Building a company from the ground up is no easy feat, but keeping it afloat through changing economic times is a task only a few businesses master. American Express Company, known similarly as AmEx/Amex, has been around since the mid-1850’s and continues to grow. With a global presence and financial products for just about everyone, AmEx continues to plow through the opposition, creating a path for everyone else to follow in.
American Express Company
American Express (AmEx) came into existence as an express mail business in Albany, NY during the 1850’s. Founded as a joint stock corporation by merging the express companies of Wells & Company, Livingston, Fargo & Company, and Wells, Butterfield & Company, AmEx set up its headquarters in the TriBeCa section of Manhattan where it enjoyed its monopoly on the movement of goods throughout New York. AmEx eventually moved their headquarters to 65 Broadway in Manhattan which was fast becoming the financial district in New York, a location that would not suit them for long due to their rapidly expanding size.
Not wanting to be known as a one-trick pony, AmEx first dipped its feet into the financial services pool during 1882 by introducing its money order business in attempt to rival that of the United States Post Office. Fueled by a frustrating trip to Europe where J.C. Fargo, president of AmEx at the time, could not obtain cash except in large cities, AmEx later introduced the traveler’s cheques in 1891 in denominations of $10, $20, $50, and $100. Ten years later, AmEx was selling more than $6 million annually in cheques.
When World War I erupted in Europe in 1914, it left over 150,000 Americans stranded and without access to cash since the banks refused to pay against any foreign letters of credit or any other form of foreign paper. AmEx was able to cash the money orders/travelers cheques in full, enabling the stranded people a quick passage home. In 1915 AmEx officially entered the travel business and within ten years were taking tours to Europe, South America, the West Indies, and other destinations around the world.
Having a successful travel business in addition to its money order and travelers cheques business, AmEx seemed to be at the top of its game. But in 1929 everything almost came crashing down. For the last few years, Chase National Bank had been secretly buying up shares of AmEx and at one point owned 97% of AmEx. Had it not been for the small number of remaining shareholders refusing to sell as well as the passage of the Glass-Steagall Act, AmEx would have been fully absorbed by Chase.
The Great Depression left AmEx in shambles, and with the prospect of another World War looming, it took the experience and ingenuity of its employees to keep AmEx afloat. Near the end of the war, AmEx began to rebuild its business and enjoyed many years of growth. Though enjoying the spoils of a successful business, they noticed a shift in the way consumers were using their...