Historical Echoes: Neither a Lender nor a Borrower Be, or When the Bard Met the Fed

Mary Tao

The Federal Reserve in secret conclave ponders
Means to cure the nation’s cloudy state o’ercast
By stormy speculation. To-morrow morning’s news proclaims
The fury of their warning. Such dismal stuff will shake
The Wall Street world to marrow of its gambling bones;

These lines come from a 1929 play, Shakespeare on Wall Street, a mash-up of famous Shakespearean characters from various plays set to the story of the stock market crisis just then in motion. Written by a Harvard Law professor, Edward Henry Warren, the play features Shakespeare as a New York investor and his three sons—Hamlet, the bond salesman; Macbeth, a timid investor; and Falstaff, an anti-prohibitionist. The opening act parallels Shakespeare’s Macbeth, but with a twist: the three witches meet up in New Jersey. When Macbeth encounters the witches, he is willing to offer them as much as a golden eagle for their investment tips. A few scenes later, Polonius mentions that Macbeth has asked him to contact the Fed for assistance.

Historical Echoes: The Whimsical Side of Banking circa 1960

Megan Cohen

Modern-day banks provide many services to their customers: checking and savings accounts, mortgages, investment advice, and the like. On occasion, visitors might receive a pen or a travel mug, children a lollipop or a coloring book. However, the generous customer rewards of yore have all but disappeared.

Historical Echoes: Banking in Early Nineteenth-Century New England

Amy Farber

Old Sturbridge Village (OSV) is an historic site, a living museum located in Sturbridge, Massachusetts, that has a well-developed public website. Its page about banking in the early 1800s describes the Thompson Bank (see also video of exterior), which was constructed in the 1830s in Thompson, Connecticut, was a bank until 1893, and was disassembled and reassembled in 1963 to be part of the museum.

Historical Echoes: The Origins of the Piggy Bank

Megan Cohen

Looking far back, all the way to the Middle Ages, people were in many ways very similar to those living today. Households acquired items of value, including currency. In those times, when the question of where to keep money arose, people didn’t typically have the option of a local bank. Instead, the answer oftentimes involved keeping their valuables in a vessel made of pygg.

Historical Echoes: The Aftermath of a Devastating Hurricane . . . in 1938

Jason Bram and Kara Masciangelo

More than seventy-four years ago, on September 21, 1938, a devastating hurricane—sometimes referred to as the Long Island Express—struck the southern shore of Long Island without much warning, killing fifty people and causing massive property damage. The storm would continue on and inflict severe damage to the southeastern part of Connecticut and much of New England. This dramatic 11-minute video from the U.S. Works Progress Administration details the storm’s aftermath and rebuilding efforts.

Historical Echoes: Reverse Bank Run, Or When the Money Came Rollin’ In

Mary Tao

On March 6, 1933, President Roosevelt issued a proclamation of a national bank holiday, which prohibited the withdrawal of gold for hoarding and other purposes and resulted in the temporary closure of all banks in the United States. The proclamation was followed by huge inflows of gold to the Federal Reserve.

Historical Echoes: 1947 Banking Basics, Step by Step

Amy Farber

In 1947, if you didn’t quite understand banking basics, the ten-and-a-half-minute film “Using the Bank” might have served as an introduction. The film follows citizen and prospective entrepreneur Frank Adams as he deposits money in his savings account, requests a business loan from his bank, opens a checking account for his new business, uses a check to pay for business supplies, and gets change for his business. The camera brings every detail to life in glorious black and white.

Historical Echoes: How Do You Say “Wall Street” in Latin?

Marco Del Negro and Mary Tao

The Forum. This is where finance happened in ancient Rome. According to the historian Jean Andreau (“Banking and Business in the Roman World”), both run-of-the-mill banking and high finance took place in the Forum. The former was performed by money lenders (in Latin, argentarii), who were mostly plebeians. The latter, as far as we know, was almost exclusively run by and for the patrician classes: senators and knights (equites). Money lenders were a professional group (many of them were former slaves). Taking deposits, making loans, and assaying and changing money (which was then made of precious metals—gold, silver, and bronze—in different denominations) was how they made their living. Those patricians who were involved in high finance, however, often had a patrimony (land, real estate, slaves) and an income they could live off. Yet they sought to increase their wealth by lending both their money and other patricians’ money. To lend money for interest in Latin is called faenerare; hence, these people were called faeneratores (see also Koenraad Verboven, “Faeneratores, Negotiatores and Financial Intermediation in the Roman World”). They were “specialized businessmen who spent all their time in the forum” (Andreau, p. 15), and who hung around the Janus medius, a vaulted passageway in the Forum: “Both creditors and lenders could be found there—that is to say both passive investors seeking to place their money and also intermediaries arranging credit, who were experts at investing money” (Andreau, p. 16). To quote Cicero (De Officiis, Book II):

Historical Echoes: FOMC … “Minutes” by Minutes

Kathleen McKiernan

Although the Federal Reserve was founded in 1913, the Federal Open Market Committee,  or FOMC, wasn’t created until passage of the Banking Act of 1933. Congress established the name and legal structure of the FOMC as a formal committee of the twelve Reserve Banks. In 1935, a System reorganization added the seven-member Board of Governors to the twelve Reserve Bank presidents—uniting the centralized and decentralized components of the Fed. In the Banking Act of 1935, Congress mandated that only five of the twelve Reserve Bank presidents would vote at any one time, along with the seven governors. The first FOMC meeting convened a year later, in March 1936.

Historical Echoes: It’s Not Easy Being Green

Amy Farber

COLOURlovers is a website for people obsessed with color and design. In 2007, a contributing blogger was inspired to write about how the color palette of U.S. money was undergoing a momentous change. He explains in “The New Colors of U.S. Money” the redesign of the $5, $10, $20, and $50 bills, offering images and careful descriptions of the coloring. He briefly observes why the currency is “safer, smarter, and more secure.”