The ‘Chicago Plan’ and New Deal Banking Reform

Abstract

1. A History of Currency and Banking in the United States. The Colonial Experience. The Continental Congress. The Beginnings of Banking in the United States. The Creation of the Federal Reserve System. Banking in the 1920s. The Stock Market Crash -- 2. Response to the Banking Crisis: Hoover, Congress, and the Economists. Hoover and Congress. Monetary Reform Proposals. The Economists Respond -- 3. Roosevelt's Election and the Banking Crisis of 1933. The Brain Trust. The Banking Crisis and Roosevelt's Inauguration. The Emergency Banking Act -- 4. The March 1933 Chicago Memorandum. Frederick Soddy's Theory of Money and Banking. The Chicago Response to the March Crisis. The Proposal Goes to FDR and Others -- 5. The 100 Days Legislation and the Banking Act of 1933. The Thomas Amendment and the Emergency Farm Mortgage Act. The Banking Act of 1933. Adolf Berle and the Future of American Banking -- 6. The November Chicago Memorandum. The Revised Proposal. The Agriculture Department Response. Congressional Interest in the Chicago Plan -- 7. The Banking Reform Agenda: A Federal Monetary Authority and Credit Allocation. The Demand for a Federal Monetary Authority. The Cutting Bill. The Silver and Inflation Lobby in Congress. The Credit Problem and the Reconstruction Finance Corporation. Reviving the RFC. Simons Reevaluates the Chicago Plan -- 8. Currie, Eccles, and the Ideal Conditions for Monetary Control. The Freshman Brain Trust. Lauchlin Currie's Monetary Theory. Currie's Memorandum on Monetary Reform. Marriner Eccles and the Reform of the Federal Reserve -- 9. 100% Money: Fisher's Version of the Chicago Plan. Fisher on Booms and Depressions. 100% Money. Fisher's Campaign for 100 Percent Money -- 10. The Banking Act of 1935. The Banking Act of 1935: The Administration Version. Carter Glass. The Legislative Battle. The Legislative Battle Concludes. Jacob Viner's Assessment of the Banking Legislation. The Reserve Requirement Increase of 1936 -- 11. Academic Views of the Chicago Plan. Alternative "Chicago" Plans: Douglas and Whittlesey. The Debate in Academic Journals -- 12. The Chicago Plan after the Passage of the Banking Act of 1935. Fisher's Continuing Efforts. The Postwar Period: Simons and Fisher. Maurice Allais and the 100 Percent Reserve Plan. Milton Friedman's 100 Percent Reserve Proposal -- 13. Financial Instability and Narrow Banking: Simons Revisited. The Financial Instability Hypothesis. The Minsky-Simons Connection. Minsky on Reform of the Financial System. Friedman on 100 Percent Reserves. Tobin's Deposited Currency. The Narrow Banking Proposal -- 14. Conclusion. The Chicago Plan -- Would it Help Today? Rebirth of the Chicago Plan -- Appendix: The Chicago Plan for Banking Reform.