The Financial Fiction Genre

From the Dawn of the American Century to the 1970s

L. Frank Baum

Probably few people who have read the Wonderful Wizard of Oz or watched the popular film realise that, despite the lack of any conclusive evidence, there is a widespread belief that Baum meant his tale to be not simply a story for children but also an allegorical treatment of the monetary debate over the merits of the gold standard versus bimetallism in the United States at the end of the 19th century and beginning of the 20th. It is claimed that the Yellow Brick Road symbolises the gold standard, the silver shoes of the witch represent silver coinage, the name Oz supposedly comes from the abbreviation of ounce (of gold) and the Cowardly Lion with his loud roar is William Jennings Bryan, the unsuccessful candidate in the 1896 presidential election. Jennings was a great orator and delivered the famous Cross of Gold Speech in the election. Numerous other parallels between the bimatallist controversy and Baum's story have been drawn. More recently David Boyle was inspired to write The Wizard, described as "a modern Wizard of Oz for the days of derivatives, sub-prime mortgages and Goldman Sachs."

Frank Norris

Frank Norris was born in Chicago in 1870 but when he was 14 his family moved to first to Oakland and then, a year later, to San Francisco. After studying art in London and Paris he became a journalist and in 1895 sailed to South Africa as a correspondent for the San Francisco Chronicle. During the Boer War he was captured by the Boers who expelled him from the country because of his association with Leander Jameson whose raid on the Transvaal was one of the incidents that led to the conflict. Back in the US he worked in New York for McClure's Magazine which sent him to cover another war in Cuba. His novels, of which the best known is probably McTeague (1899) were Influenced by the naturalism of Zola. Norris planned a trilogy of novels on the theme of wheat. The first of these, The Octopus (published in 1901) deals with the production of wheat. His second, The Pit (1903) is centered around wheat futures trading in Chicago and is probably the first novel on the subject of derivatives. Norris had planned to go to India to gather material on famine for the last work in the trilogy but before he could do so he died from peritonitis at the age of thirty-two.

Theodore Dreiser

Theodore Dreiser was born in Indiana in 1871 and started his career on the Chicago Globe newspaper in 1892. His first novel, Sister Carrie, was published in 1900 but, as it deals with the rise of a fallen woman, fell foul of the censors and was soon withdrawn. He third novel the Financier, was published in 1912 and is set in the Philadelphia of the mid-nineteenth century. It depicts the chaotic and changing circumstances of the American financial system during that period.

"The United States Bank, of which Nicholas Biddle was the progenitor, had gone completely in 1841, and the United States Treasury with its subtreasury system had come in 1846; but still there were many, many wildcat banks, sufficient in number to make the average exchange-counter broker a walking encyclopedia of solvent and insolvent institutions. Still, things were slowly improving, for the telegraph had facilitated stock-market quotations ..."
The Financier, was the first novel his Trilogy of Desire (the others being the Titan, 1914, set in Chicago, and the Stoic, 1947, in London) whose principal character Henry Worthington Cowperwood was "a financier by instinct, and all the knowledge that pertained to that great art was as natural to him as the emotions and subtleties of life are to a poet." The life of Cowperwood was based on that of Charles Tyson Yerkes whose ancestors had emigrated from from Wales to America in 1682. Charles Yerkes was jailed for embezzlement in 1871 but after his release he made a fortune from dealing in street railway (tram) stock in Chicago. Yerkes business methods included bribery of council officials and, when that didn't work, the use of "professional vamps" to seduce and then blackmail lawmakers.

In 1900, after the sale of his Chicago company, Yerkes headed a syndicate that took over some of the lines of the London Underground system with the intention of electrifying them but when he died in 1905 the Underground was on the verge of bankruptcy. Nearly 100 years later, with the British government introducing the "public private partnership" to revitalise the Underground, which has an American boss who is opposed to the whole idea, the career of Charles Yerkes is again topical.

Edwin Lefevre

At the end of the 19th century London was still the undisputed financial centre of the world but the fortunes of New York were in the ascendanct and continued to grow rapidly, despite banking panics like the one in 1907 when hundreds of American banks failed, until the Wall Street Crash of 1929 led to the world- wide Great Depression of the 1930s.

Between the turn of the century and the founding of the Federal Reserve System in 1913 a series of works of fiction set in Wall Street was written by Edwin Lefevre who was originally educated as a mining engineer but became a journalist. In 1901 a collection of his short stories entitled simple Wall Street Stories was published. This was followed by the novels The Golden Flood in 1905, Sampson Rock Of Wall Street in 1906 and The Plunderers in 1912. Later Lefevre turned from fiction to fact and in 1923 his Reminiscences of a Stock Operator was published. Although ostensibly a novel, it is generally believed to be a thinly-disguised biography of Jesse Livermore, called "Larry Livingston" in the book, the infamous trader who during first half of the 20th century amassed and lost more several fortunes fortunes before finally committing suicide with a revolver.

A couple of years after the publication of his Livermore biography, Lefevre produced another book about a stockbroker, The making of a Stockbroker. This was a straightforward, factual biography of a much lesser-known stockbroker, John K. Wing. In his introduction to the book, Lefevre stated that Wing complained to him that the American public thought of the stock exchange as it used to be when dubious practices were much more common and that nobody was writing about the modern stockbroker of the vintage of 1924. Lefevre offered to tell Wing's story and that was the genesis of The Making of a Stockbroker.

Some of Lefevre's novels are again in print having been republished by Fraser Publishing Company. Reminiscences of a Stock Operator was republished by John Wiley in 1997.

Upton Sinclair

A much more influential American author was Upton Sinclair, a socialist novelist associated with the Muckrakers, as Teddy Roosevelt (in an allusion to a term used in Pilgrim's Progress, described a group of writers, mainly journalists, who in the first decade of the 20th century repeatedly exposed fraud and corruption in business and politics. Most of what the Muckrakers wrote was factual. A book by Thomas W. Lawson, a Boston financier, Frenzied Finance constituted a major exposé of stock market abuses and insurance fraud. Frenzied Finance was originally published in 1905 and re-published by Greenwood Press in 1968.

Upton Sinclair used the novel as a medium for spreading his views on social reform. The year after widespread bank failures in the panic of 1907 Sinclair published The Moneychangers which attacked both the moral corruption and the financial chicanery of the bankers and speculators whose actions had precipitated the panic.

However Sinclair's writing was less influential than the fact that when the 1907 panic spread across the Atlantic the British banking system was able to weather the storm with ease. This intensified demands for the reform of the US banking system. The Pujo Committee Report on the powers of the US money trust in 1913 signalled the end of laissez-faire in US banking and that same year the US Federal Reserve System established. A US Postal Savings system, one of the reforms advocated by Sinclair in The Moneychangers was created in 1911 but Because of opposition from the commercial banks it did not develop in a substantial way.

In 1934 Upton Sinclair stood unsuccessfully for election as Governor of California.

Ayn Rand

The political and economic views of Ayn Rand could hardly be more different from those of Upton Sinclair. Although she did not have much to say about banking as such, she is included here because she had very forceful opinions on capitalism and on money in particular. Ayn Rand is today remembered not only as a novelist but also as a philosopher. She was born in Russia in 1905 and living through the Revolution and Civil War turned her into an implacable opponent of collectivism in all its forms. At the age of 21 she emigrated to America and worked in Hollywood as an extra, a script reader, and a waitress, among other things. Her first novel, We the Living, based on her years under Soviet tyranny, was published in 1936, but her third, and also last work of fiction, published in 1957, is the one for which she is best-known. Atlas Shrugged is a celebration of capitalism which Rand saw as the motor of the world. After John Galt, a businessman, discovers how to harness perpetual motion thereby driving competitors out of business, Congress passes the Fair Shares Law forcing successful businesses to share their profits with their less successful competitors. Atlas Shrugged tells the story of what would happen if capitalists got tired of, like Atlas, holding the world on their shoulders. In a survey by the Library of Congress in 1991 it was listed second only to the Bible as the most influential book in America.

Atlas Shrugged contains a long passage in praise of money. This short extract conveys its flavour.

"If you ask me to name the proudest distinction of Americans, I would choose--because it contains all the others--the fact that they were the people who created the phrase 'to MAKE money.' No other language or nation had ever used these words before; men had always thought of wealth as a static quantity--to be seized, begged, inherited, shared, looted, or obtained as a favor. Americans were the first to understand that wealth has to be created. The words 'to make money' hold the essence of human morality."
The book dramatizes Ayn Rand's philosophy, known as objectivism and seeks to show how 'ought' derives from 'is'. After its publication Rand abandoned fiction and spent most of her energy promulgating objectivism, which as well as being pro-capitalist and anti-collectivist, is also atheistic but despite its similarity to libertarianism many objectivists would maintain it is quite distinct.

Bruce Marshall

Bruce Marshall, unlike the other authors in this section, was British. He  was born in Scotland in 1899 and served in the Royal Irish Fusiliers during the First World War, suffering injuries which led to the amputation of a leg. After the War he completed his education and started work as an accountant in Paris, and spent the rest of his life in Paris, except for the period of the Second World War during which he worked in Britain for the intelligence service. Marshall had started his writing career in 1924 with This Sorry Scheme but Father Malachy's Miracle in 1931 is regarded as the most important of his early works. Religion was an important theme in his work and following his experiences in military intelligence war and espionage became a significant theme in some of his post-war works. The Bank Audit, first published in 1958 draws heavily on Marshall's expertise in his original profession, accountancy. It is set in Paris in the 1930s. A joke by one character in the book reflects the public image of the public accountant. "I'm a chartered accountant; but please when you go home not a word to my parents; they think I'm playing the piano in a brothel." Years later Jacques Seguela, head of a succesful Paris ad agency used a variant of that joke as the title of his autobiography: Don't Tell My Mother I Work in Advertising: She Thinks I Play a Piano in a Brothel.

Leslie Waller

The son of Ukrainian immigrants, Leslie Waller was born in Chicago in 1923. He started writing during World War II and afterwards worked as a public relations account executive while continuing to write. In the 1960s he achieved recognition with his organized crime trilogy, The Banker, The Family and The American whose characters exemplify "the big truth about banking." He also wrote a work of non-fiction on the same theme The Swiss Bank Connection (1972). making the point that "the same services are available to the honest, to the criminal, and to all the rest of us who inhabit the grey area in between." Later he turned to other themes. His last novel, Target Diana (2001) was about a fictional plot to kill Princess Diana. He died in 2007.



[ Top ]
[ Financial Fiction Genre home page ]
[ Financial Thrillers by Linda Davies ]
[ Financial Scandals home page ]
[ History of Money ]
[ Roy Davies' Home Page ]
Roy Davies.
Last updated 20 May 2010.