It’s 1975, and Wall Street has just refused to purchase New York City’s short-term notes. It’s nothing less than a coordinated credit strike that instantly lit the match on the worst fiscal crisis in the city’s history. Suddenly unable to roll over its debt, New York teetered on the brink of bankruptcy, even though the banks had happily underwritten the same notes for years — and made millions doing it.

A few weeks later, something remarkable happened. The Speaker of the New York State Assembly, Stanley Steingut — a consummate machine politician — introduced legislation, cosponsored by freshman Democrat Charles E. Schumer and sixty assemblymembers, to create a state-owned public bank as well as authorize New York City to establish a municipal bank of its own. With roughly $3 billion in state deposits sitting in private commercial banks, the state bank alone would have instantly become one of the twenty-five largest banks in the country. It would have had all the powers of a major financial institution: to hold deposits, make loans, and — by no accident — underwrite the municipal bonds and notes that Wall Street was suddenly using as leverage to bring the city to heel.

Steingut, of course, publicly denied that the proposal was retaliatory. But the timing made the truth undeniable. For a moment, New York’s political leadership briefly considered the most profound challenge possible to financial power: reclaiming public credit and putting the ownership of capital itself on the path to socialization.