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There are any number of books about various aspects of the Central Bank in the United States, The Federal Reserve Bank, but two titles do an outstanding job of providing a thorough understanding of the historical and political currents that lead to the creation of Central Banks and sustain their current practices in United States and in other countries today.

The first of these titles is "The Cash Nexus" authored by British historian Niall Ferguson. In this book Professor Ferguson traces the history of Central Banking and Public Finance using immaculately and exhaustively researched data from the United Sates and Europe over the last three hundred years. Professor Ferguson demonstrates from his research that the Central Bank emerged in Europe and the United States as part of broad political development that was motivated by the various Governments need to marshal resources to conduct war and for other state purposes, almost invariably in competition with other Governments. The processes that lead to the creation of Central Banks reached the peak of efficiency in England where transparent public finances and a highly competent tax collection apparatus allowed England to outmaneuver France and Germany for over one hundred years.

The second title that provides an outstanding historical account of the creation of the Federal Reserve Bank in the United States is Milton Friedman's "A Monetary History of the United States". This lesser known work of Friedman traces our Nation's monetary history starting with the Revolutionary War through the various monetary panics of the 19th century, the Great Depression and the "stagflation" of the 1970s. The creation of the Federal Reserve Bank early in the 20th century is placed admirably in historical context. The single chapter on the Federal Reserve Bank's disastrous reaction to the 1929 Stock Market Crash and subsequent mismanagement of the nation's money supply during this period is worth the price of the book.

Learn more about this author, Cary Dowalt.
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