History

  • 11 Oct 2007 at 9:30 AM
  • History

America’s Original Business Scandal?

If you want to think about the primordial founding of the United States, you’d probably do better to look toward Jamestown rather than Plymouth Rock. It was there that Captain John Smith conclusively demonstrated the advantage of free enterprise over welfare-state collectivism. Long before the men we call our Founding Fathers would set out their principles, Smith was proclaiming America a land of freedom and opportunity.
But it was also home to our founding business scandal, Mark Gimein argues in his Curious Capitalist column. Less than two decades after the founding of the Virginia colony, the Crown revoked the Virginia Company’s charter, seized its assets and put the colony under the administration of the crown. The investors in the Virginia Company lost everything.
Why had things worked out so badly? It was all big tobacco’s fault, according to Gimein. The fatality rate of colonists was scandalously high. “Among the reasons for this were the Virginia Company’s desperate efforts to make the colony profitable by mandating the planting of tobacco instead of food,” Gimein writes.
While we have no special allegiance to the Virginia Company, we can’t help but wonder if Gimein is being a little too gullible of the British crown’s rationale for taking the assets of the company’s investors. We can easily squint our eyes and see this as a power grab by the state eager to capture revenue from the newly profitable colony. Jamestown might have been the first business scandal in North America. Or it might have been the first time the government used business failure and public health concerns as a pretext for increasing its own power.
Whatever it was, we’re now in the 400th anniversary of its founding.
400 Years of Corporate Scandal: An Anniversary [Curious Capitalist]

As all of you know—or should know, and if you don’t: educated yourselves—September has a reputation for being the worst month of the year. (Do you like when I write “Dear Reader” statements such as that last one, wherein I pretend that I’m using my 20+ years of experience to teach you people, who work in financial services, something about the markets, when really, I’ve only been at this for not even a decade? Or that I give a fuck?) There’s a slowdown of money going into the markets and, historically, stocks decline an average 1.2% this month, versus an average gain of 0.59% during the other eleven. Additionally, many mutual funds counting October as their fiscal New Year’s Eve will be selling losing positions from mid-September until mid-October.
But how are we going to make this September the best (and by best we mean worst) one yet? Well, some think that if the Beard of Understanding takes an axe to the federal fund rates on September 18, it’ll mean there’s a recession around the corner. So that could be fun, no? We haven’t had one of those in a while. Then you’ve got a hiring freeze. And layoffs, lots and lots of layoffs, especially at Lehman Brothers, but maybe also at JP Morgan and Citi, and most definitely at Bear Stearns (is it insensitive to use this as an opportunity to plug the DealBreaker Career Center?). (If you happen to survive September, those tracking bonuses are predicting a 5% decline for bankers and a 40% decline for traders in the collateralized mortgage securities business. But that’s December’s bad news, not September’s. Focus, Levin. Focus).
Can’t really think of anything else off the top of our head at the moment, but surely you guys can come up with something. We’ll be bringing you a Sugarman update shortly.
For Investors, September Is the Cruelest Month [CNBC]
Markets Brace For Seismic September [NYP]
Wall Street hiring machine goes idle [MarketWatch]

  • 29 Nov 2006 at 12:13 PM
  • History

Buried Origins Of JPMorgan Chase Uncovered Beneath Beekman Street

salmonchase.jpgThe New York Sun reports on the ancient remains of that water utility company that nowadays goes around pretending to be a bank.

When construction workers peel back the pavement in lower Manhattan, it’s like opening a skylight into the old New York — a place where water flowed through hollowed-out logs and the streets were crowded with ship builders, pottery makers, and tavern riffraff.
More than 3,000 objects have been found under Beekman Street between Pearl and Water streets, where archaeologist Alyssa Loorya has been monitoring a city construction site for the last two years.
The largest find was four pieces of the city’s old wooden water mains. These mains are hollowedout yellow pine logs, which distributed water from a water reservoir just north of Chambers Street during the end of the 18th and early 19th centuries, a historian and author of “Water for Gotham,” Gerard Koeppel, said.
The pieces are wider on one end and narrower on the other so that each section could fit into another, with a metal collar binding them together. Customers of the Manhattan Company, which eventually became the J.P. Morgan Chase Manhattan Bank, paid $5 a year per household with no more than five fireplaces to tap into the water mains. Another $1.25 was added onto the bill for each successive fireplace as a way to account for bigger households, Mr. Koeppel said.

Value added: We all know who JP Morgan was, right? So who was this Chase fellow? The “bank” gets its last name for Salmon Chase (pictured left). Now old Sam was the Abraham LIncoln’s Treasury Secretary but he never had anything do to with the Chase National Bank. They just liked the name. Which strikes us as a bit tacky. It’s as if one of these new boutique investment banks decided to name themselves The Paulson Bank.
Archaeologist Finds Pottery, Wood Water Mains Downtown [New York Sun]