American Express

Type: Public (
Founded: 1850
Headquarters: New York, New York
Key people: Kenneth Chenault, Chairman & CEO
Industry: Finance and Insurance
Products: Financial services
Website: www.americanexpress.com

General Information

American Express (NYSE: AXP), sometimes known as 'AmEx' or 'Amex', is a diversified global financial services company, headquartered in New York City. The company is best known for its credit card, charge card and traveler's cheque businesses.

The company's common stock trades on the New York Stock Exchange under the ticker symbol 'AXP.' It is one of the 30 stocks that comprise the Dow Jones Industrial Average and is ranked as the 74th largest company by Fortune. In 2007, BusinessWeek and Interbrand ranked American Express as the 15th most valuable brand in the world, estimating the brand to be worth US$20.87 billion.

The current CEO is Kenneth Chenault, who took over in 2001 from Harvey Golub, CEO from 1993 to 2001. Prior to that, it was headed by James D. Robinson III from 1977 to 1993.

American Express Today

Sometime between 1888 and 1890, J.C. Fargo took a trip to Europe and returned frustrated and infuriated. Despite the fact that he was president of American Express and that he carried with him traditional letters of credit, he found it difficult to obtain cash anywhere except in major cities. Mr. Fargo went to Marcellus Flemming Berry and asked him to create a better solution than the traditional letter of credit. Mr. Berry created the American Express Travelers Cheque which was launched in 1891 in denominations of $10, $20, $50, and $100.

The travelers cheque established American Express as a truly international company. This was not the firm's first foray into this field, however. In 1914, at the outbreak of the First World War, American Express offices in Europe were among the few companies to honor the letters of credit (issued by various banks) held by Americans in Europe, despite other financial institutions having refused to assist these stranded travellers.

American Express became one of the monopolies that President Theodore Roosevelt had the Interstate Commerce Commission investigate during his administration. The interest of the ICC was drawn to its strict control of the railroad express business. However, the solution did not come immediately to hand.. The solution to this problem came as a coincidence to other problems during World War I.

During the winter of 1917 the US suffered a severe coal shortage and on December 26 President Woodrow Wilson commandeered the railroads on behalf of the US government to move US troops, their supplies, and coal. Treasury Secretary William Gibbs McAdoo was assigned the task of consolidating the railway lines for the war effort. All contracts between express companies and railroads were nullified and McAdoo proposed that all existing express companies be consolidated into a single company to serve the country's needs. This ended American Express's express business, and removed them from the ICC’s radar. The result was a new company called the American Railway Express Agency company formed in July 1918. The new entity took custody of all the pooled equipment and property of existing express companies (the largest share of which, 40%, came from American Express, who had owned the rights to the express business over 71,280 miles of railroad lines, and had 10,000 offices, with over 30,000 employees).