If a free bank ran out of gold in a panic it would shut down and be liquidated, but note and deposit holders often received a complete payout after some delay from the bank's assets and capital, which is why Scotland's overall loss figures were very modest despite occasional individual failures.

causalpending

Speaker

George Selgin

Evidence Quote

often there would be after some delay a complete payout of the deposit in note holders and that's why the loss figures for Scotland overall were very modest

Source

George Selgin on Free Banking 11/17/2008EconTalk
Created: 6/15/2026, 9:20:23 AM

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