New York, NY (PRWEB) May 21, 2012
Capital of Capital: New York City Banks and the Creation of a Global Economy, a new exhibition opening at the Museum of the City of New York on May 22, 2012, charts the rise of the city’s banks from early sources of credit for local merchants to institutions that transformed New York City into a global financial center. The exhibition features historic documents and artifacts including 19th-century examples of bank-issued money, a 1922 predecessor to the ATM, and artifacts related to the 2008 fiscal crisis.
The exhibition explores more than two centuries of New York’s banking system, from the founding of the city’s first banks after the American Revolution to the city’s emergence as a leading global economic power. Along the way, the exhibition reveals how banks and the capital they amassed fueled growth of the city’s stock market, the development of new industries and made New York the nation’s banking center by the middle of the 19th century and the financial capital of the world in the early 20th century. Moreover, visitors will see how banks became intertwined with New York’s growing economy, changing with the city itself as it became larger, more influential, and more global in reach.
Capital of Capital unfolds in four sections, highlighting the innovations that gave each era its character – the bank-issued notes that served as the nation’s paper currency and made possible the mercantile economy of the pre-Civil War Era; the stocks and bonds that underwrote the nation’s investments in industry and infrastructure in the late 19th and early 20th centuries; the new tools of consumer credit and banking that became a growth industry in the middle of the 20th century, and the derivatives and securitized assets that fueled the booms and busts of the late 20th and early 21st centuries.
Susan Henshaw Jones, Ronay Menschel Director of the Museum, said, “This exhibition will demonstrate that the history of New York City’s banks is, unexpectedly, very exciting, filled with twists and turns, booms and busts, and the saga continues to the present day, with newspapers filled with debate over the future of the industry.”
Capital of Capital will give visitors insight into New York’s banking history and reveal how many of the issues facing the industry today resonate back to the very early days of the city and its banks. The exhibition will provide important historical context to the ongoing debate surrounding the availability of credit, the security of investments, and government’s role in the banking sector. Capital of Capital will also cover popular protests against the industry’s power and policies and the connection between New York City and the global economy.
The exhibition was made possible by a generous grant from Citi, which is funding the exhibit as part of its commemoration of its 200th anniversary year.
“Citi was founded on Wall Street in 1812, and we have called New York our home ever since as we have worked to support economic progress in our home city and beyond,” said Citi CEO Vikram Pandit. “During our 200th anniversary year, we are excited about supporting a timely exhibit which explores the banking industry’s role in transforming New York City into the financial capital of the world.”
Capital of Capital has been organized by an exhibition team led by Sarah M. Henry, the Museum’s Deputy Director and Chief Curator and Guest Curator, Prof. Brian P. Murphy of Baruch College, City University of New York, with Jessica Lautin, Andrew W. Mellon Postdoctoral Curatorial Fellow at the Museum of the City of New York.
Exhibition Organization and Background Information
SECTION 1: BANKS FOR THE MERCHANT CITY, 1784-1863
The British Empire had prohibited most forms of banking in the colonies; as a result at the end of the War of Independence, there was only one bank on the continent. Starting a new bank was no small matter, yet despite many obstacles, more than a dozen were founded in the city during the following three decades. Between the American Revolution and the Civil War, at a time when there was no national paper currency, notes issued by private banks provided the “medium of exchange” for the mercantile economy. A centerpiece of this section of the exhibition will be an installation of a wide variety of early- to mid-19th century banknotes, in denominations ranging from three cents from the Broadway bank (1862) to a one hundred dollar check from City Bank of New York (1816). Visitors will enter the world of the merchants who created and patronized the banks, along with the goods they brought into New York harbor as it became the most important American port. They will learn about early debates over the future of the banking system, with New York’s Alexander Hamilton championing banks as a way forward for the country, and Thomas Jefferson and Andrew Jackson furiously attacking them.
This section features:
- Objects and documents from the earliest banks in New York, including the Bank of New York’s ledger containing the accounts of George Washington and Alexander Hamilton; a section of water pipe from Aaron Burr’s Manhattan Company (the predecessor of today’s Chase), and the minutes from the first meeting of the Board of Directors of the City Bank of New York (today’s Citi) in 1812.
- Vintage prints illustrating Wall Street banks in their earliest days.
- Political cartoons depicting early 19th-century protests against banks.
- Objects related to the growth of New York’s stock exchange – including the original “Buttonwood Agreement,” which marked the origins of the city’s stock market.
SECTION 2: BANKING FOR AN INDUSTRIAL NATION, 1863-1918
The nation’s economy and banking system were radically transformed by the Civil War, which ended with New York’s already-powerful banks emerging atop a new national banking system. This period saw the rise of investment banks, with New York banks underwriting and financing massive infrastructure projects, which in turn triggered an industrial revolution in manufacturing, milling and mining, and enabled a boom in agriculture, driving the country’s productivity skyward. As a result, the United States became a formidable international economic power for the first time. With the growing concentration of wealth and power that characterized “The Gilded Age” came a rising populist anger directed at New York’s banks and bankers, fueled by a series of booms and crashes in the national and world economies.
This section features:
- An array of historic stocks and bonds that illustrate the influence of banks on the stock market and their role in making investment possible, along with an original chair from the New York Stock Exchange in use from 1865 to 1971.
- Examples of the early expansion of American banking overseas, including items from City Bank of New York’s first foreign branches, as well as illustrations of bank-funded international projects like the Panama Canal and the Transatlantic telegraph cable.
- Documents and pamphlets related to key pieces of federal legislation that changed the nature of the national banking system and New York City’s role in it, particularly the National Banking Act of 1865 and the Federal Reserve Act of 1914, which made New York bankers more powerful than their peers in other cities.
- Artifacts and objects illustrating the extreme ups and downs of the banking system and national economy in the late 19th and early 20th centuries, including the crashes of 1873 and 1907 and the political backlash that these “busts” created.
- A special section on early consumer banks that originated as philanthropic organizations to encourage thrift among immigrant and working-class New Yorkers.
SECTION 3: BANKING IN A GLOBAL ECONOMY, 1919-1974
At the end of World War I, New York emerged as the central financial player in the world’s economy. As a creditor nation for the first time, the city’s banks went global – not only opening branches abroad, but lending to international customers who came to them. A decade of credit and consumption followed, until 1929 when the stock market crash revealed that banks had been using customers’ deposits to fuel their own investments in the market. The depression that followed resulted in a set of new government regulations that rewrote the social contract of banking. The signature financial legislation of the Depression Era – the Glass-Steagall Act of 1933 – separated commercial banking from investment banking, prompting commercial banks to seek more business by offering products and promotions aimed at a mass market.
The end of World War II gave way to an era of globalization symbolized locally by the creation of New York’s World Trade Center and internationally by American investments in Cold War allies’ economies. At the same time, New York banks themselves were changing. As the city entered a post-industrial era, its banks became an increasingly important part of the local economy.
- Examples of new consumer products, including early credit cards – City Bank of New York’s “Everything Card,” launched in 1967, and American Express’ purple and white card – and new marketing for travelers’ checks.
- Advertisements for New York banking services overseas
- Documents related to the debates over bank policies associated with local investments, including the controversial policies of “blockbusting” and “red-lining” that discriminated against minority mortgage borrowers.
- A panoply of television and magazine advertising for bank products developed to attract new customers.
SECTION 4: THE CAPITAL OF CAPITAL IN AN UNCERTAIN WORLD, 1975-2012
In the last quarter of the 21st century, the politically unpopular Vietnam War, the 1970s oil crisis, and runaway inflation threw into question the United States’ dominance of the financial sector. In New York City these factors, along with risky financial cooperation between banks and the city government, precipitated a fiscal crisis that left many uncertain about the viability of the city itself.
When the city finally emerged from its economic woes of the 1980s, both the city’s banks and the nation’s economy were catapulted into a period of dramatic change. Deregulation led to growth and consolidation and changed the very nature of banking. City government encouraged banks to locate their headquarters in Manhattan, and the banking industry consolidated into dramatically larger institutions after the repeal of New Deal-era regulations. Although many of New York’s banks continued to expand their core businesses, they also engineered complex new products whose risks were not widely understood until the crisis of 2008. Today, debates over the power of the banking industry rage as vigorously as they did in the early 19th century.
This section features:
- Displays explaining the emergence of new but risky investment tools such as derivatives and mortgage-backed securities.
- A timeline of changes to financial industry’s regulatory environment that began in the 1980s and culminated in the late 1990s.
- Illustrations of bank consolidation and the spread of bank branches across the city
- Artifacts from the 2008 crisis and the popular and legislative response
- Charts and graphs giving a “snapshot” of banking in New York City today
- An investigation of the competition between London and New York for the title of the “world center” of banking.