Financial history museum includes debacles

Material World

January 12, 2003|By Ralph Blumenthal | Ralph Blumenthal,NEW YORK TIMES NEWS SERVICE

What would John D. Rockefeller say?

In the basement of his Standard Oil Building, just steps from Wall Street, where the Museum of American Financial History celebrates the wonders of capitalism, an exhibit wall is papered with gaily colored stock certificates carrying names like Enron, WorldCom and ImClone Systems. It's the dark side of the American dream.

But the dot-com debacles and infamous bankruptcies of the infant millennium are as much part of the nation's financial heritage as scandals of the past and the stock market crash of 1929, say historians at the museum, an affiliate of the Smithsonian Institution.

Exhibits about the Black October Friday that ushered in the Great Depression, and accouterments like the plunging ticker tape record, have long been the biggest draw of this low-profile and literally underground museum. It has stood for 15 years at 28 Broadway, where Rockefeller first moved into a smaller building in 1883, on the same site where Alexander Hamilton's law office once stood.

But now, said Meg Ventrudo, the museum's historian and assistant director, "People are more interested in the recent bankruptcies and scandals, because they have affected their own finances."

"People want to come when the market is bad as well as good, to see why it's on a downturn," she said. With investing now widely democratic, average Americans have a stake in the market and want to see how it works. "Wall Street and Main Street have met," Ventrudo said.

Some 35,000 visitors a year come to the museum, half of them schoolchildren. The museum was founded in 1988 by John E. Herzog, chairman of the Herzog Heine Geduld securities firm, and it now operates on an annual budget of nearly $1 million, painstakingly raised from benefactors. The suggested admission is $2.

"People think because we're a financial museum we have money," Ventrudo said.

The latest exhibition of one-share stock certificates, worth virtually nothing except to collectors, were donated by Scripophily.com, the Internet's largest buyer and seller of collectible stock and bond certificates.

By way of historical perspective, an older certificate was mounted nearby. This one, a $1,000 bond, had been issued by Insull Utilities Investments.

As an exhibit panel and a longer article in the museum's magazine, Financial History, explain, Samuel Insull had been Thomas Edison's private secretary in the 1880s and built his own huge Midwest electric utilities trust worth $2 billion by 1930 ($21.5 billion in today's dollars). But when the Depression hit and he was shunned by the New York banking establishment he had alienated, his interlocking pyramid of companies collapsed.

He fled to Greece, was tried for embezzlement and fraud and was acquitted. His reputation ruined, he left for France, where he died of a heart attack on the Metro. In a final indignity, his wallet was stolen.

The stock certificates are on display until Feb. 28. Other exhibits now at the museum include one of the four remaining largest bills ever issued by the United States: a $100,000 gold note issued in 1934 and depicting Woodrow Wilson. It was used for monetary transfers between Federal Reserve banks.

Until 1969 the government circulated bills in $10,000, $5,000, $1,000 and $500 denominations. Today the largest is only $100, largely to thwart money launderers.

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