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economists under the inspiration of Jean-Baptiste Say advocating free trade and laissez-faire. 1 The movement came to fruition in the Société d’Economie Politique, which was founded in 1842. That same year the first ever scholarly journal in economics was launched, the Journal des Economistes. In the first half of the nineteenth century, the French banking system was backward, undeveloped, and strictly centralized around the Bank of France, created in 1800. Government dictated interest rates, and entry into the banking industry was severely restricted (Smith 1990, pp. 28–41). The laissez-faire school was of course very critical of this system. The attack against monopolistic central banking was led by economist Jean Gustave Courcelle-Seneuil, 2 who advocated unrestricted freedom of banking and of note issue. 3

advanced research, study and discussion on the politics, culture and society of the

The only limit to a commercial bank’s ability to discount is the limit to good commercial paper.... Such paper springs from self-clearing transactions....Itistheduty of the banker to discount freely for his customer in a crisis or panic....Theonly limit...isthelimit to good commercial paper....Thewhole purpose of the Federal Reserve

history of interbank settlement arrangements: exploring central banks’ role in the payment system