American Express

On March 18, 1850, American Express Company was formed through the consolidation of three companies - Wells & Company, Butterfield, Wasson & Co., and Fargo's company. Wells was elected as the first president and Fargo as the vice-president.

In 1852, Wells Fargo & Company was launched as an independent venture by Wells and Fargo to provide express and banking services in California, after the rejection of the transcontinental express service idea by the American Express board of directors.

American Express launched the Overland Mail Co. in 1857 as a joint venture with Wells Fargo, Adams Express Co., and United States Express Co.

American Express and Merchants Union Express Company, both facing financial challenges, decided to merge on November 25, 1868. The new entity was named the American Merchants’ Union Express Company, later renamed as the American Express Company in 1873.

American Express introduced the Money Order service in 1882, allowing customers to purchase certificates for specific amounts of money for secure cash withdrawals or payments. This service quickly gained popularity and became a significant revenue source for the company.

American Express introduced Travellers’ Cheques in 1890 as a secure alternative to letters of credit for travellers. This innovation became a major revenue stream for the company and gained widespread acceptance globally.

In 1891, American Express introduced the Travelers Cheque as a secure and convenient alternative to the time-consuming letter of credit for transferring funds from the United States to Europe. The cheque could easily be converted into foreign currency and offered a refund in case of loss or theft.

American Express opened its first European office in Paris in 1895, expanding its operations internationally.

During the outbreak of World War I in 1914, the company assisted over 150,000 stranded Americans by helping them cash their Traveler’s Cheques and arranging safe passage home.

In July 1918, the American Railway Express Agency was created as a result of the consolidation of all existing express companies into a single entity to serve the country's needs during World War I. This action ended American Express's express business.

In 1929, Chase Securities Corp., an affiliate of Chase National Bank, acquired control of American Express in a stock exchange. Albert H. Wiggin, chairman of Chase National Bank, played a significant role in this acquisition.

In May 1930, Chase National merged with Equitable Trust Co., becoming the largest bank in the world. John D. Rockefeller became the largest shareholder of American Express, and Winthrop W. Aldrich became chairman of both Chase Securities and American Express boards.

In early 1933, President Franklin D. Roosevelt declared a national bank holiday to address the financial panic. American Express, not being a bank, remained open and provided financial services like redeeming traveler's checks during the crisis.

In 1944, Ralph T. Reed took over as the President of American Express, leading the company through a period of expansion in the late 1940s and 1950s, particularly in the travel industry.

American Express entered the business of travel charge cards in 1958, launching their card with an annual fee of $6, positioning it as a premium product.

On April 26, 1960, Howard L. Clark was elected as the President and CEO of American Express, initiating a new era of management focused on diversification and growth.

In 1962, George Waters, with experience from IBM and Colonial Stores, implemented strategies to make the charge card division profitable, leading to over 900,000 cards issued by the end of the year.

Due to involvement in the salad oil scandal, American Express share prices fall to $35.

In 1964, Warren Buffett purchased shares of American Express, which marked the company's transition from traveler's cheques to credit cards. Buffett's investment in the company proved to be highly successful, recognizing its potential to become a major player in the financial industry.

In 1966, the company expanded its credit card offerings to commercial customers by introducing the Corporate Card.

By 1967, American Express had 2 million cardholders spending over $1 billion annually, marking a significant milestone in the growth of its credit card business. Strategic changes and innovations led to substantial profits for the company.

In 1968, the stock price of American Express reached $180 per share, resulting in a $20 million profit on a $13 million investment. This showcased a successful investment decision.

In 1972, the company expanded its credit card program abroad, paving the way for global expansion in the financial industry.

In 1975, David Ogilvy of Ogilvy & Mather created the successful 'Don't Leave Home Without Them' ad campaign for American Express Traveler's Cheques, featuring actor Karl Malden as the face of the campaign.

In 1977, James D. Robinson III assumed the roles of chairman and CEO at American Express, leading the company through a significant period of growth and change.

In 1979, American Express acquired 50% of the cable subsidiary of Warner Communications, forming Warner-Amex Satellite Entertainment, which included ownership of MTV, Nickelodeon, and The Movie Channel.

In 1981, American Express acquired Shearson Loeb Rhoades Inc., a leading brokerage house, which later acquired other firms like Robinson-Humphrey, Foster & Marshall, and Balcor.

In 1983, American Express launched a promotion where they pledged to donate one penny to the renovation of the Statue of Liberty for each purchase made with an American Express Card. This initiative raised $1.7 million for the restoration project and increased card usage by 28%.

In 1984, American Express acquired Lehman Brothers and integrated it into the Shearson family, forming Shearson Lehman/American Express.

In 1985, American Express announced the spin-off of Fireman's Fund Insurance Company, which it had purchased in 1968, due to declining profits and increased competition in the insurance industry.

In 1987, American Express introduced its Optima Card, the company's first credit card. Unlike regular American Express charge cards, the Optima Card allowed users to carry a balance from month to month.

Shearson Lehman acquired E.F. Hutton & Co. in 1988, merging it with the investment banking business and renaming it Shearson Lehman Hutton, Inc.

In July 1989, American Express publicly apologized to Edmond Safra and donated $8 million to the charity of his choice after a smear campaign against him was proven false.

In December 1989, American Express announced plans to inject $900 million into its struggling subsidiary Shearson. This recapitalization aimed to improve Shearson's financial health and profitability.

In 1991, American Express launched its Membership Rewards program, one of the first loyalty programs in the industry. This program offered customers various benefits and rewards for using their American Express cards.

In 1993, Harvey Golub took over as the chief executive officer of American Express after the resignation of the previous CEO. He implemented various strategies to revitalize the company, such as focusing on core businesses, launching new products, cutting costs, and strengthening the brand.

In 1998, the federal government filed an antitrust lawsuit against Visa and MasterCard for prohibiting member banks from issuing cards of rival companies like American Express and Discover, which was seen as anticompetitive and harmful to consumers.

In September 1999, American Express launched Blue, the first 'smart card' in the United States, featuring a computer chip and magnetic strip. This innovation allowed consumers to consolidate credit and debit information in a single card, catering to the growing e-commerce market.

On November 10, 2008, during the 2007–2008 financial crisis, American Express received Federal Reserve System approval to convert to a bank holding company, making it eligible for government assistance under the Troubled Asset Relief Program.

Effective in 2016 in the US and 2015 in Canada, Costco terminated its exclusive relationship with Amex, switching to Capital One and Mastercard. This move significantly impacted Amex's financials.

American Express's history and unique business model have influenced the finance structure. Warren Buffett holds a high opinion of American Express.