Echoes Dispatches From Economic History

George Washington

Every February since 1896, the U.S. Senate has observed the birthday of George Washington by having one of its members read his 1796 Farewell Address into the record.

The ceremony is usually purely symbolic. This year, however, it could influence policy: The country’s first president had some interesting ideas about the national debt that might resonate as Congress gears up for more fights over spending and taxes.

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Philip Scranton

When Michigan Shut Its Banks

over 1 year ago
Depositors

Banking panics aren’t pretty. Imagine hundreds of depositors, frightened that their savings are about to be erased, rushing to the sidewalks around the institutions rumored to be failing, pushing toward the tellers' cages and pleading for withdrawals.

Then they learn the money isn't there. The cash is tied up in illiquid investments, inventories and homes. Fear spreads. Soon, perfectly sound institutions are besieged by desperate people who want their money back.

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Oil Rig

M. King Hubbert, a geologist with Shell Oil Co., first proposed the idea of peak oil in 1956.

Hubbert was respected in his field. His outlook on oil production, now called the Hubbert curve, seemed prescient when U.S. domestic production began to decline in the 1960s and ’70s. Both the Hubbert curve and the concept of peak oil quickly gained wide, if not universal, acceptance that has hardened into conventional wisdom.

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Leigh E. Schmidt

How Valentine’s Day Created a Retailing Revolution

over 1 year ago
Valentine's Day Card

At the beginning of the 19th century, St. Valentine’s Day was of little note in American culture. It could easily have faded from the calendar out of Protestant indifference and civic irrelevance, forgotten right along with days dedicated to St. Agnes, St. Anne and any number of others.

Instead, St. Valentine’s Day suddenly surged in popularity in the 1840s. As Graham’s American Monthly announced in 1849, Feb. 14 “is becoming, nay, it has become, a national holyday.”

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Black Occupational Shares By Region

The civil-rights revolution of the 1960s is now firmly embedded in American civic culture, an inspiring story of courage in the face of violent oppression and age-old injustices finally set right.

Less well-known is that the demand for economic justice was one of the most successful and enduring features of that movement.

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Philip Scranton

When Hitler Took Charge

over 1 year ago
Adolf Hitler and Paul von Hindenburg

By fall 1932, Germany’s explosive political and economic turmoil, triggered by the Great Depression, seemed to be calming down. Although more than one third of the workforce had been unemployed early that year, the economy was now showing signs of life. The number of jobless dropped by almost half a million from June to October.

Better yet, the rampaging National Socialist Party’s fortunes looked to be slumping. Adolf Hitler, the party's leader, had lost in the April presidential election to aging Field Marshal Paul von Hindenburg. Then in the November national election, the Nazis lost 34 of their 230 parliamentary seats, receiving just 12 million of the 36 million votes cast.

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Sean Vanatta

How the Patent Office Helped to End Slavery

over 1 year ago
U.S. Patent Office

It is easy to look to early America as a moment of unshackled innovation. Yet in this respect the pre-Civil War period was especially problematic.

Then, intellectual property and human property were dual and dueling pillars of capitalist development, and for a vast swath of the population, invention was stifled under the crushing weight of slavery.

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Joseph M. Adelman

USPS Folly Was Foreshadowed by Confederate Post Office

over 1 year ago
Confederate Postal Service

The announcement yesterday that the U.S. Postal Service will cease Saturday delivery starting in August highlights the core paradox of the system: that it should both serve a universal civic function and generate enough revenue to sustain its enormously expensive operation.

Since 1971, the postal service has been run as a business- like independent government agency. As e-mail and other forms of digital communication have proliferated and health-care costs have soared, the system’s finances have deteriorated.

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Carribean

United Fruit Co. in Guatemala. Aramco in Saudi Arabia. Blackwater in Iraq. We are familiar with a few private American companies that decisively shaped foreign policy. One of the first and ultimately most influential, however, is also the least known.

In December 1892, a group of Wall Street businessmen arrived by ship in the Dominican Republic. Earlier that year, the group had created the San Domingo Improvement Co. and bought all of the country’s foreign debt from a European financial company. Now the men came to Santo Domingo on a delicate mission -- coming to terms with Ulises Heureaux, the Caribbean republic’s fearsome dictator.

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Labor Note

Americans in the early republic struggled to adjust as traditional relations of exchange and autonomy were transformed by new realities of markets, wages and growing inequality.

For each citizen who thrived in these conditions there were many more who failed to adjust. Everyone responded differently. But few rose to the moment as brilliantly, or as idiosyncratically, as Josiah Warren.

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Philip Scranton

The World War I Debts That Wouldn't Go Away  

over 1 year ago
Sir Ronald Lindsay

Late in January 1933, President-elect Franklin D. Roosevelt met separately with his predecessor, Herbert Hoover, and Britain’s ambassador, Ronald Lindsay. Each session focused on one issue: How would the new chief executive handle the nagging problem of war debts?

During the war, the U.S. had advanced European countries about $10 billion in goods and credit. Following the July 1932 expiration of Hoover’s yearlong moratorium of payments, international readjustment discussions were scheduled for March 1933. European representatives hoped the new U.S. government would then articulate fresh policies. Many nations sought a sizable writedown of principal and interest because further postponement of due dates had proved politically impossible in the U.S.

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Intellectual Property

Although typically glossed over in high-school textbooks, as a young and newly industrializing nation the U.S. aggressively engaged in the kind of intellectual-property theft it now insists other countries prohibit.

In other words, the U.S. government’s message to China and other nations today is “Do as I say, not as I did.”

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Moselle Steamboat

The Moselle isn’t remembered for being one of the fastest steamboats on the Ohio and Mississippi rivers, even though it was. Instead, it is usually remembered for its cataclysmic demise, a product of speed and shoddy construction, and especially for what followed.

The sudden and violent end of the Moselle, combined with other highly publicized riverboat explosions, prompted the creation of the first federal agency responsible for regulating American private industry.

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Uploaded by UUID:9202051 at 1/30/2013 1:29 PM

The Duke and Duchess of Cambridge, better known as Prince William and Kate Middleton, are expecting their first child in July.

Is it a boy? A girl? Twins? The jury is still out, but on one point there’s considerable certainty: Thanks to some ancient history, the future monarch will eventually inherit a sizable fortune and become the custodian of extraordinarily valuable state assets.

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Philip Scranton

How Public Power Jump-Started the New Deal

over 1 year ago
Dam Construction

Part way through selecting his Cabinet, President-elect Franklin D. Roosevelt departed Washington on Jan. 20, 1933, for a visit to a small, riverside Alabama town named Muscle Shoals. Though few knew it at the time, Roosevelt had big plans in mind: to harness the power of the Tennessee River through massive public construction projects that would provide tens of thousands of jobs and huge purchases of equipment and materials. Such projects would reinvigorate the upper South’s economy and provide hydroelectric power to the region and beyond.

During World War I, the Army Corps of Engineers began building an immense dam across the Tennessee River at Muscle Shoals, intended to generate power for adjacent plants making military explosives. The project employed more than 18,000 workers and involved about 1,700 temporary buildings.

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William Hogeland

Why the Founding Fathers Loved the National Debt

over 1 year ago
Washington Bond

Although Republicans in Congress agreed this week to suspend the U.S. debt limit for three months and forestalled another budgetary showdown, most commentators think the peace won’t last.

There’s sure to be a fight over automatic spending cuts scheduled to kick in March 1 (part of last year’s debt-ceiling deal), followed by a looming deadline for funding the government that could lead to a shutdown. And House Speaker John Boehner has vowed to block any long-term increase in the debt ceiling without corresponding spending cuts -- in effect, holding out the possibility of default as a means of controlling the country’s debt.

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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."