Home to some of the most important financial institutions, Wall Street‘s history dates back to the 17th century. The street is located in lower Manhattan in New York City and is the birthplace of multiple brokerages, investment banks, and exchanges, such as the New York Stock Exchange. We decided to illustrate the history of Wall Street from the very first day of building the wall till as it is today – the most important financial district in the world.
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History of Wall Street summarised in text
Wall Street is considered to be the symbol of capitalism, however, back in the late mid-1600s, it was nothing but a mere wooden wall to defend locals from invasions. For quite some time it has been a major slave market in the state before hosting the most important stock exchange market – NYSE. Wall Street was also the hub for numerous innovations featuring the very first telegraphs, stock tickers and even air conditioners. It withstood several stock market crashes, serious economic and political turmoils and even terroristic attacks of 9/11. The illustrated history of Wall Street presents the major events that shaped the financial district as it is today.
1652: Building the Wall
Manhattan Island was occupied by the Dutch settlers who, as a consequence of the Anglo-Dutch Wars, grew concerned about upcoming attacks from England and began building a wooden wall to preserve their settlements. The result was a 2340 feet long and 9 feet tall wall with cannons stretched from what is today the corner of Wall Street and Pearl street to Wall Street’s and Broadway’s crossing. However, the wall remained only for half a century, until it was finally demolished in 1699.
1711: Slave Market on Wall Street
Initially, in 1711 the decision was made to make Wall Street a central place for the government-sanctioned slave market. The wooden building inside the gates of Wall Street hosted active trading which supplied the rest of New York City with tax dollars. The slave market on Wall Street lasted for several decades until 1762. In the early 1730s, the Society for the Propagation of the Gospel in Foreign Parts tried to establish the first public library in City Hall on Wall Street.
1788: Federal Hall
The City Hall carried great significance for the history of New York City. The name was officially modified to Federal Hall in 1788 after the appointment of New York City as the capital city of the United States. Many major events of American history took place exactly in this Federal Hall including the Bill of Rights drafted by Congress and George Washington’s inauguration as the first-ever president of the United States.
1792: Buttonwood Agreement
Security trading became a regular part of the Buttonwood tree on Wall Street, where the traders would hold regular meetings to process transactions forming the Buttonwood Agreement. The purpose of the agreement was to avoid any intervention from the government’s side and to remain in a closed circle, not letting any outsider inside. In case someone outside the Buttonwood community intended to purchase a stock, he had to approach an approved broker. Simultaneously, the building was a place for slave trading. After several years, the security traders under Buttonwood Agreement moved to the Merchants’ Exchange building also located on Wall Street.
1817: New York Stock Exchange
In 1817, the traders from Buttonwood visited Philadelphia Merchants Exchange, which inspired them to establish their own model that was named New York Stock and Exchange Board. The very first president of the Exchange was Anthony Stockholm, whose main responsibility was to announce the stocks in trading every morning. Apart from the mandatory dress code with top hats and dress coats, the registering members had to be voted by the board members and had to pay the membership fee of $25, which eventually rose to $100 after 20 years and to $400 by 1848.
1837: First Inventions on Wall Street
In 1837, with the new invention of the telegraph by Samuel Morse, the demonstration office was established on Wall Street that cost 25 cents to try the invention. The security traders and brokers of Wall Street were excited by the invention and after some time the whole area was equipped with telegraph wires. Brokers were now able to communicate remotely, which significantly affected the growing interest in brokerage services on Wall Street.
Another important invention that soon became an integral part of trading was the stock ticker introduced by Edward A. Cahalan in 1867. The ticker was built on the wheels of narrow paper strips that displayed the transaction details. The transaction details were delivered by clerks to typists and the latter ones provided the information accordingly to the brokers via telegraph.
1867: First women on Wall Street
After 3 years, the first Wall Street stock brokerage owned by women opened. Women would have a tougher time infiltrating the New York Stock Exchange directly. The only place where women would be found back in the 1940s was the back rooms of the trading floor. However, in 1967, Muriel Siebert became the first woman ever to claim a seat on the New York Stock Exchange. In 1882, Wall Street became one of the brightest places on the planet as the very first electricity plant was introduced on Pearl Street with 7,200 lamps powered.
1903: Official Building of NYSE
The renovated and official building of the NYSE was opened in 1903 at 18 Broad Street. The constructions were directed by the architect George B. Post for 2 years and the design encompassed Corinthian pillars, various statues structured by John Quincy Adams, a ceiling with a height of 70 feet, and a marble floor. Moreover, thanks to the work of Alfred Wolff, the New York Stock Exchange building was the first one in the US to have air conditioning.
1940: Strict Margin Policies
Following the stock market crash of 1929, the government of the United States began passing various regulations to establish a more stable financial market. Together with many different acts restricting the investors’ activities, in the 1940s, the US government limited the practice of purchasing equities based only on credits. Consequently, investors were forced to cover the 100% of the stock price without taking on any loans. At that time, margin requirements hit 90% which scared away numerous investors. However, in a short time the government made a cut on the requirement, reducing it down to 70%.
1971: First Appearance of NASDAQ
In 1971, the National Association of Securities Dealers (NASD), which is nowadays known as the Financial Industry Regulatory Authority (FINRA) established the Nasdaq stock market. The world’s first electronic stock market began its operations on 8th of February. In 1985, Nasdaq introduced its one of the main indices – the NASDAQ Financial-100 index. In the beginning, Nasdaq was just a quotation system without any access to the methods of performing the electronic trades. By 1991, the share of Nasdaq had already reached 46%.
1973: SEC Regulations
In 1972-72 SEC took on liberalization of the market and abolished fixed commissions on transactions exceeding 500,000 USD. However, congress still had its doubts on fixed commissions’ influence over the interests of the investing public and the long-term benefit of the industry overall. Therefore, in just a few years the fixed commissions were eventually eliminated.
Interest towards strengthening the central market system was growing in SEC general counsel. However, the rule 394 stood in the way of accomplishing it, since the law banned any exchange member from executing the trades off the floor through OTC dealers. Therefore, the SEC took a deliberate approach to eliminate the rule 394 and thus free up trading for electronic methods.
1989: Wall Street Bull and Fearless Girl
A symbol of financial optimism and prosperity, Charging Bull bronze sculpture (or often referred to as Wall Street Bull) was created in the wake of the 1987 Black Monday stock market crash. However, in 1989 the Bull sculpture was illegally dropped outside of the NYSE building by its Italian creator Arturo Di Modica. It was soon joined by the statue of ‘Fearless Girl’ symbolizing female empowerment and making the place one of the main attractions of the city for visitors.
2011: 9/11 Attacks
One of the most significant damages was brought by the 9/11 attacks that resulted in 2,996 deaths and 6000 injuries in the financial district. The twin towers of the World Trade Center were destroyed, access to the surviving financial offices was strictly limited, communication networks were damaged almost beyond repair and eventually, the stock market was shut down for 7 days. However, the recovery of the financial district was incredibly quick, with multiple new projects appearing in the area, as well as the construction of One World Trade Center.
Wall Street Today
Today, Wall Street accounts for 35% of the total income of New York City. Wall Street has created more than 250,000 jobs and on average, the employees on Wall Street earn around $363,000 which is at least four times higher than the average scientists’ salary at the moment. One of the reasons for Wall Street’s significance is the fact that it is home to the largest stock exchanges and financial institutions. Some of the world’s major financial firms can be found on Wall Street, and include Goldman Sachs, Morgan Stanley, JPMorgan Chase, BlackRock, Deloitte and Credit Suisse. Wall Street is the place where most of the miracles in financing occur. However, due to its enduring impact on the global economy, it can also bring the economy to its knees as seen in the Great Recession of 2008-2009.