It also recalls other precedents - from wholesale wartime takeovers of entire industries to the seizing of hundreds of failed savings and loans in the 1980s. Most nationalizations have been temporary, but some endure, such as Amtrak.
The government has taken stakes in banks, railways, steel mills, coal mines and foreclosed homes.
President Bush's announcement on Tuesday that the government would directly invest up to $250 billion in the nation's top financial institutions was the latest step in increasingly bold efforts here and abroad to prop up a financial system near collapse.
It was presented as a last-resort intervention. But already this year, the Federal Reserve had taken an $85 billion stake in failing insurer American International Group, which it later upped by $37.8 billion. And it provided a $29 billion loan to help JPMorgan Chase & Co. buy investment bank Bear Stearns. The government took over mortgage giants Fannie Mae and Freddie Mac, pledging up to $200 billion.
During World War I, the government nationalized railroads, telegraph lines and the Smith & Wesson Co. During World War II, it seized railroads, coal mines, Midwest trucking operators, many other companies and even, briefly, retailer Montgomery Ward.
Later, in 1932, the Reconstruction Finance Corp. was formed, which proved that making the government a shareholder in thousands of banks can restore order during periods of financial chaos.
Another heartening outcome was that the RFC was repaid the roughly $1.1 billion it invested in nearly 6,800 banks. That suggests the same could happen this time, as the government invests $250 billion, or about $1.6 billion in 1933 dollars.
''I believe the government has a fair chance of making its money back because it is buying when smart investors should be buying - when everyone else is terrified,'' said Alex Pollock, a resident fellow with the American Enterprise Institute.
Banking lawyer H. Rodgin Cohen, chairman of the firm Sullivan & Cromwell, is also optimistic, partly because ''the banks aren't in as bad a shape'' as they were during the Depression.
But the RFC's history also provides a critical lesson about the unintended consequences of taking such an extraordinary step.
Initially conceived as a stopgap agency, the RFC wound up spending about $50 billion before shutting down in 1957. Its tentacles extended far beyond banks as it subsidized farmers, helped the U.S. effort in World War II, invested directly in other U.S. businesses and even intervened in the gold market.
This time around, the government has committed only to investing in banks. But opening such a Pandora's box is bound to increase the pressure to save other failing companies, said Robert Bruner, dean of the University of Virginia's Darden School of Business, who has studied past financial crises.
''That is part of this deal with the devil,'' Bruner said. ''My gravest concern is where do you stop? There are number of industries in free fall, like autos, airlines and newspapers.''
To guard against an expansion of the bank program into other areas, Pollock said it would be important to set provisions requiring it to disband after it achieves its goals. He thinks that might take up to five years.
The government hasn't spelled out how long this investment initiative will last, but has indicated that it may be collecting dividends from the participating banks for more than five years.
