Financial History 25th Anniversary Special Edition (104, Fall 2012) | Page 48
A Museum of Finance
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had both, and even now they are lacking
in many countries.
The Role of Finance Museums
The power of finance is clear to those
of us who study it, both historically and
in today’s world. Yet many people are
unaware of it or don’t fully understand it.
This provides the rationale for a museum
of finance. Through artifacts brought to
life with written and oral explanations,
a museum can use visual stimulation to
arouse curiosity and teach important historical lessons. Some examples may illustrate the point.
In 2009, the Museum had an exhibit
featuring the world’s oldest extant share
of stock of a publicly-traded company,
the Dutch East India Company. It was
lent by its Dutch owners. The company
was founded in 1602, and the share dated
to that decade. The company sponsored
Henry Hudson’s “discovery” of New York
harbor and the river subsequently named
after him. For New Yorkers and others, it
was a great way to relate the city’s history to
financial developments in Europe long ago.
The Museum’s permanent exhibits feature two early US government bonds. One
dates to 1792 and is registered in the name
of George Washington, whose signature
appears on it. It was “assumed debt,”
meaning that Washington had turned in
some Virginia state debt he owned for US
government debt as a part of Alexander
Hamilton’s plan for the assumption of
state debts by the federal government in
1791. This is an entry for teaching about
Hamilton’s financial innovations at the
beginning of US history, which spurred
both economic growth and our two-party
system when Thomas Jefferson and James
Madison organized a political party to
resist Hamilton’s innovations.
The other early bond is a Louisiana 6%
of 1803. Almost every American knows
of the Louisiana Purchase of that year.
But how was the Purchase actually made?
The US government issued $11.25 million
of bonds maturing some 15 years later,
of which the one on display is an example. The bonds were taken to Europe by
Barings, London investment bankers, and
sold by them and other banking houses
to European investors. The proceeds were
paid to France so that the French emperor,
Napoleon Bonaparte, had more money
to wage his wars in Europe. The transaction, the largest such international financial transaction in history to that time,
doubled the geographical size of the US.
Our country had been a bankrupt nation
in 1788, but by 1803, thanks to Hamilton,
it had one of the best credit ratings in the
world. That is why France was to be paid
in US bonds. The bonds were easily marketable to European investors, illustrating
the power of finance.
Perhaps you have heard the phrase,
“Not worth a Continental.” It refers to
the paper money issued to such an extent
by Congress during the War of Independence that it lost almost all of its value.
You can see one and learn the story
in the Museum’s permanent “Money: A
History” exhibit. Have you heard of the
greenbacks that were similarly issued by
Abraham Lincoln’s Union government
during the Civil War, and similarly lost
value? You can see greenbacks and learn
their story at the Museum.
Did you ever see a check for $642,600,000?
Investment bankers wrote such a check
to the Ford Foundation in 1956, after they
had sold a large block of the Foundation’s
stock in the Ford Motor Company to the
public. Henry Ford ran a private company,
and when he died in 1947, he left most of
his stock to the Ford Foundation. By selling
the block of stock in 1956, the Foundation
diversified its assets and increased its philanthropic activities, while the Ford Motor
Company became a public company in
which anyone could invest. You can see that
check at the Museum. A number of stories
about the power of finance can be conveyed
on the basis of it.
But one shouldn’t have to come to New
York to view these artifacts of financial
history and learn the stories that they
tell. Modern information technologies can
allow us to put these and other treasures,
and their stories, online. Then anyone in
the world with access to the Internet can
see and learn from them. It means more, of
46 FINANCIAL HISTORY | Fall 2012 | www.MoAF.org
course, to see the real thing up close. When
I was young, I saw many images of the
Mona Lisa and the Venus de Milo, but they
meant much more when I later viewed the
actual masterpieces at the Louvre in Paris.
So our online plans when realized will not
be a substitute for a visit to 48 Wall Street,
as much as an invitation to make that visit.
Using artifacts from financial history
and exhibits based on them to increase
the public’s understanding of the power of
finance is just one aspect of the Museum’s
mission. Financial education broadly construed is just as important. The Museum
does that for adults with its evening lecture series featuring prominent speakers
from the financial and academic worlds.
Its “Lunch and Learn” midday events give
authors of recent books on finance and
financial history an opportunity to explain
their work. The Museum Finance Academy uses the Museum’s own and Wall
Street’s resources to educate high school
students about the power of finance and to
increase their personal financial literacy.
In 1987, in the wake of the stock market
crash of October 19 that year, Wall Street
and the US financial system were under
a cloud. Some feared it was 1929 all over
again and expected a depression to follow. In those dark days, stockbroker John
Herzog, knowing of the power of finance,
decided to dedicate his fine coll