This Chapter introduces the Railroad Era and the financial and regulatory changes spawned by Richard Trevithick’s steam-powered locomotive. In particular, railroads illustrate how technological innovations, like the steam engine and rail car, often require financial innovations to bring the new technology to market because not only is production of the product itself expensive, but it also requires enormous investments in infrastructure like the Transcontinental Railroad. For example, preferred stock was invented to make railroad financing more appealing to governmental investors, but it was quickly adopted for many different purposes. Although the idea of using public funds to purchase railroad stock was unpopular with legislatures in the beginning, constituents soon began to demand access to this preference and additional rights. Additionally, as the acrimony between Federalists and anti-federalists persisted throughout the era, another financial evolution was primed to take place–the abandonment of the gold standard. Federalization of the money system continued as the United States attempted to better control its economy by adopting the gold standard.

This chapter uses the work of Toni Morrison, especially Song of Solomon, to explore the racialised history of finance in America. The first section suggests that the two intertextual reference points for this novel, William Faulkner’s Go Down, Moses and Ralph Ellison’s Invisible Man, provide a telling history of those key moments in America – the 1870s, the 1930s and the 1960s – in which credit has been associated with false promise and dispossession for the African Americans. Its second section uses this context to trace the narrative of the protagonist of Song of Solomon, Milkman Dead, as he uncovers the loss that has constructed his own family history. Morrison traces this racialised history of finance, especially the self-ownership promised by insurance, to explore the particular and paradoxical crisis in the credit cultures of the 1970s. The novel reads the politics of the contemporary by returning to the old failures of both the New South and the New Deal and reckons with the persistent and still-present legacies of a credit system that was rooted in the trade in humans.