Thursday Excursions

The Federal Reserve Bank of New York

As Senior Museum Interns, we get the opportunity to participate in out-of-office learning experiences once a week.  We have been given the privilege visiting some of the most important financial institutions located in the New York area.  Thus far, these sites have included the Federal Reserve Bank of New York and the New York Mercantile Exchange.  Visiting the Federal Reserve, located a short walk from the museum, presented a once-in-a-lifetime opportunity.  The Bank takes part in more transactions than any other bank in the United States Federal Reserve System.  At the building, security kept a watchful on us, and they informed us that security officers have their own private shooting range on the premises for target practice.  This might seem extreme, but remember that the bank houses over 300 billion dollars worth of gold.  The museum portion of the building featured many interesting exhibits, including the most valuable US coin in existence.  They even allowed us a chance to visit the gold vault on the tour.  Located several floors underground, the gold vault holds the gold reserves of many foreign nations and multi-national corporations.

Our next visit was to the New York Mercantile Exchange. The tour took us straight to the observation deck located right above the trading floor.  From this vantage point, we saw the entire trading floor, and observed the controlled chaos transpiring below on the exchange.  The guides at the New York Mercantile Exchange took us to the trading floor, and allowed us to walk among the traders as they conducted business.  We saw the “pits” where different commodities, such as gold and silver, trade amongst buyers and sellers.  Each pit contained traders communicating to each other, computer screens, and terminals with telephones.  The guide informed us that the number of people who work on the trading floors has decreased over the last decade.  Automation and digitalization resulted in a decreased demand for human traders on the floor as more and more trades now take place electronically.  The guide continued by saying that he thinks the trading floor would always be a necessity, because of the resources the building offers and the need for face-a-face interaction when making deals.

Our internship thus far

Interning at the Museum of American Finance has been a great experience. While most summer internships for college students consist of tedious letter filing and coffee runs, we learn first-hand what it takes to run a non-profit museum in the financial capital of the world.  In addition to archiving, guiding tours and utilizing social media outlets such as Twitter and Flickr, we take weekly trips to local partner institutions.  The interns here have interests across a range of areas including American history, finance and the visual arts.

One of the better aspects of the internship is that there is a rotational schedule; we spend two weeks on each project, be it visitor services, archiving, social media or educational development. This system allows for collaboration between interns and establishes a sense of community in the office.

Despite the freezing temperatures in the library and the archive room, working in the archiving department provides us with a rare inside look into the collections that have been generously donated over the years to the Museum.  Sifting through old banknotes, bonds, magazines, stock certificates and photographs, interns quickly learn about the nation’s rich financial history. Archiving has also showed us the process of preserving the collections and its importance in helping to maintain objects in their original state.

Everybody looks forward to Thursdays, which is field-trip day. So far, we have been fortunate enough to visit the Federal Reserve Bank, the New York Stock Exchange and the New York Mercantile Exchange. Along with these important financial institutions, we have visited other museums such as the Skyscraper Museum, the National Museum of the American Indian and the New York Public Library. Visiting the museums has given us the chance to see how other institutions maintain and present their collections and exhibits. We found that the NYPL, in particular, had a wide range of collections and a great layout to its exhibits.  It has been both helpful and interesting to compare and contrast the MoAF with other museums.

The upcoming “Race Around Wall Street” scavenger hunt has been a joint project amongst the interns, and is essentially an amalgamation of the different rotations; researching and assembling this event has involved all of the skills and knowledge the interns gained from their various roles at the Museum. We’ve marked key sites around the Financial District, and, using the financial and historical knowledge acquired from walking tours and field trips, generated sets of challenging clues for the competitors.  The skills gained from the interns’ social media rotation have been most beneficial, as we have used Twitter, Facebook and Museum mailing lists to advertise our events.

Our work is made even more enjoyable because of the friendly community atmosphere of the Museum. The staff at the Museum is unbelievably accommodating and open to all of our questions and concerns; rather than regarding interns as lowly grunt men or hassles, the staffers have made a concerted effort to include the interns in staff discussions and traditions such as Free Lunch Friday.  Such a warm community makes the unpaid work bearable!  A small staff ensures that everyone at the Museum gets to know each other, and even employees and interns that leave the Museum come back to visit.

Taking Stock of History: The Bull and Bear Statue

The focus of this video is the Bull and Bear Statue, an object on display at the Museum of American Finance, on loan from LaBranche & Co. The statue previously stood at the entrance of the Stock Exchange Luncheon Club, which was located on the seventh floor of the NYSE. This club was an exclusive place for traders and brokers to discuss the trades of the day and to unwind with fresh seafood and drinks after work.

There are a number of theories for the origin of bull and bear markets – too many to be included in this short video. The term “bull” was used in association with markets as early as 1714. A bull is a person who buys commodities or securities, optimistically anticipating a rise in prices. He may also be someone who tries, by studying stock trends, to contribute to a rise in the market. The longest bull market trend was in 1949, which lasted eight whole years.

The term “bear” dates back to 1709, when it was used as shorthand for the bearskin jobber occupation. The title “bearskin jobber” originates from a proverb highlighting the practice of selling bearskins before catching the bear. In a more modern sense, a bear is someone who expects prices to fall, thus selling stocks in hopes of a future compensation.

In light of its ancient connotations, the bull and bear statue was an emblem of success for Luncheon Club members, as they would superstitiously rub the horn of the bull and hope for their trades of the day to go up. Although the club has closed, the bull and bear symbol remains pertinent to traders and brokers today, as the statue remains an important icon of the history of finance.
To find out more about this historically significant statue, watch the video: “Taking Stock of History: The Bull and Bear Statue.” Additionally, LaBranche & Co. invites the public to view and to touch this statue, here at the Museum of American Finance.

Julia Edwards is a Senior Museum Intern at the Museum of American Finance.

Video by Senior Museum Interns Kelly O’Brien and Julia Edwards.

Photo caption-writing contest

Here at the Museum we come across a lot of interesting photos and documents in our collection.  Today we found one that really takes the cake… so we’ve decided to run a caption-writing contest:

Please put your captions in the comments section below.  Winner gets free admission for two to the Museum, as well as a Mu$eum hat!

UPDATE:: Our office has voted and decided that “Primping before the major announcement of ‘the return of the bull market.’ is our favorite caption! Congrats NEWARKMUSEUMPR! We’ll contact you soon about picking up your prize and thanks to all the people who participated and submitted captions!

Scandal!: Ponzi’s fate

The Museum is opening a new exhibition, Scandal! Financial Crime, Chicanery and Corruption that Rocked America, on April 29th and we’ve been doing a lot of research on different topics ranging from the first major financial scandal in the United States to the history of Ponzi schemes and instances of egregious disregard for corporate governance.  Unfortunately, we won’t be able share all of the information and interesting tidbits we’ve amassed over the last few months. Instead of letting these juicy facts go to waste, we’ve decided to share some of them via the blog.

It wouldn’t be possible to put on an exhibition on financial scandals without a portion dedicated to Charles Ponzi, the namesake of the Ponzi scheme.  We’ve been researching Charles Ponzi and two other infamous Ponzi artists.  Each of the three men paid for their crimes after their schemes unraveled. Although all three men’s fates have garnered attention and been featured on the covers of newspapers around the world, Charles Ponzi’s is probably the most prolonged and intriguing. 

Ponzi’s scheme was exposed in 1920 by investigative reporting by the Boston Post (the paper is now defunct, but won a Pulitzer in 1921 for their coverage of Ponzi’s crimes) and financial reporter Clarence Barron (founder of Barron’s and a famous financial journalist of his time).  Ponzi was charged by the Federal Prosecutor for two indictments to which he reluctantly pled guilty and served only three and a half years of a 5-year sentence in federal prison.  During his federal prison sentence the state of Massachusetts additionally charged him with 22 charges of larceny for the same scheme, and he was forced to immediately return to court.  Nearly penniless in jail, Ponzi represented himself in court, and to the surprise of many (especially the prosecutors), Ponzi was actually quite deft in the courtroom.  On the state charge of larceny he argued that a promise of profits is not a crime because it is simply a promise and in regards to investments, promises may be broken when circumstances change. His aptitude for law panicked the state prosecutors who changed the charge to only 12 indictments (this seemed advantageous to Ponzi at the time but worked to his disadvantage when he was tried for them in another case later) and was acquitted on all charges by a jury. 

After his early release on parole in 1924, Ponzi’s freedom didn’t last long because only a few months later the state of Massachusetts responded with a vengeance and charged Ponzi with five of the remaining indictments he had originally been charged.  He was forced back to court in February 1925.  This trial ended in a deadlock, requiring a third state trial later that year.  Having effectively been tried four times for the same scheme, Ponzi was found guilty again on this third state trial.  Before he was sentenced, though, he escaped to Florida and elsewhere in the South where he attempted another scheme but gave up, traveled around the Southern United States where he requested a deal of a presidential pardon in exchange for his immediate deportation (which neither President Coolidge not Mussolini acknowledged) and eventually surrendered himself to authorities to serve seven years in jail. Ponzi was released early again on parole in February 1934.  As the Bennington Evening Banner from July 1934 here reports, the United States continued hunting Ponzi after his release from state prison and pursued his deportation. He petitioned the charges against him, claiming double jeopardy, as the Bennington Evening Banner reports on his request for pardon from Massachusetts Governor Joseph Ely:

He urged that the state conviction and a federal conviction of using the mails to defraud were based on the same offense and that only one charge of moral turpitude was involved. Whether or not he succeeds in halting execution of the federal deportation order which has been pending for some months since his release from the Massachusetts state prison Ponzi will remain in this country until Sunday at least.

In the meantime he planned to apply for a writ for habeas corpus.

Ponzi’s appeal was denied yet again, and he was deported back to his homeland in Italy where he lived for a short while before moving to Brazil.  He attempted to find his fortune there but died in poverty there in 1948.

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