary Union, edited by Pierre Siklos, to be published by Kluwer Academic Publishers.Banks and banking - History ; Money theory

Lessons from a laissez-faire payments system: the Suffolk Banking System, 1825-58

Suffolk Banking System ; Banks and banking - History ; Payment systems ; Banks and banking - New England ; Clearinghouses (Banking)

Excessive scarring as a consequence of healing

Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/73140/1/j.1524-475X.1995.30106.x.pd

Harmonizing the Policy of the Bankruptcy Code and Article 9

In a true sense bankruptcy law--at least as represented by the 1978 Code--is in conflict, not in harmony, with Article 9. To a considerable degree (perhaps more than they realize) debtors and unsecured creditors got things they wanted from Congress by the adoption of the Bankruptcy Reform Act of 1978. It is doubtful that that Act could have been passed in any Congress before or since. In many ways, the rights of the debtor and of the unsecured creditors have been cut back since the adoption of the Bankruptcy Reform Act