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The purpose of this paper is to review the problems of liquidity allocation in the United States in the second half of the nineteenth century both in normal times and in times of crisis and to identify the elements that led to the creation of the Fed. Three major problems existed before the creation of the Fed: the inelasticity of money and liquidity shocks; the provision of emergency liquidity; and the lack of a framework for dealing with trusts and systemic risks. The creation of the Fed would solve the first problem, partially solve the second, and leave the third untouched, which would require further innovations in liquidity provision in the 2007 crisis. JEL codes: E58, G01, N21