History of Wall St

Once upon a time, before New York City was a city, there really was a wall. It was built in 1644, on the lower end of Manhattan "Island" by the Dutch to protect against British attacks. Years later, the defensive wall was gone, but the road alongside remained and was, of course, called Wall Street. We think of Wall Street as the financial center of the world, but it hasn't always been this way.

Early in our country's history, Boston was the financial center of America. Bonds for projects such as roads, canals and bridges, and contracts for commodities such as hides and molasses, were bought and sold mostly by Boston dealers. However, there was not yet an official place to conduct such business.

Other countries had such "exchanges" for many years. Belgium established the world's first in 1531. Amsterdam soon followed, with brokers conducting their activity on a street called Warmoesstraat. In 1602, under the Amstel bridge, shares of the East India Company were bought and sold. Money was raised here to finance the Pilgrim's trip to America.

At this time, Paris conducted their financial business on Rue de Quincampoix.. In the early 1600's, Berlin's traders and merchants conducted their business at the Grotte in Schlossgarten.

London's stock exchange began as an outdoor market centered on Exchange Alley. By 1725, many London brokers began doing business at Jonathon's Coffee House which was renamed "The Stock Exchange" in 1773. An advertisement of the time by a broker named John Taylor proclaimed "Buyeth and selleth new lottery tickets, Navy victualling bills, East India bonds, and other publick securities".

It was just a matter of time before our new country, The United States of America, would organize formal stock and bond trading. 1792 was the year. In 1792, New York City's population was about 34,000, not including Brooklyn and Queens which were still separate towns. Much of Manhattan had just been rebuilt with brick buildings after the devastating Great Fire of 1776. 

Wall Street was New York's center of commerce. Just a few blocks long, from Broadway on the west to the East River at the other end, Wall Street was not yet paved or even lined with cobblestones. There were warehouses for furs, coffee and tea, and other goods from all over the world. To the south, streets were crowded with slaughter houses and tanneries.

Wealthy businessmen, along with their ordinary trade, would sell lottery tickets, bonds, and shares of stocks in new banks that were forming. The hottest trading and speculating, was in treasury bonds issued by the new Bank of the United States.

Until 1792, a person wishing to buy or sell an investment would either advertise, or spread the word among associates and friends. Some of the first merchants to keep a supply of stock shares on hand were Leonard Bleeker at 16 Wall Street and Sutton & Harry at 20 Wall. On one day in 1791, 100 shares actually changed hands. Imagine that! 

The first organized stock exchange was created in 1792, when under a buttonwood tree in Castle Garden (now called Battery Park), John Sutton, Benjamin Jay, and 22 other financial leaders signed an agreement of rules, regulations and fees.

Then in a building at 22 Wall Street, securities were auctioned every day beginning at noon, sold to the highest bidder. The seller paid the exchange a commission on each stock or bond sold.

They originally called this organization The Stock Exchange Office. This was a very exclusive organization, allowing only the elite of New York's financial community to join. And certainly no women were allowed! In just recent years, Muriel Siebert became the first female member of the New York Stock Exchange.

In 1817, the name was changed to the New York Stock and Exchange Board. In 1850 the stock exchange was located at Wall and Hanover, its fifth address. At that time, the Board's total yearly costs including rent and salaries, was less than $5,000.

In 1863, the Board changed its name to the New York Stock Exchange, and moved into the majestic building at the corner of Wall and Broad Streets, where 140 years later, the big exchange still does business today.

The NYSE had competition from smaller exchanges both in New York and other cities. One of the largest New York organizations to compete with them was a group of securities dealers who conducted their business outside, rain or shine. They were known as the Curbstone Brokers.  The Curbstone Brokers were willing to deal with stocks of smaller companies that couldn't meet the requirements to be listed on the Big Board, as the NYSE began to be called.

Relying on prices set earlier in the day at the Board's auction, they would gather in the evenings where they would auction as little as a single share at a time. The big exchange set a minimum of 100.

In 1880, William Worthington Fowler described these after-hour brokers as "they are all eyes and ears, scud and scamper, their fingers quivering like aspen leaves, their mouths pouring out a stream of bids and offers. Disencumbered of all the spare syllables, while they telegraph signals with the ten digits and with nods and winks".

After over 100 years, the Curbstone Brokers decided it was time to move inside. In 1919, they purchased a lot at 86 Trinity Place at the west end of Wall Street, and erected a tall modern building. In 1928, they renamed themselves the New York Curb Exchange and moved into their new home. It wasn't until 1953 that the Curb changed its name to the American Stock Exchange.

How many companies were traded on the early exchanges? The first was the Bank of New York, being established in 1784. In 1800 there were only 295 corporations, of which about 20 traded publicly. In 1835, the listings on the NYSE swelled to 121, many of them railroads. The first American investment bubble occurred at this time and burst in what came to be called The Panic of 1836. In 1869, there were 145 companies listed, including insurance, steel, farm equipment, tobacco, and other manufacturers.

In 1900, the biggest stock was U.S. Steel. Other companies on the New York Stock Exchange were AT&T, Westinghouse, Eastman Kodak, Procter and Gamble, Pillsbury, Sears, Kellogg, and Nabisco Crackers (they introduced their yummy Oreos in 1902). 

At this time, the market was roaring. The prevailing wages around the country were quite low, with 10 cents or less per hour considered a fair wage. Women and children, working in sweatshops in the garment district, were paid as little as 25 cents for a 12 hour workday. But a good Wall Street "runner" (delivering paperwork and stock certificates between brokerages) could make the amazing sum of $8 a day, and some successful traders, of course, were making millions.

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