Former State Treasurer Duane A. Davidson is opposed to the citizens of Washington acquiring the benefits of fractional reserve lending.
It’s a concept that has been around for centuries. The success of this concept is easily observed by noting the number of successful financial institutions in every community.
The citizens of North Dakota figured this out 100 years ago and created the Bank of North Dakota so its citizens could leverage state money just as the private sector does.
There were numerous state banks following the success of President Andrew Jackson’s terminating the Second Central Bank of the United States. None of these state banks survived the turmoil of the Civil War and the pressure from the private banking sector to preserve the benefits of fractional reserve lending for themselves.
The failure of our nation’s third central bank — Federal Reserve, established in 1913 — to achieve its assigned goals, “Maintain sound money and full employment” and the high cost of borrowing has prompted citizen organizations in many states to pursue the creation of state or city institutions modeled after the Bank of North Dakota so as to reap the benefits of fractional reserve lending for their citizens.
A really good deal for the citizens of the state of Washington, in spite of Duane’s negative view.