A transcontinental railroad across mid-19th century America was a colossal project, far larger than any American railroad built before then. While campaigned for and debated for years, work got underway while the country was in the midst of civil war. Trepidation on the part of investors meant it hardly got off the ground at all.…
In April 1906, an earthquake struck San Francisco and the event was a disaster for the city, the largest in California at the time, and for insurance globally. The tangible costs of the disaster were mammoth and the damage was felt (figuratively-speaking) far away from San Francisco, in the rest of America, Britain, Germany,…
The Panic of 1857 was just another of the tumultuous 19th century in American finance. In the western United States, it had begun two years earlier in San Francisco. At the start of 1855, the city still seemed to be booming, growing from a population not much greater than zero a decade earlier into a…
Bank failures were commonplace in 19th century America but it would be wrong to presume no concerted effort was made to cure this epidemic. State governments grappled with the challenge of creating an environment conducive to bank formation and yet protected customers and others from the effects of a bank’s collapse. New York’s solution was…
Over the course of the 20th century, courtesy of improvements in communication, and some deregulation along the way, owning shares in listed companies was transformed from a privilege of the wealthy and connected few to something almost as common as a bank account or insurance policy. Yet, in the decade after the stock market crash…
The Second World War not only pulled American economic output closer to its potential capacity, but also transformed its composition. War-related industries were prioritized and the production and consumption of other goods was controlled by rationing. This is fairly well known. What is less well known are the ways credit was mobilized during the war,…
In the early days of any industry, growth requires lots of external capital. Reinvested profits, if there are any profits at all, are usually woefully insufficient to meet the growth expected by visionary founders or eager customers alike. This means the founders and executives of firms in new industries have to be capable financiers, or…
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,…
