The Case Against the Fed, Murray Rothbard 1994

Rothbard provides a succinct account of the origins of money, showing how money must originate from a commodity. Banking originated from goldsmiths, who issued warehouse receipts for gold deposited with them. From this a fractional reserve system developed, inherently prone to monetary expansion and panic.

In the late nineteenth century, a movement toward bank centralization arose among both “progressives” and bankers, the latter eager to increase their profits. From these plans, the Federal Reserve System developed. Rothbard shows the dominate influence of the banking House of Morgan at the Fed’s inception. During the New Deal, Rockefeller interests took first place in influence, with the Morgan interests reduced to a subordinate though still potent role.

The book concludes with an account of the Fed’s role in causing inflation and the business cycle. Abolition of this nefarious agency must be part of any agenda for genuine financial reform.

The central bank has always had two major roles: (1) to help finance the government's deficit; and (2) to cartelize the private commercial banks in the country, so as to help remove the two great market limits on their expansion of credit, on their prosperity to counterfeit....

Governments everywhere and at all times are short of money, and much more desperately so than individuals or business firms. The reason is simple: unlike private persons or firms, who obtain money by selling needed goods or services to others, governments produce nothing of value and therefore have nothing to sell. Governments can only obtain money by grabbing it from others, and therefore they are always on the lookout to find new and ingenious ways of doing the grabbing.