The Michigan Free Bank Experience: Wild Cat Banking or Interference with Contract?

Joint Winner of the James Soltow Award for Best Paper in Essays 2014


  • John A. Dove Troy University
  • Gary M. Pecquet Central Michigan University
  • Clifford F. Thies Shenandoah University


Wild Cat banking was only one of the factors behind the collapse of Michigan’s banking system and the state’s subsequent fall into a deep and prolonged depression. The Wild Cat period was brief, less than a year; the number of Wild Cat banks was small, perhaps a dozen; losses to note holders due specifically to Wild Cat banking would have been only about $350,000 had it not been for an interference with contract; and, there is little evidence that Wild Cat bank notes ever had a general circulation. This study argues that the Wild Cats gained the level of notoriety that they did mainly because of other events, including the state’s interference with contract. The interference first delayed and then completely undermined the collection of the debts owed to the Free Banks of the state and, in so doing, undermined all the Free Banks of the state, whether reckless or not.