Echoes Dispatches From Economic History

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.

Cable television has lately been bringing the art and science of owning a pawnshop to life -- even for those fortunate enough to experience it only vicariously. But pawning has been integral to Americans' financial lives for centuries.

History Channel's "Pawn Stars" features the oversized Harrison family and their Las Vegas pawnshop, Gold & Silver. Old paper currency, antique pistols, classic guitars and works of art are typical of the items offered up for appraisal there, making the series seem like a less genteel version of "Antiques Roadshow."

American firms have been on the move of late -- and not just to Mexico or China. Most major job relocations are from one U.S. state to another, according to the Department of Labor. And with unemployment remaining stubbornly high, and companies sitting on a lot of cash, states have been competing ever more fiercely to attract new businesses.

Ohio reportedly has offered incentives worth $400 million to Sears to entice the company and its 6,000 employees to move from Illinois. Pennsylvania, Ohio and West Virginia are vying intensely to be the home of a new "ethane cracker" Shell plans to build. The governors of Kansas and Missouri have intervened, personally, in a battle to host the headquarters of AMC Entertainment.

Americans struggling through the Great Depression didn’t have Jon Stewart and Stephen Colbert to provide a nightly lampooning of the rich, powerful and foolish, but they did have Will Rogers. “I am not a member of any organized political party," he famously observed, "I am a Democrat.”

Born in the Territory of Oklahoma in 1879, Rogers became a working cowboy. In about 1900, he assembled a circus act that performed roping tricks, and took it to New York City theaters, where he headlined in vaudeville for a decade. He started touring nationally, offering witty commentaries on the news, and he began a syndicated "Daily Telegram" which soon ran in 500 newspapers. (His columns are collected here.)

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India's ambivalence about modern retailing has brought derision from the West. The government's decision to put off legislation that would have opened India's retail market to foreign investors, announced Dec. 7, led to howls of outrage. On Jan. 10, the government partially reversed course, decreeing that foreigners could own single-brand stores under certain conditions.

Those conditions include obtaining at least 30 percent of the products sold from small Indian manufacturers -- which was unattractive to retailers who gain competitive advantage from their ability to source globally on a large scale. On Jan. 22, the Swedish furniture retailer IKEA said it was putting its entry into the Indian market on hold.

We usually don't think of the U.S. as a monetary union, but early in its history it essentially was. Unlike the crisis-wracked euro zone, the dollar zone survived its first few decades without a major crisis, providing the fragile young republic with a period of relative stability during which it began to congeal culturally, economically, politically and militarily.

European policy makers hoped that the euro would serve as the unifying and integrating force of the European Union much as, they believed, the dollar had for the early U.S. What the Europeans failed to appreciate was that early America's real glue was not its dollar union but its fiscal one.

History is filled with examples of people who achieved fame not because of a major accomplishment, but simply because they were the first to do something. Such is the case of Ida May Fuller, a resident of rural Vermont who became the first beneficiary of a recurring Social Security payment on Jan. 31, 1940.

Fuller was born on Sept. 6, 1874, and attended school in Rutland, Vermont, as a classmate of future President Calvin Coolidge. Known to her family and friends as “Aunt Ida,” she never married or had children, and she lived alone most of her adult life. After working for decades as a teacher and legal secretary, and contributing to Social Security for almost three years, she filed her retirement claim in November 1939.

Japan’s imperial ambitions on mainland Asia, driven in part by shortages of industrial raw materials, exploded onto the global scene in September 1931. Chinese hostility to Japanese economic policies had led to boycotts, reducing Japan's export sales to China by 60 percent in nine months.

After deceptively staging an attack it blamed on Chinese dissidents, the Japanese army invaded China’s northeastern region, Manchuria, which was rich in coal and iron ore. The invasion was in defiance of orders from Tokyo. In January 1932, as the occupation intensified, military leaders sought additional gains, almost 700 miles south, at Shanghai. (For related film clips, click here.)

Environmentalists are increasingly pressuring us to give up incandescent lighting in favor of compact fluorescent bulbs and light-emitting diodes. The public is resisting, talk-radio hosts have rebelled, and Congressmen have claimed that the government has no right to tell people how to light their homes and offices.

This will probably be a long battle. But the transition away from incandescence will surely be quicker and easier than what occurred when the incandescent bulb first became available.

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In the summer of 1924, when her husband died, Lillian M. Gilbreth was left not only with their management-consulting business to run, but 11 children -- ranging in age from 2 to 18 -- to raise on her own.

Gilbreth is the mother in that romp of a book (and later movie), "Cheaper by the Dozen." But the 1948 book, written by two of her children, though entertaining and eternally popular, trivialized the life of a complicated and accomplished woman.