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145 votes
Accepted

Why did stock brokers go bankrupt after the crash of 1929?

To expand on Schwern's answer somewhat, using leverage as a trader works more or less like this: Scenario 1: you have $1k of play money and use it to buy stocks. The market goes up 10%. You sell. You ...
87 votes

Why did stock brokers go bankrupt after the crash of 1929?

If they did, it would be because of the practice of buying on margin, a form of loan from your broker where you use the stocks themselves as collateral. This allows you to buy more stock than you have ...
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36 votes
Accepted

Venezuelan crisis of 1902–03: Why is there a Russian flag on the cover of the prominent newspaper 'Le Petit Parisien'?

I think this is a color error (in reproduction, printing, fading, etc.) It is a 19th Century Venezuelan flag with the cluster of stars visible on the blue bar.
  • 27.4k
24 votes

Why did stock brokers go bankrupt after the crash of 1929?

Brokers went bust due to an aspect of investing that isn't often covered by mainstream media: the margin call. When you buy stocks on margin, meaning you're borrowing the money to buy a lot of the ...
  • 3,438
20 votes

Why did Charles I not borrow abroad?

SHORT ANSWER Charles I did borrow money from abroad but it was never enough to meet his needs. The financial drain of the Thirty Years War on much of Europe, a muddled foreign policy, and a lack of ...
12 votes

What percentage of Jews were in "finance" (money-lenders) throughout Middle Ages?

The number of Jews who lent money in the Middle Ages is unfortunately commonly over-estimated. The majority of Jews had jobs that did not involve money-lending. This is a fairly new historical ...
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10 votes
Accepted

How big was the IMF loan Britain received in the 1970's?

According to the autobiography of Lord Denis Healey, who was Chancellor of the Exchequer from 1974 to 1979, Britain only drew half of the IMF loan. Furthermore, he states that drawn amount were repaid ...
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10 votes
Accepted

What factors led to much higher US war bond sales and participation rates in WWII over that of WWI?

The article cited by Pieter Geerkens asserts that all the bonds issues were oversubscribed, and this is backed up by this other source. Wikipedia here and here, Investopedia and the Museum of American ...
9 votes
Accepted

Which tools were available in 1933 for the Chinese government to intervene in the money market?

The short answer is that there was little in the way of pre-defined tools, but the government could rely on its governing and legislative powers to intervene on an ad-hoc basis. There was no coherent ...
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9 votes

Was the financial crash of 2008 caused by top graduates of the American Ivy Leagues working at wall street banks?

The author was mixing up cause and effect. The position that the 2008 crash was largely caused by the behavior of lending institutions is quite supportable. The lending bubble was pretty much ...
  • 112k
8 votes

Why did Britain decide to issue perpetual bonds during Napoleonic era?

As the wikipedia article on consols mentions, Britain actually started issuing these perpetual bonds in 1751. So their use during the Napoleonic Wars some fifty or so years later was far from ...
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8 votes
Accepted

What were factors that led to a decline in bond yields during World War II given that the opposite should have happened?

Bond yields dropped as it became more and more apparent that the United States would win the war. Then the war expenditures were seen an "investment" in a lasting and durable peace. At the end of ...
  • 103k
8 votes

How was Napoleon's military funded just a decade after the French Revolution ostensibly because of bankruptcy/mismanagement of funds?

From 1799 (when Napoleon became First Consul of France) to 1805, the French treasury was most dependent on taxes from France and its empire. After 1805, conquered territories in Europe such as Spain, ...
7 votes

Venezuelan crisis of 1902–03: Why is there a Russian flag on the cover of the prominent newspaper 'Le Petit Parisien'?

After zooming in, it does look like the white part is a faded yellow and there is a circle of stars in the middle of the flag (as pointed out in Aaron's answer):
7 votes

Has there ever been a case where a country adopted the currency of another country with a smaller economy?

United States of America used Spanish dollar as the (sole) currency until 1792 - it even remained a legal tender until 1857. EDIT: In 1820 (when the Spanish dollar was still a legal tender and widely ...
7 votes

Has there ever been a case where a country adopted the currency of another country with a smaller economy?

Since Fiat money (paper banknotes) are often based on the strength of an economy of the country that issued it, it is unlikly that a bigger economy would be able to use the currency of a smaller ...
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7 votes

Was the financial crash of 2008 caused by top graduates of the American Ivy Leagues working at wall street banks?

During the crisis I worked in the team that was creating pricers for the complex derivatives in the bank where CDSs were invented. 2007-8 crisis has many reasons. The origin of it lies in easing the ...
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6 votes
Accepted

What is the oldest debt that any country is paying right now, and to whom?

As Semaphore points out, the UK is paying interest on consolidated annuities. His links are better, but here is a story from the New York Times. (Note: Semaphore corrected my quibble about UK vs GB; ...
  • 31.1k
6 votes

Was the financial crash of 2008 caused by top graduates of the American Ivy Leagues working at wall street banks?

Fairly obviously not. The problems of 2008 were the consequence of a great many people (far more than the total number of Ivy League graduates), all acting in ways that they thought would be ...
  • 2,865
6 votes

Was the financial crash of 2008 caused by top graduates of the American Ivy Leagues working at wall street banks?

What you referred to about "top graduates" was a "symptom," but not the underlying "disease." The real problem was the "pedal to the medal," and "anything ...
  • 103k
6 votes

Was the financial crash of 2008 caused by top graduates of the American Ivy Leagues working at wall street banks?

I worked in the financial services industry back in 2007/8 in software engineering and saw the crash happen with a front row seat. The root cause of the crash was the massive overvaluation of CDS (...
  • 11.1k
5 votes

Were debts owed or outstanding debts factored into the Roman census?

tl;dr Yes, it appears that debts were taken into account by the censors, and that details were provided as part of the statement given by every Roman citizen to the censors. This is an interesting ...
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5 votes
Accepted

How did New York become the financial hub of America?

I think the best way to answer this question is to ask: Why did Philadelphia lose its position as the hub of American finance? Philadelphia had first mover's advantage over New York in terms of ...
  • 18k
5 votes

What was the effect of the Panic of 1837 on financial/banking policy?

Specie Circular: The most direct and immediate effect of the Panic of 1837 was the repeal of the Specie Circular of 1836. The Specie Circular was a highly deflationary policy because it required that ...
  • 18k
4 votes

What were the factors that caused debtors' prison to disappear in most parts of the world in the 20th century?

In 1976 the practice was abolished by the UN under "the International Covenant on Civil and Political Rights"on the grounds that "No one shall be imprisoned merely on the ground of inability to ...
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4 votes
Accepted

Did the historic events behind the film The Big Short happen under Glass Steagall?

Ummm..no. As a bit of background, Glass Steagall was passed in the wake of the Great Depression to prevent commercial banks, or entities affiliated with commercial banks, from speculating in ...
  • 112k
4 votes

What were factors that led to a decline in bond yields during World War II given that the opposite should have happened?

The return on a bond can, to a first approximation, be thought of as the inverse of it's price. When bond yields drop this means their price rose - due to either decreased supply or increased demand. ...
4 votes
Accepted

How did the debt collection of Gregorius IX work?

This mechanism is describing the cheque. It was not sufficient to present the "cheque", one also had to establish one's identity as the "payee" - just as in a modern chequing transaction. That this ...
4 votes

Why were eighteenth century financial inventions only patentable under French law for 21 months?

SHORT ANSWER The French Assemblée nationale législative saw financial patents as 'dangerous' as they were open to abuse and could be used to exploit people. The issue of speculation was a major ...

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