Artifacts of Finance


Shavers, Sharks and Payday Lenders

Westerners have long harbored a love-hate relationship with lenders, and their ambivalence shows no sign of abating anytime soon. What has changed over time is the perception of what constitutes “bad” types of lenders or loans. In various times and places, it was illegal/immoral to charge any interest at all, to exact interest from kinsfolk, to charge rates considered too high or to use violent collection methods. Today, it is lawful, and even somewhat morally acceptable, to charge any rate of interest to anybody willing to pay it. Reformers, however, want to protect borrowers from being cajoled, forced or tricked into borrowing at high rates for long periods.

The King James version of Exodus (22:25) states that “If thou lend money to my people poor by thee, thou shalt not be to him as a usurer, neither shalt thou lay upon him usury.” Usury here is usually taken to mean taking any interest whatsoever, though at least one recent translation reads instead: “If you lend money to one of my people among you who is needy, do not treat it like a business deal; charge no interest.” If the traditional interpretation is correct, perhaps early Jews lamented lost profit opportunities because Deuteronomy (23:19–20) clearly allows some lending at interest: “Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury.”

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Visit the Wall Street Collectors Bourse IV

During the Revolutionary War, Jonathan Trumbull, then-governor of Connecticut and after whom Trumbull, Connecticut, is named, raised a lot of money to help its funding. Connecticut was the main source of supplies for the northern and middle states, and more of its debt instruments survive from the period than from any other state. In 1864, this certificate was issued to recall the sacrifices made by Trumbull, also known as “Brother Jonathan.” As General George Washington’s close friend, advisor, and aide throughout the war, the General gave him his nickname. "We must consult Brother Jonathan,” is used in New England to this day, an iconic symbol of the part the northern colonies played in our independence from Great Britain.

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Dominick & Dominick

The early 1900s were marked by steel and rail consolidations, a bull market, the Panic of 1907, securities investigations and re-regulation. This would all end by 1913 with the newly-created Federal Reserve and the death of J.P. Morgan. Historian Robert Sobel called this era, “The end of the Golden Age,” as Victorian bankers faded into the past.

Investment banking historian Vincent Carosso wrote, “Never again would they [bankers] be so free to conduct their affairs as they had been at the turn of the century, when J.P. Morgan presided over the securities industry. His death in Rome…proved to be far more of a dividing line in the history of American high finance than was generally acknowledged at the time.” All the while, D&D quietly involved itself in NYSE governance, developing its stock business and helping companies like International Nickel and American Bank Note distribute large blocks of stock.

As D&D headed into the 1920s, Bayard Dominick passed away and Bayard Dominick, Jr. took control of the firm. He surrounded himself with men like the well-connected Andrew V. Stout and the knowledgeable Major Barnard. When he retired in the mid-1920s, Stout took the reins of the firm. Along the way, Bernon Prentice had become an important driver of new business for D&D, and he made valuable connections to the DuPont family and William Durant, co-founder of General Motors.

Museum of American Finance

While securities trading was central to D&D’s business, it was also a private banking firm. Historian Susie Pak describes this world in her book, Gentlemen Bankers, saying, “A private banking partnership was not simply a job. It was an identity that required constant vigilance, a process or mode of becoming, that was fragile because of its dependence on relationships to others. If private banking was a way of life, a banker’s social ties were as much a statement of his identity and reputation as his economic associations.” In short, the senior partners at D&D gained their influence through their standing in the financial community, which allowed them to operate their style of business.

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–Bart Ward is CEO of the Investment Advisory firm of Ward & Company, Ltd. Since 1993 he has written the weekly Wall Street history and market-oriented column, “The Corner.” He has his degree in history from UCLA.


McDonald's and the New Franchising Paradigm

Credit: Wikimedia Commons

If you were to ask for the name of world’s largest real estate developer and property management firm, you may be surprised by the answer: McDonald’s. Aside from being the largest purveyor of food in the world, the company controls the real estate in 33,000 restaurant locations in 119 countries and territories.


The founders of McDonald’s—Richard and Maurice McDonald—did not start out by selling hamburgers.

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The Anniversary Celebration of Important Global Companies Auction

The Museum of American Finance on Wall Street will commemorate its 25th anniversary on October 19th, 2012. Other companies reaching milestone anniversaries will also be celebrated this weekend. "The First Anniversary Celebration of Important Global Companies" is a special feature of the second annual Wall Street Bourse which will take place October 18-20 at the museum at 48 Wall Street. This event is a first of this magnitude and early reactions to the new concept have been very enthusiastic and gratifying according to event coordinators. The Celebration and Live Auction will begin in the museum gallery at 10am on Saturday. Admission is free for the entire Bourse weekend.

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Early Corporate America: The Largest Industries and Companies before 1860

Second Bank of the United States
Philadelphia, PA, Credit: Wikimedia Commons

Although the United States drew on European precedents to guide much of its early financial maturation, in one area it led the way: the development of the corporation as an important form of competitive business enterprise. Early European corporations were few, far between, and usually monopolies. Examples include the Bank of England, which had a monopoly of corporate banking in England and Wales into the 1850s, and the East India Company, which enjoyed a monopoly of British trade with India until well into the 19th century.

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At the Institute

This posting marks the end of a very long series about CFA Institute’s annual conference. Today’s title doesn’t refer to that Institute, though, but to a post-conference visit to the Art Institute of Chicago and the musings about the conference, the business, and the profession that it triggered.

For insight, it’s hard to beat a world-class museum. You come face to face with beauty one minute and brutal reality the next. Your perspectives are altered and your beliefs are challenged. You see the sweep of history—the connections across time reveal themselves and the true innovations seem mysterious and remarkable. You think about notions of quality and the nature of genius, of art and craft, of inspiration and perspiration.

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From Gilt-Edged to Blue Chip - The Evolution of a Stock Market Term


Credit: Wikimedia Commons

When the stock market was in full-scale panic mode in 1893, the New York Herald reported that “there was no relation whatever between prices made on the tape and the intrinsic value of the securities sold.” The paper noted that “the fall was perhaps sharpest in gilt edged, dividend paying stocks which have been comparatively firm while others were tumbling.”

Today even the most casual followers of the financial markets would describe those as blue chip stocks, while the term “gilt- edged” is now applied to one particular segment of the bond market.

How did this change in the language of investing come to pass? Perhaps the Stock Market Crash of 1929 played a role.

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The $1 Conspiracy


Credit: Wikimedia Commons

How Ralph Kramden brought down Casey Jones, in which a cartoon rabbit and a very real civil-rights heroine also appear...

Conspiracy theories are endemic to politics and big business. Vast library shelves groan under the weight of hundreds of volumes revealing “the truth” about or debunking lurid tales of assassinations, movie stars, organized crime, and smoke-filled rooms. Most of the theories fall flat after a moment’s sober reflection, but the stories seem deathless.

A great irony of the unending fascination with conspiracies is that one of the very few that was not just proven, but for which the perpetrators were tried and convicted, lies forgotten. Among a dedicated few the debate over the National City Lines (NCL) continues to rage. But few people outside the wonkish world of transit advocates know that for the middle half of the 20th century a coalition of oil, tire, and automobile companies created a front company to buy up municipal streetcar lines and convert them to buses.

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Insuring Lives and Protecting Families - The Early Years of the $5 Trillion Life Insurance Industry

NY Life Check

19th century blank check from the New-York Life Insurance and Trust Company

It’s hard to believe that life insurance, a $5 trillion industry in the United States, was once considered profane. After all, many initially thought it would be offensive to put a dollar value on a person’s life.

But the insurance industry, which already had been insuring ships and later the lives of marines in England as far back as the 16th century, began informally protecting human lives in the United States in the mid-18th century.

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Beware of Unintended Economic Consequences


Unissued bank note from the
Second Bank of the United States

Many observers are beginning to examine the unintended economic consequences of major reform legislation in the areas of health care (The Patient Protection and Affordable Care Act) and financial services (The Dodd-Frank Wall Street Reform and Consumer Protection Act). Such consequences have often followed sweeping actions taken by various elements of the federal government. All three branches have at times seemed equally oblivious to the unintended economic consequences of their decisions.

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Checks & Balances: Three Epochs of Federal Budget Management

White House
Credit: Wikimedia Commons

“Today,” President Bill Clinton (1993–2001) said on January 6, 1999, “I am proud to announce that we can say the era of big deficits is over.”1 Clinton’s pronouncement was profoundly premature, a fact underscored by the debt ceiling impasse and Treasury bond downgrade of 2011. Unless the US economy improves faster than even the most optimistic economist now forecasts, huge federal deficits will be in America’s future for many years to come. That means the national debt, already at almost $15 trillion and 100% of GDP, will continue to grow, putting more downward pressure on the government’s bond rating and additional upward pressure on interest rates. Many Americans believe that more dangerously destabilizing political squabbles over taxes and social programs are forthcoming, with results that no one with a decent respect for the intricacies of politics and economics dares to predict.

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Wall Street in Widescreen: The Financial Crisis of '08 in Cinema


In the fall of 2008, as investment banks exploded and their debris cascaded upon the middle and lower classes, many Wall Street CEOs continued receiving bonuses worth millions. The Financial Crisis of 2008 fit Hollywood’s formula for profit—power, corruption, and lies equal ticket sales—so the recent spate of crisis-related films is not surprising. It is important to analyze the most noteworthy of the new films because they will, undoubtedly, become historical references in their own right in years to come as they help to define the Financial Crisis of 2008 for millions of moviegoers.

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First Wall Street Collectors Bourse at the Museum of American Finance a Success

Ribbon Cutting

The first Wall Street Collectors Bourse, held at the Museum of American Finance, on October 21 and 22, 2011, was a success with approximately 400 visitors. Twenty-three dealers participated, showing and trading their stock and bond certificates and bank notes, including US and worldwide rarities in a wide variety of subjects. In addition, there were autographs, coins, and other ephemera related to finance.

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The First Activist Congress

LincolnObservers who marvel at the far-reaching nature of the legislation passed by the 111th Congress that met from January 2009 to December 2010 may be even more amazed at the groundbreaking actions of the 37th Congress. 

That group of representatives met in four separate sessions from March 1861 to March 1863, and passed several acts that profoundly changed the federal government’s involvement in many aspects of the nation’s business.The 35th and 36th Congresses had passed 129 and 157 public acts and resolutions, respectively. The 37th Congress passed 428, while its successor extended or passed another 411. Many related not to contingencies of the ongoing Civil War, but to unfinished Republican Party business left over from prewar legislative sessions. Without representatives from 11 states that had seceded and formed the Confederate States of America (CSA), the 37th Congress passed landmark legislation such as the Revenue Act, Legal Tender Act, Homestead Act, Morrill Act, National Banking Act, and Pacific Railway Act, creating what historian Leonard Curry has labeled “a blueprint for modern America” that is still visible some 150 years later.

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Nerds on Wall Street


Not long ago, trading on a stock market meant you would be in a crowd of people energetically shouting, running around, and making a mess with great quantities of paper.

No more.

Visiting a financial market now is more like visiting the “cloud,” a big data center. Computers and network gear hum in racks. Fans blow. Rows of tiny lights flicker. Occasionally someone shows up, but do not count on much water cooler conversation.

Technology did not suddenly transform our markets. It has been a gradual process, and understanding how we got here, and the simpler machines we used along the way, provides insight into today’s complex markets. It turns out that going back to the basics, from the buttonwood tree and hand signals, is a good way to explain technology that can seem hopelessly complex and buried in jargon.

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Wall Street Bourse at Museum of American Finance

HerzogCertificate Wall Street Bourse, the first numismatic show to take place at the Museum of American Finance, will be held on October 21 and 22, 2011. Twenty-two dealers will bring stock and bond certificates and bank notes including US and worldwide rarities in a wide array of topics and subjects such as railroads, mining, autos, aviation, Internet and technology, telecommunications, and navigation.  In addition there will be autographs, coins, tokens and other ephemera related to finance and its history.  Admission to museum events, including the Bourse (which will be run by an independent numismatic group), will be free to the public from 10 am to 4 pm on both days.  Much to the delight of collectors and enthusiasts of numismatic objects, the Bourse will also feature an auction by Archives International Auctions on Friday evening at 8 pm, hosted at India House (One Hanover Square). John Herzog, founder and chairman emeritus of the Museum, says "This show should be of interest for the historical perspective it offers practitioners about companies they might be analyzing."   

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Real Estate: The Bubble, the Bust, and Beyond

With a decline of 24% in U.S. home prices since its record high in March 2007, this year marks the longest real estate bear market since the beginning of World War II. There is much public debate about when housing’s problems will end and a new bull market will begin. Financial history can provide us with some important insight into the longstanding pros and cons of real estate investing and clues to its future as a popular investment choice.

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Artifacts of Finance: Bull and Bear, Wall Street’s Good Luck Icon

Bull and Bear Statue from the NYSE Luncheon Club
There is debate as to the exact origins of the terms “bull” and “bear” markets. But, many agree that the term “bears” first originated in reference to London bearskin brokers who would speculate on the future purchase price of the skins they acquired from trappers. The bulls were likely designated the opponents of the bears due to the popular 19th century blood sport of pitting bears against bulls. It has also been suggested that the metaphor is derived from the manner in which the animals attack, with the bull thrusting its horns up, and the bear swiping its paw down.

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Artifacts of Finance: Alexander Hamilton’s Society of the Cincinnati Badge

Hamilton's Society of the Cincinnati BadgeAlexander Hamilton is known for helping to create the US Mint and the first national bank—but he is also the founding father of our national debt, which, according to John Steele Gordon, eventually led to the creation of capital markets. Hamilton butted heads with Thomas Jefferson over the assumption of national debt—among many other issues—and revisiting these early debates seems apropos in light of recent politics.

The badge above, awarded to Hamilton by the Society of the Cincinnati and passed down through the generations to his descendants, is currently on display at the Museum of American Finance as part of the “Alexander Hamilton: Lineage and Legacy” exhibit (through July 12, 2011). According to guest curator Dr. Richard Sylla, “Hamilton’s principal goals—US independence, a stronger government and economic modernization—are also his legacy. The exhibit shows that Hamilton, the subject of many stiff portraits and cold statues, was really quite a passionate soldier, statesman and financier.” 


Artifacts of Finance: Puck Lampoons Jay Gould

Jay Gould cartoon
This 1882 cover of Puck lampoons Jay Gould, a leading railroad developer of the times. Labeled the “Robber Baron” by the press, Gould considered himself the most hated man in late-19th-century America. He was often vilified as a reckless speculator and brutal strikebreaker. Although he sought to create intricate railroad and communication systems in New York City, his hand in bribery and stock manipulation overshadowed his contribution to the development of American industry.

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Artifacts of Finance: 18-Karat Monopoly Set

18-Karat Gold Jeweled Monopoly Set

The Museum of American Finance is now exhibiting an 18-karat solid gold Monopoly set covered with hundreds of precious gemstones, on loan from the Smithsonian Institution National Museum of Natural History. The Smithsonian received the game as one of 20 jeweled art objects from the personal collection of world-renowned artist and jeweler Sidney Mobell. A long-time resident of San Francisco, Mobell is known for his fanciful and innovative employment of everyday household items as works of art. This unique object is in the Guinness Book of World Records for its value (the dice alone are worth $10,000). It will be on display at the Museum, located at 48 Wall Street, through October 2012.


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