Asset management company T. Rowe Price has opened its extensive archiv. By roaming through letters and historic documents, we gain an entirely new way of looking at the history of asset management in the twentieth century. At the same time, the documents also tell the fascinating story of T. Rowe Price itself since its founding in 1937. While the first part of the story starts with the Great Depression, this trip back through time looks at the 1950s, 60s, 70s, 80s and 90s and finally the industry’s current situation.
It was 1929. On 29 October – known as Black Tuesday – the US stock market collapsed. This had a domino effect across the globe, with GDP falling by approximately 15 percent between 1929 and 1932. Some countries’ national economies took until the start of the Second World War to recover. It affected both poor countries and rich countries like the USA equally: personal incomes, prices, taxes and profits fell, while unemployment in the US rose to around 25 percent. As a result, people were suspicious of anything to do with finance. If they had money, they were reluctant to let it go. The idea of investing, particularly in equities, was almost inconceivable for many.
In the years that followed, the US returned to growth as it became the main driving force in the arms industry. However, it experienced an economic recession in 1937 and 1938,
A man named Thomas Rowe Price Jr. was not discouraged by hard times. In 1937, he founded a firm focusing solely on portfolio management on a fee basis – something that was new at the time. The entrepreneur named the firm after himself: T. Rowe Price. Initially, other companies and individual asset managers viewed Price’s new firm with amusement and did not take it seriously.
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