A
Brief Financial History of the United States
Written by Catherine McGrew Jaime
Copyright 2010 by Catherine McGrew Jaime
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Introduction
I find timelines the best way to keep history straight. But, don’t worry, I use footnotes liberally – I had to look up many of these financial expressions, people, events, and terms, and I share that information throughout the book.
I also happened to be teaching a class on Benjamin Franklin at the time I started this study. I noticed that he had some sayings that applied to this topic – I’ve sprinkled a few of those throughout the book.
At the request of a friend, I’ve also sprinkled “Catherine’s commentary” throughout. Those appear as CC: ______It will become clear very quickly that I come at this from a fiscally conservative perspective!
Let us begin, close to the beginning:
16th Century
Spain establishes the first permanent settlement of Europeans in what is now Florida.
17th Century
In 1606, King James I of England charters the Virginia Company of London[1] to establish colonial settlements in North America.
Much of the labor in the colonies is done by slaves and indentured servants. In fact, it is not clear from historical records whether the first Africans that come to Jamestown in 1619 are slaves or indentured servants. Over time, most of the slaves come into the colonies from Africa, and most of the indentured servants come in from Europe.
Indentured servants generally signed contracts for 3 to 7 years of labor. While they are under their contracts, they are often not treated much better than slaves. In the early colonial years, most indentured servants have signed contracts to pay for their passage to America. In later years, many of the indentured servants are training as apprentices to learn a new skill.
During the Battle of Quebec in 1690, Massachusetts becomes the first American colony to issue bills of credit[2] to pay their soldiers.
In 1694, the Bank of England is founded as a privately owned foundation. (It is later nationalized, in 1946.)
1720
The Colonies begin printing their own paper money. (The money works well in each individual colony, but sometimes hampers trade between colonies.)
1731
Benjamin Franklin begins printing money for Pennsylvania. He develops special methods to fight counterfeiting.
1764
With the end of French and Indian War, and the need to pay the costs associated with it, the British Parliament bans the colonies from printing their own money. Ben Franklin lobbies unsuccessfully in London for the law to be repealed.
1765
In response to Parliament’s dreaded Stamp Act, the Stamp Act Congress debates “taxation without representation” at New York’s City Hall. Showing their displeasure, colonists fly their flags at half-mast.
1775
As the American Revolution begins, the Continental Congress authorizes $2 million in bills of credit to be issued.
1776
British economist Adam Smith writes in The Wealth of Nations, “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”
CC: In other words, profit is not such a bad motivator!
Towards the beginning of the American Revolution, Thomas Jefferson writes of critical economic concepts in the Declaration of Independence.[3]
Benjamin Franklin sails to France as an American Ambassador. One of his primary jobs there is to secure loans to help the Americans in their fight against the British.
1779
More than $241 million in continental money has been printed. But now, due in large part to high inflationary[4] rates and British counterfeiting, it is often said, “It is not worth a Continental”.
1781
The Articles of Confederation are ratified. They will direct the new country and its operation. They give some guidance for dealing with money/taxes in the new United States.[5]
1782
The first commercial bank in the U.S. opens in Philadelphia.
As U.S. Ambassador to the Netherlands, John Adams secures a loan of 5 million guilders from Dutch bankers.
CC: Our first constitution,[6] the Articles of Confederation, took us through the American Revolution. But within a few years, the federal government’s inability to collect taxes and pay its bills led to a desire for a new constitution, and a stronger federal government. But even with that push came the warning from those that would come to be called anti-federalists[7] that a stronger federal government was not without problems.
1788
The ninth state ratifies the U.S. Constitution[8] and it replaces the Articles of Confederation as our country’s ruling document. It, too, will spell out the economic limits of our government, though giving the federal government much more power than it had under the Articles of Confederation.
1789
Under President Washington, Alexander Hamilton becomes the first Secretary of the Treasury for the new United States. The U.S. is already in the midst of a financial crisis – the federal government and the states owe almost $80 million (to the French and Spanish governments and Dutch bankers, among others) from the recently fought War for Independence.
1790
With the recent break from England, the new United States is now without easy access to a stock market.[9] Philadelphia, the largest city in the U.S. at this time, starts the first American stock exchange – the Philadelphia Stock Exchange (PHLX). Shares in the market come initially from the Bank of North America and the Bank of New York. One of the earliest problems of the Stock Exchange is getting information to Philadelphia quickly enough from the European ships coming into New York City.
Philadelphia brokers set up signal stations across New Jersey to relay information, a system that works very well until the telegraph replaces it in 1846.
The federal government takes a break from printing money, but state and private banks quickly fill the gap. (In the next 75 years, over 8,000 banks issue paper money.)
CC: Needless to say, with each state issuing its own money, trade outside of local areas is often difficult, due to a lack of a common currency.
1791
In order to help curtail the financial debt crisis, Treasury Secretary Hamilton helps convince Congress to charter the first Central Bank for the new United States, modeled after the Bank of England. The Central Bank’s job will be to help regulate the economy by guarding the money supply, lending to regular banks in times of financial crisis, and selling shares to help pay off war debts. Thomas Jefferson and James Madison oppose the idea.
CC: If Thomas Jefferson and James Madison were against the idea of a Central Bank, it should give us pause to think!
1792
The U.S. Mint is established; the first U.S. coins are authorized.
Twenty-four bankers and brokers meet regularly under a Buttonwood (Sycamore) tree off Wall Street[10] in New York City to take care of business. They formalize this arrangement with the “Buttonwood Agreement”, forming the beginnings of the New York Stock Exchange.
1794
When Eli Whitney invents the cotton gin, the South increases its cotton production, and the North increases its textile industries.
1795
With help from an American banker, James Swan, the U.S. finally pays off its foreign debts from the Revolutionary War. (Domestic debt still exists.)
Thomas Paine (author of Common Sense) writes a pamphlet calling for a 10% property inheritance tax to establish a fund that would, among other things, give a small annual stipend to senior citizens. The idea doesn’t gain general acceptance.
1803
President Jefferson purchases the Louisiana Territory from France with low interest loans from English and Dutch banks, doubling the size of the United States.
1807
In reaction to a British attack on an American ship, the Chesapeake, the U.S. passes the Embargo[11] Act of 1807. The Embargo Act effectively puts an end to U.S. imports and exports, giving Americans the need to produce and manufacture more of their own goods in order to be more independent from Britain and the rest of Europe.
Robert Fulton launches his first steamboat from Manhattan, navigating it safely to Albany in 32 hours. It will help bring sweeping changes to river transportation.
1811
Construction begins on the first national road, the Cumberland Road. This is the first to be paid for by the federal government and will extend, upon completion, from Cumberland, Maryland across the Appalachian Mountains into the Ohio River Valley.
The First Central Bank’s charter is allowed to expire under President James Madison, who opposed its establishment in 1791.
1816
After the financial difficulties of the War of 1812, President Madison helps get the Second Central Bank of the United States chartered.
1819
The United States Supreme Court legitimizes the idea of a Central Bank for the U.S. in the case of McCulloch v. Maryland.
1825
600 carpenters in Boston strike for 10-hour work days. They are not successful – and the movement to organize themselves into a trade union is quickly labeled “un-American” by those who oppose their efforts.
After 8 years of construction, the Erie Canal is completed – on budget and ahead of schedule. New York City has been successfully connected to the Great Lakes with a system of 18 aqueducts and 83 locks – the greatest construction feat of its time.
1832
Unions in New England condemn excessive amounts of child labor: “Children should not be allowed to labor in factories from morning till night, without any time for healthy recreation and mental culture.”
1836
Members at the National Trades’ Union Convention make the first proposals to establish minimum ages for children working in factories and Massachusetts passes the first child labor law, requiring children under 15 to be in school at least three months each year.
The New York Stock Exchange moves into its new home, the Merchants Exchange, with room for 3,000 brokers and merchants.
The Supreme Court may approve of the U.S. having a Central Bank, but President Andrew Jackson does not. President Jackson prevents the Central Bank from renewing its charter, citing reasons such as: it concentrates the nation’s power in a single institution; it serves mainly to make the rich richer; and it exercises too much control over members of Congress.
CC: One of the few positive things some of us remember about President Jackson’s presidency!
1844
The invention of the telegraph by Samuel Morse revolutionizes communication.
1846
Elias Howe invents the sewing machine, revolutionizing the manufacturing of clothing.
The first department store opens in New York City – the Marble Palace. By centralizing the location of a wide variety of goods, it helps transform the way people shop.
The United States is now in the midst of an Industrial Revolution (often dated from 1820 – 1870).
1849
A class struggle, with New York City’s workers and their favorite American actor on one side, and the elitists and their favorite British actor on the other, erupts during a performance of Macbeth. After the working class mob attacks the Astor Place Opera House, police and militia are called in.
1852
Massachusetts passes the first compulsory education laws. Other states will soon follow.
1862
During the Civil War, the U.S. Bureau of Engraving and Printing is established. The first U.S. paper money is printed.
The North begins paying out Civil War pensions to injured Union soldiers and the families of deceased soldiers.
1864
Treasury Secretary Salmon P. Chase strongly encourages Congress to pass the National Bank Act to help finance the Civil War. The Act establishes “national banks”, in addition to the state banks already in existence.
Congress approves the use of “In God We Trust” on coins.
1866 – 1873
After the Civil War, there is a surge in Railroad building, including the completion of the Transcontinental Railroad in 1869.
1870
Boss William Tweed, the most corrupt politician in America, gains control of New York City’s finances as the Commissioner of Public Works.
1873
With the Coinage Act of 1873, the United States officially ends “bimetallism” – going from backing its money with gold and silver to backing it with only gold. (Almost 30 years will go by before the final move to gold alone is completed, in 1900.)
After much railroad overbuilding, the Northern Pacific Railway declares bankruptcy, leading to a run on the banks, and the closing of the New York Stock Exchange for 10 days. The Panic of 1873 turns into a 6 year “Long Depression” (originally called “the Great Depression”).
1881
The American Federation of Labor (AFL) calls on all states to ban children under 14 from working.
1882
Dow Jones & Company is started in New York City by Charles Dow, Edward Jones, and Charles Bergstresser. They produce and deliver daily news bulletins to subscribers in the Wall Street area.
Thirty thousand workers march in New York City in the first Labor Day Parade.
1883
Dow Jones & Company starts producing the “Customers’ Afternoon Letter”.
J.P. Morgan begins purchasing and organizing (“morganizing”) the railroads and railroad tracks in and out of New York City. Morgan works hard throughout his lifetime to keep the financial base in New York City strong.
1884
Journalist Charles Dow develops a system of Stock Averages to make it easier for investors to follow the top 11 stocks on Wall Street. (Most of the top stocks at the time are railroad stocks.)
It is included in the “Customers’ Afternoon Letter”. Dow’s Average makes the Stock Market understandable to everyday people and helps make stocks a viable investment option. Previously most investors had preferred bonds.
The Federation of Organized Trades and Labor Unions (forerunner of the AFL-CIO) pushes for an eight-hour work day.
1886
The Knights of Labor, a new labor organization, forms in Philadelphia.
In May, a group of unemployed union workers in Chicago clash with non-union workers who are replacing them. Over the course of several days, the violence escalates. When a number of policemen are killed by a bomb, eight anarchists are rounded up, tried for murder, and executed.
1889
The “Customers’ Afternoon Letter” becomes the Wall Street Journal.
May 1st is declared by the Second International (Organization) as “International Workers Day” -- a day of solidarity of the working class. May Day becomes the symbol (and celebration) of socialism.
1890
Twenty-eight percent (28%) of the U.S. population now lives in urban areas.
The Sherman Antitrust Act is passed by Congress almost unanimously. The Act limits monopolies[12] and cartels[13]. Its goal is to prevent artificial price hikes that could be caused by restricting trade or supply. In other words, it sought to protect competition.
After a seven-month strike, New York garment workers win the right to unionize.
1894
Jacob Coxey, an Ohio politician organizes unemployed workers to march on Washington. Tens of thousands, “Coxey’s Army”, start towards D.C., but only about 500 make it to the capitol. The march is not considered successful, but it does bring some attention to the unemployment issues of the time.
1895
The Supreme Court declares the first graduated income tax unconstitutional.
CC: The Supreme Court had the right idea!
1896
A new financial panic lasts three years, until the Presidential election of William McKinley over William Jennings Bryan. Bryan is depicted as a “radical and a socialist”, McKinley is seen as a “tool of business”. Bryan runs on a strong platform against the gold standard.[14] (Almost 80% of eligible voters turn out for the election.)
Charles Dow introduces the Industrial Average for the top 12 industrial stocks. The original dozen companies are American Cotton Oil, American Sugar, American Tobacco, Chicago Gas, Distilling and Cattle Feeding, General Electric, Laciede Gas, National Lead, Tennessee Coal & Iron, North American (Utility), U.S. Leather, and U.S Rubber.[15] The first Dow Industrial Average is 40.94. The Average is published daily in the Wall Street Journal.
1900
With the passage of the Gold Standard Act, the United States officially moves to a currency based solely on gold.
1904
The subway system opens in Manhattan. It consists of 28 stations along 9 miles of track, and is the first subway system in the country.
1907
The Stock Market drops 50%, helping bring on a Bankers’ Panic that starts in New York City and spreads across the country. After eight weeks, New York Banker J.P. Morgan helps end the financial crisis, convincing other bankers to join him in putting their own money into the system and helping to avert the crisis.
1908
Henry Ford succeeds in producing a “car for the masses” – the first Model T.
1909
Twenty-thousand female garment workers in New York City go on strike.
1910
40,000 clockmakers (mostly male) go on strike in New York City. Louis Brandeis (soon to be a Supreme Court Justice) is instrumental in bringing the strike to an end with the Protocol of Peace, which brings improvements in conditions and wages, in exchange for workers promising not to continue the strike again.
1911
Just before closing time, a fire breaks out in the Triangle Shirtwaist Factory, in the upper floors of the Asch Building. Hazardous conditions, including a locked exit door, make it difficult for most of the workers to get out of the building in time. The final death toll is 146 -- primarily young women. The factory owners are acquitted in a criminal trial.[16] New York responds with increased fire safety codes and improved safety regulations.
1913
The U.S. Constitution is amended for the 16th time, addressing the issue of income taxes: “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”
Congress and President Woodrow Wilson establish the United States’ third Central Bank, the Federal Reserve. It is an independent banking agency with leadership to be appointed by the President and confirmed by the Senate. Its stated purpose is “to prevent banking crises”. It will not be as strong as the first two central banks, since it will consist of 12 separate banks across the country.
CC: At least the theory is that the Federal Reserve is not as strong as the first two Central Banks. Many today would disagree. In fact, there is a growing movement today to rein in the Federal Reserve.
1914
The New York Stock Exchange is closed for four and a half months during World War I. (This is the first time the market has closed since 1873.)
Arkansas passes their first laws prohibiting Child Labor.
1916
The Dow Jones Industrial Average (not limited to industrial stocks now) increases from 12 to 20 companies. As from the beginning, the averages are maintained by the editors of the Wall Street Journal.
1918
Author H.G. Wells is one of the fans of a new anti-capitalism movement, “Technocracy”. It is based around the principle of “production for use” rather than “production for profit”.
1919
Bowing to pressure from the Temperance Movement, the 18th amendment is written and ratified. The Prohibition begins – making the sale of alcohol almost entirely illegal (until the amendment is repealed in 1933).
1920
Thanks in large part to the earlier Industrial Revolution, for the first time, more people in America live in cities than on farms.
Charles Ponzi becomes notorious for using the “Ponzi Scheme” technique[17] to defraud people.
1923
President Warren Harding dies; Vice President Calvin Coolidge becomes President. Coolidge believes in laissez-faire government and announces, “The business of America is business…Don't expect to build up the weak by pulling down the strong.”
1925
Under Coolidge, the top tax rate is lowered to 25%.
1928
The Dow Jones Industrial Average list increases to 30 companies, the number it still includes today.
1929
Even though he is a Republican, when Herbert Hoover becomes President, he is not committed to laissez-faire government.
The Wall Street Journal editors start the Dow Jones Utilities Averages (limited to utilities). They also maintain the Dow Jones Railroad Averages (eventually converted to Transportation stocks in general). These are not as well-known or as oft-quoted as the Industrial Averages.
By 1929, almost half of bank loans are being used for stock market investments. In the first half of the year over 300 banks close; an “Ordinary Recession” begins in August.
There are murmurs of problems in the Stock Market on Thursday, October 24. As the market starts a downward spiral, powerful New York City bankers, taking a play from JP Morgan’s earlier playbook (see 1907), invest their own money heavily to help stabilize the Market. There is a slight rally on Friday, October 25, but with back-to-back drops of 12.8% and 11.7% on “Black Monday” and “Black Tuesday”, the stock market officially crashes.[18] The Great Depression has begun.[19]
1930
Fifty-six percent (56%) of the U.S. population now live in urban areas.
By February the Fed has cut the prime interest rate from 6% to 4%.
Another 1,000 banks close. (There is no deposit insurance at this time, so depositors lose all their money when their banks close.)
Huey Long, Louisiana Governor and U.S. Senator, calls for the redistribution of the wealth from the nation’s wealthiest to the poorest – he calls it “Share Our Wealth”. Long’s slogan is “Every Man A King”. Within 5 years, more than 7 million have joined “Share Our Wealth Clubs” across the country.
Over the protests of 1,028 national economists, President Herbert Hoover signs into law the Smoot-Hawley Tariff Act. The law raises tariffs[20] on 20,000 imported goods.
“No nation was ever ruined by trade.” Benjamin Franklin
1931
In an attempt to help the financial situation of the country, the Federal Reserve raises interest rates.
CC: Probably not a wise move at the time!
President Hoover is blamed for the rising unemployment across the country. Shantytowns, often referred to as “Hoovervilles”, spread across the country – hundreds of thousands of homeless men occupy them.
The Empire State Building is built in 11 amazing months (during the Depression) on the site of the recently demolished Waldorf-Astoria Hotel. It becomes the tallest building in the world. In its first year, fees from the observation deck bring in over one million dollars.
As the Great Depression gains speed, Great Britain becomes the first major power to go completely off of the gold standard.
Davis-Bacon is signed into law by President Herbert Hoover; the purpose is intended to prevent local firms from underbidding large national firms. (It is still on the books, and today benefits big unions more than anyone else.)
1932
Less than 3 years into the Great Depression, the Stock Market has fallen 91%, to 41 points. Industrial production has fallen 52% in the same period, and corporate profits have fallen 49%.
Under President Hoover, Congress creates the RFC (Reconstruction Finance Corporation), an independent government agency. Its role is to provide capital to banks, insurance companies, mortgage companies, and building and loan associations, in the form of loans from the federal government. (In the next 25 years it will buy stakes in more than 6,000 financial institutions, at a cost of more than $50 billion.)
Herbert Hoover signs into law the largest peacetime tax increase in our country’s history, raising the top tax rate from 25% to 63%.
Franklin Roosevelt accepts the Democratic Party nomination at the Convention in Chicago. He ends his acceptance speech with his first reference to the New Deal that he will work hard to implement:
“I pledge you, I pledge myself, to a new deal for the American people. Let us all here assembled constitute ourselves prophets of a new order of competence and of courage. This is more than a political campaign; it is a call to arms. Give me your help, not to win votes alone, but to win in this crusade to restore America to its own people.”
Franklin D Roosevelt handily beats Herbert Hoover in the fall presidential election, receiving 472 electoral votes to Hoover’s 59 votes.
1933
On March 4th, in his first inaugural address, President Franklin Roosevelt (FDR) tells the American people with respect to the struggling economy, “The only thing we have to fear is fear itself.” The next day Roosevelt declares a Four-Day Bank Holiday to begin on March 6th.
FDR then signs the Emergency Banking Relief Act of 1933, prohibiting people from “hoarding gold”. The following week Roosevelt introduces his radio “fireside chats”[21] to reassure the American people about the economy.
The Civilian Conservation Corps (the CCC) is created to help provide jobs for many of the 25% who are unemployed.
In April, Roosevelt takes the American Dollar off the “gold standard”, making it easier for the federal government to inflate money.
In May President Roosevelt signs the Tennessee Valley Authority Act (TVA). FDR wants the TVA to be “a cooperation clothed with the power of government but possessed of the flexibility an initiative of a private enterprise.”
Congress creates the Agricultural Adjustment Administration (AAA), the Farm Credit Administration, the Federal Emergency Relief Administration, the National Recovery Administration, and the Public Works Administration.
Congress passes the Emergency Banking Bill, the Farm Credit Act, and the National Industrial Recovery Act.
In June the Glass-Steagall Act is passed. It establishes a “wall” between investment banks and commercial banks and establishes the Federal Deposit Insurance Corporation (FDIC).
A minimum wage is enacted ($0.25 per hour) as part of the National Recovery Act. (In 1935 the Supreme Court declares the National Recovery Act unconstitutional, and the minimum wage is abolished.)
Upton Sinclair, California author and socialist, writes up a 12-point plan: EPIC – “End Poverty in California”.
By the end of the year an additional 4,000 banks have failed and almost 44% of mortgages are in default. FDR signs the Home Owners Loan Act, creating the Home Owners Loan Corporation. With its creation, Roosevelt declares,
“I feel we have taken another important step toward the end of deflation[22] which was rapidly depriving many millions of farm and home owners from the title and equity to their property.” With a significant investment of capital from the Treasury, the agency helps over one million homeowners (20%) refinance their mortgages in the next three years, though many will eventually default on their loans anyway.
Sixty-six year old Dr. Townsend comes up with a plan, the “Townsend Old Age Revolving Pension Plan”, or simply, the Townsend Plan, to have the government take care of elderly with a pension plan. Within two years, there are more than 2 million members in Townsend Clubs across the country trying to get the Townsend Plan passed.
1934
In a close three-way race, Upton Sinclair loses his bid for California Governor.
The Federal Reserve (“the Fed”) is reorganized so that it will have more financial clout, and the Federal Housing Administration (FHA) is created. The FHA insures mortgages so that more lower-income families can afford to buy homes.
The SEC (U.S. Securities and Exchange Commission) is established as an independent agency responsible for enforcing federal securities laws.
President Roosevelt announces that he intends to provide a program for “Social Security”.
1935
Following an idea already popularized in numerous European countries, the Social Security Act is signed into law by President Franklin D. Roosevelt. The new law creates a social insurance program to provide retired workers, 65 and older, a continuing income.
The Wagner Act passes – giving Union officials exclusive bargaining power in unionized workplaces.
The Supreme Court declares the portions of the National Recovery Act which empowered the President to regulate employment hours, wages, and minimum ages, to be unconstitutional.
Congress creates the Works Progress Administration, the National Labor Relations Board and the Rural Electrification Administration.
Congress passes the Banking Act of 1935, the Emergency Relief Appropriation Act, the National Labor Relations Act, and the Social Security Act.
The Revenue Act of 1935 brings the top income tax rate level to 75%.
1936
The Stock Market has increased 73% in 2 years – back up to 180 points.
The top tax rate is raised to 79%.
1937
When the Supreme Court threatens to deal a constitutionality blow to more of FDR’s programs, he threatens to expand the number of Justices on the Supreme Court so that he can get a pro-Roosevelt majority. With “a switch in time that saves nine”,[23] the Supreme Court reverses itself on the minimum wage issue, and ushers in a modern era of constitutional law that allows almost limitless amounts of government intervention in the marketplace.
CC: We can only dream of what might have been different if the Supreme Court had had a collective backbone at the time!
Additionally, the Supreme Court upholds the constitutionality of the Wagner Act. The response in the workplace is a growing amount of unemployment – back to 1931 levels.
The first lump-sum payments are made to retired workers under the new Social Security.
1938
Fair Labor Standards Act sets federal standards for child labor.
The Federal National Mortgage Association (Fannie Mae) is created by FDR – to buy mortgages from lenders, keeping some and selling the rest on the secondary mortgage market. This makes it easier for lenders to continue to make loans during the economic turmoil of the Great Depression.
CC: Now we know where the Fannie Mae problems started!
1939
The top tax rate is 91%.
Adolf Hitler invades Poland, starting World War II. The United States does not enter the war for another two years, but war efforts will begin to bring the United States out of the Depression.
1940
Monthly payments begin to retired workers under the relatively new Social Security Act.
1945
As World War II winds down, 29 countries, including the United States, establish the International Monetary Fund (IMF) and the World Bank. Their purpose is to help rebuild Europe after the war.
1949
“Urban renewal” in NYC begins with a vengeance with the Federal Housing Act or “Title 1” money brought in. Robert Moses oversees the subsequent destruction and construction in New York City, making him responsible for the displacement of hundreds of thousands of NYC’s poor.
1950
The first Diners Club credit cards are issued – the first “universal” credit cards, they are initially accepted at 14 New York City restaurants.
1950’s
Right-to-work laws spread across various states – prohibiting forced union membership.
1952
President Truman orders the nation’s steel mills seized by the U.S. Army to prevent them from being closed by strikes. Two months later the Supreme Court declares the move by Truman illegal.
1955
The AFL-CIO is created by the merger of the two largest labor organizations in the U.S.
1956-1957
Congress declares “In God We Trust” to be the U.S. national motto. It first appears on paper money.
1959
The Landrum-Griffin Act restricts union activity.
1960
The United States imposes a partial embargo on Cuba. The purpose is to impose economic sanctions against country in hopes of overthrowing Cuba’s dictator, Fidel Castro.
Bernard Madoff founds the Wall Street firm, Bernard L. Madoff Investment Securities LLC.
1961
The Foreign Assistance Act of 1961 prohibits aid to Cuba and authorizes a total trade embargo against Cuba. The total embargo is phased in over the next few years, and includes travel bans to Cuba.
1964
Four years before his own first attempt at the Presidential office, Ronald Reagan gives a campaign speech for Candidate Barry Goldwater, "The Founding Fathers knew a government can't control the economy without controlling people…And they knew when a government sets out to do that, it must use force and coercion to achieve its purpose…So we have come to a time for choosing.”
CC: I liked Reagan’s speech so much -- more of it appears as the last appendix. It is a very timeless message.
1965
The term “Black Friday” to refer to the heavy shopping/sales on the day after Thanksgiving, is first used in Philadelphia.
1966
Savings & Loans (S&Ls) start to struggle under rising interest rates. Because of interest rate ceilings, S&Ls cannot compete with interest rates being offered by other financial options such as money markets.
CC: Rate ceilings are a great example of the problems caused when the government interrupts the role of prices!
1968
President Lyndon B. Johnson changes Fannie Mae’s status to that of a GSE[24] with the implied backing of the government. It becomes one of the world’s largest financial service companies.