Free banks in the United States issued private banknotes without discretionary restriction of entry. Previous research suggests explanations for noteholders' relatively large losses and the substantial number of banks that closed. The authors examine these hypotheses and the hypothesis that contagious runs were important. The evidence provides no support for the importance of wildcat banking due to par versus market valuation of bond reserves; episodic, but not general, support for the importance of declining bond prices; and support for contagion effects and contemporaries' knowledge of them with little or no impact on the number of banks that closed. Copyright 1994 by Ohio State University Press.