America's First Great Financial Journalist: Echoes

We live in a golden age of financial journalism. Michael Lewis, Gretchen Morgenson, James Stewart, William Cohan, Jesse Eisinger, Jake Bernstein, those fellows at Bloomberg: They’ve turned the business page and business books into required reading, and sometimes thrilling entertainment.

But this style of reporting isn't new. It began in the '60s -- the 1860s -- with the work of one man. He was a relentless investigator, a witty writer, a teller of gripping tales, America’s first great financial journalist.

In the midst of the Great Depression, people who bet on stock-market declines were considered unpleasant, unwanted, un-American, un-something. Yet as a New York Times writer noted in February 1932, "The bearish speculator is not often reviled in healthy markets; it is when prices are declining that opprobrium is heaped upon him."

Short-selling transactions involve a broker "lending" equity shares to an investor, who pledges to return them at a later date. Usually, the broker sells the shares, credits the investor's account, then waits for the investor to repurchase and return them. If the buyback price is lower, the account balance, less fees and interest, represents profit; if the price is higher, the investor adds funds and takes a loss. Short sales can yield big gains when markets collapse, but analysts have long debated whether they accelerate price slides or instead help establish "fundamental" values after a bubble.

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Word on the street is that the publishing industry is under attack by technology. Amazon.com Inc. has launched a bare-knuckled assault against independent bookstores. Print-on-demand firms make it possible for anyone to get his work on the market, and thus threaten to render agents and editors obsolete. And with e-books priced so low, how can authors and booksellers earn a decent living?

Yet the publishing industry has a long history of weathering these sorts of challenges, and its past offers some optimism for the future.

Although it may seem shocking to watch the 112th Congress, there was a time when national leaders were swift and decisive in getting things done. In November 1910, in the space of less than two weeks, a group of government and business leaders fashioned a powerful new financial system that has survived a century, two world wars, a Great Depression and many recessions.

Of course, the Jekyll Island conference, which met that month, was dodgy even by the standards of the Gilded Age: a self-selected handful of plutocrats secretly meeting at a private resort island to draw up a new framework for the nation’s banking system. Add in the gnarly live oaks and dripping Spanish moss of coastal Georgia, and the baronial becomes baroque.

Before Greece entered the euro area, its basic monetary unit was called the drachma. As the country debates with growing seriousness whether to return to its old currency, the coin's history and design repay a closer look. They speak of the extreme persistence of an idea, a coin and an image -- going back 25 centuries.

The word drachma comes from the Greek "drax," meaning a handful. It originally referred to a handful of six iron rods, called obols. Obols were used as currency before the widespread use of coinage.

Feb. 12, 1970, was a historic day on Wall Street. For the first time in the 178-year history of the New York Stock Exchange, a black man joined the trading community on the exchange floor.

Joseph L. Searles III, the Newburger, Loeb & Co. partner who achieved this milestone, took a meandering route to the Street. He had been a professional football player for the New York Giants and later made a name for himself in politics as an aide to New York City Mayor John Lindsay. But Searles's experience in finance was extremely limited.

For President Herbert Hoover, the election year of 1932 would be a rough one. It opened with weak equities markets, declining commodities prices and intensifying anxiety about both economics and politics.

Benjamin Roth, a lawyer from Youngstown, Ohio, noted in his diary: "Even those who invested after 1930 -- after the crash -- at what they considered bargain prices, now find their 'bargains' selling at half price or lower." He added: "Business shows no sign of pick-up. People are already looking toward the next presidential election when a Democrat will probably replace Hoover. In the meanwhile, Hoover adds to his long list of artificial stimulants."

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More than a year and a half after the Dodd-Frank financial reform was enacted into law, many of its provisions are under attack.

Banks have fiercely opposed everything from its proposed limits on proprietary trading to its new rules on derivatives to its regulation of the muni-bond market. Republicans in Congress have opposed much of what the Consumer Financial Protection Bureau was established to do. Republican presidential candidates have called for the act's repeal. And regulators have missed three-fourths of the law's rulemaking deadlines.