The causes of free bank failures. A detailed examination

Arthur J. Rolnick, Warren E. Weber

Research output: Contribution to journalArticlepeer-review

76 Scopus citations


In this paper we propose and test a new explanation of bank behavior during the Free Banking Era, 1837-1863. Arguing against the conventional view that free bank failures were due to wildcat banking, we claim they were caused by falling asset prices. Confronting both explanations with our new and detailed data set developed from state auditor reports, we find that the falling asset price explanation of free bank failures explains far more failures than does the wildcatting hypothesis.

Original languageEnglish (US)
Pages (from-to)267-291
Number of pages25
JournalJournal of Monetary Economics
Issue number3
StatePublished - Nov 1984


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