In 1913, exactly a century ago, the United States was a flourishing, economically advanced country. Its real output per capita was the world’s highest. It produced a great abundance of agricultural products and was a leading exporter of cotton, wheat, and many other farm products. Yet it also had the world’s largest industrial sector, producing as much manufactured output as France, Germany, and the United Kingdom combined. It brought forth new technological marvels almost daily, and its cities featured well paved and lighted streets, automobiles, modern sewerage and water-supply systems, central electrical-supply systems, skyscrapers, street cars, subways, and frequent intercity train service. During the preceding fifty years, its real income per capita had grown by about 2 percent per year, on average, and its total real output by about 4 percent per year, on average. All races, classes, and regions participated in this progress. In 1913, the rate of unemployment was 4.3 percent, and the price level was roughly the same as its average during the nineteenth century.(full story "1913—The Final Days of the Old Regime in the United States" at independent.org)
Yet the United States in 1913 had no federal income tax, no central bank, no social security taxes, no general sales taxes, no Securities and Exchange Commission, no Equal Employment Opportunity Commission, no Department of Health and Human Services, no National Labor Relations Board, no federal this, that, and the other as far as the eye can see. Except for restrictions on Chinese and Japanese immigration, nothing but perfunctory health examinations impeded the free flow of foreigners into the country, and hundreds of thousands arrived each year, mostly from Europe. All governments combined spent an amount equal to about 7 percent of GDP; the federal government’s part amounted to only about 3 percent of GDP. Local governments were the biggest actors in terms of regulations and expenditures. The average American had no regular contact with the federal government aside from the postman and little or none with the state and local governments aside from the school teachers and the public streets. The country was on an official gold standard. Gold and silver coins circulated as normal media of exchange, and gold certificates issued by individual commercial banks, as well as their checking accounts, served the public for making larger transactions.