The country’s oldest public banksource • jacobin.com
Michael J. Lansing:
With the ongoing financial crisis, it’s a perfect time to look to the Bank of North Dakota. It is the only state-owned bank in the continental US and was formed in 1919 by a left-wing farmer movement to free working people from the grip of private finance.
During the 1910s, hard-pressed wheat farmers in North Dakota faced predatory practices in the grain economy. Few imagined that the state’s farmers — including Ukrainians, Germans, Irish, Icelanders, Norwegians, Danes, Hungarians, Estonians, Dutch, Swedes, Czechs, Syrians, Germans from Russia, and African Americans and other native-born Americans — could transcend their differences and improve their situation.
But for all their ethnic and religious differences, small farmers faced similar conditions. They shipped grain to Minneapolis for processing and saw little of the profit that their wheat produced. Crop values, controlled by milling and trading companies, were low. Transportation costs, set by railroad companies, were high. Mortgages from local bankers — held in trust by big-city banks — were larded with exorbitant interest rates.
Nor could farmers look to their state government for succor. Dominated by out-of-state corporations, North Dakota was reduced to a kind of colonial hinterland of the Twin Cities. As one failed farmer put it: “There are only two ways of making a living in North Dakota. One way is to dig the wealth out of the ground. And the other way is to dig it out of the hide of the fellow who digs it out of the ground.”