Asymmetrical Information

You're telling me that not one banking or insurance or brokerage company from pre-revolutionary Boston or Philadelphia has survived? Nobody can trace their history back that far?

Or do they mean the literal building itself?

The Bank of New York, which was founded in 1784, claims to be the oldest bank in the United States (e.g. http://www.bankofny.com/htmlpages/npr_2006_1965.htm). But it appears that the Philadelphia Contributorship, set up by Benjamin Franklin in 1740 (http://www.firehouse.com/magazine/american/colonial.html), is still existence, although they don't seem to have a website.

The Bank of New York claims to be the oldest surviving bank in the United States, dating back to 1784. JP Morgan Chase can trace its corporate ancestry back about as far, but not as a bank - it started out as a water supply company.

What I find hard to believe about this is that banking, which has been around for thousands of years, took so long to make it here. It might be, though, that banking was more of a "small business" enterprise prior to that. I can't imagine that all of the Americas did without some system of lending until so recently.

Nick Kasoff
The Thug Report

Sorry, I have lots of reasons not to believe this.

None of the big European financial institutions had operations in the Americas before 1775? None of the mutual insurance organizations existing before then merged into one that exists today? Harvard's endowment fund didn't have a bank account before 1775? (After 100? years of being around)

I could go on...

It isn't that hard to believe it. You must remember the reasons why the revolution was fought. One was the practice of mercantilism. While merchants could smuggle goods across the borders to other colonies, bankers, whose business is dependent upon good recordkeeping, were not as free to do business in other colonies. There would have been a huge advantage and virtually no drawbacks to setting up the official business in England, not the colonies. A banker in New York or Philadelphia was probably not free to make a loan to a resident of Georgia, but an English banker was.

Person: It's not impossible. The claim isn't that there were no financial institutions, but that this is the only one that survived to the present day. American banks, insurance companies, etc., often failed in the 18th and 19th centuries. New institutions arose in their place, maybe even in the same building, but there's no continuity of the business.

I don't know about the big European banking houses, which often do have business continuity going way back. Maybe the colonies simply weren't lucrative enough to get an official branch office. (I expect that it was easier and less risky to partner with a local bank - then, when something went wrong, the European bank would just cut ties and seek another local partner.) It's also quite likely that, as part of England's general mercantilist policy, non-English European banks were banned or placed at a heavy disadvantage in the Colonies, and then the Revolution caused the closing of any branches of English banks.

It's certainly not impossible, but it is surprising that somebody couldn't trace themselves back through mergers and name changes. I believe we still have a few newspapers from that era bearing the same names.

I guess that's what makes this an intersting factoid.

Yep, Philadelphia Contributorship was founded in 1752 by B. Franklin and others, and is still in existance. I note that a competitor existed up until 1997. One could argue the Library Company is even older:
"On July 1, 1731, Franklin and a group of members from the Junto, a philosophical association, drew up "Articles of Agreement" to form a library. The Junto was interested in a wide range of ideas, from economics to solving social woes to politics to science. But they could not turn to books to increase their knowledge or settle disputes, as between them they owned few tomes. But they recognized that via the Junto's combined purchasing power, books could be made available to all members.

So it was that 50 subscribers invested 40 shillings each to start a library."

Seems like a financial endeavor indeed, and still in existance.

markm/Njorl: What about Harvard's endowment fund that I mentioned? If a pawn shop can count as a "financial institution", certainly that can as well. And as for Monte de Piedad, I'm interested in knowing what one's position on the Ship of Theseus has to be to count it as continuous. Also, why does it not count English banks that had operations in America before then?