The affair of the State Trust Company, which General Andrews recounts here, occurred in 1900, when trust companies were increasing in number and expanding so rapidly as to arouse current comment in financial journals. Since such companies were less stringently regulated by law than other types of banking houses, their rise was viewed with interest tinged in some quarters by alarm. The rumor of sharp practices in the State Trust Company found, eager acceptance. There were those who wanted to make political hay immediately by claiming negligence on the part of the Superintendents of Banking and of Insurance, seeking thus — in an election year — the discomfiture of Theodore Roosevelt, Governor of New York. Others used the incident as a grim example when, during the next few years, muckraking became a popular journalistic sport.

The State Trust Company had been organized in 1890. It was affiliated with the American Surety Company, and could handle investment business in which the insurance firm could not legally engage. In 1898 both companies came under the control of the group of financiers mentioned in this article. The trust company had continued to prosper, and in November of 1899 the State Bank Examiner had certified that it was in sound condition.

The role of government in the ante-bellum American economy has been boldly redefined in a score of books and articles published during the past decade. Close analysis of state and local sponsorship of enterprise, initiated and supported by the Committee on Research in Economic History, has suggested a thesis that appears to invite a new view of American capitalism in its formative years. Taken together, the works here reviewed form a consistent report of economic endeavor in an almost unfamiliar land. There, the elected public official replaced the individual enterpriser as the key figure in the release of capitalist energy; the public treasury, rather than private saving, became the major source of venture capital; and community purpose outweighed personal ambition in the selection of large goals for local economies. “Mixed” enterprise was the customary organization for important innovations, and government everywhere undertook the role put on it by the people, that of planner, promoter, investor, and regulator.