Cover image for State banking in early America : a new economic history
State banking in early America : a new economic history
Bodenhorn, Howard.
Personal Author:
Publication Information:
New York : Oxford University Press, 2003.
Physical Description:
ix, 355 pages : illustrations ; 24 cm
Reading Level:
1490 Lexile.
Format :


Call Number
Material Type
Home Location
Item Holds
HG1778.U5 B63 2002 Adult Non-Fiction Non-Fiction Area

On Order



Howard Bodenhorn's State Banking in Early America studies the financial experimentation that took place in the United States between 1790 and 1860. Dr. Bodenhorn's book explores regional differences in banking structures, which bear indirectly in the conection between financial and economicdevelopment. If a single theme emerges, it is that the United States benefitted from its free banking philosophy in which state governments, rather than a centralized authority, created financial structures designed to serve specific, local needs. Thus decentralized federalism provided statelegislatures with a great deal of flexibility in their individual approaches to economic and financial issues. The important lessons to be learned from Dr. Bodenhorn's historical account are that successful banking systems are flexible, predictable, and incentive-compatible; they meet the needs ofthe borrowers, depositors and shareholders, and they reduce downside risks to generally agreed upon levels. These lessons imply that we cannot, a priori, define an optimal, one-size-fits-all banking system. We need to know something about the formal and informal institutions underlying an economyand about the risk preferences of its citizenry. Historically, outsiders view Americans as experimenters and risk takers. Nowhere is this experimentation and risk taking more apparent than in early American banking policies.

Author Notes

Howard Bodenhorn is at Lafayette College.

Reviews 1

Choice Review

Bodenhorn (Lafayette College) has written widely on antebellum banking, including A History of Banking in Antebellum America (CH, Jul'00). This current work examines the different state banking systems in the US from 1790 through 1860. It contains 11 chapters, several of which are based on previously published articles. The first part of the book consists of an introductory chapter, one on the establishment and governance of banks in the antebellum period, and another on banking theory and practice. Subsequent chapters focus on banking in different regions of the country. Those on New England include an introductory chapter ("Small Banks and Familial Ties") and one on the rise and fall of the Suffolk system. Chapters focusing on the Middle Atlantic region provide an introduction as well as discussion of the New York Safety Fund system (the US's first deposit insurance system) and free incorporation in banking, which was pioneered by New York's 1838 free banking law. Additional chapters cover banking in the South and West. Final chapters look at property banking, free banking, and branching and conclude with an assessment of early banking in the US. ^BSumming Up: Recommended. Public and academic library collections, upper-division undergraduates and up. R. Grossman Wesleyan University

Table of Contents

1 Introduction
2 Establishment and Governance of the Antebellum Bank
3 Banking Theory and Banking Practice in Antebellum America
4 New England: Small Banks and Familial Ties
5 The Rise and Fall of the Suffolk System
6 Middle Atlantic: Conservatism and Experimentation
7 New York's Safety Fund System: America's First Bank Insurance Experiment
8 Free Banking: The Populist Revolt Takes Root in New York
9 Banking in the South and West: Banks and the Commonweal
10 Property Banking, Free Banking, and Branch Banking
11 Assessing America's Early Banks