Financial History Issue 117 (Spring 2016) | Page 13
EDUCATORS’ PERSPECTIVE
led to some very interesting classroom
discussions over the years.
Two years passed quickly and, to our
relief, we realized we hadn’t come close
to running out of material for our column. These articles have been a joy to
write, and they have been extremely useful within the classroom. For instance,
“Depreciation Goes to War” (Fall 1996)
is a great way to introduce the concept of
depreciation in an introductory finance
course. Likewise, “The Playboy and the
Radium Girls — Part 1” (Spring 2008) is
an effective, if somewhat morbid, example
of diversifiable risk. At least two articles
provide excellent examples of the pitfalls
and practices of capital budgeting: “The
XIT Ranch of Texas: A Capitol Capital
Budgeting Project” (Winter 2010) and
“Turning a Yankee Liability into an Asset:
Selling New England Ice in India, 18331880” (Fall 2012).
In the area of personal finance, the
articles “Financing the American Dream:
A History of the Fully-Amortized 30-Year
Mortgage” (Spring 2015) and “Overcoming Resistance to Life Insurance in the 19th
Century” (Fall 2004) offer students unique
perspectives on these topics that can’t
be found in the typical personal finance
textbook.
Beyond the classroom, we hope the
readers of Financial History have found
our Educators’ Perspective columns to be
entertaining and informative. As academics, we are painfully aware of the tendency
for financial economists to ignore history
in their writing and emphasize tedious
mathematical equations or arcane statistical methods that leave most readers gasping for air. Our aim with every Educators’
Perspective article is to provide readers
with a deeper appreciation for the perspective history provides to anyone wishing to
understand financial markets.
The topics we have covered over the
span of the last two decades have been
wide-ranging and sometimes unexpected.
Educators’ Perspective has addressed everything from chickens to Theodore Roosevelt. Scott Joplin’s Wall Street Rag, the
American West, gambling, the Dust Bowl,
Billy Wilder movies, the Biltmore Estate,
Charles Dickens, short squeezes, changes in
20 Lessons From 20 Years
of Educators’ Perspective
1. Financial history matters.
2. The Empire State Building was a construction marvel but a financial disaster.
(Issue 65, 1999 I)
3. We can thank gamblers for the development of statistics. (Issue 93, Winter 2009)
4. Alexander Hamilton’s nemesis, Aaron Burr, founded the Bank of the Manhattan
Company. JPMorgan Chase & Co. traces its beginnings to Burr’s fledgling
institution. (Issue 89, Fall 2007)
5. Director Billy Wilder understood risk better than most finance professors do.
(Issue 98, Fall 2010)
6. Music, with its ability to express emotion, has an extraordinary ability to capture
the moods, cadences and rhythms of financial panic. (Issue 59, Summer 1997)
7. The word “mortgage” comes from an Old French word meaning “dead” and an
Old Germanic word meaning “pledge.” Thus, a mortgage is a “dead pledge!”
(Issue 113, Spring 2015)
8. It’s possible to ship ice from New England to India in a wind-powered sailing
vessel without refrigeration. (Issue 104, Fall 2012)
9. Texas got a great deal when it traded land in the Texas Panhandle for a new
capitol building. (Issue 96, Winter 2010)
10. Charles Dickens hated compound interest. (Issue 110, Spring 2014)
11. There once was a speculative chicken bubble. (Issue 114, Summer 2015)
12. Never take investment advice from an academic. (Issue 92, Fall 2008)
13. The flow of information has always been important to financial markets.
(Issue 60, Fall 1997)
14. Financial acumen is not hereditary; Hetty Green’s children squandered her
fortune. (Issue 55, Spring 1996)
15. Depreciation played an important role in preparing the United States for entry
into World War II. (Issue 57, Fall 1996)
16. Wall Street got a small taste of the Dust Bowl in May of 1934 when a dust storm
darkened the skies for about five hours and dumped an estimated 40 tons of
dust per cubic mile on the city. (Issue 95, Fall 2009)
17. Huguette Clark, the daughter of the “Copper King” William Andrews Clark (1839–
1925) died in 2011 in New York City at the age of 104. (Issue 106, Spring 2013)
18. John D. Rockefeller, Sr. was no fan of competition. (Issue 111, Fall 2014)
19. A lot of financial history happened in Montana! (Issue 64, 1998 IV; Issue 84,
Fall 2005; Issue 97, Spring 2010; Issue 105, Winter 2013; Issue 106, Spring 2013;
Issue 107, Summer 2013)
20. The Spanish Conquistadors were not professional soldiers. Their ventures into the
New World were more entrepreneurial than military in nature. (Issue 116, Winter
2016; and forthcoming)
www.MoAF.org | Spring 2016 | FINANCIAL HISTORY 11