What Is Free Banking, and Why Should I Care?

What would happen if we didn't have a central bank? Prof. Lawrence H. White explains [from an Austrian perspective] that private banks would be able to circulate money by issuing notes and checks redeemable for coin. Trustworthy banks would make arrangements to accept each other's notes and checks. Banks would have better incentives than the federal government to ensure their currency retained its value, because if it didn't, people would bank elsewhere.