Daniel Kuehn sends us to the eloquent George Selgin:
Free Banking » Banknotes Are Not, and Have Never Pretended to Be, Warehouse Receipts: [O]ne of the loci classici of the belief, now widespread among fans of a certain sort of Austrian economics, that fractional reserve banking is fraudulent… is that the notes issued by fractional reserve banks have been indistinguishable from warehouse receipts. After all, if you are going to swindle people by "counterfeiting" something, you wouldn't be inclined to make the fakes obviously unlike the genuine articles, right?
Here are some images of (1) various warehouse receipts and (2) various banknotes. I draw my readers' attention to the language common to the specimens in each set. They will note how items in the first all make specific mention of the fact that valuables have been received "for storage" (or something like that); while those in the second merely "promise to pay" a sum on demand, making no reference to storage at all.
I leave it to those readers to then determine for themselves whether the evidence is consistent with the "clever swindle" theory of fractional reserve banking.
I think that George is largely right. But there is a ghost of a problem here: everybody said "I have $2,963,000 in my Bernie Madoff account" when they should have been saying "Bernie Madoff owes me $2,963,000".