History of Wall Street
Located in lower Manhattan’s financial district, Wall Street is synonymous with capitalism and money and has been the headquarters of some of the most important financial institutions in the world. Eight blocks long, Wall Street stretches east to west from Broadway to South Street and comprises the securities traders, hedge funds, and banks responsible for managing the stock market and the American financial system.
Wall Street wasn’t always such a powerful financial mammoth. It started as a literal wall. In 1652, England and the Netherlands were competing for land in what was then New Amsterdam, where the Dutch had settled. Fearing that the British were plotting to attack, the Dutch settlers built a wooden wall to defend their land.
Measuring nine feet high and approximately 2300 feet long, the wall included cannons and stretched from what is now Wall Street and Pearl Street to Wall Street and Broadway. The Dutch referred to this structure as “de Waal Straat.”
The financial history of Wall Street began with slavery, with the introduction of a slave market in 1711. Slavery was extremely important to the economy at the time. Still, stock and commodity trading was centered in Philadelphia at the time, which New York traders wanted to change. They came up with the Buttonwood Agreement, which started a movement toward limited securities trading to registered brokers. Soon after, these traders created the New York Stock and Exchange Board.
These forward-thinking men helped Wall Street become the premier place for financial trading. More and more companies and traders began bringing their business to Wall Street rather than Philadelphia. Other major factors encouraged New York City as the country’s financial capital, including the development of the Erie Canal, which made it easier to travel to New York from the Midwest, as well as the introduction of the country’s first power plant and telegraph. These innovations made it even easier for traders in New York to conduct business, especially with the introduction of Charles Dow’s stock tracking system and the stock tickers.
Wall Street is forever linked with the Great Depression of the 1930s. This infamous crash began on Black Thursday, or October 24, 1929, when the market opened at 11 percent lower than it closed the previous day. Many institutions tried to stabilize this change by bidding over market price but on the following Monday, known as Black Monday, the market closed at 13 percent down. On Black Tuesday, the market fell another 12 percent. Ultimately the market would lose 89.2 percent, resulting in financial ruin that impacted many. This devastation lasted throughout the 1930s.
The market suffered another major crash on October 19, 1987, when $500 billion was lost in a day due to a computer error that allowed the liquidation of thousands of stocks. This same error prevented anyone from buying stock, making it a money out only situation. Due to this massive mistake, new rules were designed and executed to prevent a similar error from happening again. Another major stock market crash occurred in 2008 as the resulting of mishandling of subprime mortgages.
Today, Wall Street continues to be a financial behemoth and also a popular tourist site, with many visitors going to see the New York Stock Exchange, the Charging Bull statue, and Federal Hall, where George Washington was inaugurated. There are also adjacent attractions, including the 9/11 Memorial, Battery Park, and the South Street Seaport, offering plenty for the curious tourist to do in a day.