If one defines fractional reserve banking as two individuals having equal and simultaneous claim on the same asset, then I would agree with Howden’s conclusion; in fact, in a free market, such a contract could not be written due to the impossibility of meeting the terms, as Salerno himself has pointed out.
However, if one defines fractional reserve banking as what exists today – the depositor is, in fact, an unsecured lender by contract – I find no reason to stand in the way of this practice.
The problem is the monopoly protection afforded by central banking and the government backing in all of its forms. Target the monopoly.
Free banking provides effective regulation via the market. Mises (Human Action Chapter 17, Section 12) and Rothbard (The Mystery of Banking, Chapter 8) both recognized this. I remain open to anyone pointing me to work by either of these authors that later refute their statements in these respective sections of their work.
I find no reason to create artificial means to achieve that which the market is perfectly capable of regulating – regulation that both Mises and Rothbard found effective. There is not only one "Austrian Way," and when two or more are offered, I find tendency to lean toward the free market choice.