From its enterprising shopkeepers, wildcat banks
, violent slave plantations, huge industrial working class, and raucous commodities trade to its world-spanning multinationals, its massive factories, and the centripetal power of New York in the world of finance, America has come to symbolize capitalism for two centuries and more.
Problems with notes issued by "wildcat banks
" in 19th century America, which people sometimes adduce as evidence against competitive note issue, were the result of too little competition, not too much.
Economists usually point to wildcat banks to assess the stability of the free banking system.
Wildcat banks became so rampant that "no man is safe sleeping over night with one dollar of Illinois currency in his pocket....
He concluded that only one bank had all the three characteristics of wildcat banks defined by Rockoff; that is, Illinois free banks were quite sound.
It concludes that the great failures of free banks in 1861 were not simply induced by factors outside the banking system; wildcat banks played a crucial role in those events.
Simultaneously, reports about wildcat banks emerged in Illinois.
In contrast, the performance of banks formed in 1857 was not that satisfactory: more banks were located in remote places, and thus they were easy to be treated as wildcat banks. However, there may be another explanation; that is, the crisis of 1857 drained specie from Illinois owing to a lack of commerce; as a result, banks tended to hide themselves in remote places to avoid redemption in specie.
The majority of them had no characteristics of wildcat banks at all.
Located in remote places and exiting from the banking industry in a short time, those free banks are easy to associate with wildcat banks.