Echoes Dispatches From Economic History

Kristin Aguilera

A History of Wall Street's Women: Echoes

over 2 years ago
Log Book

On Dec. 28, 1967, Muriel "Mickie" Siebert became the first woman to own a seat on the New York Stock Exchange -- a full 175 years after the exchange was founded. According to Siebert, her NYSE member badge was the most expensive piece of jewelry she ever bought (at $445,000), and it was also the hardest earned. She had been turned down by nine prospective sponsors before finding the two she needed to endorse her application.

As the lone woman among 1,365 men at the exchange, Siebert wasn't universally welcomed. Headlines such as "Skirt Invades Exchange" and "Powder Puff on Wall Street" conveyed a reluctance on "the Street" to accept a sea change that had been making its way through many other professions for years. In fact, when Siebert purchased her seat, she wasn't issued the standard scroll all new members received, and which she was required to display. She didn't receive it until the following year, when the exchange had a new president.

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By late 1931, economic troubles had been growing for more than two years. Those expecting a quick recovery were disappointed and sought explanations. What's wrong with the world economy? How did we get into this swamp?

Among many theories advanced at the time, three stand out: one focused on long-term economic imbalances, one on financial contingencies and one on cultural or psychological explanations.

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Kirsten Salyer

Weekly Links: Echoes

over 2 years ago

History News Network on economic lessons from "It's a Wonderful Life"
Forbes on why Obama is an awful economic historian
Designer Daily on the history of business cards
Ronald McKinnon on how Alexander Hamilton could save Europe
Slate on how Nerf become a kid’s arms dealer
Mother Jones on the economics -- and “elf slaves” -- of online shipping
Peter Temin on "Financial Intermediation in the Early Roman Empire"
Vox on how countries have dealt with high debts since 1880
Doug Short on similarities between the panic of 1907 and the crisis of 2008
Paul Krugman on British debt history

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In December 1908, the insurance industry declared war on Christmas. The New York Board of Underwriters issued an announcement to every client of every fire-insurance firm in the city.

It read:

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Leslie Berlin

When Steve Jobs Was a`Joker': Echoes

over 2 years ago
jobs letter

In June 1976, Steve Jobs went looking for someone to print the manual for the Apple I computer, the first product from the company he had started with Steve Wozniak and Ronald Wayne a few months earlier. Jobs's friend Regis McKenna, the head of Silicon Valley's premier advertising and public relations firm, suggested he contact Mike Rose, who ran a small advertising agency in Los Altos, California.

After speaking with Jobs on the phone, Rose was leery. He wrote a short note to his business partner, warning him that young Mr. Jobs would be in touch. That note, which Rose donated to the Silicon Valley Archives at Stanford in 1998, is reproduced here.

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In 1931, Britain’s parliamentarians had created a coalition "National Government," partly to address deep divisions the Great Depression had opened among members of the Labour Party, whose plurality in the 1929 elections brought Ramsay MacDonald to No. 10 Downing Street.

Economic stress paralyzed the cabinet, however, as key leaders refused to accept a budget-cutting austerity program while others rejected deficit spending or revenue increases through tariffs. (Britain had long been the champion of free trade -- no taxes on imported goods.)

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Kristin Aguilera

Brother, Can You Spare a $100,000 Bill?: Echoes

over 2 years ago
$100,000 Specimen Gold Note

In one of financial history's great ironies, the first $100,000 bill rolled off the presses on Dec. 18, 1934 -- at the very height of the Great Depression.

These bills, issued as gold certificates, were never publicly circulated. They were issued only to Federal Reserve banks against the equivalent amount of gold held by the Treasury. Their purpose was to facilitate banking transactions in a time prior to electronic money transfers.

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It is commonly opined, in high school history classes and backyard barbeques, that government spending in the run-up to World War II "got us out of the Depression." This narrative conveys the sense that the end of the Great Depression was both accidental and necessarily belligerent.

But exactly how World War II got us out of the Depression is generally ignored -- even though it provides a lesson at odds with the accepted interpretation.

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Kirsten Salyer

Weekly Links: Echoes

over 2 years ago

Marketplace on the history of BlackBerry addiction on Wall Street
The Big Picture on why the financial crisis was entirely foreseeable
GOOD on whether money can, in fact, buy happiness (infographic)
Zero Hedge on the anniversary of the Bank of the United States' 1930 failure
Credit Writedowns on the new relevance of Herbert Hoover's 1931 statement on federal expenditures
Felix Salmon on how Vogue monetizes old content
Paul Kedrosky on the meaning of “Banker’s Dozen”

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The next time you browse the grocer's cereal aisle, plan a spa weekend or contemplate a new diet and exercise regime, give a thought to John Harvey Kellogg, who died 68 years ago this week.

Best known as the inventor (with his younger brother, Will) of Corn Flakes breakfast cereal, Kellogg also left a broader imprint on 21st-century lives as an early proponent of wellness and nutrition.

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Philip Scranton

The Gold Standard and the Great Depression: Echoes

over 2 years ago

In September 1931, Britain abandoned the gold standard, at least for the next six months. This followed Germany’s decision in mid-July of that year to establish strict exchange controls, a response to serious foreign-account liquidations and demands for gold shipments in early summer.

What was this gold standard and why was it under pressure in 1931?

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Kirsten Salyer

Weekly Links: Echoes

over 2 years ago

Paul Krugman on Friedrich Hayek’s exaggerated role in the history of macroeconomics

Marginal Revolution, in response to Krugman, on the importance of Hayek

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One of the strangest pamphlets ever authored by an American public official appeared in 1797. Written by Alexander Hamilton -- a founding father and the first U.S. Secretary of the Treasury -- its title constituted a mini-essay in its own right.

It was called: "Observations on Certain Documents Contained in #s 5&6 of 'The History of the United States for the Year 1796,' in which Charges of Speculation Against Alexander Hamilton, Late Secretary of the Treasury, Is Fully Refuted by Himself."

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Jeffrey Fear

The Long Shadow of German Hyperinflation: Echoes

over 2 years ago
German Hyperinflation

In February, Axel Weber surprised much of Europe when he resigned as Bundesbank president. Weber said that he felt isolated for his “clear positions” in opposition to the European Central Bank’s policy of purchasing distressed euro-area sovereign debt on secondary markets.

In September, Jurgen Stark, the Bundesbank representative on the ECB's board, also resigned. He was concerned that further ECB bond purchases would destabilize the euro and undermine the central bank's independence. Monetary policy, he feared, was propping up profligate national fiscal policies.

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Philip Scranton

War Reparations and the Great Depression: Echoes

over 2 years ago

International debt accounts were deteriorating. Nations, like families, couldn’t pay their bills. In the early 1930s, European nations owed the U.S. roughly $11.5 billion in World War I debt (about $165 billion in 2011 dollars), chiefly for food and war materiel.

And Germany, penalized under the Treaty of Versailles for war aggression (a much-disputed claim), initially owed $64 billion in gold as reparations, a sum reduced to $27 billion in a 1929 revision. In theory, Germany's payments to France or Britain could be shipped to the U.S., reducing war-loan balances. But German payments were slow and small, and the arrangement fell apart after the stock-market crash of 1929.

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Kirsten Salyer

Weekly Links: Echoes

over 2 years ago

Origins on America's long struggle with mass unemployment

Slate on the history of bathroom-tissue marketing

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In November 1874, the Greenback Party was founded. It briefly rose to prominence in U.S. politics but in less than 15 years was gone, much of its platform co-opted by the Democratic Party. The issues it raised, however -- hard money versus soft money, inflation versus stability -- are with us still.

Like so much in late 19th-century America, the Greenback Party was a product of the Civil War. The extraordinary cost of the conflict had forced the U.S. to abandon the gold standard. The country printed $450 million in fiat money during the war -- called greenbacks after the color of the ink used in the bills.

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The Ford Edsel, 1958 Corsair model.

In November 1956, Ford settled on a name for its new line of mid-priced automobiles: It would be called the Edsel, after the son of the firm’s founder. Launched the following September, the Edsel was an utter flop, and has since become an exemplar of a product gone wrong, of how seemingly omnipotent firms and advertisers can be laid low by grass-roots consumer antipathy.

Documents held by the Hagley Library help make sense of the Edsel debacle. Two months after the Edsel’s launch, Ford hired Ernest Dichter, then the nation’s leading market-research analyst, to help the company determine how to increase sales. Dichter's frank assessment, laying out the extent of the Edsel’s troubles, offered only a few glimmers of hope for the company.

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Philip Scranton

Prohibition and the Great Depression: Echoes

over 2 years ago

Even French wine was bad in 1931. A poor vintage capped a pretty miserable year around the world. Of course, you couldn’t get Burgundy or Bordeaux legally in the U.S. -- Prohibition was the law of the land. Still, those with friends and contacts could find their way to bottles (and cases) from the legendary 1929 harvest and the excellent 1926.

Prohibition is going through something of a renaissance in today's popular culture, from Ken Burns’s terrific PBS series to the riveting HBO show "Boardwalk Empire," with its savagely charismatic crime boss, Nucky Thompson.

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Protest movements against big business and distant power are a recurrent theme in U.S. history. The Occupy Wall Street protesters who spent two months camped out in lower Manhattan have forerunners dating back to the Revolution. Many were fleeting; like Occupy Wall Street and its progeny around the country, they called attention to economic wrongs, but offered no formulas to right them. One of these protest movements, however, was long lasting and highly successful.

Its objective? Restraining the power of chain stores.

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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."