American Central Banking and Oil

American Central Banking and Oil and the Impact of their Visual Depictions

By: Teodor Serbanescu

Submitted in Partial Fulfillment of
The Humanities & Arts Requirement
Worcester Polytechnic Institute
Worcester, Massachusetts

This Seminar in the History of Science and Technology and the History of Scientific and Technical Illustration is the culmination of my five Humanities and Arts courses at Worcester Polytechnic Institute. Every class, in some way, related to the theme of the seminar, and helped maximize my final product. For example, HI 2314 set up a foundation of basic American history for me to build upon. HI1312 discussed American social history, which taught me about public opinions and behaviors through time. EN2211 helped improve my writing skills, which was crucial to my success in the seminar. Also, HI2331 and HI2332 taught me the history behind science and technology over a period of two centuries. The subject of the actual seminar was more focused on the technical images throughout the history of science, which required me to do some research that I have not done previously. The paper that I wrote was about American central banking and oil and the impact of their technical depictions. It ties into the theme of the seminar because central banking and oil companies were, in a way, a type of science, and the images related to them and impacted them in a strong way.

Introduction

Since the nineteenth century, central banking and the oil industry have been areas of importance in regard to the shaping of American politics and society. Central banking and the Federal Reserve System have played a significant role in the country’s finances, but have also been scowled at by a number of people, especially during its early years. The oil business has affected our country in a variety of ways as well, and also has been frowned open at times. During this time, artists have drawn images in newspapers and magazines that portray what is happened in the country. Additionally, these images are drawn mainly to provide a theme of controversy, such as the one that banking and oil have provided. Central banking and the oil industry have been scrutinized with visual imagery throughout history, often times to depict their true nature to the public.

Central Banking

America’s first bank was founded by Alexander Hamilton in 1871. It was modeled after the Bank of England. Unlike today’s banks, it did not hold all of America’s money supply, rather only about 20%. The Bank was opposed by some, most notably Thomas Jefferson and James Madison, who thought that the system would lead to corruption, manipulation, and misuse. Five years later, a second bank was created to improve the first. The second bank, like the first, did not have an official name. It was structured mostly the same as the first bank, except it expanded across the US and was allowed to hold more money. However, the bank’s downfall was due to President Andrew Jackson, who denounced the bank in 1830 and claimed it to be a source of corruption.

The image above is a political cartoon published in an 1832 newspaper. This drawing was inspired by Andrew Jackson’s battle with the second bank of the United States; Jackson vetoed the bank in 1832, saying that it served mainly to make the rich richer. Jackson told his vice president, Martin Van Buren, “The bank is trying to kill me, but I will kill it!” These words are portrayed in the above cartoon quite literally. While analyzing this picture, a few things are obvious: the main characters are Andrew Jackson, a young man, and the green monster, and it takes place in a bedroom at night. The bedroom belongs to Andrew, the young man is Andrew’s butler, and the green monster is the portrayal of the bank; I can only assume this through logic reasoning. Andrew Jackson is holding a sword and trying to attack the monster ‘bank’, while his butler is holding him back, and the monster is in an offensive position as well. The implications and themes of this picture are as follows: Andrew Jackson is a small old man with a brave heart (a characteristic that is generally favored among people), because he is trying to fight a huge monster. The young butler is trying to hold Andrew back from this monster (this adds a comical affect). And the monster ‘bank’ is trying to attack Jackson (monsters are generally un-favored among people). When putting these three generalizations together, people during that time, and even today, will get the idea that the bank is evil and Jackson is brave and noble, which is exactly what the artist most likely intended. It turned out that Jackson was in fact favored by the majority of people, and succeeded in his battle with the bank; whether or not this newspaper cartoon had an impact on that is a question that cannot be answered, but I believe the answer is yes.

After the downfall of the second bank, the Free Banking Era emerged. It lasted from 1837 to 1862. Each state was allowed to govern their own interest rates, loans, and other finances. Nevertheless, banks still existed, but only locally. In 1863, the National Banking Act was passed and a national currency was introduced. The system had certain flaws, such as the inability to back up their money with treasuries. This lead to the Panic of 1907, in which the government came to the conclusion that separate national banks were insufficient, and a main central bank was needed.

The picture above is another political cartoon, published in 1908 by the Pioneer Press. It reads, “Uncle Sam’s Need Of An Elastic Currency // President Roosevelt: “You see, those galluses ought to have rubber in them, so that when Uncle Same stoops to move the sheaf there won’t be much strain on the buttons.””1 Galluses is an old way of saying a pair of suspenders for trousers, and sheaf is another way of saying a pile.2 What Roosevelt is implying is that the US government needs an elastic money supply in order to move the money to different locations. He is personifying the US bank as Uncle Sam, the ‘galluses’ as the money supply, the ‘sheaf’ as the portion of the money to be moved, and the buttons as the finance center. In this picture, the artist portrays Roosevelt’s analogy in a clever way. He drew Uncle Same about to ‘move the sheaf’, as Roosevelt had mentioned, and even drew out some of the implications that he made. For example, Uncle Sam’s ‘Galluses’ are drawn out and labeled ‘US Currency’, the buttons are labeled “Finance Center”, and the ‘sheaf’ is labeled ‘The Crops’, which is another term for the goods or money to be moved. The artist also added two gentlemen watching and Uncle Sam with a pondered look upon their faces; one of the men has ‘Congress’ written on his hat, implying that congress is overseeing this process and looking for ways to improve it. The humor is that Roosevelt took the serious idea of an elastic money supply, and created this witty scenario that we have above. The effects that this image had on the public, other than being funny, was to inform them about this new idea and raise their support towards it through amusement.

After the Free Banking Era, in 1913, the Federal Reserve System came to power. This system was not exactly part of the government, but too far away from it either. It was responsible for holding money and deposits from other banks, i.e. reserving it, also called the ‘banker’s bank’. Since then, the Fed has gone through a number changes and provisions. Today, the Fed employs a monetary policy, which gives it the power to change prices, taxes, and credits to ensure positive economic growth in the country. It is responsible for controlling our national finance and debt.

This cartoon was drawn by Greg Strid in 2007 and named ‘Uncle Sam’s Credit Brothel’. It portrays the Federal Reserve as sort of vacuum machine, sucking up the money coming from the window of the store. The store, labeled ‘Uncle Sam’s Brothel’ is in flames. Also, the man is driving the machine, with a hat labeled ‘Ben’, he has an unhappy look on his face. You can tell that the setting is during the early 1900s, because the automobile and store is made of wood. There is also a sign on the other side of the building saying ‘Moral Majority Entrance’.1 The implication of ‘Uncle Sam’s Credit Brothel’ is to represent an ordinary bank during that time, and brothel is used to represent the money and credits, not actual prostitutes, as the word actually means. The message that the artist is trying to send here is that the Federal Reserve is destroying small town banks by coming through the back entrance, i.e. using politics to destroy them, not actual force. The driver, named Ben, has a sad expression on his face because he is portrayed as an average working citizen.

Oil Industry

Oil has been around for thousands of years, but until the 1800s, oil was used for other purposes than fuel. It was used for disinfectants, vermin killers, hair oil, and boot grease. The oil industry in the US began in the mid 1800s when gas powered automobiles were invented.1 Soon after, a man named John D. Rockefeller took control of the oil industry by driving his competitors into bankruptcy and then buying them out. In 1870, he formed the Standard Oil Company, which took control of the entire oil industry in the US. This all ended in 1911, when the Supreme Court of the United States ruled that the Standard Oil Company was using illegal monopoly practices. Congress then divided the oil industry into 34 new companies.

The image above is a political cartoon drawn by Udo J. Keppler in 1904. It appeared in a magazine, during that time, called ‘Puck’. The picture shows an octopus monster, labeled ‘Standard Oil’, devouring a manufacturing site and wrapping its tentacles around some buildings and people. The octopus is representing J.D. Rockefeller’s oil industry monopoly. The other figures in this picture are the steel, copper, and shipping industries, which are being crushed under the octopus. Also, the state house and U.S. Capitol located the left and right of the monster are being grabbed. The octopus is reaching towards the White House.1 The four people being attacked seem to be the owners of the other industries, whom are disgruntled by their defeat. This picture’s setting is on top of the globe, which emphasizes the power and strength of the standard oil octopus. The main theme of this drawing is to show how powerful the standard oil company is becoming, how aggressive and scary it is, and how close it is to grabbing the white house and gaining full control of the country. Could this have played a role in the eventual downfall of Rockefeller’s Standard Oil Company?

Up until World War II, the true value of oil was not entirely known to the US. After WWII, the government quickly realized the full extent of oil value, and started playing a vast role in the oil business. In 1933, the government paid $275,000 to Saudi Arabia’s King for an oil concession, and this was just the first of many transactions that the government would make with foreign countries. Since then, the value of oil has increased. Today, oil prices are rising drastically, and causing much controversy in public opinion. The problem is that US does not have enough oil supply to fulfill its demand. Due to this, the Bush and Cheney Administration stated that they would focus their attention more on the Middle East for future oil supply. Once the September 11th terrorist attacks occurred, the administration decided to engage Iraq. Many believe that the main reason for this was oil, although, President Bush says that the main reason was because they believed Saddam Hussein had weapons of mass destruction. Recently, Bush stated that the forces cannot leave Iraq because terrorists will use the oil refineries against us.

This cartoon was drawn by S Greenberg and published in the Ventura County Star newspaper in 2003. It shows George W Bush in a blue business suit and army helmet, talking about reasons to go to Iraq. In white quote bubbles, he firsts asks why we must go to Iraq, then in the other bubble, he gives four reasons. These reasons are the same as the ones that he publicly states all the time, such as Saddam’s threat to the US and the threat weapons of mass destruction.1 The humor is how the artist bolded and capitalized the letters ‘O I L’, in the words ‘toil recoil boil and soil’. So if a person reads only the bold letters, they will read ‘oil, oil, oil, oil’ where Bush is explaining the reasons to go to Iraq. Also, Bush’s facial expression and posture show that he is trying to preach something, which adds more of a comical affect. Most citizens know that oil has a large role in the reason why we are in Iraq, even though Bush won’t admit it; cartoons like this one help emphasize that point.

Conclusion

A lot of times, when organizations, such as the Central Bank and Oil Industries of the US, try to do something immoral or unjust, an artist, somewhere, ends up drawing something about it. These depictions are seen in newspapers, magazines, and now, the Internet. Unfortunately for the organizations, public opinion matters, and visual images can change public opinion from the way they depict the organizations. To conclude, visual imagery can affect the way a country is run in an indirect way.

References

1) Federal Reserve Bank of Minneapolis. A History of Central Banking
in the United States. Minneapolis, Minnesota. April 25, 2008.
http://www.minneapolisfed.org/centralbankhistory/bank.cfm Apr 23, 2008.
2) Random House Unabridged Dictionary. Dictionary. Random House, Inc 1997.
http://dictionary.infoplease.com. Apr 25, 2008.
3) Andrew Jackson, U.S. President. www.answers.com/topic/andrew-jackson, Apr 25,
2008
4) Mukhtar Amin, Joshua Berkowitz, Suzanne Bremer, Kevin Gallagher, Julie A. Nelson,
Brian Roach. Macroeconomics in Context. Global Development And Environment Institute Tufts University, Medford , MA.
5) Strid, Greg. Uncle Sam’s Credit Brothel.
splendidmarbles.com/category/cartoonscultural, Apr 23, 2008.
6) Sjuggerud, Steve. History of Oil: The Single Greatest Prize in All History. The Oxford
Club, 1999. http://www.investmentu.com/IUEL/2004/20040811.html. Apr 27,
2008.
7) Picture History. 1997. www.picturehistory.com/product/id/17529. Apr 27, 2008.
8) Duroy, Quentin. John Davison Rockefeller. Spring 1999.
http://www.bgsu.edu/departments/acs/1890s/rockefeller/bio1.htm
9) Loven, Jennifer. Bush gives new reason for Iraq war. Associated Press, August 31,
2005.
http://www.boston.com/news/nation/articles/2005/08/31/bush_gives_new_reason
_for_iraq_war/. Apr 27, 2008.
10) Bush’s New Benchmark.
http://marjorieanndrake.blogspot.com/2007/08/bushs- benchmark-oil-
privitazation-mucho.html. Apr 28, 2008.

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