Echoes Dispatches From Economic History

When the New Orleans chugged into the city for which it was named on Jan. 10, 1812, it made history as the first steam-powered vessel to travel the western waters of the U.S. At the time, few people thought it would touch off a commercial revolution.

Within 10 years, however, western-river steamboats carried twice as much freight in two weeks as had gone upriver in all of 1811. The Mississippi River pulsated with commerce. People and goods moved with relative ease between Pittsburgh, St. Paul, St. Louis, New Orleans and even Montana.

From Boss Tweed’s influence in the 1800s to political scandals during the Great Depression, New York City was a hotbed of corruption.

Theodore Roosevelt fought it as police commissioner in the 1890s, but when his reform efforts angered corrupt New York politicians, he left to become the assistant secretary of the Navy. A generation later, Governor Franklin D. Roosevelt also confronted New York graft in his efforts against its principal beneficiaries, Tammany Hall, the Democratic machine and New York City Mayor James Walker.

Business Insider on nine wars that were really about commodities
Gold Money on the history of exchange-rate regimes
BBC on the dangers of economists' obsession with the Great Depression
The Atlantic on 60 years of U.S. history in one graph
Project Syndicate on Glass-Steagall's ghost
The Exchange on the publication geography of Adam Smith's "Wealth of Nations"
History News Network on how Mitt Romney's economic plan misreads history

Read more from Echoes, Bloomberg View's economic history blog.

In the early years of the American republic, Sackets Harbor in upstate New York was one of the U.S. Navy’s most important ports, guarding access to the St. Lawrence River. In the War of 1812, Americans repulsed two British assaults there. As the war ended, they erected an odd memorial to their victories: the forlorn, uncompleted hulk of the battleship New Orleans.

It could still be seen rotting on its stocks 70 years later. If it had been launched, the New Orleans would have been one of the most powerful ships in the Navy. It was larger than Horatio Nelson’s HMS Victory. But when peace came, construction stopped and the New Orleans began its long decline.

(Corrects year of railway’s completion in first paragraph and number of buffalo in 14th paragraph.)

The completion of the first transcontinental railway in 1869 divided the Great Plains in two. Some of its earliest passengers were buffalo hunters, and as they spread out from the railroad’s embankments, the vast buffalo herds were divided, as well.

In the summer of 1861, shortly after the start of the Civil War, U.S. Treasury Secretary Salmon P. Chase negotiated a loan of gold from northeastern banks.

Until that gold arrived in Washington, the government planned to issue $50 million in demand notes, a currency payable on demand in gold at any Treasury office, to fund the military effort. Because the Treasury Department had no facility for the production of paper money, a private business in New York, the American Bank Note Company, produced the notes in sheets of four. These sheets were then sent to the Treasury, where scores of workers cut them and trimmed the almost 7 million notes with scissors.

“There are two ideas of government. There are those who believe that, if you will only legislate to make the well-to-do prosperous, their prosperity will leak through on those below. The Democratic idea, however, has been that if you legislate to make the masses prosperous, their prosperity will find its way up through every class which rests upon them.”

There couldn’t be a more concise presentation of the current partisan standoff in Congress and also of this year’s presidential race.

In 1932, Lancashire, the U.K.’s cotton-manufacturing center, was a terrible mess.

At its peak in 1913, the nation’s cotton industry turned out 8 billion yards of cloth, 85 percent of which was sold abroad, the Economist reported. In 1924, production had slowed to 5.6 billion yards, 83 percent shipped internationally. By 1931, output was dismal, 3.1 billion, as exports shrank 60 percent due to higher tariffs and increasing capacity elsewhere, particularly in Japan.

While watching the “Today Show” one morning in 1967 from his Southern California home, Roy Bellman felt his knees buckle. The program was offering remote coverage from the iconic Gimbels department store in New York’s Herald Square. There, a reporter breathlessly introduced the “world’s first computerized ticketing system.”

For Bellman, a manager at Computer Sciences Corp., it was as though the floor had dropped out beneath him. He could barely process the images on the flickering screen because, up until that moment, he had thought that his company -- not the one featured on the “Today Show” -- was developing the world’s first computerized ticketing system.

Once, not too long ago, the local shopping district was filled with booksellers and hardware dealers who had known you for years.

Then an out-of-town competitor homed in on the party, offering goods of all sorts delivered from a far-away warehouse. The local merchants, paying rent on their brick- and-mortar stores, couldn’t match the intruder’s prices. One by one, they began to close their doors.

Beginning with 2011 model-year vehicles, federal regulators have required automakers to use petite female crash dummies in frontal automotive crash tests.

Several news outlets have picked this story up. Yet they haven’t recognized that it’s part of a longer struggle in business-government relations -- and the product of a long-held cultural resistance to considering gender differences in design.

In summer 1932, sections of the Midwest experienced militant and sometimes violent responses to an intensifying agricultural crisis.

Grain farmers denounced futures markets and the ineffectual policies of President Herbert Hoover. Dairy and livestock farmers revolted when unregulated spot markets savaged their returns on investment.

Naked Capitalism on the 40-year war on students
History News Network on whether Monica Lewinsky saved Social Security
Slate on the historic importance of the pallet
The New York Times Magazine on predictions of the future from 1964
Wonkblog on how people think recessions are rarer than they are
Read more from Echoes, Bloomberg View's economic history blog.

Mitt Romney, the presumptive Republican nominee for president, regularly invokes free enterprise, which he has called “one of the greatest forces for good this world has ever known.”

Representative Paul Ryan, Romney’s recently announced running mate, uses the phrase even more frequently. In his very first speech as Romney’s selection, he called for a return to the founding principles of “liberty, freedom, free enterprise.”

Helen Gurley Brown, who died this week at 90, embodied countless contradictions. In her first book, “Sex and the Single Girl” (1962), Brown scandalized the nation by arguing that single women ought to have lives of sexual fulfillment rather than of spinster desperation. Notably, she waited to do this until she had safely nabbed her own Mr. Right, and then wrote the book only at his urging.

She advised women to use their feminine wiles in the work place (though she always contended that sleeping your way to the top was all but impossible). She steered the failing Hearst publication Cosmopolitan far into the black, and into pop culture history, by eliminating all traces of cosmopolitanism and recasting the magazine as a guidebook for what became known as the “Cosmo girl.”

With central bankers and market participants rushing to find an alternative to the London Interbank Offered Rate (or Libor), the interest-rate index that sets borrowing costs for consumers and multinational corporations, it’s a good time to ask where Libor came from. And to ask how the midmorning estimates of a handful of London-based bankers came to play such an outsized role in the modern, quant- driven financial system.

Libor represents the cost of one large bank borrowing unsecured funds from another, in various currencies and at varying maturities, in the London market. Each day, the British Bankers’ Association asks a panel of market participants, “At what rate could you borrow funds, were you to do so by asking for and then accepting inter-bank offers in a reasonable market size just prior to 11 a.m.?” The answers are then compiled and published by Thomson Reuters Corp. (Bloomberg LP, the parent of Bloomberg News, competes with Thomson Reuters in selling financial and legal information and trading systems.)

Stock values had plummeted by July 1932. Yet from July to August, the Dow Jones Industrial Average doubled, a huge leap given that bad news seemed to flow in from all directions.

Other positive reports also surfaced that summer. Were they to be taken seriously as a sign of recovery?

By any standard, Andrew Carnegie, who died 93 years ago today, was one of the greatest entrepreneurs in American history. He was also among the most improbable: Perhaps no other life so vividly illuminates the awesome and often vicious power of capitalism's creative destruction.

Born in Dunfermline, Scotland, in 1835, Carnegie immigrated to the U.S. with his economically struggling parents and siblings in 1848. The family settled in Pittsburgh, where they had relatives. After brief stints in a textile mill and a bobbin factory, Andrew found work in a telegraph office. There he rose quickly, and by 1851, at age 16, he had become a full-time operator, earning a salary sufficient to support a family.

Social Science Research Network on the history of gold as a traded object
Marginal Revolution on the notion that women and children are saved first in maritime disasters
Alphaville on the rise of U.S. manufacturing
Recording History on the impact of inventions that changed the way we listen
The Economist on the making of the atomic bomb (video)
History News Network on the decline of good customer service
Economix on how this isn't the worst recovery since the Great Depression

Read more from Echoes, Bloomberg View's economic history blog.

Andrew Carnegie, who died 93 years ago tomorrow, remains a polarizing figure. He has been labeled a great industrialist by some, a robber baron by others. Some argue that his impoverished childhood and work in a cotton mill enhanced his sympathy for workers, while others contend the conditions in his steel mills were inhumane.

Even his unparalleled philanthropy -- which continues to shape the American educational and cultural worlds to a remarkable degree -- has sparked its share of criticism.