An Empire of Wealth

I recently read An Empire of Wealth: The Epic History of American Economic Power by John Steele Gordon. This book provided an excellent understanding of how America’s history, legal system, financial systems and spirit of enterprise have enabled the US to foster the most vibrant economy over hundreds of years.

The following were among some of the interesting points:

1. An accountant was appointed by Ferdinand and Isabella of Spain to sail with Christopher Columbus on his first voyage to ensure that they got their full share of the hoped-for profits.
2. During colonial times, under the system of indenture, blacks and whites were required to work off their indentures and then were set free. Some blacks became large landowners and even had slaves of their own.
3. While iron is one of the most abundant elements on earth, copper is much easier to work with. Iron is never found in a pure state, is chemically highly reactive (which is why it rusts), and has an extremely high melting point. On the other hand, copper has a melting point, which is easily achieved in an ordinary fire.
4. Charcoal is wood heated in the absence of air until it is reduced to pure carbon.
5. King Charles granted William Penn nearly 30 million acres of land in what is now Pennsylvania, making William Penn the largest private landowner in history.
6. While Canada is rich in land, it had a very short growing season, limiting the number of crops that could be grown.
7. President Jefferson’s Embargo Act forbade American ships from dealing in foreign commerce, and the American navy was deployed to enforce it. In effect, the United Stateswent to war with itself and blockaded its own shipping.
8. Whaling was an important industry in the 1800s. Besides the meat, the blubber produced an oil that was an excellent fuel for lamps as well as a lubricant for machinery. Whalebone was indispensable for corsets and buggy whips.
9. Gold is extremely heavy: A cubic foot of granite weighs about 170 pounds and gold weighs more than 1,200 pounds per cubic foot. Gold is also inert which means that it does not combine with other elements.
10. So many men were attracted to the California gold rush that when California became a state, less than three years after the gold strike, its population was 92% male.
11. Wall Street stock traders employed agents with both the Confederate and Unionarmies during the Civil War to keep them abreast of battles. Wall Street learned the outcome of the Battle of Gettysburg before President Lincoln did.
12. In 1868, the New York State Legislature actually passed a law the effect of which was to legalize bribery.
13. One of the reasons that New York became a commercially successful city is that regular ship departures (to London and Europe) were initially established there. Before the advent of regularly scheduled departures, ships gave estimates of the departure. The ship captains first filled the ships with cargo and then began allowing passengers on board. Typically, passengers had to wait a week until they were allowed on board.
14. The railroads effectively established standardized time zones. Before this occurred the setting of time was determined by local noon, which at the latitude of New Yorkis about one minute later for each 11 miles one travels westward. Thus, when it was noon in New York, it was 11:55 AM in Philadelphia, 11:47 in Washington and 11:35 in Pittsburgh. The state of Illinoisused 27 different time zones and Wisconsin 38.
15. When the first railroad traveled at the then unheard of rate of 16 miles per hour, passengers wrote sentences down to prove that the human mind was capable of thinking when traveling at such rapid speeds.
16. Industrialist Henry Clay Frick was once attacked in his office by an assassin. Despite two bullet wounds to the neck and three stab wounds, Frick fought back ferociously and managed to subdue his attacker with the help of his office assistant. He then refused anesthetic as the doctor probed for the bullets and insisted on finishing his day’s work.
17. In order to tap into the industrial strength of America during World War I, the German government tried to gain control of Bethlehem Steel by offering Charles Schwab, president and principal shareholder, twice the market value of his stock for control of the company.
18. During World War I, the British government made J.P. Morgan its American purchasing agent, which gave the bank enormous influence with many American companies. Its first deal was for $12 million worth of horses. This buying of horses caused the price to rise for horses which was a prime reason that tractors so quickly replaced them on American farms at that time.
19. Corporate logos became important when automobiles began traveling past road signs at 30-40 miles per hour. 
20. Henry Ford was adamant about squeezing costs out of the production of his cars. That is the reason that his Model T’s were only painted black: Black dried faster than other colors and thus contributed to lower production costs.
21. Before the Great Market Crash of 1929, many corporations were involved in lending money to investors trading on margin. Bethlehem Steel had $150 million in the call money market and Chrysler had $60 by the end of the summer of 1929.
22. On inauguration day in 1933, the economy was in such a miserable state that The New York Stock Exchange announced that it would not open that morning and did not state when it would reopen again.
23. One mitigating factor of the Great Depression was that children stayed in school longer. The number of people receiving high school diplomas almost doubled in the 1930s, while those receiving college degrees increased by 50%.
24. During World War II, The Ford Motor Company alone produced more war material than the entire Italian economy. The entire U.S.economy shifted to war production. Between 1943 and 1945, the American automobile industry produced exactly 37 automobiles.