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Michael Gagnon
Associate Professor of History
Georgia Gwinnett College
Incorporating
Business
Ventures in
Antebellum
Athen...
Why Incorporate a Business?
• Limited Liability
• Ability to raise large amounts of
capital
• Monopoly rights and taxes
3 Shares of Stock issued in 1854
Creators of GA RR Bank
Augustin Clayton William Dearing James Camak J. Edgar Thomson
Incorporating the Georgia Railroad
• Athenians first met to discuss a RR in June
1833, when SC neared completing its railr...
How Stock Subscription Worked
• Each Share costs $100
– Had to put down $5 at subscription
– Sometimes accepted “notes” in...
Locomotive shipped to Atlanta by wagon
before Georgia Railroad completed from
Madison
Georgia’s
Antebellum
Industrial Zone
Athens
$10 Georgia Railroad Bank
Note from Athens Branch
Corporations regulated because feared
• Most important corporations were banks
• Bank of the United States acted similar t...
Corporations regulated because feared
• Most important corporations were banks
• Bank of the United States acted similar t...
Bank Panics - Depressions
Bank Panics - Depressions
Banking Cycle: Economy Collapses EVERY 20
years under unregulated capitalism
Basic Causes:
1. Un...
Bank Panics - Depressions
• Panic of 1819
– 2 years
– Bank Failure and Cotton Prices
• Panic of 1837
– Up to 8 years
– Ban...
Charting the 1837 Bank Panic
Later
Depressions
• 1873
• 1893
• 1907
• 1919
• 1929
Later
Recessions
• 1946
• 1959
• 1974
• 1981
• 1992
• 2000
• 2008
Effects of Panic
1. Banks fail to pay depositors – Bank Runs
- Think Michael’s Tuppence in the Movie “Mary
Poppins”
2. Cre...
Other Corporation in Athens
• Scull Shoals Factory 1834
• Princeton Factory 1834
• Georgia Factory 1839
• Southern Mutual ...
General Incorporation Laws start in
Georgia in 1848
• Primarily for factories
• Everything else still done through individ...
Questions?
2014 athens clarke county library money smart week presentation
2014 athens clarke county library money smart week presentation
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2014 athens clarke county library money smart week presentation

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Incorporating Business in antebellum Georgia

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2014 athens clarke county library money smart week presentation

  1. 1. Michael Gagnon Associate Professor of History Georgia Gwinnett College Incorporating Business Ventures in Antebellum Athens Money Smart Week Athens/Clarke County Library April 7, 2014 11:00 AM
  2. 2. Why Incorporate a Business? • Limited Liability • Ability to raise large amounts of capital • Monopoly rights and taxes
  3. 3. 3 Shares of Stock issued in 1854
  4. 4. Creators of GA RR Bank Augustin Clayton William Dearing James Camak J. Edgar Thomson
  5. 5. Incorporating the Georgia Railroad • Athenians first met to discuss a RR in June 1833, when SC neared completing its railroad from Charleston to near Augusta • Arranged coordinated approach with other towns in October 1833 • Legislature passed incorporation in December • Subscription books opened for 10 days in February 1834 and sold 6015 shares. • Organized and elected officers in Athens on March 10, 1834
  6. 6. How Stock Subscription Worked • Each Share costs $100 – Had to put down $5 at subscription – Sometimes accepted “notes” in lieu of $5 – Later called for payment of portion of subscription 15-20% as needed in following years • In 1836, added Banking to corporate charter – Augusta Town Council bought 2,000 shares of 7,500 new shares offered – Opened independent branches in Athens and Augusta • With national depression in 1837, bank in Athens faltered, Augusta purchased controlling share of stock • Closed Athens branch in 1842
  7. 7. Locomotive shipped to Atlanta by wagon before Georgia Railroad completed from Madison
  8. 8. Georgia’s Antebellum Industrial Zone Athens
  9. 9. $10 Georgia Railroad Bank Note from Athens Branch
  10. 10. Corporations regulated because feared • Most important corporations were banks • Bank of the United States acted similar to today’s Fed • People thought it too influential and too powerful to be safe • Not elected but controlled by rich • Andrew Jackson waged war against the BUS, forcing it out of business • Banks only as good for economy as people’s trust in them
  11. 11. Corporations regulated because feared • Most important corporations were banks • Bank of the United States acted similar to today’s Fed • People thought it too influential and too powerful to be safe • Not elected but controlled by rich • Andrew Jackson waged war against the BUS, forcing it out of business • Banks only as good for economy as people’s trust in them
  12. 12. Bank Panics - Depressions
  13. 13. Bank Panics - Depressions Banking Cycle: Economy Collapses EVERY 20 years under unregulated capitalism Basic Causes: 1. Unstable Banking System 2. Collapse of Major Agricultural Commodity
  14. 14. Bank Panics - Depressions • Panic of 1819 – 2 years – Bank Failure and Cotton Prices • Panic of 1837 – Up to 8 years – Bank Failures and Cotton Prices • Panic of 1857 – 6 months to 2 years – Insurance/Bank and Wheat Prices – Also Manufacturing
  15. 15. Charting the 1837 Bank Panic
  16. 16. Later Depressions • 1873 • 1893 • 1907 • 1919 • 1929 Later Recessions • 1946 • 1959 • 1974 • 1981 • 1992 • 2000 • 2008
  17. 17. Effects of Panic 1. Banks fail to pay depositors – Bank Runs - Think Michael’s Tuppence in the Movie “Mary Poppins” 2. Creditors sue everyone who owes them to pay their own debts, but most debtors can’t pay debts because no money available 3. If you lost lawsuit, Creditors sell all you own at Court House steps to highest bidders, who pay pennies on the dollar for your possessions.
  18. 18. Other Corporation in Athens • Scull Shoals Factory 1834 • Princeton Factory 1834 • Georgia Factory 1839 • Southern Mutual Insurance 1848 • Athens Factory 1848 • Pioneer Paper Mill 1852 • Athens Foundry 1852 • Bank of Athens 1856
  19. 19. General Incorporation Laws start in Georgia in 1848 • Primarily for factories • Everything else still done through individual incorporation laws • Most general incorporation still awaited until after Civil War
  20. 20. Questions?

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