Chicago plan
<p>The <strong>Chicago plan</strong> was a collection of <a title="Monetary reform" href="https://en.wikipedia.org/wiki/Monetary_reform">banking reforms</a> suggested by <a title="University of Chicago" href="https://en.wikipedia.org/wiki/University_of_Chicago">University of Chicago</a> economists in the wake of the <a title="Great Depression" href="https://en.wikipedia.org/wiki/Great_Depression">Great Depression</a>. A six-page memorandum on banking reform was given limited and confidential distribution to about forty individuals on 16 March 1933. The plan was supported by such notable economists as <a title="Irving Fisher" href="https://en.wikipedia.org/wiki/Irving_Fisher">Irving Fisher</a>, <a class="mw-redirect" title="Frank H. Knight" href="https://en.wikipedia.org/wiki/Frank_H.Knight">Frank H. Knight</a>, Lloyd W. Mints, <a title="Henry Schultz" href="https://en.wikipedia.org/wiki/Henry_Schultz">Henry Schultz</a>, <a class="mw-redirect" title="Henry C. Simons" href="https://en.wikipedia.org/wiki/Henry_C.Simons">Henry C. Simons</a>, <a title="Garfield V. Cox" href="https://en.wikipedia.org/wiki/Garfield_V.Cox">Garfield V. Cox</a>, <a title="Aaron Director" href="https://en.wikipedia.org/wiki/Aaron_Director">Aaron Director</a>, <a class="mw-redirect" title="Paul H. Douglas" href="https://en.wikipedia.org/wiki/Paul_H.Douglas">Paul H. Douglas</a>, and Albert G. Hart.</p>
<p>Between March and November 1933, the Chicago economists received comments from a number of individuals on their proposal, and in November 1933, another memorandum was prepared. The memorandum was expanded to thirteen pages; there was a supplementary memorandum on "Long-time Objectives of Monetary Management" (seven pages) and an appendix titled "Banking and Business Cycles" (six pages).</p>
<p>These memoranda generated much interest and discussion among lawmakers. However, the suggested reforms, such as the abolition of the fractional reserve system and imposition of 100% reserves on <a title="Demand deposit" href="https://en.wikipedia.org/wiki/Demand_deposit">demand deposits</a>, were shelved and replaced by less drastic measures. The <a title="Banking Act of 1935" href="https://en.wikipedia.org/wiki/Banking_Act_of_1935">Banking Act of 1935</a> institutionalized Federal deposit insurance and the separation of commercial and investment banking. It successfully restored the public's confidence in the banking system and ended discussion of banking reform.</p>