American Express (Amex) began in New York in 1950, a time when many east coasters were moving west. The U.S. Postal Service was slow, expensive, and unreliable (sometimes items were lost or stolen); it didn’t deliver everywhere; and it only carried letter-sized envelopes. It hardly met the needs of a growing nation, and the climate was ripe for something new. Seizing the opportunity, several entrepreneurs began express companies that became integral in connecting the United States as it grew, with horseback riders and stagecoach drivers carrying all kinds of packages from the established eastern cities to the expanding west. American Express became known as the best of these companies.
After realizing that its largest client base was banks, Amex limited its delivery services to smaller packages. Because of the small size and ease of transport, delivering financial packages such as stock certificates, notes, and currency to banks turned a good profit. The company began offering its own financial products, introducing money orders in 1882 and travelers cheques in 1891, with great success. These financial endeavors led to relationships with many European banks. The American Express name became visible around Europe, and its first office there opened in Paris in 1895. A London office followed the next year, and by 1910, offices were located in Southampton, Liverpool, Hamburg, Berlin, Bremen, Antwerp, Rotterdam, Copenhagen, Naples and Genoa.
As history passed, the company’s evolution unfolded in response to changing eras and events on the world scene. As American Express grew in Europe, millions of those Europeans were beginning new lives in America. Immigrants arriving on Ellis Island needed to exchange currencies, but there were no official currency exchange services. Independent money changers were swindling the immigrants, so in 1905, the U.S. Immigration Department asked American Express to provide official currency exchange services on Ellis Island.
A decade later, Amex was inadvertently thrust into the travel business by World War I. The summer of 1914 found 150,000 American tourists stranded in Europe. Banks there had stopped honoring foreign credit, so many of these tourists had no access to money and no way to get home. American Express offices throughout Europe provided help, cashing travelers cheques and money orders so Americans could arrange travel back to the states. Amex and nine U.S. banks then shipped $10 million in gold to Europe, allowing local banks to honor foreign drafts again. This allowed the remaining American tourists to book passage home. In 1915, American Express officially entered the travel business, and before long it was offering tours throughout the world. The war ended, and in 1922, an American Express ship completed the first ever cruise around the world. As a result, the company became known for providing luxury travel.
The stock market crashed in 1929, and because it was not technically a banking institution, American Express did not close during the three day bank holiday that followed. Once again it was able to fill a void by offering bank services. The company had enough cash reserves to cash all travelers cheques and money orders, and was even able to cash those issued by other banks that had gone out of business. Though the 1930s were difficult, the company hung on.
Its experience in WWI allowed Amex to navigate and survive the trials of WWII, and its European offices actually remained open until the last possible moment in countries about to be invaded. In England, the company helped evacuate Allied military leaders and diplomats, as well as British children.
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