Although monetary historians have tended to overlook it, the check tax enacted as part of the Revenue Act of 1932 seems to have had an important influence on the currency-demand deposit ratio and the money stock in the early 1930s. The tax gave the public yet another motive for withdrawing cash from the banking system, and the public responded accordingly, contributing to deflationary pressures that were already extreme… The check tax was enacted by legislators who were informed of its likely, adverse monetary consequences, but who chose to overlook them in their endeavor to balance the budget.
– William D. Lastrapes and George Selgin
“The Check Tax: Fiscal Folly and the Great Monetary Contraction,”
The Journal of Economic History, Vol. 57, No. 4, (Dec., 1997), p. 876