Other People's Money: How Banking Worked in the Early American Republic by Sharon Ann Murphy (review)

Sharon Ann Murphy's Other People's Money: How Banking Worked in the Early American Republic begins exactly where a scholar of the ante-bellum economy might expect—with a prologue that addresses the oft-documented Jacksonian Bank Wars of the 1830s. But as Murphy goes on to observe, most such discussions tend to be limited to the Jackson v. Biddle storyline. Moreover, they tend to focus primarily on the political dimensions of this drama, and leave out the broader economic issues that drove this famous showdown. "For most students of American history," she says,

the Bank War is the main—if not the only—encounter with the history of money and banking from the Revolution through the Civil War. … Yet this political fight had economic causes and consequences that are often lost in the telling of that tale. It is difficult to understand the true extent of the passions behind the Bank War without first understanding how the financial system worked during the first century of the nation's existence.

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Other People's Money provides a clear, accessible, and well-organized breakdown of exactly this broader context—how money was imagined, what forms it took, how it was made available, and the many ways it was manipulated in early America.

In this it is a valuable—one might even say invaluable—overview of this often confusing, and sometimes overlooked, field of American history. Unclear about the fractional reserve system and bank discounting? Or perhaps you're a bit fuzzy about corporate banking charters, paper money, tariffs, or investment banking. Maybe you just want to know how the Civil War was financed in the North or the South. Then this is the book for you (or your students). Which is to say that this book is a primer, and aimed primarily at nonexperts: advanced undergrads or graduate students interested in economic history, professors in related fields (literature, American studies, art history), and so on. Absent of confusing jargon, this book is structured with the aim of distilling complex concepts, rather than positioning itself in relation to differing arguments in the field. Moving from early chapters that outline how money and banks worked in the precolonial, colonial, and Revolutionary periods (we see an engraving of Columbus bartering with the natives of the Caribbean, and images of early banknotes) to a discussion of economic panics (more popular lithographs regarding the Panics of 1819, 1837, 1857, etc.), to the midcentury experiments in money and finance, to (finally) the way in which the Civil War was financed, Murphy is at pains to provide us with a clear overview of the way in which the financial world was developing from the late eighteenth to the early twentieth century. At the same time, she is equally concerned to show us how developments in the economy tended to emerge as the result of dramatic upheaval—wars, economic panics, social conflicts. In doing so, she shows us how these broad crises both shape and are shaped by the tidal force we know as capitalism.

I should perhaps mention my own position vis-a-vis the field of economic history. I am a scholar of antebellum American literary history. For the past twenty years or so, I have analyzed authors such as Washington Irving, Nathaniel Hawthorne, and Herman Melville in the context of the financial climate Murphy describes. In my first book, for example, I discussed the ways in which this literature both reflected and commented upon the shift from a gold standard to a credit economy. In more recent work, I have looked at the role of the slave economy in the development of national and even global capitalism. And let me say that my work to date would have benefited greatly from Murphy's book—less because of her brief discussion of books like Melville's 1857 novel The Confidence Man (105–06), and more because this is the...