Echoes Dispatches From Economic History

Kristin Aguilera

How Social Security Really Began: Echoes

over 2 years ago
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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.

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Philip Scranton

When Japan Invaded Shanghai: Echoes

over 2 years ago
Echoes: Bund Shanghai

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.)

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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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Echoes:Working Moms

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.

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Sven Beckert & Seth Rockman

How Slavery Led to Modern Capitalism: Echoes

over 2 years ago
A slave being auctioned, 1861

When the New York City banker James Brown tallied his wealth in 1842, he had to look far below Wall Street to trace its origins. His investments in the American South exceeded $1.5 million, a quarter of which was directly bound up in the ownership of slave plantations.

Brown was among the world's most powerful dealers in raw cotton, and his family’s firm, Brown Brothers & Co., served as one of the most important sources of capital and foreign exchange to the U.S. economy. Still, no small amount of his time was devoted to managing slaves from the study of his Leonard Street brownstone in Lower Manhattan.

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Phillip Scranton

On Hoover's Attempts to Rescue the Banks: Echoes

over 2 years ago
This Week

In 1929, there were nearly 25,000 banks in the U.S. Many European nations had fewer than 100. More than 90 percent of U.S. banks served small towns and rural districts, held state charters and hadn't joined the Federal Reserve System (which was mandatory for nationally chartered banks). Thus they couldn't seek loans from the Fed to support liquidity.

Given that deposits were uninsured, "runs" commenced when rumors circulated that a bank was having difficulty collecting mortgage and loan payments. Accountholders lined up hoping to recover their savings or liquidate their checking accounts. Banks often responded by limiting payouts or requiring, say, 30 days' notice for withdrawals. Fears of being "wiped out" spread and deepened, credit dried up, closures multiplied.

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Regina Lee Blaszczyk

How Auto Shows Sparked a Color Revolution: Echoes

over 2 years ago
Marketing Tools Used by Automakers in the mid-1920s

It was a spectacle that made people's eyes pop. The "dazzling colors" and "smart bodies" of the 1925 New York Automobile Show drew record crowds.

In the midst of a wicked Nor'easter, 8,000 motor enthusiasts flocked to the Kingsbridge Armory in the Bronx, New York, on Jan. 3, 1925. An additional 6,000 men in the auto business -- dealers, salesmen, jobbers -- toured the show during special trade days.

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Child Labor

Republican presidential candidate Newt Gingrich turned a few heads in November when he called U.S. child-labor laws "truly stupid." The former House speaker said having kids from poor homes take a turn as school janitors would teach them a work ethic they're not learning at home.

Everyone from union representatives to child advocates to social scientists expressed outrage over the idea.

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Men Working on Government Gardening Project

January 1932 saw a widening recognition that reversing the tide of the Great Depression was America’s No. 1 priority. And there was no shortage of ideas about how to get people back to work.

Maryland Senator Millard Tydings argued that re-legalizing beer “would provide work for 300,000 people in 24 hours,” and $500 million in annual tax revenue.

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Echoes: Exchange Rates

Determining the exchange rate from dollars to euros for that trip you're taking to Italy now takes a matter of seconds with an online currency converter. But that wasn't always the case.

Like today’s businesspeople, the merchants of the past required timely financial information to conduct their affairs profitably. And access to currency-exchange rates was critical.

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Regina Lee Blaszczyk

Remembering the Great Strike of 1912 (Part 1): Echoes

over 2 years ago
Echoes: Textile strike

It began on Jan. 11, 1912. The Polish women at the Everett Cotton Mills, in Lawrence, Massachusetts, opened their pay envelopes and found they had been shortchanged by 32 cents.

Since New Year's Day, when the company posted notice of a new state law that reduced the workweek by two hours, everyone had worried about a pay cut. Now that fear was a reality. The missing 32 cents would have bought three loaves of bread.

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Echoes: Great Depresssion

The Depression hit Pittsburgh hard. As 1932 began, the steel industry in the city was operating at 12 percent of capacity and unemployment had reached 31 percent for white workers, 48 percent for black workers.

Father James Cox -- a former steelworker and the pastor at Old St. Patrick’s Church in Pittsburgh since 1923 -- had run a soup kitchen for two years and helped build a Shantytown to house the foreclosed and the evicted. Late in 1931, Cox decided a march on Washington was the next logical step, recalling an 1894 trek from Ohio by Jacob Coxey’s “Army” of the unemployed during another depression. (Ironically, as Pittsburghers assembled on Jan. 5, 1932, Coxey had just become the Republican mayor of Massillon, Ohio.)

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On June 27, 1848, Daniel Drew found himself in court over insider trading. Not because it was illegal; there was no law against it at the time. Rather, his partners had sued him because he hadn't divided the profits fairly.

Drew launched the caper in 1844, in Wall Street's paleolithic era. At the time, brokers would gather at the stock exchange in New York City on weekday mornings and listen as securities were called one at a time. They made bids and offers, concluded their sales, and prices were scribbled on a big chalkboard. Then they had lunch. Then they went through the entire list once more.

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Echoes: Depression

The European Union is in trouble. Some governments are teetering on default, and even German creditworthiness is questioned. Interbank lending in the euro area is increasingly strained. The entire project of European economic integration, wrought through six decades of delicate negotiation, seems at risk of collapse.

In the U.S., meanwhile, European leaders are being criticized for failing to face up to their troubles. The New York Times condemns them for "gross mismanagement of the euro-zone debt crisis." "European elites," says the Boston Globe, "have for too long deceived themselves into believing they can have their cake and eat it too." Europe would be better off today, says the Washington Post's David Ignatius, if its leaders "had handled their problems as cleanly as the United States did three years ago."

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December, not April, was the cruelest month in 1931. U.S. stock markets cratered, and railway shares were “breaking to the lowest levels in the history of the Dow-Jones averages,” the Wall Street Journal noted on New Year’s Day, 1932. Shares of industrial companies followed them down. In the bond market, “new financing reached the vanishing point in the final quarter.”

Brazil’s Coffee Council planned to destroy 600,000 tons from the harvest. Japan abandoned the gold standard at mid-month, and the U.S. Department of Agriculture reported that 1931 crop values had fallen by 30 percent from a year earlier. In the midst of “one of the worst gold scares in history," the boats that usually carried gold across the Atlantic were overburdened and slower vessels had to be pressed into service.

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Regina Lee Blaszczyk

Wanamaker's Gilded Age Luxury Emporium: Echoes

over 2 years ago
John Wanamaker Store on Market Street

On Dec. 30, 1911, thousands of Philadelphians crowded City Hall Plaza to celebrate a Golden Jubilee. It had been 50 years since John Wanamaker, the city’s leading merchant, opened his first clothing store, Oak Hall, on Market Street.

To mark the anniversary, Wanamaker planned the grand opening of his newest and most ambitious store, this one designed by the father of the skyscraper, Daniel H. Burnham.

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About Echoes

Echoes is Bloomberg View's economic history blog. It is edited by Stephen Mihm, an associate professor of history at the University of Georgia and the author, with Nouriel Roubini, of "Crisis Economics: A Crash Course in the Future of Finance," and of "A Nation of Counterfeiters: Capitalists, Con Men and the Making of the United States."