Echoes Dispatches From Economic History

This year, consumers are expected to spend $18.6 billion on Mother's Day, an increase of 8 percent from last year, according to a survey by the National Retail Federation. The holiday is a major boon to confectioners, card makers, florists and the restaurant industry. And it's certainly popular among moms: The average consumer expects to spend more than $150 on them this year.

The woman who invented Mother's Day would be livid.

History News Network on how Mormon history has shaped Mitt Romney
The Levy Economics Institute on an alternative history of money
The University of Gothenburg on the origins of the Sicilian mafia
The American Numismatic Society on an exhibit about the history of inflation at the New York Fed 
Felix Salmon on the decline of venture capitalism
Marginal Revolution on the "growth of justice" in the U.S.

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

On May 10, 1869, the tracks of the Union Pacific Railroad (extending from Omaha, Nebraska) and the Central Pacific Railroad (extending from the San Francisco Bay area) met in an obscure area of Utah Territory called Promontory Summit, after five years of arduous and often acrimonious construction.

A golden spike was driven to celebrate their joining.

How can excessive debt sink a government? Look no further than New York -- in 1871, under the leadership of the eminently corrupt William M. Tweed.

Today, the U.S. government owes some $15.2 trillion. Its largest group of public creditors comprises foreigners and foreign governments, led by China and Japan. Overseas creditors hold $5.1 trillion in U.S. paper and continue to be big buyers at Treasury auctions. What would happen in the (still unlikely) event they stopped buying?

(Corrects name of beverage in first paragraph.)

Our poor penny. Half a century ago, it was a respectable, if humble, piece of money. Just one could buy all sorts of candy or a postcard; three might buy a cherry cola or a newspaper.

In April 1932, a struggle over trade policy between France and the U.S. was put on hold for the French election, which would mark a significant shift in the country’s economic and political position.

Although French imports had fallen by about 40 percent in a year, exports had dropped further, yielding a deficit of almost 1 billion francs per month. The French created quotas for incoming goods and raised tariff rates to encourage the purchase of domestic substitutes, retaliating for the 1930 U.S. tariff increases.

Disunion on how Arctic explorer Isaac Israel Hayes missed the Civil War
Credit Writedowns on how pro-cyclical economic policy led to the rise of Hitler and Mussolini
Wonkblog on how economists have misunderstood inequality
Nikolaos Antonakakis on business-cycle synchronization during U.S. recessions
Tyler Cowen on technology's role in government growth
The Big Picture on U.S. stock market value versus GDP over time
Moneybox on Friedrich Engels's take on working-class homeownership 

To read more online from Echoes, Bloomberg View’s economic history blog, click here.

Americans like to imagine that the Founding Fathers were virtuous and civic-minded giants bestriding the continent. But many of them kept a sharp eye on the main chance, alert to opportunities for personal profit.

The birth of the mega-bank JPMorgan Chase & Co. (JPM) may be traced to two such figures: Aaron Burr, the dark star of America’s early years, and his longtime nemesis, Alexander Hamilton, the first secretary of the Treasury.

In the 1945 edition of Remington Rand’s "How to Be a Super-Secretary," the stunning Betty Grable poses on the front cover dressed as an "ideal" secretary would.

The tips the publication included on how to dress and act "lady-like" at work might make professional women of today shudder. Preceded with the caveat that these hints are ones "your boss will never tell you," secretaries are encouraged to be beautiful in looks and actions, hide personal matters, and pass credit for originating good ideas to the boss.

When protesters settled in New York's Zuccotti Park in September, few anticipated how big a phenomenon the Occupy Wall Street movement would become. Soon, dozens of encampments were established around the world.

A month later, the majority of Americans knew about the movement and supported its goals. It seemed that a new form of political action -- youthful, tech-savvy and decentralized -- had scored a major victory. Inequality was back on the agenda.

As the graduation season neared in the spring of 1932, journalist and Smith College alumna Eunice Fuller Barnard assessed the prospects for women exiting American colleges for an uncertain job market.

These weren’t just a few wealthy co eds; tens of thousands of women annually graduated from institutions of higher education at the time. And they were no longer confined to small, elite Eastern women’s schools. Barnard informed the New York Times and Scribner’s Magazine that some 500,000 “girls” now attended U.S. colleges and normal schools, which trained graduates to be teachers. About 80,000 of them would receive degrees in May commencements.

FT's The World blog on the top 10 nationalizations in history
Norges Bank on the American subprime crisis compared to the Norwegian banking crisis of 1987-92
The Big Picture on debunking bailout myths
NPR on the creation of Silicon Valley's startup culture
The Exchange on digitizing the Nation's Business monthly magazine
Paul Krugman on how Britain's economy is worse than it was in the 1930s

To read more from Echoes, Bloomberg View's economic history blog, click here.

During World War I, as cities pulled every young man who wasn't a doughboy into their factories, the U.S. became an urban nation.

After the war, there was a sharp and short depression in 1920 from which the cities quickly recovered, but rural America did not. That year, the census recordeed more people living in cities than in the country. Returning soldiers looked for work in the cities rather than return home. And all those people needed somewhere to live.

The legendary economist and investor Benjamin Graham is widely known as the father of value investing. He may also be the father of the hedge-fund industry.

While most historians and industry professionals credit Alfred Winslow Jones with launching the first hedge fund in 1949, some people, including Graham’s protege, Warren Buffett, disagree.

“It is just a well-organized, semi-hysterical assembly of the discontented.”

Thus did the New York Times’s Frederick Birchall dismiss the Nationalsozialistische Deutsche Arbeiterpartei in late March 1932. But the Nazi Party’s power was growing.

Not long after the economic crisis began, the president's landmark Conference on Homeownership reported that "down payments of 10 percent, 5 percent, and even nothing down" had become common practice in the home-mortgage market. Reliance on second mortgages and novel financing terms, the report noted, were also widespread.

Although these developments sound all too familiar, this Conference on Homeownership was held in 1931 and the president sponsoring it was Herbert Hoover, not George W. Bush or Barack Obama. We often think of the expansion of easy mortgage financing as a relatively recent development, but the growth of indebted homeownership has older and more complicated origins.

Alphaville on what five years of crisis data tells us
The Exchange on the business history of the Titanic
Project Syndicate on gold-standard analogies and the euro
Bloomberg Businessweek on the history lessons of digitizing coins
The New Republic on how Wall Street is less efficient today than 100 years ago
The Huffington Post on what Frederick Douglass would think of Emancipation Day 2012
Credit Writedowns on Herbert Hoover's take on balancing the budget

On April 19, 1792, a Manhattan securities speculator named William Duer sought protection from his creditors. Literally. A mob of several hundred of them formed, seeking a rough form of justice.

“We will have Mr. Duer,” they chanted. “He has gotten our money.” Not very catchy, even by the standards of the day. But the mob dispersed only after the sheriff appeared and made clear that he would protect Duer, with force if necessary.

Signs are everywhere that U.S. industry is reviving, and there is much talk of government aid to help manufacturers update their factories. But an obscure episode half a century ago shows the need for caution.

Like many government policies, support for manufacturing can have unintended consequences. In 1962, it hurt many of the firms that policy makers were most eager to assist.

As the 19th century wound down, the industrialization of the U.S., by then the world's largest and most productive economy, was piling up fortunes of unprecedented size.

Cornelius Vanderbilt had died the richest self-made man in the world when he left his heirs $105 million in 1877. His son William Henry Vanderbilt doubled his father's fortune in just eight years. When Andrew Carnegie agreed to sell Carnegie Steel Corporation to J.P. Morgan for $480 million in 1901, Morgan told him, "Congratulations on becoming the richest man in the world." By 1910, John D. Rockefeller was worth $1 billion.