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Wall Street history

Wall Street, Wall Street History


Wall Street, Wall Street HistoryIn March 1792, twenty-four major New York merchants met secretly at Corre's hotel to look for new ways to bring customers to their business, taking them off to their competitors. Two months later, on May 17, 1792, these traders signed a paper named Buttonwood Agreement, by the name of their traditional meeting place.

The agreement required signatories to trade securities only between them, without taking part in other securities auctions. These people had found what would become the New York Stock Exchange, a stock exchange that would later be located at Wall Street number 11.

Wall Street… owes its name to episodes not quite peaceful. During the 17th century, Wall Street coincided with the northern border of New Amsterdam: at that time the "wall" was not yet a real wall, and the limitation of the then Dutch possessions was more like a kind of fence.

The wall was subsequently reinforced to defend the European plant from the attack of various Indian tribes, and then, with the increase in tension with British competitors, around half of the seventeenth century, the fence became a wall that would now arrive, more or less, to the first floor of the modern street buildings. The "wall" existed until the end of the century (1699) when the British were the ones to break it down; what they did not succeed was to break down, however, it was the reputation that surrounded the area, the name that extended over the centuries to the new Millennium.

In fact, when happened the episodes just mentioned, Wall Street was the "wall" road only for its inhabitants, but it was not yet the Wall Street symbol of the US financial markets for the rest of the world. The first merchants built their storehouses and shops here, together with a town hall and a church. New York was the United States national capital from 1785 until 1790, with the Federal Hall being built on Wall Street and was even inaugurated by George Washington.

The imposing advent of money on the roadside occurred a few decades later when Manhattan's road became the main artery of the commercial environment of the city. Towards the end of the eighteenth century at the edge of the same street was formed the New Yorkers Association, which would soon lead to the birth of the New York Stock Exchange.

The first stock market in America was founded in Philadelphia in 1790. A group of New York entrepreneurs, realizing that their stock market was declining after a series of "wars" of stocks and bonds, sent an observer to Philadelphia in the early months of 1817. On his return, the subject brought with him the news that the city was a thriving harbour and they gave life the New York Stock and Exchange Board.

Formally, the New York Stock and Exchange Board was born on March 8, 1817, in a building on Wall Street 40, and every morning the chairman Anthony Stockholm reads the titles that would have to be traded. The exchange was an exclusive organization, the new members had to be accepted by vote, and a candidate could be placed on a "blacklist" with three negative votes. In 1817 a seat in the Exchange Board cost $ 25, in 1827 it went up to $ 100 and in 1848 it reached $ 400.

The early 1900s saw the birth of huge fortunes on Wall Street. In 1901, J.P. Morgan has astonished Wall Street with a merger of billions of dollars that gave birth to the United States Steel Corporation. In 1907, a wave of panic hit Wall Street, with $ 800 million in securities that were lost within a few months. Stock prices have collapsed and several companies were forced to close their doors. Morgan, under pressure from the major New York bankers to prevent the country's total collapse, became practically the sole reference point.

From this episode originated also one of the most important financial newspapers in the world, the Wall Street Journal, which was born as an information bulletin for the associates of the Trade Organization. Wall Street soon became the centre of all the financial attractions of the city, and several financial institutions took office in the old "street of the wall". Several are also the sad episodes that would bring Wall Street fame during the twentieth century. In particular two events of the first half of the century.

It is September 16, 1920, when, after a warning letter, a device is blown up in front of Wall Street No. 23, headquartered by J.P. Morgan, causing 38 deaths and injuring over 300 people. The history attributed to some anarchist groups the attack, although no clue was ever found about the real offenders.

Differences were also the meanings related to the event: the bomb was actually exploded right in front of the company's most famous banker, John Pierpont Morgan, who died just seven years before in Rome, and mind of some of the most important companies in the industry already from the second half of the nineteenth century (for example, is reminding the operation that led to the birth of US Steel).

JP Morgan is also responsible for the creation of General Electric (from the company's "ash" of Edison General Electric and Thompson-Houson Electric Company), as well as the support of some of the most important companies at the time.

Nine years later, in 1929, Wall Street's name is linked to the great crisis affecting the country's stock market and to the severe depression that followed immediately. At that time, the Americans were convinced that the country was in a wave of financial glory. Rich and poor had put their money in stocks and bonds. Stock prices have been pushed to a price well beyond the real value of the companies.

In 1929, stock prices were 400% higher than they were in 1924. Insiders had made their fortunes and could no longer support these prices, so on October 23, 1929, the market fell by 31 points. Stock prices dropped by 49 points on October 28 and the 29th market collapsed.

The collapse of 1929 struck the United States much harder than what would then come in 1987, known as "Black Monday" when, on 19 October, Dow Jones fell by 508 points (over 22%), one loss never recorded throughout the century and caused by a sudden wave of sales. The collapse in 1987 had a clear impact on European and Asian stock exchanges, but it was avoided (thank the action of Central Banks), that this plague could have disastrous repercussions for the world financial system as in '29.

From the end of the nineteenth century to today, Wall Street has become so important that its name is a symbol of important business, it is synonymous with the nation's financial markets and also relates to American financial institutions. The testimony of its great growth is also in the numbers. In 1800, the NYSE companies were only 295, of which only 20 had publicly tradable shares. In 1900, the largest listed company was the U.S. Steel (behind which there were the operations financed by J.P. Morgan), but other companies also grew rapidly: AT&T, Kellogg, Gamble, Eastman Kodak, Westinghouse.

Today, in addition to the evolution of the New York Stock Exchange, Wall Street also has another major stock exchange, the National Association of Securities Dealers Automated Quotation, better known as NASDAQ, established on Wall Street in 1971 and climbed to the main topic of news in recent years, inter alia, following the bubble burst of the new economy.

Even today, it is possible to see how the largest companies in the industry have their headquarters not far from Wall Street, and anyway in the vicinity of Manhattan, although recent trends are shifting to other areas of the city. Beyond its architecture and its geographical location, what matters most in Wall Street is what it represents, the US financial environment for excellence, a sign of the capitalist economic system and the loved-hated "almighty dollar".

 

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