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Exhibit brings NYC banking history to life

In Manhattan, the Museum of the City of

In Manhattan, the Museum of the City of New York opens a new exhibit "Capital of Capital'' this month which explores how banks became intertwined with New York's growing economy early on, and how they changed and developed with the city over time to make it the financial center that it is today. (June. 4, 2012) Credit: Nancy Borowick

Crashes, panics, depression, deflation -- they're all part of an exhibition at the Museum of the City of New York.

The exhibition, which opened last month, explores how the economic dynamo that is New York was made possible in great measure by its innovative and controversial banking sector, according to the museum's website.

Museum visitors will see how New York banks molded American culture and our personal lives in ways we don't even realize, said Sarah Henry, the museum's deputy director and chief curator.

Henry and an economic historian dug through Citibank's 200-year-old archives to create the exhibition "Capital of Capital: New York's Banks and the Creation of a Global Economy," which runs until Oct. 22.

"This is a good time for New Yorkers to understand our banking history and learn where we came from," she said this week. The exhibition illustrates how "the banking debate has not changed since the American Revolution and that it is a continuing saga" where lessons can still be learned, she said.

The museum's historical dig revealed the first bank notes -- or money -- issued by New York banks after the American Revolution. It also displays bank ledgers with the personal bank accounts of George Washington, Alexander Hamilton and John Adams.

Other artifacts include an original New York Stock Exchange seat when they were actual seats, a ticker tape that documents the stock market crash of 1929, and a 300-page "toxic" mortgage security bundle -- an example of what led to the recent real estate bust and the 2008 stock market downturn.

The exhibition also tells the story of how the city's banking system became national and then global after World War I when New York banks opened offices in China, Henry said.

"In the 1920s, banks started lending money to people," Henry said. The exhibition shows bank advertisements enticed people to borrow money for new washing machines, vacuum cleaners or "ice-o-matic" refrigerators.

The exhibition also illustrates how banks have always been controversial. At the end of the American Revolution, the populace worried that banks were creating a power base for themselves by issuing bank notes, Henry said.

"People were worried about how much money banks could accumulate. They also worried how they would control the supply of money and hold the key to the economy," she said.

"The state legislature would not give banks charters and wanted to regulate the banks so that their bank notes could be trusted," she said, thus the creation of the "Safety Fund," which required banks to contribute to a common fund in case they failed.

The last section of the exhibition brings visitors to the present day, where a wall-size graph shows the consolation of major banks from 37 in 1992 to four in 2009.

Visitors also can hear and see the Senate debate that led to the 1999 repeal of the Glass-Steagall Act of 1933, which had prohibited commercial banks from engaging in investment activities.

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