Over the course of the 19th century, banking services were extended to rural parts of America. This trend continued into the next century. Compared to urban banks, those in small towns in rural parts of the country had exposure only to a narrower array of economic activities requiring their services, these regions being mostly agrarian.…
Honest financial journalism is indispensable to ethical financial markets. It is hard to imagine a clean financial industry in operation if the state of its trade press was unchanged from that of the middle of the 19th century, when financial journalism could be summarized as the propagation of rumors, often with nefarious ends. The professionalization…
In the absence of metal coins or modern banknotes, commodities have been used as money. The commodities most suitable are those held in high demand by traders and merchants. In colonial America, examples of these included beads, beaver belts, and tobacco. The latter is particularly interesting not only because of its particularly broad acceptance as…
Bankruptcy gives debtors a reprieve from their creditors by allowing an orderly liquidation of assets or a restructuring, often alongside a reduction or complete discharge of remaining debts. Usually a sign of financial defeat, it can be easy to forget that bankruptcy is a protection largely provided to the borrower and not the creditor. Before…
The world became more interconnected in the 19th century as railways and telegraph expanded the reach of business. By facilitating long-distance transactions, express shipping became vital to many industries, including finance. This softens any surprise accompanying the fact that two of the largest financial firms in the United States today, Wells Fargo and American Express,…
Lending money, even at a premium rate of interest, to a government facing existential crisis is hardly a safe proposition. Yet, it is often in these times of crisis, in these times of the greatest anxiety and disquiet that money is most desperately needed. During the American Civil War, the Union government’s Secretary of the…
America’s Gilded Age fortunes are infamous, but much less well known to the average person in America are its early tycoons. Like those of the late 19th century, those of the earlier part of that century benefited from opportunities obvious only in hindsight along with employing at least some questionable practices. John Jacob Astor possessed…
The Stock Market Crash of 1929, the panic that led to the Great Depression, was not the best time to be a banker. It was an even worse time to be a trader as strategies that worked in the boom years now produced only losses. Goldman Sachs was both a banking and a trading organization,…
In spite of, if not because of, their importance, banks are not usually popular. They are frequently the target of zealous reformers. Yet, bold policies rushed into enthusiastically should be the most worrisome. Campaigning against any institution in the name of progress should bring into question what exactly will replace it. Left unaddressed or poorly…
Today, coins and banknotes are the most common physical manifestations of money, but money does not need to take these common forms. Anything could be money, or at least exhibit some of the qualities of money, even seemingly common items anyone could produce. Consider that cowrie shells were used as money in Africa and Asia…
When the investor Warren Buffett finds a worthwhile investment, he rarely lacks commitment. Many of his holdings, either in the days of his old investment partnership or at his firm Berkshire Hathaway, are large relative to the total portfolio’s size. At odds with others’ guiding rules, Buffett has often eschewed diversification, at least when he…
Agricultural commodities have been traded between places for millennia before modern commodity exchanges were founded. However, these exchanges brought many of the services required by merchants and traders under a single roof. In the 19th century, exchanges became larger, partly the result of improved communications and transportation infrastructure. Two American commodities exchanges formed in the…
