One of the historical tidbits students miss is the importance of the United States Postal Service and the telegraph. They usually just think letters. WRONG! The most important function of both was to move money. To become a millionaire you had to invest your money. But you could not invest money if you could not move it. You could have millions of dollars worth of gold during the Alaska Gold Rush, but how did you get that money safely to the lower states?
And this was in the days before everyone had credit card or what are now called identification cards.
So how was it done?
As you can see here, banks took the gold in and transported it as bank property. Once it was in banks in the lower 48 states, the owner would reclaim the gold with letters of credit. But those letters of credit had to be verified by – you guessed it –mail or telegraph from the Alaskan bank. So next time you step up to an ATM, think how long it would take someone to get $100 of their own money from a bank in Seattle when the gold had been given to the bank in Fairbanks six months earlier.