https://mises.org/library/what-has-government-done-our-money
https://libgen.rs/book/index.php?md5=79BC441BCBD6EB006034ADBA4712B248
https://libgen.rs/book/index.php?md5=FE21D2680924D21B6B2A4DD253E1E4E8
The Federal Reserve is also a cartel (along the lines of ICC and other Progressive-Era regulators)
Some banks would issue excessive bank notes (back when every private bank could issue notes), and would find that individuals would go to their own banks (particularly Boston & Pittsburgh banks which had well-developed clearing mechanisms) which would in turn demand redemption of bank notes. This caused the dishonest banks to be drained of specie and ultimately go bust.
The idea is to create a cartel that regulates the rate of inflation (inflation here having the traditional meaning: artificial expansion of currency and credit). All the banks expand credit in concert, with none able to demand specie payment and thereby bankrupt more-expansive banks. The Federal Reserve Act brings in the force of government to achieve this coordination, legalize the scheme, and in exchange cut the State in on the proceeds. It also serves as the famed "lender of last resort" in case demands for redemption should begin to bankrupt the most vulnerable banks, attempting to keep the confidence game going.
But the cartel could not be expanded to the general public or to foreigners, and the cartel was forced to default on specie to each in 1933 and 1971.
