Investing, Philadelphia Style
Land ownership once was the only practical form of savings, until banking matured in the mid-19th century. Philadelphia took an early lead in what is now called investment and still defines a certain style of it.
Quakers: All Alike, All Different
Quaker doctrines emerge from the stories they tell about each other.
Revolutionary Philadelphia's Patriots
All kinds of people were patriots in 1776, and many of them were all mixed up about what was going on and how they stood. Hotheads in the London Coffee House stirred up about an inoffensive Tea Act, Scotch-Irish come here to escape the British Crown, the local artisan class and the local smuggler class, unexpectedly prospering under non-importation, and the local gentry -- offended to be denied seats in Parliament like other Englishmen. Pennsylvania wavered until Ben Franklin stepped forward with a plan.
Causes of the American Revolution
Britain and its colonies had outgrown Eighteenth Century techniques of governance. Unfortunately, both England and America lacked the sophistication to make drastic changes smoothly.
Arch Street: from Sixth to Second
When the large meeting house at Fourth and Arch was built, many Quakers moved their houses to the area. At that time, "North of Market" implied the Quaker region of town.
Dislocations: Financial and Fundamental
The crash of 2007 was more than a bank panic. Thirty years of excessive borrowing had reached a point where something was certain to topple it. Alan Greenspan deplored "irrational exuberance" in 1996, but only in 2007 did everybody try to get out the door at the same time. The crash announced the switch to deleveraging, it did not cause it.
Philadelphia Changes the Nature of Money
Banking changed its fundamentals, on Third Street in Philadelphia, three different times.
Right Angle Club 2008
A report, to the year 2008 shareholders of the Right Angle Club of Philadelphia, by the outgoing president, Neale Bringhurst...
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|American Philosophical Society|
Jay Robert Stiefel of of the Friends Advisory Board to the Library of the American Philosophical Society entertained the Right Angle Club at lunch recently, and among other things managed a brilliant demonstration of what real scholarship can accomplish. It's hard to imagine why the Vaux family, who lived on the grounds of what is now the Chestnut Hill Hospital and occasionally rode in Bentleys to the local train station, would keep a book of receipts of their cabinet maker ancestor for nearly three hundred years. But they did, and it's even harder to see why Jay Stiefel would devote long hours to puzzling over the receipts and payments for cabinets and clock cases of a 1720 joiner. Somehow he recognized that the shop activities of a wilderness village of 5000 residents encoded an important story of the Industrial Revolution, the economic difficulties of colonies, and the foundations of modern commerce. Just as the Rosetta stone told a story for thousands of years that no one troubled to read, John Head's account book told another one that sat unnoticed on that library shelf for six generations.
The first story is an obvious one. Money in colonial days was mainly an entry in everybody's account book; today it is mainly an entry in computers. In the intervening three centuries, coins and currency made an appearance, flourished for a while as the tangible symbol of money, and then declined. Although Great Britain did not totally prohibit paper money in the colonies until 1775, in John Head's day, from 1718 to 1754, paper money was scarce and coins hard to come by. Because it was so easy to counterfeit paper money on the crude printing presses of the day, paper money was always questionable. Meanwhile, the balance of trade was so heavily in the direction of the colonies that the balance of payments was toward England. What few coins there were, quickly disappeared back to England, while local colonial commerce nearly strangled. The Quakers of Philadelphia all maintained careful books of account, and when it seemed a transaction was completed, the individual account books of buyer and seller were "squared". The credit default swap "crisis" of 2008 could be said to be a sharp reminder that we have returned to bookkeeping entries, but have badly neglected the Quaker process of squaring accounts. As the general public slowly acquires computer power of its own, it is slowly recognizing how far the banks, telephone companies, and department stores have wandered from routine mutual account reconciliation.
|John Head's Account Book|
From John Head's careful notations we learn it was routine for payment to be stretched out for months, but no interest was charged for late payment and no discounts were offered for ready money. It would be another century before it became routinely apparent that interest was the rent charged for money and the risk of intervening inflation, before final payment. In this way, artisans learned to be bankers.
And artisans learned to be merchants, too. In the little village of Philadelphia, chairs became part of the monetary system. In bartering cabinets for the money, John Head did not make chairs in his shop at 3rd and Mulberry (Arch Street) but would take them in partial payment for a cabinet, and then sell the chairs for the money. Many artisans made single components but nearly everyone was forced into bartering general furniture. Nobody was paid a salary. Indentured servants, apprenticeships trading labor for training, and even slavery benignly conducted, can be partially seen as efforts to construct an industrial society without payrolls. Everybody was in daily commerce with everybody else. Out of this constant trading came the efficiency step for which Quakers are famous: one price, no haggling.
One other thing jumps out at the modern reader from this book of account. No taxes. When taxes came, we had a revolution.
Originally published: Saturday, September 20, 2008; most-recently modified: Wednesday, May 22, 2019
|Posted by: Rachel Potter | Sep 13, 2016 1:52 AM|
|Posted by: John Scragg | Jun 15, 2012 6:00 AM|