The U.S. Taxpayers' Party stands against the Federal Reserve and the threat of economic destruction that its existence poses. From August 1929 to March 1933. Friedman and Schwartz, p. 352. Finally, when state authorities began declaring bank holidays in response to insolvencies caused by currency withdrawals and loan losses, they unwittingly provoked even greater withdrawals by depositors. When banks go on holiday, deposits are immobilized, and checks become practically useless in making payments.
Currency can, however, still circulate while banks are temporarily closed.
Therefore, any suspicion by the public that their banks will go on holiday will lead to a wholesale flight to currency as consumers rush to protect themselves against the risk of being stuck without any means for making purchases. The failure of the Federal authorities to provide adequate reserve compensation during this flight to currency contributed significantly to the severity of this phase of the Great Depression. It caused interest rates, which for a decade before were probably below their 'natural' level, to suddenly rise substantially above it. Friedman and Schwartz, pp. The potential for private money exists now, with the Internet being the chief tool in its production and transfer.