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.
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.
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
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.
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.
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.
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.
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
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):
the Federal Reserve was founded in 1913, the Federal Open
Market Committee, or FOMC,
wasn’t created until passage of the Banking Act of
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.
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.”