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Wheeling-and-dealing history of money

If any group has enough money to endow a museum, then it surely must be Wall Street's people in blue suits.

Until recently, however, no such museum existed. Private collectors snapped up old stock certificates, and old brokerage houses displayed artifacts of their past in plush boardrooms, yet no one made a serious effort to explain U.S. history by using objects culled from the nation's 200 years of financial frolics.

But thanks to one man's passion for Wall Street paraphernalia, this void is slowly being filled. Operating out of its first permanent quarters in lower Manhattan, the Museum of American Financial History is gaining momentum. Its sixth exhibition was held recently, and it has started a modest endowment. It is hoping to expand its opening hours, which now are limited to 11:30 a.m. to 2:30 p.m. Monday to Friday.

"You'd think that this sort of thing would have existed previously, but it's never been tried before. Especially in America, where so much has to do with material wealth, it would seem obvious," said John E. Herzog, the founder.

Herzog, chief executive of Wall Street market maker Herzog Heine Geduld Inc., started the museum five years ago, putting on an exhibit at the U.S. Customs House. He eventually found a permanent home for it last year in a ground-floor room of his brokerage.

About the size of a large living room, the museum has its own entrance on 26 Broadway, a block from Wall Street. It charges no admission and can be viewed by appointment.

For all its advances, the museum hardly rivals nearby tourist attractions such as the New York Stock Exchange. It still lacks the space to display thousands of objects it already owns, which Herzog estimates to be worth about $1.2-million.

But its exhibits are still able to present new twists to U.S. history.

The current exhibition, "The Financial Roots of the Civil War," sheds light on the North's victory by comparing the two sides' financial markets. The exhibition uses a time line as a marker for important military and political events of the Civil War, such as the Emancipation Proclamation, the Battle of Gettysburg and Lee's surrender.

Next to the time line are bills and certificates showing the effects of the Confederacy's inflationary monetary policy, which helped lead to mass desertions by Southern soldiers.

While most people know that the South was outmanned and out-muscled industrially in the war, the exhibits bring home the difference with striking clarity: The South, for example, had missed the Industrial Revolution to such a degree that it lacked the printing equipment and skilled labor necessary to print its own currency.

Nearby cases hold objects from the museum's standing collection: ancient ticker tape machines, "WALL STREET" cigar boxes, a huge Dow Jones news wire machine and a pre-computer era Quotron machine.

Some of the exhibits come directly from Herzog's private collection, which he started 35 years ago. A self-confessed scripophile _ someone who likes to collect old bond and share certificates _ Herzog has crammed his office with Wall Street memorabilia, including five old ticker machines and a poster for a 1912 Broadway musical, That Wall Street Girl.

It was only in the late 1970s, however, that the 57-year-old Herzog heard of other serious collectors. A German collector came into his wife's store, R.

M. Smythe, which specializes in selling old certificates. The collector's passion for the goods spurred Herzog to take a trip to Frankfurt and London, where he met other collectors who bought and sold bond certificates, some of them dating back to imperial Russia and China.

"When I looked at my collection I realized that I was looking at the American experience through finance, something that may be of more importance in this country than in others," Herzog said.

The idea for a museum, however, didn't take shape until the stock market crash of 1987, when friends said it would be interesting to compare current events with the crash of 1929.

Two years later, in 1989, he registered the museum with the state of New York and showed two exhibits in the Customs House.

Academic interest in the topic is also growing. The Stern School of Business at New York University recently created the first chair for history of financial markets. The holder of that post, Dr. Richard Sylla, said most economic history has tended to focus on currency and banking.

"There's a realization that capital markets have been crucial to many aspects of history. This museum is trying to show those other aspects," Sylla said. "It's small, but many great things start small."