Investing Advice

Wall Street & Stock Market History

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.
 

Peter Minuet, representing the Dutch East India Company, paid whom he thought were the “Man-a-hat-ta” Indians 60 guilders worth of trinkets for this piece of choice land we call Manhattan.

The Canarsie Indians took what they apparently believed were gifts, and paddled back to their village in Brooklyn.

 

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.

Other History of Wall Street and Stock Market Topics:

  1. History of Wall Street and Stock Markets
  2. More Wall Street History
  3. 1929 Stock Market Crash
  4. More Stock Market History

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