Published by EH.Net (December 2015)

Robert E. Wright and Richard Sylla, Genealogy of American Finance.  New York: Columbia University Press, 2015. xii + 324 pp. $60 (hardback), ISBN: 978-0-231-17026-0.

Reviewed for EH.Net by Daniel Giedeman, Department of Economics, Grand Valley State University.

I will admit that when I first received my copy of Robert Wright and Richard Sylla’s Genealogy of American Finance I was not exactly certain what to make of it.  For one thing the book, published in conjunction with the Museum of American Finance, appeared as though it could be a coffee-table book: it was large and contained pictures — glossy pictures, in fact, and many of them.  But the book also contained many scholarly references and was written by two very well-respected economic historians, so it was clearly going to be a serious work.

As it turns out, what Wright (Nef Family Chair of Political Economy at Augustana College and Director of the Thomas Willing Institute for the Study of Financial Markets, Institutions, and Regulations) and Sylla (Henry Kaufman Professor of the History of Financial Institutions and Markets and Professor of Economics at the Stern School of Business, New York University; and Chairman of the Museum of American Finance) have written is a fascinating compilation of the genealogical histories of the fifty largest financial institutions in the United States.

The book begins with an overview of these fifty largest institutions containing maps and tables showing such things as the industry of origin for each institution (which ranges from commercial banking to freight) and the year in which each institution’s earliest known ancestor began operations (almost as many institutions could be traced back to the 1700s as could be traced to the 1900s and only one institution’s history dates back less than ninety years (Charles Schwab, 1971)).

The book then provides a basic overview of the history of the American financial system followed by several pages of “Necessary Technical Talk,” which provide various definitions and an explanation of how the genealogies contained in the book were determined.  The fifty entries on the individual institutions come next and the book ends with a short conclusion.

Each financial institution’s entry begins with a chart that displays its genealogy — a family tree of sorts showing how the current institution is composed of prior institutions with which it has merged or acquired.  Some of these genealogies are very small; for example, Discover and CIT Group have two and three predecessors, respectively, while Charles Schwab Corporation derived solely from Charles Schwab Bank.  Others, such as Fifth Third Bancor, PNC Financial Services, and Regions Financial, have lineages that stretch over multiple pages and provide wonderful illustrations of the merger and acquisition movement that has taken place in the American financial system in the two decades following the passage of the Riegle-Neal Act (which freed banks to operate interstate branches).  The genealogical charts are somewhat mesmerizing to examine, several times I found myself reading a once-familiar name and thinking to myself “so that’s what happened to that bank.”  The simple clarity of the charts’ organization belies the amount of research that certainly was required to produce the genealogies.  (The richness of the genealogies is such that a number of the charts were abridged so that they could fit in the book — the authors have made the complete genealogies available online.)

The entries then contain a brief history for each institution noting key circumstances in the institution’s development. These histories range in length from approximately 1000 to 5000 words with most being around 2000 words. Despite not being terribly long, the histories are densely packed with information.  They are also very well-written; the authors have done a nice job of writing entries that inform the reader in an engaging manner.  Because I had less prior knowledge of them, I particularly enjoyed reading the entries of the smaller institutions and those that are subsidiaries of foreign firms.  Each entry also includes a bibliography and contains at least one (and usually several) photograph or illustration highlighting various aspects of the institution’s history.

Readers should remain aware that this book is not a history of American financial institutions in general.  For the most part, the institutions presented represent the success stories of American financial institutions and are not representative of financial institutions as a whole.  The authors acknowledge this potential survivorship bias, but suggest that it is important to understand the “characteristics of successful banks” (p. 7). What we don’t completely know, however, is how different these characteristics were from the characteristics of banks that were not successful.  This is a minor quibble and I mention it as a caution to the reader rather than as a criticism of the book.

The potential audience for Genealogy of American Finance is broad.  Any scholar considering research on the history of any of the major American financial institutions should consult this book either to obtain an introduction to the institution in question or to verify that his/her understanding of the history of the institution is correct.  I also recommend that professors and graduate students in fields related to finance or banking read this book to acquire a general sense of how the current major financial institutions came to be.  Additionally, I think instructors of undergraduate students could use one of more of these histories as the basis for case studies showing how the American financial system has changed over time.  Finally, I expect that non-academics with an interest in the financial sector would also enjoy the material covered and nicely presented in this volume.

In summary, Wright and Sylla have put together an interesting compilation of large financial institutions’ genealogies.  Their book is clearly written and enjoyable to read.  I expect that all readers will learn something new from the book and that the vast majority of readers will learn quite a bit.  I recommend it with enthusiasm and no qualms.

Daniel Giedeman is the author of several articles related to financial history and is the current Chair of The Economic and Business History Society.

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