Chapter

Establishment and Governance of the Antebellum Bank

Howard Bodenhorn

in State Banking in Early America

Published in print December 2002 | ISBN: 9780195147766
Published online November 2003 | e-ISBN: 9780199832910 | DOI: http://dx.doi.org/10.1093/0195147766.003.0002
Establishment and Governance of the Antebellum Bank

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Bank chartering in early America was high‐stakes politics. Legislators were asked to create corporations with governance structures and corporate hierarchies that would be accountable and transparent, yet profitable. While the chartering system in some states was prone to corruption and rent‐seeking, corporate charters created firms that mitigated the principal‐agent problem. Internal structures aligned the incentives of shareholders and managers.

Keywords: accountability; bank chartering; corporate hierarchy; corruption; governance; incentives; managers; principal‐agent problem; rent‐seeking; shareholders

Chapter.  14875 words.  Illustrated.

Subjects: Economic History

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