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Other People's Money

How Banking Worked in the Early American Republic

Sharon Ann Murphy

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How the contentious world of nineteenth-century banking shaped the United States.

Pieces of paper that claimed to be good for two dollars upon redemption at a distant bank. Foreign coins that fluctuated in value from town to town. Stock certificates issued by turnpike or canal companies—worth something... or perhaps nothing. IOUs from farmers or tradesmen, passed around by people who could not know the person who first issued them. Money and banking in antebellum America offered a glaring example of free-market capitalism run amok—unregulated, exuberant, and heading pell-mell toward the next...

How the contentious world of nineteenth-century banking shaped the United States.

Pieces of paper that claimed to be good for two dollars upon redemption at a distant bank. Foreign coins that fluctuated in value from town to town. Stock certificates issued by turnpike or canal companies—worth something... or perhaps nothing. IOUs from farmers or tradesmen, passed around by people who could not know the person who first issued them. Money and banking in antebellum America offered a glaring example of free-market capitalism run amok—unregulated, exuberant, and heading pell-mell toward the next "panic" of burst bubbles and hard times.

In Other People’s Money, Sharon Ann Murphy explains how banking and money worked before the federal government, spurred by the chaos of the Civil War, created the national system of US paper currency. Murphy traces the evolution of banking in America from the founding of the nation, when politicians debated the constitutionality of chartering a national bank, to Andrew Jackson’s role in the Bank War of the early 1830s, to the problems of financing a large-scale war. She reveals how, ultimately, the monetary and banking structures that emerged from the Civil War also provided the basis for our modern financial system, from its formation under the Federal Reserve in 1913 to the present.

Touching on the significant role that numerous historical figures played in shaping American banking—including Alexander Hamilton, James Madison, Benjamin Franklin, Henry Clay, Daniel Webster, and Louis Brandeis—Other People’s Money is an engaging guide to the heated political fights that surrounded banking in early America as well as to the economic causes and consequences of the financial system that emerged from the turmoil. By helping readers understand the financial history of this period and the way banking shaped the society in which ordinary Americans lived and worked, this book broadens and deepens our knowledge of the Early American Republic.

Reviews

Reviews

This is a brisk, well-researched tour of how the American finance and banking sector got its start.

Murphy has provided what should be the go-to source for anyone looking to understand the differences among savings banks, investment banks, and commercial banks in pre-Civil War America; to know what it meant for banks to provide discounts on commercial paper; and to know what terms like fractional reserve, independent treasury, bimetallism, shinplasters, wildcat banks, and bills of exchange meant.

Murphy has written what this financial historian considers a sound and reliable introductory or companion text to early American banking that is both engaging and easy-to-read, and at the same time broadly consistent with recent economic research on the topics covered.

It [Other People's Money] does much to further our understanding of an important feature of international capital markets, and it raises crucial policy issues.

The strengths of this work are numerous. In addition to narrating some intriguing vignettes on Abigail Adams, Benjamin Franklin, and Herman Melville, this book contains a fascinating array of cartoons and images of credit instruments, many of which are drawn from the author’s extensive personal collection. Murphy’s writing is also straightforward; her analysis, insightful.

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About

Book Details

Publication Date
Status
Available
Trim Size
6
x
9
Pages
208
ISBN
9781421421759
Illustration Description
20 b&w illus.
Table of Contents

Acknowledgments
Prologue. How the Bank War Worked
1. How Money Worked
2. How Banks Worked
3. How Panics Worked
4. Experiments in Money and Banking
5. How Civil War Finance Worked
Conclusion. Andrew Jackson

Acknowledgments
Prologue. How the Bank War Worked
1. How Money Worked
2. How Banks Worked
3. How Panics Worked
4. Experiments in Money and Banking
5. How Civil War Finance Worked
Conclusion. Andrew Jackson, Other People's Money, and the Creation of the Federal Reserve
Epilogue. Why Is Andrew Jackson Harriet Tubman on the $20 Bill?
Notes
Suggested Further Reading
Index

Author Bio