To understand the history of Wall Street one must also understand the history of the U.S. stock market. The history of Wall Street and the stock market are intimately tied together.Long before the establishment of New York City as a large city, financial district, and port, the Dutch had erected a wall in what is now known as Manhattan's lower end. The wall was built in the mid 1640s and was to serve as protection against attacks from the British. Many years later the wall was eventually taken down. The road that was positioned beside the long wall remains however, and this is where the name Wall Street is derived. While the history of Wall Street makes many people think of New York City's financial district, this was not always the case. Prior to the fame of Wall Street, Boston, Massachusetts was the financial center of the nation. This is where many businesses bought and traded, but no official financial district had been established at that time.
Many other nations had official exchanges. The first official exchange was established in Belgium by the early 1530s. Later, an exchange was established in Amsterdam on Warmoesstraat Street. Paris was conducting financial business transactions in the 1600s on Rue de Quincampoix. In Berlin, around the same time, merchants and traders were conducting their business and financial transactions at the Grotte in Schlossgarten. London began their stock exchange in an outdoor market located on Exchange Alley. By the mid 1720s, the brokers in London were doing their exchanges at a coffee house later called The Stock Exchange. A stock market was not established in America until the early 1790s. Since Wall Street proved to be the center for all commerce in the city of Manhattan, this seemed an ideal place to establish a stock market exchange.
The history of Wall Street reveals that after the Great Fire in the city, the city of Manhattan got new brick buildings. While streets like Broadway were paved, the Wall Street was still made of old cobblestones. The street was lined with a variety of businesses including tea houses, coffee houses, fur warehouses, and other businesses like slaughter houses and tanneries.
At this time, banks were being established and business men were selling lottery tickets, trading and selling bonds, and offer stock shares. When the U.S. Bank issued treasury bonds they were a hot commodity and many business men were speculating and trading them. Up until the year 1792, an individual wanting to sell, buy or trade on any kind of investment would have to spread knowledge of his desires via word of mouth.
There were a few merchants that maintained some shares of stock including Sutton and Harry on 20 Wall Street and Leonard Bleeker on 16 Wall Street. The organized exchange in the US was established in 1792 in what is now known as Battery Park. Twenty financial leaders along with Benjamin Jay and John Sutton described and designed the fees, regulations, and rules in a signed agreement. The exchange was established at 22 Wall Street where, at noon each day, securities were auctioned and given to the highest bidder. The exchange earned an agreed to commission on every bond and stock that was sold. This exchange was initially identified as the Stock Exchange Office. At first, only the US elite were allowed to participate and women were not permitted.
More History of Wall Street and Stock Market Information
In 1817 the stock exchange office was renamed to the New York Stock and Exchange Board. It was later moved to Wall and Hanover; this was the fifth location for the exchange since its establishment. In 1850, on an annual basis, the Board paid out fewer than five thousand dollars for wages and overhead.
In the early 1860s the exchange's name was changed again, this time it was known as the New York Stock Exchange. It was again moved to where it stands today, at the corner of Board and Wall Street. Today, it competes with other exchanges. One competitor, the Curbstone Brokers, catered to those business people that were excluded from the elite New York Stock Exchange Board. It too, established a position on Wall Street. It was later named the New York Curb Exchange and even later, the American Stock Exchange.
History of the Wall Street Crash
The history Wall Street cannot be explored without exploring the history of Wall Street crash in 1929. Many people lost a substantial amount of money when the stock market took a dive in October of that year. The market began to give significant hints of instability the month prior since the prices of shares were rising steadily until September. Then, suddenly, the prices dropped, rose, and dropped again. On the 29th of that year the Dow Jones Industrial Average took a steep dive leading to the crash. Billions of dollars were lost. The result was a slump in the economy for more than a decade. Thousands of people became unemployed as the bottom of businesses fell out and businesses went bankrupt. Many people committed suicide after losing all that they had invested.
The history of the Wall Street Crash is an important lesson for all investors, then and now. Americans have learned just how risky the market could be and it has made modern day investors far more cautious. It should be noted however that this was not the very worst day for the market. Instead, in 1932, in August the Dow Jones Industrial Average dropped below 63, an all time low. It had dropped to below what it had started at in the late 1890s.