The Museum of American Finance, an affiliate of the Smithsonian, is presenting an exhibit that chronicles the most notorious of American financial scandals. The following Exhibit Excerpts from Scandal! Financial Crime, Chicanery and Corruption that Rocked America have been written by the Museum of American Finance:
The King of the Alley: William Duer and America’s First Financial Scandal
On April 19, 1792, a mob of angry rioters surrounded the jail near City Hall in New York City, chanting “We will have have Mr. Duer, he has gotten our money!” William Duer, former member of the Continental Congress and once Alexander Hamilton’s right-hand man at the US Treasury, was imprisoned there for playing a key role in the Crash of 1792. The sheriff dispersed the crowd, but the city was in a panic — Duer had attempted to corner the market in government bonds and shares in existing and proposed banks by borrowing as much money as he could, from everyone he could.
Betrayals of the Public Trust: Teapot Dome and Credit Mobilier
Deep-rooted conflicts of interest and corruption were at the heart of two of the biggest scandals in US government history. In 1864, the Union Pacific Railroad, America’s first transcontinental railway, awarded valuable construction contracts to a company called Credit Mobilier. Few were aware that the directors of the Union Pacific and the Credit Mobilier were the same people, or that one of these directors and many of Credit Mobilier’s shareholders were members of the federal government — members who were responsible for oversight and continued government backing of the Union Pacific construction project.
In 1929, the Teapot Dome Scandal rocked the Harding administration when it was discovered that the Secretary of the Interior, Albert Fall, had given drilling rights for naval oil reserves to two oil companies in return for bribes and interest-free loans. Fall nearly got away with it, but a two-year investigation led by Senator Thomas J. Walsh uncovered one transaction that he neglected to cover up: a $100,000 interest-free loan from oil tycoon Edward Doheny. Fall was the first member of a Presidential Cabinet to be sent to prison as a result of his actions in office.
Cooking the Books: The Salad Oil Scandal and WorldCom
Allied Vegetable Oil, a little-known company in Bayonne, New Jersey, set off a market panic in 1963 when word spread that it had been taking loans from major banks using nonexistent vegetable oil as collateral. The fraud was audacious — Allied exploited the fact that oil floated on water, fooling inspectors into thinking that the tanks they were measuring were full of oil. The fallout bankrupted several companies, brought down two major Wall Street firms, and caused American Express to lose half its stock value, ultimately leading it to sell its warehousing division.
Return to the Museum of Finance for the rest of the exhibition excerpts and "the nation's only independent public museum dedicated to celebrating the spirit of entrepreneurship and the democratic free market tradition which has made New York City the financial capital of the world."
Don't overlook the Museum shop which features such unique items as a Pig Leather Pink Zipper Bank, “Look Out Wall Street!” stock market board game, a bank in a book, bull and bear paperweights and silver cuff links
