Credit Systems and Markets

In the 19th century in the new states and territories of the United States money was scarce to the point people often used Spanish silver. Real goods, like lumber or grain, were valuable and relatively plentiful and in immediate demand. Consequently, people mostly used barter and issued credit agreements as an everyday thing. For example, if you were building a mill and needed some steel parts, you might strike a deal with a blacksmith to provide 100 bags of wheat or a portion of your production for 2 years to pay for a steel axle for the mill.

Banks weren't really necessary for farming on a small personal scale, but with the development of the transportation systems like the canals and railroads, banks could serve as an intermediary between more anonymous distant parties, and money/credit could facilitate trade between producers of unlike goods without the hassle of negotiating contracts for every transaction.

Railroads developed agricultural infrastructure, like grain silos, to facilitate the mass movement of commodities like corn or wheat to where they'd be actually consumed or processed. Money was a sort of token within the context of that entire system that started to represent a portion of the productivity of it as an entirety.

Large scale commerce and concentration of commerce in cities and ports also led to the ability to command large quantities of goods and manpower which led to the growth in industry and a parallel growth of the "financial system". As a side effect the banks which issued "credit" within those systems were able to leverage the productivity of all the commerce that was carried on within them even though the bankers didn't actually do anything.

By the Bubba Clinton presidency, the financial markets completely disassociated from the "real" economy of railroads and grain elevators. The real economy is hugely productive and massively undervalued, while the paper and electronic economy is parasitic, country clubbish, and hugely overvalued.