that something should be public or private would rage for another 75 years. With the Civil War and Congress’ s creation of the national banking system in 1863, it became a national debate, one centered on the US Comptroller of the Currency, and later the Federal Reserve, the Federal Deposit Insurance Corporation and the Reconstruction Finance Corporation. Indeed, only during the New Deal— by which time Fillmore’ s contribution to the debate was already long forgotten— was the question of how responsibility for financial risk management should be allocated among private bankers and public officials settled firmly in favor of the public.
Whether it will remain settled remains to be seen.
Metropolitan Museum of Art
Portrait of James M. Cook, superintendent of the New York State Banking Department, from 1856 to 1861.
examination authority, Cook pursued what he called a“ radical” path, seeking to push oversight fully onto the private sector. Examination on suspicion, Cook argued, was“ a delusion and... purely a cheat of the people.” Better to strip away the fantasy that public power could protect private interests and let the people look after themselves.
“ When banking capital in this State … finds itself in danger of loss,( and the loss under the law falling alone upon depositors and stockholders,) it, through its managers, entrenches itself in a position... which looks to ultimate solvency instead of large profits,” Cook opined.“ The great and controlling law of self-interest, once learned through the rough road of experience, is a far more effectual rule of human action than any statutory provision, however strictly enforced.” The private interest would always trump the public power.
Cook’ s program, like Fillmore’ s, went nowhere. Both men imagined supervision could be something much different and much better. The debate about whether
Peter Conti-Brown is the Class of 1965 Associate Professor of Financial Regulation at The Wharton School of the University of Pennsylvania and a nonresident fellow in economic studies at the Brookings Institution. Sean H. Vanatta is senior lecturer in financial history and policy at the University of Glasgow and a non-resident fellow at the Julis-Rabinowitz Center for Public Policy and Finance at Princeton University. This article is adapted from their recent book, Private Finance, Public Power: A History of Bank Supervision in America( Princeton University Press, 2025).
Sources
Annual Report of the Comptroller of the State of New York. Weed, Parsons, & Co. January 4, 1849.
Annual Report of the Superintendent of the Banking Department. State of New York. January 5, 1859.
“ Astounding Disclosures of the Canal Bank, Albany.” New York Herald. August 14, 1848.
Bodenhorn, Howard. State Banking in Early America. Oxford University Press. 2003.
“ The Canal Bank— Disgraceful Failure.” The Evening Post. July 14, 1848.
“ Failure.” Brooklyn Daily Eagle. July 12, 1848.
“ Pratt Bank of Buffalo.” Buffalo Commercial Journal. August 2, 1848.
Rayback, Robert J. Millard Fillmore: Biography of a President. Henry Stewart. 1959.
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