2014 athens clarke county library money smart week presentation

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Incorporating Business in antebellum Georgia

Transcript of 2014 athens clarke county library money smart week presentation

  • 1. Michael Gagnon Associate Professor of History Georgia Gwinnett College Incorporating Business Ventures in Antebellum Athens Money Smart Week Athens/Clarke County Library April 7, 2014 11:00 AM

2. Why Incorporate a Business? Limited Liability Ability to raise large amounts of capital Monopoly rights and taxes 3. 3 Shares of Stock issued in 1854 4. Creators of GA RR Bank Augustin Clayton William Dearing James Camak J. Edgar Thomson 5. Incorporating the Georgia Railroad Athenians first met to discuss a RR in June 1833, when SC neared completing its railroad from Charleston to near Augusta Arranged coordinated approach with other towns in October 1833 Legislature passed incorporation in December Subscription books opened for 10 days in February 1834 and sold 6015 shares. Organized and elected officers in Athens on March 10, 1834 6. How Stock Subscription Worked Each Share costs $100 Had to put down $5 at subscription Sometimes accepted notes in lieu of $5 Later called for payment of portion of subscription 15-20% as needed in following years In 1836, added Banking to corporate charter Augusta Town Council bought 2,000 shares of 7,500 new shares offered Opened independent branches in Athens and Augusta With national depression in 1837, bank in Athens faltered, Augusta purchased controlling share of stock Closed Athens branch in 1842 7. Locomotive shipped to Atlanta by wagon before Georgia Railroad completed from Madison 8. Georgias Antebellum Industrial Zone Athens 9. $10 Georgia Railroad Bank Note from Athens Branch 10. Corporations regulated because feared Most important corporations were banks Bank of the United States acted similar to todays Fed People thought it too influential and too powerful to be safe Not elected but controlled by rich Andrew Jackson waged war against the BUS, forcing it out of business Banks only as good for economy as peoples trust in them 11. Corporations regulated because feared Most important corporations were banks Bank of the United States acted similar to todays Fed People thought it too influential and too powerful to be safe Not elected but controlled by rich Andrew Jackson waged war against the BUS, forcing it out of business Banks only as good for economy as peoples trust in them 12. Bank Panics - Depressions 13. Bank Panics - Depressions Banking Cycle: Economy Collapses EVERY 20 years under unregulated capitalism Basic Causes: 1. Unstable Banking System 2. Collapse of Major Agricultural Commodity 14. Bank Panics - Depressions Panic of 1819 2 years Bank Failure and Cotton Prices Panic of 1837 Up to 8 years Bank Failures and Cotton Prices Panic of 1857 6 months to 2 years Insurance/Bank and Wheat Prices Also Manufacturing 15. Charting the 1837 Bank Panic 16. Later Depressions 1873 1893 1907 1919 1929 Later Recessions 1946 1959 1974 1981 1992 2000 2008 17. Effects of Panic 1. Banks fail to pay depositors Bank Runs - Think Michaels Tuppence in the Movie Mary Poppins 2. Creditors sue everyone who owes them to pay their own debts, but most debtors cant pay debts because no money available 3. If you lost lawsuit, Creditors sell all you own at Court House steps to highest bidders, who pay pennies on the dollar for your possessions. 18. Other Corporation in Athens Scull Shoals Factory 1834 Princeton Factory 1834 Georgia Factory 1839 Southern Mutual Insurance 1848 Athens Factory 1848 Pioneer Paper Mill 1852 Athens Foundry 1852 Bank of Athens 1856 19. General Incorporation Laws start in Georgia in 1848 Primarily for factories Everything else still done through individual incorporation laws Most general incorporation still awaited until after Civil War 20. Questions?