Today, American Express is a $20 billion dollar financial giant. One hundred and fifty years ago, however, they were a small courier company, transporting mail and packages by horse and rail. Begun in 1850 as a merger of three smaller courier companies - Wells and Co., Livingston, Fargo and Co., and Wells, Butterfield and Co. - in Buffalo, New York, the company quickly expanded its operations. They immediately purchased the headquarters for their stables and in 1854 they purchased a lot in New York City. In 1874, American Express was strong enough to rent a building in New York City's prosperous and prestigious financial district. From the beginning, American Express controlled 71,000 miles of railroad track, enabling them to dominate the courier industry. Changes were made in the early 1900's, though, due to the Interstate Commerce Commission's anti-trust rulings. The "express" division had to be given up and a new company, the American Railway Express was born. By the time the United States government took away the track in 1917, to facilitate the movement of troops and supplies during World War I, American Express's railroad division employed over 30,000 people. In 1882, American Express began to compete with the US Postal Service, by making mail orders available as part of their services. After one of American Express's founders, J.C. Fargo took a trip to Europe and discovered that he had a difficult time getting cash outside the larger cities, the company began to offer its traveler's checks in denominations of $10, $20, $50 and $100. This division turned out to be very profitable for American Express, benefiting by not only charging upfront fees but by investing the money they collected from their customers. While a customer's traveler's check remained uncashed, they had access to the funds for investments. To further increase their traveler's services, American Express began offering luxury steamship travel to all over the world. You could see the world and pay for it, too, all through American Express. American Express issued its first credit card in 1957, to directly compete with the Diner's Club card. Despite the fact that the card was simply a piece of stiff paper with your account number on it, demand for it resulted in a pre-launch issue of 250,000 cards. The Diner's Club card carried an annual fee of $6, while American Express charged $7. This was seen, however, as a sort of superiority over the Diner's Club card and made American Express customers that much more exclusive. The prestige of American Express cards grew even more in 1966, with the introduction of the Gold card. (There's a Platinum card, now too, for the elitest of the elite.) These cards come with an unlimited spending limit, and interest-free charges, provided the full balance is paid in full every month. The prestige and honor associated with the American Express cards is so high that certain high-end retailers like Neiman Marcus will only accept American Express or cash. Only the very best is good enough for the very best, it seems. In the 1980's a short lived partnership with Warner Communications saw American Express venture into television media. With Warner, they developed Nickelodeon, MTV and The Movie Channel. American Express sold its interests to Viacom in 1984, and while the partnership dissolved, the networks live on. American Express is undoubtedly a leader and innovator in the credit card industry. In addition to its Gold and Platinum cards, it now offers a variety of cards for business and consumer alike. These cards allow one to carry a monthly balance while charging interest fees, making them direct competition for the likes of MasterCard and Visa. American Express has a long and storied history over its 150 years. It has evolved and adapted itself and its services over time, allowing it to survive even the toughest of economic times. From courier to travel service to multi-billion dollar financial institution, American Express has stood the test of time to become an icon of American business.
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Today, American Express is a $20 billion dollar financial giant. One hundred and fifty years ago, however, they were a small courier company, transporting mail and packages by horse and rail.
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