1. F. A. Hayek,The Fatal Conceit: The Errors of Socialism (Chicago: University of Chicago Press, 1989), pp. 102?4.
2. Vera C. Smith,The Rationale of Central Banking and the Free Banking Alternative (Indianapolis, Ind.: Liberty Press, 1990), chap. 12, p. 169.
3. Israel M. Kirzner,Discovery and the Capitalist Process (Chicago: University of Chicago, 1985), p. 168.
4. F. A. Hayek,Denationalization of Money: The Argument Refined, 2nd ed. (London: Institute of Economic Affairs, 1978), pp. 119?20. Hayek concludes, ?I expect that it will soon be discovered that the business of creating money does not go along well with the control of large investment portfolios or even control of large parts of industry.? I am afraid, however, that Hayek gives insufficient recognition of the fact?central to Mises's theory of money?that free market money must be acommodity money, and that competing kinds of money are dysfunctional of the very purpose of a medium of exchange, as the free market always generates a tendency of the convergence towardone, universally employed commodity money.
5. Before Mises, the most distinguished author who defended the one hundred percent reserve requirement was David Hume in his essay ?Of Money? (1752), where he states that ?no bank could be more advantageous, than such a one as locked up all the money it received, and never augmented the circulating coin, as is usual, by returning part of its treasure into commerce.? David Hume,Essays: Moral Political and Literary (Indianapolis, Ind.: LibertyClassics, 1985), pp. 284?85.