Contrary to Hülsmann, fractional-reserve banking prevailed over warehouse banking by offering customers a better deal, not by government intervention. No examples of the legal suppression of an explicit money warehouse have ever been discovered, although examples of legally protected money warehousing can be found today, in such services as fully guaranteed gold storage and bank safe-deposit boxes (which U.S. law treats as a bailment).
Lawrence H. White is a Research Fellow at the Independent Institute and Professor of Economics at George Mason University.
Banking and FinanceBanking Law and RegulationEconomyLaw and Liberty
Other Independent Review articles by Lawrence H. White
Spring 2023 The Lords of Easy Money: How the Federal Reserve Broke the American Economy
Summer 2010 Central Banking in a Free Society
Winter 1999/00 The Defining Moment: The Great Depression and the American Economy in the Twentieth Century