The author of this collection of entrepreneurial histories, John Steele Gordon, knows how to tell an exciting tale, and his passionate interest in business history is evident on every page. With sparky enthusiasm, Gordon admirably succeeds in turning a subject that could so easily be dry and boring into something fascinating, and he gets extra marks for extolling the virtues of the free market along the way. Also, there are clear hints of a libertarian bias in his writing, which for this reader is a rare but welcome breath of fresh air.
- The author highlights the importance of organisation as a driving force. The full rigged ship of Colombus' era was extraordinarily expensive and new ways of financing were required to support full scale commercial exploration (beyond appeals to royalty). Spain didn't develop these ways and soon stagnated while England and Holland developed the joint-stock company. This enabled investors to pool together resources and diversify their investments, limiting liability to the value of the stock (compared to the individuals full net worth in the case of partnerships).
- The joint-stock company and the pursuit of profit was a key component in the settlement of New England. The investors who stayed at home in (Old) England were known as 'adventurers', which echoes today in the term 'venture capitalist'.
- 1666: The first market 'corner' in New York. Frederick Philipse corners the wampum market. Wampum = beads made from clam shells that were traded with the Indians for furs. Philipse trained in carpentry and helped to build the wall that gave Wall St its name. In 1659 wampum inflation set in. Governor tried various measures that failed. Philipse bought up wampum and took much out it of circulation = value increased. Philipse was effectively acting as a one man central bank and he became the colony's richest citizen.
- 'Cornering' became prevalent in the early days of Wall St. Commodore Cornelius Vanderbilt twice cornered Harlem railroad stock and once Hudson railroad stock. In 1869 Jay Gould and Jim Fisk almost cornered the gold market.
- Cornering reduced as size of stock increased and not various regulations are in place.
- That said, when the Hunt brothers tried to corner the silver market in the late 70's, they suffered greatly. In 1979 they had accumulated all the floating silver supply. But US Treasury had stocks and at the new high prices mines opened up. Even the metal value of some coins was worth more than the face value. The Hunts found themselves the only buyers left, and prices fell. The Hunts were margin-called and the price of silver lost more than half its value in a single day. By 1987 they had to file for protection.
- In the 'Woolworth's Cathedral', Gordon starts off with Shelley's 'Ozymandias' poem and notes that men of power seek often seek immortality in stone, hoping that tombs, statues and palaces will remind the world of their greatness [Carnegie Hall, the Cooper Union, Rockefeller University, Paley Park, Whitney and Guggenheim Museums, etc.], even though, as Shelley highlights, the exercise is essentially barren.
- Cod story and the Tragedy of the Commons: Cod can be over six feet long and weight over 200 pounds, and is quite sluggish and terrible for sports, but it is great for commercial fishing. It is also relatively boneless and easy to prepare (dried cod is crucial in a time without refrigeration), and is about 80 per cent protein. From Newfoundland to Massachusetts, there are a series of banks which provide the ideal conditions for the cod fish. When the secret became widespread, a cod rush followed and soon 60 per cent of the fish being eaten in Europe was cod, most if caught in North American waters. Unlike gold and silver, cod is a renewable resource, but as new technologies were developed and exploited (new nets, higher powered engine boats, onboard freezing and eventually sonar), the rate of catching exceeded the rate of reproduction. The fish that were caught were first smaller than those caught previously, and then they became fewer and fewer.
- The US has only produced three unique cheeses: Monterey Jack, Brick and Liderkranz. Adolph Tode, who owned a popular deli in New York, asked his cheesemakers to duplicate the German Scholosskaese cheese. 22 year old Emile Frey inadvertently came up with a new cheese which they tried on the members of the German singing club in New York called the Liederkranz society, who were enthusiastic. Demand eventually took off but when the company moved location, they couldn't replicate the cheese. The facilities were too clean. Frey bought the wooden parts of the old factory, which had the right microorganisms embedded in them, and installed them in the new factory . Voila. The cheese was back. In late 1980s, the decision was made to stop making the cheese (but it seems to have returned).
- The field of nutrition in the early days left plenty of room for cranks. 'There appears to be a nearly bottomless market for nutritional nonsense, just as there is for astrological advice. Hundreds of diet books are published every year in this country. Their authors crisscross the land on lecture tours to feed this longing for a Rosetta stone to the secret of good health and longevity and to make very tidy incomes in the process. The man who first discovered this market, and exploited it profitably, was an American named Sylvester Graham. He was an eloquent and forceful speaker and became a lecturer for a temperance society. He promoted abstinence from alcohol and sex, and plagiarised books on medicine, which was just turning into a science. When the cholera epidemic of 1832 hit the map, people flocked to hear anyone spouting advice (he ascribed cholera to 'excessive lewdness' and chicken pie. He went on to lecture widely, the underlying message being that anything stimulating was detrimental, including warm baths, meat, sweets, and alcohol, and stated that vegetables and bread should be the primary component of the diet. Legacy: The Kellogg brothers were influenced by him. Invented Graham crackers and Graham bread. Helped found the American Vegetarian Society. Insisted on frequent bathing. He was also known as 'philosopher of sawdust pudding'.
- Oliver Evans' contributions have been overlooked due to his unsociable personality (he was bitter and combative). He died in 1819 but he is widely seen as the founding father of the American Industrial Revolution. Evans foresaw rail travel, which truly began in America 1828. "The time will come when people move in stages (stagecoaches) moved by steam engines, from one city to another, almost as fast as birds fly". He described how refrigerators would work, designed a solar boiler, a machine gun, a gas lighting system, and central heating systems. He also invented the high-pressure steam engine - in England, a similar engine was developed independently by Richard Trevithick. Evans created the first truly integrated industrial process in America, Evan's mill was the factory as a machine. Grain is poured in one end, and flour came out of the other. The manual input was just adjusting, maintaining and monitoring. But his contemporaries paid little attention. He patented the technology and over time it was taken up, aided by a how-to book written by Evans. He also built a steam dredge for Philadelphia harbour, which he converted into the first non-muscle powered car for the purpose of transporting it to the harbour.
- Owing to the poor state of many roads, freight would often move by water of not at all. The US government granted monopolies to the early steam operators (prior to steam, freight flowed downstream on rafts etc and was dragged upstream along the shoreline by human effort.) The monopolies became hated by the public and potential competitors. When the New York monopoly was ruled against in 1824, the number of steamboats operating went from six to forty-three.
- While the first Atlantic passenger service was in sailing ships, steam quickly replaced sail. But the steam passenger business was rarely profitable, and mostly depending on government subsidies to stay viable. The names of British liner were often preceded by the letters RMS, standing for Royal Mail Ship (i.e. big subsidies hidden in mail contracts).
- Henry Ford: 'I invented nothing new.' 'I simply assembled into a car the discoveries of other men behind whom were centuries of work..So it is with every new thing. Progress happens when all the factors that make for it are ready, and then it is inevitable. To teach that a comparatively few men are responsible for the greatest forward steps of mankind is the worst sort of nonsense.'
- Nathan Strauss: Born in 1848. Moved into the family retail business in 1881. Would wander around the store whistling popular tunes, provided a lunchroom with food at cost. The Strausses would invent bargain sales and exhibitions. They introduced odd pricing (e.g. $3.95 vs $4.00). Moneymaking had never been his sole concern and he dabbled in politics and philanthropy (in the terrible winter of 1893-94, he provided meal tickets to fully 1.5 million people), and worked tirelessly to secure a safe milk supply for children, setting up pasteurised milk stations in the poor areas of New York, giving away free milk. His national efforts are estimated to have saved the lives of 445,800 children. He left not a penny of his estate, worth around $1m, to charity, stating: 'What you give for the cause of charity in health is gold, what you give in sickness is silver, and what you give in death is lead.'